‘Editorial: Don Quixote and the muni’

Copied below in its entirety from the Daily Camera:

William Michals as Don Quixote in the Arvada Center’s production of "Man of La Mancha" in 2013.

William Michals as Don Quixote in the Arvada Center’s production of “Man of La Mancha” in 2013. (P. Switzer / The Denver Post)

Gene Camp’s recommendation that the Colorado Public Utilities Commission reject the separation plan Boulder submitted to establish a municipal electric utility sets up an interesting test of City Council’s relationship with the real world.

Camp is the PUC’s chief engineer and manages its energy section staff. As always, anything is possible, but his recommendation is a serious blow to Boulder’s hopes of establishing a municipal electric utility anytime soon. If the commission agrees with the staff recommendation and rejects Boulder’s current application, the city will go back to the drawing board yet again.

Not as damaging but just as telling was testimony before the PUC by IBM, a major city employer, which expressed doubts about Boulder’s ability to provide the risk-free electric service it requires and asked that its campus be excluded from the separation plan the city proposed.

If you ever read Don Quixote, you have a feel for how this tale is going. Our heroes have virtuous hearts, but their grasp of reality is in doubt.

There are two skill sets required to make the muni happen. One is envisioning it. The city has that covered. The other is the practical ability to negotiate the regulatory and legal landscape to move the ball forward. That’s another story.

Facts, as John Adams pointed out, are stubborn things. Here’s the record so far: In its sixth year, something between $10 million and $20 million spent, and no progress toward the goal. None. In proceedings before the PUC, Boulder District Court and the Federal Energy Regulatory Commission, the city’s plans and proposals have been repeatedly rejected.

Its biggest victory so far was the announcement last fall that its application to the PUC was finally complete. That’s the application Camp now recommends be rejected.

We do not have room to go into all the problems Camp enumerated with that application. In the end, the difficulties trying to separate Xcel infrastructure designed and built to serve both city and non-city customers is proving to be an enormous problem. Boulder’s initial solution was to serve customers both inside and outside the city with its municipal utility. The PUC shot that down. Now Boulder proposes a complicated arrangement in which it takes over Xcel equipment, then leases it back to the company, which would be required to continue to operate it during a transition period. Camp expressed doubt that the PUC has the authority to require Xcel to participate in such an arrangement and predicted Xcel would challenge its authority to do so in court.

The good news for the muni advocates is that Camp acknowledged Boulder has a legal right to municipalize and sets out a path to do so within the bounds of established PUC authority. The bad news is it puts Boulder’s takeover of Xcel’s infrastructure at the end of the process and requires Boulder to pay for replacement infrastructure to serve Xcel’s non-city customers first. That bill would be calculated by Xcel and would include its PUC-authorized rate of return, its standard profit margin. This process could extend both the timetable and up-front costs unpredictably before Boulder’s prospective utility owns anything or is generating any revenue.

For those who remember their Don Quixote, adopting this plan might be the Second Sally, which included tilting at windmills. Or possibly the third; we’re losing track.

Last summer, with some fanfare, the city and Xcel announced jointly that they were in settlement talks and might have a new franchise agreement laden with green energy cherries ready for the 2016 ballot that would put this quest to rest. Then? Crickets. The muni’s true believers pulled on the reins and council’s support of the settlement talks withered.

That was the situation prior to the release of Camp’s recommendation. The question is whether this latest bad news has any impact on the five council members who have ignored every legal and regulatory defeat so far. If they wait until the PUC decision, expected this spring, and it goes against them, their bargaining position at the table with Xcel will reach a new low. At some point, their fiduciary responsibility to taxpayers must come into play.

What behavioral psychologists call consistency and commitment tendency is strong with the muni’s slender council majority. They have been shouting out and pounding in their advocacy for years. As time goes on, it gets harder and harder to reverse course, even as events continue to rain blows on the project’s prospects.

We are not saying they are wrong on the merits. Frankly, even six years in, we are so lacking in reliable information about the ultimate costs, service and power sources of a municipal utility, we find it impossible to say.

We are saying they are not getting anywhere. They are not making any practical progress toward their goal. They are spending money and spinning their wheels. You can blame Xcel, you can blame the PUC, you can blame Donald Trump for all it matters. The reasons are less important than the results. If there is to be a settlement, now is the time, before the city’s last bit of leverage slips away with an adverse PUC ruling this spring.

Having made no progress so far, two options are on the table. Those five council members — Matt Appelbaum, Suzanne Jones, Lisa Morzel, Sam Weaver and Mary Young — could commit Boulder to another bruising election campaign this fall in a bid to extend the muni tax and keep this Don Quixote quest going. Or, one or more of them could decide that this is one of those times when discretion is the better part of valor.

—Dave Krieger, for the editorial board. Email: kriegerd@dailycamera.com. Twitter:@DaveKrieger 

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s