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BEFORE THE PUBLIC UTILITIES COMMISSION OF THE STATE OF COLORADO
* * * * * IN THE MATTER OF THE APPLICATION OF THE CITY OF BOULDER, COLORADO FOR APPROVAL OF THE PROPOSED TRANSFER OF ASSETS FROM PUBLIC SERVICE COMPANY OF COLORADO TO THE CITY AND ASSOCIATED AUTHORIZATIONS AND RELIEF
VERIFIED APPLICATION
OF THE CITY OF BOULDER
PROCEEDING NO. 15A-____E JULY 7, 2015
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BEFORE THE PUBLIC UTILITIES COMMISSION OF THE STATE OF COLORADO
* * * * * IN THE MATTER OF THE APPLICATION OF THE CITY OF BOULDER, COLORADO FOR APPROVAL OF THE PROPOSED TRANSFER OF ASSETS FROM PUBLIC SERVICE COMPANY OF COLORADO TO THE CITY AND ASSOCIATED AUTHORIZATIONS AND RELIEF
) ) ) ) ) ) ) )
PROCEEDING NO. 15A-____E
VERIFIED APPLICATION
OF THE CITY OF BOULDER, COLORADO
The City of Boulder, Colorado (the City or Boulder), pursuant to 40-5-101(b) and
40-5-105, Colorado Revised Statutes and Commission Rule 4 CCR 723-3-3104, respectfully
submits this application to the Colorado Public Utilities Commission (the PUC or
Commission) for approval of the transfer of certain assets owned by Public Service Company
of Colorado (PSCo) to the City which are necessary for the operation of a municipal electric
utility pursuant to Article XIII of the Boulder Home Rule Charter and Article XX, Sections 1 and
6 of the Colorado Constitution, and for associated authorizations and relief described in this
Verified Application.
I. SUMMARY OF APPLICATION
Boulder is asking the Commission to approve the transfer of distribution assets necessary
for the operation of the Citys municipally-owned electric utility. As part of this request,
Boulder is not seeking the transfer of generation assets or major transmission assets. Rather,
Boulders request includes the electric facilities within the buffer created by Boulders purchase
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July 7, 2015 Page 2 of 34
of open space. The Citys proposed transfer includes PSCo facilities necessary for the City to
create the utility of the future in the near term.
Electric distribution systems are not designed to respect municipal boundaries. Rather,
they are designed to serve electric load in an efficient manner. In the Boulder area, that load is
nearly entirely inside the buffer created by the thousands of acres of open space that now ring the
City. Because Boulder has purchased surrounding open space over the past 50 years, Boulder
may be in the unique position of being one of the few cities on Colorados densely populated
Front Range that is able to fairly cleanly separate from its current electric utility provider.
Consequently, when Boulder examined PSCos existing distribution system to determine
the technically optimal location to separate ownership between a municipal electric system and
PSCos system, the Citys engineers recommended that Boulder take ownership of the facilities
within the open space buffers. This includes distribution feeders that cross enclaves within
Boulder (i.e., pockets of land that have not been incorporated into the City) and weave back and
forth across the jagged municipal boundaries at the Citys perimeter.
The Acquisition Area, inside which Boulder seeks Commission approval for the
transfer of assets from PSCo to the City, is described and depicted in the Direct Testimony of
Boulder witness Tom Ghidossi, P.E. of Exponential Engineering Company. As Mr. Ghidossi
describes, this plan for separating ownership at the Acquisition Area boundary follows industry
standards and good engineering practices, and incorporates the same terms of facility sharing that
Boulder and PSCo previously negotiated for their shared presence at the Citys Boulder Canyon
Hydroelectric Plant. This plan maintains operation of the system as it is currently operated
today, which maintains reliability as it exists today. It sets clear boundaries between the two
systems, and clearly delineates responsibility for outage management and customer service
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responsibilities, protecting the safety of line workers and the general public. The plan also
minimizes the number of interconnections between the two systems, a key factor in maintaining
reliability.
It is both commonplace and straight-forward for one utility to rely on another utilitys
facilities to, in part, deliver electricity to its customers. Co-locating facilities in substations,
sharing poles, and wheeling power over another utilitys lines, as Boulder is proposing in this
Application, are all done everyday across the country, including Colorado.
