On Tuesday, November 1, voters in Boulder, Colorado initiated the first steps toward replacing Xcel Energy Inc. (“Xcel”) and developing a city-owned electric utility.  The city of Boulder narrowly approved two separate measures relating to the creation of a municipal electric utility.  One ballot question asked voters to decide whether to authorize the creation of a locally run electric utility.  This utility would only be created once all start-up costs are determined, and if rates would be no more than those of Xcel, at the time of acquisition.  The other ballot question asked voters to extend and increase the Utility Occupation Tax for a limited time to fund the costs of exploring both the creation of a municipal electric utility and acquiring an existing electric distribution system. 

The city’s goal is to eventually separate the portion of the distribution system that serves Boulder from Xcel’s larger system and to provide electricity using existing facilities, accessing wholesale markets and possibly purchasing or building its own power generation.  (Natural gas service will continue to be provided by Xcel Energy).  The passage of both ballot measures does not mean that the municipalization of the power system is imminent; it simply gives the city the authority to take prospective steps towards this goal.  Additionally, Boulder could decide not to proceed with creating a local utility if the costs of acquiring the electrical distribution system are more than those allowed in the initial ballot measure.

Xcel has repeatedly stated that it does not intend to sell the assets used to serve Boulder, and has actively campaigned against the ballot measures.  To proceed without Xcel’s consent, Boulder will have to condemn the assets through a public domain process.  While the first step is for Boulder to make a good faith offer to Xcel, Tuesday’s election outcome has set the stage for lengthy negotiations, hearings, and litigation that could continue for years to come.