Steve Pomerance

On Tuesday night the City Council had a useful discussion on possible sales tax ballot items for the open space and transportation departments and the general fund. Their discussions yielded significant improvements over the proposal that was floated at previous meetings. And many council members have finally acknowledged that there are some serious problems coming for the city’s transportation system that are not going to be solved by a few million additional dollars a year. Paramount of these is dealing with the impacts of growth and shifting funding to some form of user fee. But there was still the vestige of the idea that, just because Boulder voters re-approved in 1997 a 0.33 percent sales tax for open space, now set to expire in 2018, that they will meekly accept a new 0.33 percent sales tax that is partially for other purposes. Boulder voters are much more focused on how their money will be spent and whether there is real value to be gained, than whether the new taxes add up...

Xcel is spending massive sums of money chattering about the dangers of Boulder creating a green electric utility and firing criticisms at Boulder’s analyses. If all Xcel says were true, it would be in Xcel’s interest to stop its barrage of negativity and just let Boulder pursue its own future. Then, if the disaster that Xcel keeps predicting actually occurs, other cities would not even think about following Boulder toward a cleaner energy future. And Xcel’s nearly $700 million of pre-tax income from Colorado would be protected forever. Or at least until ratepayers revolt over skyrocketing rates from rapidly increasing coal costs, and carbon taxes make an albatross of Xcel’s new billion dollar Comanche 3 coal plant. ( sourcewatch.org/index.php /Existing_U.S._Coal_Plants) In spite of essentially flat electric sales, Xcel’s Colorado pre-tax/after-expense income more than doubled in six years — from $323 million in 2006 to $690 million in 2012 (per PSCo’s 10K filings.) So the $8.2 mill...

Boulder’s open space program has probably provided more benefits to Boulder residents than any other single program. Our prime water supply, the 55-foot height limit, the Blue Line, the Boulder Valley Comprehensive Plan, etc. all are important. But open space has provided us with unparalleled protection from sprawl and fantastic access to the outdoors. On Tuesday night, the City Council discussed options for extending the current open space taxes. Low interest rates and favorable land prices make this the time to go full out to complete the property purchase program. Here’s the way I see it: The council has already identified a long list of properties that it wants to acquire, called the Accelerated Acquisition Plan, estimated to cost nearly $90 million. It includes very visible parcels along the road to Lyons, and others east and south of town. In addition, the council is looking to open space to purchase oil and gas drilling rights, help build a regional trail network, and incr...

The Boulder City Council was on the right track Tuesday night when it unanimously approved a one-year fracking moratorium. Whether fracking can be done in a way that is environmentally benign is still an open question, but it is clear that this is not currently occurring on a consistent basis. So hitting the pause button until critical research is completed is the prudent thing to do. Whether the council will be able to hold that line after the first year is still an open question. It would have been a lot easier if the Legislature had moved forward on some of its fracking bills this session. But that would have required Gov. Hickenlooper to support the citizens rather than the oil and gas industry. Unfortunately, neither Tom Tancredo nor Scott Gessler, who are in the running to be his Republican opponent in 2014, represent a sufficient threat at this point to force the governor to shift his allegiance. Interestingly, new technology is emerging that could reduce fracking’s enviro...

Clearly, Xcel is behind the current attempt to amend Boulder’s charter in a way that could stop Boulder from creating a clean, innovative, and financially responsible electric utility. The proposed language was taken word-for-word from a poll Xcel did, and Xcel is intending to fund this effort to maintain its highly profitable monopoly. (See Camera stories of May 16 and 22.) Here’s what the initiative says, and what it means: The first paragraph requires that, “Before the utility issues any debt, voters must approve the amount of the utility’s debt limit and the total cost of debt repayment that the utility will incur…” This requires voter approval of both a debt limit and the total cost of debt repayment. This is much more stringent than even the Taxpayers Bill of Rights (TABOR). It forces a vote on the exact total cost of repayment, not on the maximum as TABOR requires. This means that the utility will have to guess at the final interest rate, because the vote will occur well b...

