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OK, new thread for the muni. Interesting packet...
Basically, Boulder isn't going to have info in time for a go/no-go vote in 2020. That will be, at the earliest, 2021.
As such, they *might* run out of $$ to keep doing the work, as the Utility Occupation Tax is only extended through 2022 BUT planned for a 2018-2020 engineering work timeframe, which got delayed bc of the PUC process with Xcel, which wrapped in October after ~3 yrs.
Some more details in the presentation than in the packet, such as: COST ESTIMATES!

Idk how accurate these are, but...
Boulder pinning acquisition costs at $150M
Cost of separating the systems and building Boulder's new one: $110M
Plus $28M in startup costs
No new estimate for power supply costs; 2018 estimate was $83M-$126M
So at the low end using those numbers: $371M.
High end: $414M
Still so much unknown in there, so those are incredibly rough estimates.

Surprised to see that acquisition cost; Boulder's most recent offer to Xcel was $93.9M
A $214M cap was approved by voters and put in the charter, but that increases with inflation. So that 2014 $$ today is $259M. That includes purchasing or acquiring the assets and paying stranded costs all at once; I don't think it covers power supply, startup costs or separation.
Put another way, using these estimates, we *might* still be under the cap. But again, these are just estimates.
We'll know for sure once Steve Catanach gets to this slide in the presentation. He's slooooow.
Catanach going over the fact that if we did our own utility, we could generate more power than we need (and then sell the extra, I guess). Right now, the state caps how much we can generate to 120% of demand.
Yates asks: Couldn't we just change that state law?
Yes, is the answer. Not sure if that's in our lobbying agenda; I don't remember it, but it was a big document.
100MW (Boulder's goal for local renewable generation by 2030) is roughly 10% of our generation, Catanach says.
Catanach now going over current cost estimates.
As you all just read in the paper, we made an offer of $94M to Xcel. $150M is the amount we use in our financial modeling, Catanach says. Negotiations with Xcel are ongoing, but if they don't work, we move to condemnation.
Boulder filed for condemnation in June(? July) but a court dismissed that upon Xcel's request bc PUC process wasn't done. Boulder is appealing that. Bc now, PUC process *is* done.
RE: Power supply: Those estimates come from the request for indicative pricing Boulder did in 2018; it's an annual figure.

70% or so of the annual budget for an electric utility is power supply, Catanach says.
The higher number, $126M, is what it would cost Boulder to buy power from Xcel.
Wallach: Power supply would not be included in the bond issue?
Catanach: Correct, but we're defining these numbers to determine viability of the utility. We're doing cash flow out several years.
Wallach: I assume there's a threshold of where cost savings would be eaten up by long-term debt and it wouldn't make sense.

Staff: We haven't done that $$ bc there are a lot of variables: interest rates, acquisition costs, etc.
But there is a feasibility calculator on the city site where you can input the key costs and see where it stops making sense.
You know, if you're looking for something fun to do on a Saturday night.
Sam Weaver calls this "fascinating," if you needed an endorsement.
Yates: Is the break point number in excess of the $214M cap approved by voters?
We don't know yet, staff says.
OK, we're talking stranded costs a bit now. Here's a definition: As part of the compromise reached to make the transmission grid available to all, a customer (City of Boulder) that no longer wishes to receive power from its generation provider (in this case, Xcel) ....
...but does wish to continue to use that provider’s transmission system, must reimburse the generation provider if that provider cannot sell to others the power obtained to serve the departing customer. Investments that cannot be sold to others are referred to as stranded costs.
Basically, as I understand it, Xcel planned to have Boulder as a customer forever, so planned for the power it needed. Boulder is obligated to pay for the power that Xcel can't sell to anyone else.
If Boulder keeps buying power from Xcel, it can reduce the stranded costs it has to pay.

There are other ways to reduce that, including stepping up its local power production before breaking with Xcel (thereby reducing the amount of power Xcel planned for long-term in the city)
I *think* that's how it works. All this muni stuff is so complicated... I'm barely getting my head around it after 1.5 yrs.
To clarify, stranded costs can be paid all at once or over time.
It's been a big sticking point for critics of the muni, bc the financial feasibility tool I linked to earlier? It has stranded costs at $0. The city says this is bc there are so many variables.
Critics say it's bc it would blow the feasibility to pieces.
Going over what the cap covers. It's the debt, Tom Carr says: The bond we'll issue to cover whatever the $ is that comes from the condemnation case, to take over Xcel's physical system.
Kathy Haddock, assistant city attorney: Appraisal for Xcel's system is $63M.

But that doesn't include going concern: Boulder's obligation for Xcel's lost profits.
Boulder has contended it may not have to pay those, per precedent in the courts. Xcel disagrees.