Recognizing PSCos right to serve its customers located outside the Citys boundaries,
Boulder is proposing that PSCo wheel electricity across Boulders distribution facilities to
serve those PSCo customers located within the Acquisition Area, but outside the Citys
jurisdictional limits (PSCo Customers in the Acquisition Area). The Citys proposed PUC-
jurisdictional wheeling arrangement is designed to ensure cost comparability in terms of the cost
for PSCo to serve the PSCo Customers in the Acquisition Area using PSCo-owned facilities, as
compared to the cost for PSCo to serve those same customers over the same facilities when
owned by the City. When implemented, the cost of wheeling service to these customers should
result in distribution charges to PSCo, presumably to be passed on to its customers, that are
comparable to the current PSCo charges for distribution across the very same lines. Further,
PSCo will receive compensation from the City in the future when Boulder acquires these
distribution facilities through negotiation or condemnation and will no longer have the expense
of maintaining those lines.
The City is also proposing a distribution wheeling arrangement to the Points of
Interconnection (those nine points at which the Citys system would be connected to the PSCo
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system) that would be governed by a tariff that meets the reciprocity requirement under the PSCo
Open Access Transmission Tariff (OATT), as determined by the FERC.
A critical component of Boulders acquisition plan is ensuring that the safety and
reliability of the system that serves PSCo Customers in the Acquisition Area will not fall below
the levels those customers currently enjoy. To that end, Boulders plan recognizes that how
outages will be handled, how meters will be read and how billing data will be shared with PSCo
must be addressed through a transition plan. Further, to enable PSCo to provide reliable service
to PSCo Customers in the Acquisition Area and assure the Commission of the Citys
commitment to service quality, the City is willing to commit that the ongoing reliability of the
distribution wheeling service the City provides PSCo will be the same as or better than the
reliability those customers currently enjoy. The City proposes that the particulars of this
commitment be resolved in negotiations between PSCo and the City or, if necessary, by the
Commission as part of a transition plan filing or separate rate filing.
For several years now, Boulder has advised the Commission of its desire to form its own
electric utility, and has expressly recognized the importance of ensuring PSCos other ratepayers
would not be negatively affected by Boulders departure. This is particularly true in the area of
generation. In this Application, Boulder proposes a transitional power supply arrangement with
PSCo for a designated period of time. Initially, Boulder proposes to enter into a wholesale
power supply agreement with PSCo to serve all of the Citys energy and capacity requirements.
Then, over time, Boulder proposes to leave the PSCo system gradually, while simultaneously
allowing PSCos non-Boulder native load to absorb, in increasing blocks, the capacity that was
previously dedicated to meet the Citys electric demand in lieu of paying for the construction of
new facilities or the costs of new power supply contracts. As contemplated, this simultaneous
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exchange will take place in a time frame consistent with PSCos forecasted future resource
needs. This approach not only helps ease the transition of Boulders departure from the PSCo
system, but it also helps to protect PSCo and its customers by promoting a least cost approach
that avoids unnecessary investment in duplicative facilities or contracted generating capacity.
Boulder is requesting the Commissions endorsement of this plan, as presented in greater detail
in the Citys prayer for relief.
Finally, Boulder has been working for quite some time to develop a transition plan that
would make the transfer of assets and the start up of the new municipal electric utility as
seamless as possible for customers inside and outside the City. In the testimony provided in
support of this Application, Boulders witnesses explain the work that has been done and will
continue to be done until Boulder is actually operating the new electric utility, Boulder Light &
Power. At the conclusion of this proceeding, Boulder will attempt to work with PSCo to develop
a joint transition plan that is beneficial to the Citys and PSCos respective customers. Boulder
will return to the Commission for approval of a joint transition plan or, if agreement with PSCo
is not possible, Boulders transition plan. Boulder is requesting the Commission to encourage
PSCo to work with the City to develop a joint plan.
Boulders objective in forming a municipal electric utility is greater local control and
self-determination over its electric delivery system and supply. This includes the Citys goals of
democratization, decentralization and decarbonization of its power supply.
Boulder acknowledges the Commissions role in ensuring that the transition is as
seamless and minimally disruptive as possible for customers. The City further acknowledges
and appreciates the Commissions guidance in ensuring the Citys Application is not contrary to
the public interest through its review of safety, reliability and service quality issues. For all the
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reasons provided in its Application and accompanying testimony, Boulder maintains that the
Application is not contrary to the public interest when considering the interests of customers,
whether inside or outside Boulders city boundaries.