On April 26, the Boulder Planning Board finished its three-day review of the proposed annexation and development of the Hogan-Pancost property, located adjacent to the East Boulder Community Center. The city staff did not identify significant downsides in their memo, thereby effectively endorsing the project, but the planning board still turned down the annexation request 7-0. This unanimous vote raises fundamental questions about the suitability of the site for development in general, as well as about the proposed development plans in particular. City staff and the planning board members are smart, capable people. So how did they come down 180 degrees apart? Or, to generalize, when should city staff be advocates and when is their role to just provide information? The planning board had concerns about flooding, ground water, wetlands, riparian areas and neighborhood impact. All these issues are covered by policies in the Boulder Valley Comprehensive Plan, with which annexations m...

This title is a combination of “creative destruction,” that which occurs when innovation destroys an economic system, and the thesis of “Disruptive Challenges,” a paper that discusses the impact of distributed renewable energy on the utility business model. This study was prepared for the Edison Electric Institute, an association of U.S. investor-owned electric companies, and is on their website. In recent years, utility regulators, public interest groups, and even utility companies themselves have asked whether the changes that are coming will disrupt their business and regulatory models in the way that that mini-mills changed the steel industry, or the internet and cell phones changed the Ma Bell telephone companies. If that happens, history may be repeated, with current players being replaced by newer, more nimble competitors and the whole economic structure reconfigured. On the supply side, photovoltaic cells, wind turbines, gas-powered micro-turbines and fuel cells like Bloo...

Xcel Energy, in what appears to be an attempt to gain a PR victory to try to stop Boulder from creating a municipal electric utility to escape from Xcel’s coal-intensive monopoly, asked the city to engage in yet another last-moment process. I fully expect Xcel to use this to try to kill the muni process so it can keep its Boulder customer base. The first four Xcel-City processes in the last five years produced little to nothing of value: The first was SmartGridCity, which Xcel promised to be the Holy Grail by helping integrate solar, wind, and demand management, providing real time billing and information, and costing the ratepayers nothing. SGC ended up producing little of customer value, and ratepayers are already on the hook for nearly $30 million of its costs. Then came the franchise negotiations, in which Xcel basically stonewalled the city. After the vote on the occupation tax that replaced the franchise came the city’s offer to Xcel to be its “laboratory” , where Xcel could ...

What got me thinking about this topic was the article in the Camera a few days ago announcing the upcoming debate on fracking between County Commissioner Elise Jones and Governor John Hickenlooper. To quote the Camera, “the goal of the 45-minute session is to provide a state-versus-local perspective on the effects of fracking, including public health concerns, the environmental impacts and local economic considerations.” To me, an equally important issue is the use of natural gas as the “transition fuel.” Hickenlooper speaks of it this way, but if he really grasped its significance, he’d be raising a whole host of other issues. Of primary importance is that methane (70-90 percent of natural gas) is a potent greenhouse gas that, per the EPA, has 25 times the global warming potential of CO2 over a 100-year period, with the effect concentrated in the first decades. Although burning methane may produce half as much CO2 per unit of electric energy produced as coal, any gas leaking from ...

Investor owned utilities, like Xcel, that own their own generation, transmission and distribution, make money by investing their equity capital and borrowed debt in hardware (power plants, transmission lines, etc.) and earning a regulated rate of return on these investments. This rate of return is determined by the Public Utilities Commission and is ultimately set by looking at other utilities in similar circumstances. This somewhat circular process, together with the ability of utilities to spend large sums on legal and accounting staff, has led to a double whammy of high returns on equity (over 10 percent/year) with very low risk, witness the PUC allowing Xcel to recover $29 million back on its SmartGridCity debacle. So these monopolies are completely unlike normal companies, which must perform competitively to make any money at all. That’s the regulatory “bargain” we all have had to live with. Because the return on equity is so certain, it becomes in effect a relatively fixed ob...