Xcel Energy Inc. and Boulder have reached an impasse in negotiations for the utility to provide wind power to the city, leaving the utility's future with the city in doubt.
Before Xcel's last 20-year franchise agreement with Boulder expired last year, the city started exploring whether to create a municipally owned utility as part of efforts to reduce greenhouse gas emissions and get more energy from renewable sources.
State law requires Xcel to get 30 percent of its power from renewable sources by 2020. But in May, Xcel offered to use wind power to supply 90 percent of Boulder's energy, with the average residential customer paying about $4 extra per month to help cover costs of building a new wind farm in eastern Colorado, if the city would enter another 20-year agreement.
City staff and some City Council members expressed concerns about how much financial risk the city would assume under that proposal. Talks to resolve those concerns broke down this week, but Xcel and Boulder disagree over whose fault that is.
Xcel said it wanted the city to ask voters to decide among Xcel's wind proposal, a municipally owned utility, or having Xcel serve the city for 20 more years without the wind proposal. It contends the city balked on the last option, prompting talks on the wind deal to end.
The city says City Council members unanimously indicated in June that they don't want to consider a standalone franchise agreement with Xcel, without the wind deal.
City Manager Jane Brautigam said in a written statement that a franchise by itself would tie the city to a long-term energy future largely dependent on investments in coal and a business model that prevents local decisions on energy. "This runs contrary to the goals Boulder wants to achieve," she said.
The city contends the impasse resulted because Xcel refused to agree to a wind deal unless voters also were asked about a standalone franchise with Xcel.
Xcel officials said they simply don't want to limit voters' options. It contends a municipal utility wouldn't necessarily keep customers' rates comparable to what they are now or offer as much renewable energy as Xcel's wind proposal.
"If customers don't want more renewable energy, they should have the option to stay with Xcel," said Paula Connelly, managing attorney with Xcel.
City Council members are set to consider potential ballot language Tuesday. Connelly said Xcel is optimistic city leaders could put the wind deal back on the table.
For now, Xcel is still providing Boulder with electricity.