Clear Winners in the Municipalization Debate
By Zane Selvans
Moderator John Tayer (center) introduces the municipalization contenders. From left to right: Bellemare and Miller (against), Weaver and Regelson (for). Photo by the author (http://flic.kr/p/afzX1T)
PLAN-Boulder County put on a well structured and well attended debate of the utility municipalization question Monday night (August 22,2011) at the West Boulder Senior Center. The forum pitted Ken Regelson and Sam Weaver from Renewables YES against David Miller, representing the Boulder Smart Energy Coalition (which recently sent out a glossy Fear, Uncertainty and Doubt leaflet to many Boulder residents) and Bob Bellemare of UtiliPoint International — a consultant hired by Xcel Energy.
First, each side got to make a 10 minute introductory statement or presentation, followed by a series of pre-submitted questions posed by the moderator. Finally, written questions from the audience were vetted by Alan Boles, representing PLAN-Boulder, and passed on. Regelson and Weaver's PowerPoint presentation attempted to get across the basic results of the citizens' modeling effort. Among them:
We can achieve rate parity with Xcel while reducing CO2 emissions by 67%, using natural gas and a 40% renewables mix, if we assume start-up costs of $250M to $400M.
Coal and renewables simply can't play well together on the same grid. The renewables get curtailed because coal fired power takes a long time to turn on and off.
Xcel's business model, based on large existing investments in coal, can at most accommodate a 15% reduction in CO2 emissions.
David Miller was supportive of meeting Boulder's Climate Action Plan goals, but seemed unsure whether going after the emissions due to power generation was the best strategy, suggesting we might instead focus on demand side management, energy efficiency, and the use of renewable energy credits. As with the flier circulated by his organization, most of the points he made focused on uncertainties. Two points he made which I thought did warrant real concern were:
About 75% of Boulder's energy consumption is commercial/industrial, and that constituency isn't directly represented in the voting public.
It is important that we not let the municipal utility's revenues get entangled with the city's general funding, as it sets up all kinds of poor incentives for the organization, and leads to an opaque city revenue scheme.
All in all, Miller seemed earnest, but less informed than he ought to have been. Maybe that's not his fault — based on the PLAN-Boulder flier, it looks like Craig Eicher, Xcel's community affairs manager for Boulder, was supposed to be sitting in his seat. Bob Bellemare, on the other hand, seemed like a more practiced, more active hired gun. Among his recurring points:
Hardly anybody ever succeeds in this process; maybe one city every decade nationwide.
Once you vote in November to begin, it will be very difficult to actually stop the process, regardless of what "off ramps" you've supposedly put in place. The only way an exit ever seems to happen is by voting in a new city council.
Your cost estimates are wildly wrong. It will be much more expensive, and take much longer than you think. You will probably lose money.
There's no reason to think that your local monopoly (the municipal utility) will be any less monopolistic than Xcel.
The point about requiring the voting in of a new council to stop the process seemed like a thinly veiled political threat. Often the debate became one side asserting some number, and the other simply claiming it was wrong. Stranded costs, separation costs, fuel costs, interest rates, etc. At some point Bellemare claimed that Xcel was going to be shutting down half its coal plants, which got shocked and appalled looks from both Regelson and Weaver. Half? Really? Their counterclaim was that coal generation was going to drop from 2400MW to 2000MW (a 1/6 reduction, not 1/2).
When quantitative issues become he-said, she-said, all you can do is get someone to go look at the calculations or data. In this sense, I think the proponents of municipalization have a big advantage. Their models are all public. They're willing to have you examine their assumptions and check their work. Xcel, on the other hand, has been very cagey with their data, and unwilling to give detailed background on where their estimates are coming from (it took months just to get the city's power consumption profile… and only happened after Boulder had obtained similar data from Ft. Collins).
Bellemare and Miller (photo by Liz Payton)
Some of the audience questions were actually quite good. One requested that each debater disclose how much they were being paid (if anything) to participate, and by whom. Weaver and Regelson (and John Tayor, the PLAN-Boulder moderator) were volunteering their time without pay. Miller received a few hundred dollars from the Boulder Smart Energy Coalition. Bellemare is a paid consultant working for Xcel and "[his] financial arrangements are not a matter of public information."
At some point near the end of the debate, it became clear that the proponents of municipalization were winning pretty unambiguously in terms of both information and eloquence, and they became a bit more aggressive. Miller claimed that obviously our rates would have to go up in a less carbon intensive scenario, as renewables are simply more expensive — just look at all the renewables assessments on our bills. Weaver took almost violent objection to this point, noting that wind is already the same price as coal; we just can't take advantage of it with the coal fired grid we've got today because of the baseload/curtailment issue. He further noted that while solar is more expensive today, it's dropped 40-50% in cost over the last 5 years to around $5.15 per installed watt, and if/when it gets to $2.75, it will be cheaper than grid power, at which point he envisions an explosion of distributed generation, "behind the meter" i.e., outside of Xcel's control, which he believes will prove disruptive to Xcel's business model. It came off as being somewhere between a warning and a threat.
Weaver and Regelson (photo by Liz Payton)
The final question, which came directly from the moderator, was on the larger consequences of the decisions being made, both for other communities watching the process, and for the future Boulder 10, 20 or even 50 years on. The proponents of municipalization clearly felt that we are attempting to set an example for others, of creating a scalable, replicable, financially and climatically responsible power system. One which a few decades hence they also expect Boulder ratepayers to be thankful for, due to much lower exposure to high and volatile fossil fuel prices. Miller held out hope that we would find a "third way" to achieve our goals, also setting an example for other communities, though he didn't lay out in any detail what such a third way would look like, and how it could work from within the confines of the Xcel energy system. Bellemare felt that regardless of the outcome of the election it would have little effect more broadly. Every franchise agreement is different, state regulations are different, what you learn in one place doesn't really transfer well to others. Should the ballot measure succeed, he expected 5 years of wrangling to get the utility set up, and another 5 years before we really figured out how to run it. Twenty or fifty years on? Well, who knows… If the ballot measure fails, he expects Xcel and Boulder to keep on working together as they have for years, continuing to build one of the nation's best energy efficiency programs. This inspired a pretty loud response from Regelson who noted that yes, we do have one of the best efficiency and renewables programs in the nation for an investor owned utility, but several municipal utilities do far better. Austin, TX and Sacramento, CA were mentioned as examples.
Based on their overall performance, it seemed pretty clear to me that the proponents of municipalization can win if they're given a fair forum. It's less clear to me how they will fare in the decidedly unfair landscape of full page newspaper ads, push polling, semi-anonymous glossy mailers, radio sound bites and yard signs. In those fora, money talks much louder than good information, and Xcel has a lot more money at their disposal.
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Post Published: August 23rd, 2011
Author(s): Zane Selvans
Found in section: Featured
Tags: bob bellemare, david miller, election 2011, energy, john tayer, ken regelson, municipalization, renewables, sam weaver, xcel
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One Response to "Clear Winners in the Municipalization Debate"
Regina Cowles says:
Excellent article! Sam Weaver emphasized how important it is for Boulder to exercise control over it's power supply, to make sure it is a cleaner and more ethical mix. I also liked the audience question asking what is wrong with squeezing out the profit in order to have power by the people, not power for profit. Very well-organized event by PLAN Boulder County. It was filmed and taped, I'm interested in knowing when it will air, if anyone knows?