II. BOULDERS ENERGY STORY
The City of Boulder is located 35 miles northwest of Denver and has a population of just
over 100,000 residents. Nestled at the base of the Flatirons, the City has a strong and
longstanding commitment to environmental stewardshipto creating a community reflective of
its idyllic setting. The Citys legacy in conserving its lands stretches back to 1898, when
forward-thinking community members voted to purchase and preserve property that is now home
to the historic Colorado Chautauqua. Around the same time, the City first considered forming its
own electric utility.
Boulders legacy is the 65 square miles of City-owned open space that create a buffer
between it and other cities, but the communitys dedication to sustainability has evolved beyond
maintaining diverse ecosystems and creating well-traveled public trails. The community is home
to climate scientists, progressive activists, and outdoors enthusiasts, all of whom drove the City
to take action related to climate change. Boulder is home to the University of Colorado at
Boulder and its more than 30,000 students, faculty and staff, as well as several federal
laboratories, including the National Center for Atmospheric Research, National Institute for
Standards and Technology, and the National Oceanic and Atmospheric Administration. These
institutions contribute to a vibrant local economy, with significant industry clusters in clean
tech, natural and organic foods, and active living and recreation.
In 2002, the City became one of the first cities in the nation to pass a resolution
supporting the Kyoto Protocol, establishing a goal of reducing greenhouse gas emissions
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(GHGs) by seven percent below 1990 levels by 2012. The community voted its support,
funding programs and ordinances designed to increase energy efficiency and investments in local
solar through the nations first carbon tax: the Climate Action Plan Tax (CAP Tax). The CAP
Tax is assessed on a customers electricity consumption and is included on customers electric
bills. Consumption of electricity is the single largest source of GHGs attributable to the Boulder
community, making efficient and renewable electricity use the focus of Boulders climate action
efforts.
Boulder is a leading community in environmental awareness and action. In 2006, the
City became one of the first communities to adopt a residential green building code and, in 2010,
Boulder adopted a rental housing energy efficiency ordinance. In 2011, Boulder piloted an
energy advising service called Two Techs and a Truck, designed in collaboration with
community volunteers. This service is now being implemented as EnergySmart through Boulder
County and the City and County of Denver, and is funded by a $25 million American Recovery
and Reinvestment Act grant. With as many as 70 percent of homeowners who participate in the
program installing one or more energy efficiency measure, the program is a national model of
success.
The Citys franchise with PSCo expired at the end of 2010. Years of analysis and
community outreach drove the City, and the community, to ask PSCo for a stronger commitment
to green its electricity supply and offer more innovative, collaborative, services.
Unfortunately, PSCo felt it was unable to provide the City with what it wanted, pleading that the
restrictions of traditional utility regulation prevented it from providing Boulder with anything it
did not offer to other communities. As with most franchise agreements, the PSCo franchise with
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the City anticipated the Citys departure from the system and its right to construct, purchase or
condemn the public works and ways of PSCo.
In 2010, the City Council also adopted Energy Future goals that established the basis for
defining and evaluating energy options using community input on values and a vision for clean
energy. Not only do the values envision a low-carbon future, but one that connects a vibrant
private sector market with individual customers to create a dynamic, clean energy economy.
In 2011, Boulder voters supported a utility occupation tax that took the place of the
former electric franchise fee, but they also approved putting aside a portion of that funding to
study whether the City should form a local electric utility. This was not the first time Boulder
considered such an effort. However, while municipal utilities have historically been formed to
ensure low rates and high reliability, Boulders utility would have an additional, new impetus: a
clean energy supply delivered through a utility of the future that was responsive to local
conditions, resilient in the face of natural disasters, and as innovative as a community full of
start-ups, scientists, and educators could desire.
The City Council developed, and voters approved, a series of conditions that must be met
to determine whether this innovative local utility could be formed. These conditions, which are
in the City Charter, are:
Rates must be equal or less than those offered by PSCo at the time of acquisition.
The utility must have sufficient revenue to cover operating costs and debt, plus carry a
reserve of 25% of the debt payment, referred to as Debt Service Coverage Ratio.
Reliability must remain comparable to that being offered by PSCo.
There must be a plan to increase renewables.
There must be a plan to decrease greenhouse gas emissions.
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Article XIII of the Boulder Home Rule Charter is provided as Attachment 1 to this Application.
