Green. Local. Not-for-profit. That’s the goal in Boulder, Colorado where grassroots activists and the local nonprofit New Era Colorado Foundation have been campaigning to turn the city’s private power source into a public utility in order to more aggressively pursue renewable energy options and reduce carbon emissions. In November 2011, despite a massive financial effort to defeat them, two ballot measures passed narrowly that would allow for municipalization—the legal process whereby the city would form its own public utility company and purchase the infrastructure of the existing provider.
This year that existing large private corporation, Xcel Energy, has redoubled its effort to override this democratic decision by pushing new ballot measures on reducing government debt that would limit Boulder’s effort to move forward with the process. In response local community activists have turned to supporters throughout the nation and the world with an inspiring video andcrowd funding campaign that has gone viral in recent weeks.
Public utilities are far from a new or radical concept in the United States. Appearing in the first decades of building out the grid in the late 19th and early 20th century, they have always been an important part of providing energy to U.S. homes. In fact, more than 2,000 local public utilities currently supply power to nearly 46 million customers—along with cooperatives, they account for more than 25 percent of the nation’s total electricity sales and customers.
And the benefits of public power are readily apparent. Local control allows for an engaged citizenry to control the energy choices of their communities. Additionally, nonprofit public utilities do not answer to shareholders, and do not pay their executives exorbitant salaries, allowing them to deliver energy more inexpensively and return more of their revenue to local communities.
According to data from the American Public Power Association, on average customers of private companies pay 14 percent more than customers of public utilities. State and local governments benefit more too. Although public utilities do not pay taxes like traditional private utilities, they still transfer a greater percentage of total revenues to state and local government general funds — the median transfer from public utilities to state and local governments (in lieu of taxes) is 5.2 percent of revenues compared to a median of 3.9 percent for private energy corporations. Moreover, their nonprofit status also allows public utilities to drive their surplus into improving the grid and delivering better service. As a result of their difference in mission, customer relationships, and types of investments, public utilities are also anchor institutions that can leverage their resources to support the local community in ways that private utilities would not have the incentives to do so.
In Boulder, the idea of municipalization has been discussed since 2004. Over the subsequent six years, there were repeated attempts by Boulder citizens and council members to persuade Xcel to more aggressively increase its renewable energy portfolio. In the end, Boulder residents were not happy with an energy provider that derived more than 60 percent of its energy from coal and would not commit to achieving more than 30 percent renewables until 2028. As its 20-year franchise approached renewal, two ballots were drafted for voter approval in 2011. The first, Ballot Issue 2B would increase the utility occupation tax to fund the planning process. The second, Ballot Issue 2C would authorize the city to form the utility and issue bonds to buy the distribution system—providing that the new municipal utility’s rates would be equal to or less than Xcel’s. Despite Xcel outspending supporters of the initiatives by more than 10:1 (more than $1 million in total), both initiatives squeaked by. Barring a victory for Xcel in the coming election, the earliest that a municipal provider could come online would likely be 2017.
While municipalizations are not uncommon in the United States—indeed in recent years more public power utilities were formed (16) than were sold (13, and most of these to rural cooperatives)—many people on both sides of the Boulder effort recognize the importance of the outcome on the future of how energy is provided to communities throughout the United States. The amount of money and effort Xcel has put into fighting the citizens of Boulder on this issue is staggering. And in their video, the New Era Colorado Foundation sums up their larger goals, stating that: “If we can do it, maybe other communities will start wondering what the millions they pay in profits to their power provider can do in their city. And in fact communities are already starting to do just that. And that would be a symbolic defeat Xcel can’t have. If we win, we trigger a national model that can be replicated across the country.”