Carbondale – It was an offer Scott Chaplin and the other town trustees thought Xcel Energy Inc. couldn’t refuse.
Why not add a few thousand dollars for solar-powered panels on the town hall and a couple of schools as part of the city’s renewed 15-year franchise agreement with Xcel, worth about $2 million a year to the utility?
The power company, however, had other ideas.
“Xcel’s basic argument for not wanting to put renewables in the franchise agreement was that if they did it for us, they would have to do it for everyone,” Chaplin said.
Denver and about 30 other Colorado municipalities are renegotiating utility franchises in the next five years and, in a unique move, the towns are using the talks to push Xcel for initiatives such as solar panels and energy-efficient lights.
The franchises do not affect rates, but regulate the public rights of way Xcel depends on to reach its 1.3 million electricity customers in the state.
November’s passage of Amendment 37, requiring Colorado utilities to get 10 percent of all energy from renewable sources by 2015, prompted several cities to try to alter the franchises, municipal officials said.
The amendment, which was opposed by Xcel, passed with 53 percent of the vote across the state and 63 percent in Denver.
As long as the proposed franchise programs fall under the amendment, the company and not ratepayers would foot the bill, according to Rick Gilliam, a senior energy adviser for Western Resource Advocates.
The Colorado franchise movement has no precedent in the nation, according to the Washington, D.C.-based Edison Electric Institute, the largest utility trade group.
“Typically, franchise agreements are narrow in scope,” said spokesman Jason Cuevas.
Xcel, while remaining committed to using renewable energy, opposes the franchise movement, believing the agreements are not the forum to discuss the issue, said spokeswoman Margarita Alarcon.
“These agreements are really about right of way,” she said. “It’s really boring stuff. We’re talking about painting power poles.”
If any municipality can change the boilerplate agreement, it is Denver, which has the utility’s largest customer base in the state – 550,000 people – and a mayor who set “environmental sustainability” as a priority.
Denver is being pressed by groups such as Western Resource Advocates and the Sierra Club to include more renewable energy and energy efficiency programs in the deal.
Talks are expected to wrap up next spring.
The franchise agreements run for 15 to 20 years and pay a municipality 2 to 3 percent of the amount the utility gets for electric service in that area. The Carbondale franchise fee last year was about $60,0000. Denver – whose franchise expires at the end of 2007 – received $12 million in 2002, according to the most recent figures available.
Denver City Attorney Cole Finegan declined to discuss the negotiations.
“We have been in constant contact with the environmental community and will look to see what mutual interests we share and promise to do what we can,” said Beth Conover, director of Denver’s Sustainable Development Initiative.
Since Denver is a home-rule city, the franchise will be put before voters. In 1986, the last franchise vote, turnout was 5 percent.
“Because Denver voted so overwhelmingly for Amendment 37, we think it’s important that there’s something in the the franchise agreement that addresses renewables and efficiency,” said Western Resource Advocates’ Gilliam. “We want to hold Xcel’s feet to the fire.”
So far, the utility has rejected requests made by several cities with lapsing agreements, including Louisville and Nederland.
Negotiations with Louisville broke down last year when the utility balked at pledging money for renewable energy or agreeing to give the city whatever it ends up giving Denver. Louisville agreed to a two-year extension of its agreement, in part to see what Denver gets, Mayor Chuck Sisk said.
Seeing other cities’ thorny negotiations with Xcel is one reason Boulder may switch to its own municipal system.
“They’ve made their own nest – they’ve not been receptive to this idea of energy efficiency,” Boulder Mayor Mark Ruzzin said.
On Tuesday, Boulder issued a statement saying Xcel, in violation of the franchise, had refused to provide financial data the city needs to decide whether to switch.
Boulder’s request is “premature,” said Xcel spokesman Mark Stutz. The financial data would have to be released when the city decides to take over the system, he said.
Xcel has a commitment to renewable energy, Alarcon said, noting a decision to purchase energy from wind farms near Lamar and Peetz. And in Carbondale, after the franchise agreement was signed, Xcel gave a community group a $27,000 grant to install the solar panels at town hall.
Staff writer Kim McGuire can be reached at 303-820-1240 or kmcguire@denverpost.com.