Nearly 100 community volunteers, many with deep subject matter expertise, have helped
Boulder explore the creation of a municipal electric utility over the past five years. Moreover,
extensive engineering analyses were conducted to understand the age and condition of the
system, and to forecast the kinds of investments that must be made to meet the communitys
objectives. This exploration has shown that a local utility could provide the community with
opportunities to decarbonizes its energy source, increase citizen participation in democratic
decision-making regarding their use of electricity, and decentralize its energy source through
expanded distributed generation.
Having survived the September 2013 flood, Boulder seeks to develop its own resilient
electric utility that meets the needs of its citizens. Weather patterns and natural disasters have
intensified, largely as a result of climate change. The City intends to operate its utilities in a
manner that can adapt to that new reality. A resilient utility will enable the City to both avoid
adding to climate change and deal with the effects of the changing climate.
Further, the energy industry itself is evolving. The City Council voted to pursue
acquisition of PSCos electric utility assetsviewing it as a step toward local self-determination
in a quickly changing energy environment.
III. BOULDERS QUALIFICATIONS
A. Overview of Boulder City Government
Boulder was incorporated on November 4, 1871. It is a Colorado home rule
municipality, established pursuant to Article XX of the Colorado Constitution. The Charter of
the City of Boulder, Colorado, adopted by a vote of the electorate on October 30, 1917, serves as
the source of the Citys authority and can only be amended by a vote of the Boulder electorate.
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Under both the state constitution and the Boulder Home Rule Charter, the City has the authority
to, among other things, acquire, maintain, and operate light plants, power plants, and any other
public utilities or works local in use and extent. See Colorado Constitution, Art. XX, 1 and 6,
and Boulder Home Rule Charter Section 2(d), provided as Attachments 2 and 3, for the full
text.
1. City Council
Boulder has a Council-Manager form of government, which has been in continuous
operation since January 1918. Under this form of government, the elected City Council sets the
policies for the operation of the Boulder government. The administrative responsibility of the
City rests with the City Manager, who is appointed by the City Council. The City Council
consists of nine members. The Mayor and Mayor Pro Tem are selected by the council members.
The current Mayor is Matt Appelbaum. The current Mayor Pro Tem is Suzanne Jones. Other
council members include Macon Cowles, George Karakehian, Tim Plass, Lisa Morzel, Andrew
Shoemaker, Sam Weaver and Mary Young.
Boulder conducts its general elections on the first Tuesday in November of odd
numbered years. All City elections are administered by the City Clerk.
Nine council members are elected at-large on a non-partisan basis for two- and four-year
terms. After each election, council members select one of their members to serve a two-year
term as mayor. Every two years (odd-numbered years), five council members are elected to
office. The four receiving the most votes serve four-year terms and the fifth person, receiving
the least number of votes, serves a two-year term.
City council appoints and sets salaries for its three direct reports, the City Manager, the
City Attorney and the municipal judge.
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Council meets regularly on the first and third Tuesday of each month at 6 p.m. in the
Council Chambers of the Municipal Building. All council meetings are open to the public.
2. City Manager
The City Manager is hired by council to handle the affairs of the City in accordance with
the policies set by City Council. The position is structured so all department heads are directly
or indirectly (through the Assistant City Manager or Deputy City Manager) responsible to the
City Manager. The City Manager is the Citys Chief administrative officer. The current City
Manager is Jane S. Brautigam. There are separate departments within the City, administered by
department heads who are hired by the City Manager. The Citys current organization chart is
provided as Attachment 4.
3. Boards and Commissions
Boulder has 23 boards and commissions. The members of these boards and
commissions advise the City Council with regard to a variety of matters including planning,
historic preservation, liquor licensing, human relations, environmental matters, the Citys
libraries, water resources and transportation.
B. Management and Employees
Boulder employs 1420 standard and temporary employees and another 747 seasonal
employees. Of those, 680 are members of collective bargaining units. The following unions
negotiate contracts on behalf of those collective bargaining units: Boulder Municipal
Employees Association, the International Association of Fire Fighters, and the Boulder Police
Officers Association.
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C. Financial Strength
According to the Citys most recent audited financials, total primary government assets
(including current and other assets and capital assets) for the City totaled $1.29 billion. Total
revenues, excluding transfers and extraordinary items, increased from 2012 to 2013 by $2.3
million, or 1%, to $271.6 million. Sales and use tax revenues constituted 45% of the Citys
General Fund. The assessed valuation for property within the City was $2.567 billion in 2013.