That's the big factor in how much acquisition will cost, Yates says: The actual value of the system is not likely too different from the appraisal.
Certainly not more than double the $63M, Carr says; again, the city uses $150M in its financial assessments.
Wallach: What are the prospects this isn't ready for a vote even in 2021?
Catanach: "On the engineering side... I'm feeling pretty confident. But certainly as we look at the legal work, there are risks."
Carr: "There's a risk it will not be done in time for 2021. There's no way to tell for certain. I think there's a good chance it will be done in time."

"There's only so many ways you can string that (condemnation action) out."
Yates: You've previously said 9-18 mos. for the condemnation case. That's late 2020, mid 2021. If someone appeals... what then? How does that impact things?
Yates: Do we still go to voters?
Carr: "That would be your call. Hopefully we'll know what the appeal is then and we can provide info to voters or decide not to. We will have a valuation, a number, and if there's an appeal, we'll know what that is."
Haddock: Appeals in condemnation is v different from other issues. Legal issues are decided before valuation trial. The issue of going concern will be decided before valuation trial.
"Regardless, we'd probably have a separate line item in the verdict that the jury gives us." We'll be able to decide whether or not to do a vote before the appeal is done.
Yates going over some possibilities: Someone could appeal the going concern decision, stopping the condemnation case.
Haddock: Xcel may want to stop the process, but condemnation is for the purpose of the landowner not stopping the government process.
Joseph: Is there any way to get to voters in 2020?
Carr: We could. We're operating under instructions to finish condemnation so we have a better cost estimate to acquire Xcel's system. But if council doesn't want to wait for that, we don't have to.
Catanach: Moving vote to 2021 does create an unfunded need.
"Our plan is to continue to work together. We've been brainstorming on what potential solutions may be available to us. We'd like to come back to council in April 2020 in order to have a discussion."
Catanach: We could look at general fund, which is not a good option as you've just heard from the past 2 presentations, there are real needs there.. not that we're not a real need there.
Also might look at a ballot issue.
Likely to extend the UOT again or do some other type of funding.
Yates: We're finishing the year with $6.1M in muni spending in 2019?
Doelling: That sounds about right. What we want to be clear about with unfunded needs is the staffing piece.
UOT (utility occupation tax) is meant to cover staffing for 3 yrs (2018-2020). We've got 9-ish staff that isn't covered by that.
*If we extend it by another year, they're not covered. To clarify.
Yates: We've over-collected the tax. We collected $6M last year but only spent $2.8M. We had $3.2M carryover. Even amount spending this year is a bit more than tax, we have some carryover. The problem happens next year.. we carry $1.6M over to 2020, tax drops down to $2M..
So we only have $3.6M to spend in 2020. I'm guessing you'll tell us we're spending more. (Yates again)

Doelling: Yes, we're going to spend more.
Doelling: The tax was intended to reimburse general fund reserves within 5-yr period with the expectation this was a three-year project.
About $1.4M due to the general fund reserves, per Yates (and whatever chart he is looking at)
Weaver: This is a cash flow problem, not necessarily a debt problem. We'll be low in 2020, 2021, but the 2022 collection will zero us out.
Yates: If we spend less than $7M through 2022.
Catanach: The shortfall we have now is staffing, along with extended legal costs. It's hard to predict exactly what those costs will be if there is an appeal. We're working to refine those right now.
Yates: Staffing roughly $1M a year?
Catanach: Umm
Yates: It was $1.2M last year
Doelling: That's reasonable enough.
(as an average)
Catanach: Boulder has been focusing on answering the q, Can we municipalize? But now we need to consider, Should we? Much has changed in recent years with state laws, Xcel goals, etc.
"We believe these should be part of the bigger conversation."
April "would be an appropriate time to have this conversation."
Matt Lehrman, Energy Strategy Advisor, going over some of those considerations.
Like state progress on climate goals. Colorado now requires utilities to file clean energy plans; Xcel's will be done either in Feb 2020 or March 2021. They plan to achieve 100% clean energy by 2050; Boulder's own goal is 100% renewables by 2030.
Boulder’s electricity-sector emissions for 2018: 710,000 Metric Tons
• Boulder electricity-sector CO2 emissions in 2030 if Xcel 80% emissions reduction goal is achieved: 250,000 MT
• Boulder electricity-sector emissions in 2030 if Boulder achieves 100% renewable electricity: 0
Brockett: You say closing the gap by conserving energy, but whatever we do, we reduce the gap. You can't close the gap just by conserving, right?

