Along with next Tuesday’s assorted primary skirmishes, the Denver ballot includes an item about the city’s business deal with utility Xcel Energy. The franchise renewal will add a modest amount to Xcel bills, with the money going to support city services, and there are provisions to expand renewable fuel sources in keeping with the mayor’s green initiative.
The franchise agreement is a 20-year contract that grants Xcel permission to operate in public right-of-ways. Mayor John Hickenlooper’s administration has worked for two years to update the city’s agreement with Xcel and is presenting it to voters for approval. It is Measure 1A on the Aug. 8 ballot, and we urge a “yes” vote.
Under the agreement, Xcel will pay an increased annual franchise fee, which contributes to the city’s financial stability. This year, it is expected to generate $22 million in revenues that help fund such things as public safety, parks and recreation and public works.
We want to emphasize that this isn’t some sort of corporate largesse: Xcel raises the money to pay its franchise fee from you and me. The utility charges customers directly to cover the fee and forks over the proceeds to the city.
The new agreement would restructure how the 3 percent franchise fee is applied. The current agreement exempts the first $12.50 of a customer’s bill, a provision that has been removed from the new proposal. That change is expected to add an estimated $9 a year – 75 cents a month – to the average Xcel bill, and it will bring in about $2 million more in city revenue each year.
Under the proposal, the increased revenue will be used to help low-income people heat and cool their homes. The poorest among us are the most vulnerable when the weather turns extreme, and we think this is a good use of the new franchise revenue.
The new agreement also has the utility paying the cost of relocating gas pipes and electrical lines on construction projects that are at least 50 percent funded by government entities, such as FasTracks. This will benefit the city to the tune of about $60 million over the life of the agreement.
And the agreement would have the utility contribute $200,000 to a solar power pilot project. Xcel also would buy up to 22 megawatts of hydroelectric power from Denver Water during the next 20 years.
If voters were to reject the measure, the city would renegotiate and present voters with a new deal.
Thus far, Measure 1A has garnered no discernable opposition. We see benefits for the city under the new Xcel agreement and hope it meets with voter support.
