Cities such as Denver and Boulder that are served by Xcel Energy don’t have a lot of options when it comes to finding alternative electric or gas providers.
That’s because Xcel, the state’s largest utility, owns the power lines and gas pipelines that run to homes and businesses.
“The bar to go elsewhere is very high,” said Boulder Mayor Mark Ruzzin.
Boulder has been exploring the possibility of creating a municipally owned electric system. But to do so would mean the city would have to acquire Xcel’s power lines, poles and other equipment, which could cost $100 million to $150 million, said Ruzzin.
A municipally owned system would allow Boulder to have more control over how the power it buys is generated. One benefit would be an ability to use more wind and solar power to help cut greenhouse-gas emissions, Ruzzin said.
On Monday, Denver said it had reached a 20-year franchise-renewal agreement with Xcel that would give the utility access to public rights of way for its power lines in exchange for $22 million in fees a year. The agreement must be approved by voters in August.
Boulder’s franchise agreement with Xcel expires in 2010, and Boulder and other Colorado cities are keenly interested in reviewing Denver’s agreement with Xcel.
“We’ll look at it and see if there are provisions in there that we think are important to us,” said Heather Balser, Louisville’s assistant city manager.
Louisville couldn’t reach a long-term franchise agreement with Xcel two years ago because of disagreements over Xcel’s commitment to renewable-energy sources and the length of a new contract. So it entered a franchise extension through July 15, 2007, intending to renegotiate once Denver completed its agreement, Balser said.
A number of Colorado cities – including Colorado Springs, Fort Collins, Glenwood Springs, Fort Morgan and Gunnison – own their electric-distribution systems. They contract with power providers for electricity.
Xcel spokesman Mark Stutz said one reason utilities such as Xcel have monopoly status is so that communities aren’t overrun with dual sets of expensive power lines. He said franchise agreements with cities give Xcel the right to use streets and alleys for its lines in exchange for a fixed fee.
“Unless you are going to do something drastic, I guess you renegotiate the (franchise) agreement and go with it,” he said.
Staff writer Steve McMillan can be reached at 303-820-1695 or smcmillan@ denverpost.com.