I'm not sure what the answer was exactly, but I think it was, yes.
I'm sorry, my head is spinning a little bit.
Xcel was 27-28% renewable in 2017
Similar in 2018
Will be to 50% renewable by 2026, under current plan

When their new plan is filed in 2020-2021, that's when we'll have a better idea of how close they are to their stated goals.
Bc it will look through 2029 mix of sources
For Xcel to achieve its goals, Four coal plants require
early retirement (Hayden 2, Craig 2 and Pawnee by 2030; Comanche 3 by 2050)
At least 600 MW of natural gas would also need to be retired by 2050.
Weaver: So in order to meet 2030 goal, they'd have to move the Pawnee retirement up by 11 years?
In my opinion, Lehrman says, yes.
Weaver: Is Xcel planning to close the others, in their current clean energy plan?
Lehrman: No. Not by 2030.
OK, my head is spinning again with all the dates. UGH, muni makes me feel the worst as a reporter bc I'm so bad at it.
Friend: Do we have any right to object to Xcel's requested delay to file their new clean energy plan?
Not sure on the response to that. Didn't hear anything definitive from staff.
Wallach: What's the enforceability of these requirements? If they get to 2046 or 2050 and they want delays..?
That's cute, that he thinks we'll still have a habitable planet and a functioning society by 2050.
Sorry, I know pessimism is defeatist. I promise I'm doing things to try and help!
Joseph asked about equity for low-income residents, under-served areas, etc. I missed the exact q, but staff was going over efforts to add solar to BHP properties and Ponderosa, etc.
Weaver asks staff to go over the Just Transition efforts; it's a partnership with CU to make sure the city's climate goals "are done in a way that do not harm individuals," engagement manager Sarah Huntley says, "and don't create a larger gap between the have and the have nots."
Huntley: A lot of clean technology is very expensive, so that's inequitable. And lower-income residents tend to be more impacted by climate change.
Huntley: We've been talking about how not to have equity just as a part of the plan, but having it drive and inform climate planning.
Young: To electrify your house and move away from gas appliances is quite a challenge and probably inaccessible to many residents. How does that work into the plan?
Catanach: I'm going to get a little bit visionary.
"It is a valid question: How do we facilitate something that can be very, very expensive, especially if you're looking at an older home that is just inadequate for electric conversion."
There was an estimate of how much this would cost to do for the entire city in a presentation. I don't remember what it was, but it was A LOT.
Catanach talking about business models. I'm fading...
Weaver: We're shooting for 100% renewables by 2030 but not emissions by then, in acknowledgement of the fact that there are still gas furnaces, etc.
Young: Yes but if we're going to transition... it still requires that infrastructure change to get the emissions reduction, which is ultimately what we want.
OMG Young just gave the most Boulder re-do of a classic phrase: "That's where the rubber meets the road or (rather) where the solar power meets the roof."
Friend: Is it worth considering asking the voters in 2020 should we do the muni, especially since some ppl are planning their own ballot measure?
Carr: We'll have a study session in May where council will consider ballot measures to pursue. That's why we're having a muni check-in and budget discussion in April.
Young: What additional bills may be introduced in Colorado leg this session that might change the situation? We'll know those in April/May and what has passed.
Brockett: "It seems like 2021 is the year we want to present voters with as much info as possible. Let's keep working it."
Weaver: "It's been obvious to me that 2020 was getting farther and farther away." Our objective from voters was give us as much info as possible so we can decide. That's what we need to do.
Swetlik: We have "decades and decades" of proof that co. consider it cheaper to cheat and pay a fine than achieve goals. That's why it's important to continue on this path, bc you can't trust shareholder-led companies.
Weaver putting in another plug for that financial forecast tool.

Guess I'll have to give up a weekend night and see what it takes to break the muni.
*Le sigh*
Yates: I know there are so many assumptions that go into stranded cost. But it would be helpful for you guys to give some ranges. Are we talking the Dif between $0 and $10M? Or $0 and $100M?
"I don't have any conception of what the mid case and high case... Idk how many 0s are behind that number."
Catanach: We can do that.
It's more likely Boulder will pay that over time as part of transmission costs, not as a one-time cost, so that complicates things.
Interesting q b4 council now: Should they debate recent state law and Xcel goal and if they make the muni make less sense?
Brockett: I think it would be helpful to get a sense of benefits and costs. But Xcel's commitments aren't the same as data points; they're promises. But an analysis of muni vs other outcomes would be helpful.
Young: How does local power compare in its ability to serve the most ppl and in an equitable way? And how are workers affected? Those are qs I'd like to see answers to.
Weaver: "I very much want to track this. I don't think we can *not* do this."

There are other values than cost, which we talk a lot about. Democratize and decentralize.
Democratize is what ppl don't focus on and they should. Burying the lines, developing micro grids so neighborhoods that can provide their own power — both of those are going to become more important for resilience in the face of climate change.
(That was Weaver, btw.) He's still talking: We asked if city staff could be involved in any way in Xcel's distribution planning in Boulder. The answer was no, "and not a soft no."
Safety is also a consideration, when we consider the risk of wildfire. Shareholder utilities have worse maintenance than municipal ones bc munis are responsible to the voters, he says, referencing PG&E in Cali.
Wow, that's the end of this meeting. Really snuck up on me.
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