The General Fund is the primary operating fund of the City. At the end of 2013, the
unrestricted fund balance of the General Fund as $39.1 million, while the total fund balance
was $42.4 million. Unrestricted fund balance includes fund balance committed by City
Council, assigned by City management, and unassigned fund balance as disclosed in the
Governmental Fund Balance Sheet. As a measure of the General Funds liquidity, it is useful
to compare unassigned fund balance to total fund expenditures and transfers out. For 2013,
unassigned fund balance of $28.2 million represents 24% of total General Fund expenditures
and transfer out of $119.2 million.
As of December 31, 2013, the unrestricted net position of the Water Utility Fund was
$29.4 million, the Wastewater Utility Fund was $11.8 million, the Stormwater and Flood
Management Fund was $16.2 million, the Downtown Commercial District Fund was $5.1
million, the non-major enterprise funds were $1.2 million. The total increase in net position for
the proprietary funds was $11.1 million.
During 2013, the Citys general obligation credit ratings were established as Aa1 by
Moodys Investors Service and AAA by Standard & Poors. The primary reasons cited in the
past for these high rating levels have been the general strength of the Boulder economy, its
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distinctiveness from the general Denver metropolitan economy, and the lesser reliance of the
Citys General Fund on sales taxes when compared with other Colorado municipalities.
IV. DESCRIPTION OF ASSETS TO BE ACQUIRED
AND PLAN FOR INTERCONNECTION
The City seeks the transfer of all facilities serving Boulder customers within the
boundaries of the Acquisition Area, and the property interests associated with those facilities.
Specifically, the City requests the Commission approve the transfer of all PSCo distribution
facilities within the Acquisition Area including:
a. Overhead and underground distribution lines;
b. Distribution transformers (pole and pad mount);
c. Overhead and underground secondary and service conductors;
d. Fiber optic and other communications equipment associated with the
distribution system;
e. Meters and other equipment;
f. Easements and associated property rights for the electric distribution
system;
g. Streetlights and traffic signal lights owned by PSCo within the City limits;
and,
h. Secondary conductors serving streetlights within the Acquisition Area, but
outside the City limits, up to the load side of the Point of Delivery, as
defined in PSCos PUC-approved electric tariff.
Each of these items are identified and described more specifically in the Direct
Testimony of Thomas A. Ghidossi, P.E., which supports this Application. Mr. Ghidossi has
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prepared a list of assets to be transferred based on the best information available to him as of the
date of this filing. That list is as attached to the Direct Testimony of Mr. Ghidossi as
Confidential TAG-8, at PSCos request.
Mr. Ghidossis Direct Testimony also explains Boulders proposal with regard to the
interconnection of City and PSCo facilities. Because Boulder has dense development at its core,
and is surrounded by tens of thousands of acres of open space that create a buffer of land around
the City that cannot be developed, the electrical system has naturally developed to be technically
and geographically isolated from surrounding areas. As a result, Mr. Ghidossi determined that
only nine points of distribution system interconnection would be required to separate the electric
facilities serving Boulder from the portion of the PSCo system that serves other areas.
Separating the system in this way, and using practices common in the industry for shared
facilities, avoids the need for duplicate facilities and maintains the operation of the system as it is
operated by PSCo today. Because the system will continue to be operated after separation as it
was designed and is currently operated, the Citys plan for separating the ownership of the
system is not contrary to the public interest. Customers of both utilities will continue to enjoy
reliable service without losing any of the existing redundancy or capacity built into the system.
V. POWER WHEELING AND THE DISTRIBUTION ARRANGEMENT
The Citys requested transfer of assets from PSCo, if approved by the Commission, will
result in the City owning all of the electric distribution facilities within the Acquisition Area.
However, Boulder is proposing that, despite Boulders ownership of the distribution facilities,
PSCo continue to serve at retail the PSCo Customers in the Acquisition Area. Under this
proposal, PSCo would wheel power to those customers over Boulder-owned facilities - the same
facilities PSCo uses today.
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Boulder witness Mark Beauchamp presents the Citys approach and methodology for
entering into a wheeling arrangement with PSCo. This wheeling arrangement will enable PSCo
to continue to serve the PSCo Customers in the Acquisition Area. Mr. Beauchamp explains that
wheeling arrangements can be a cost-effective and efficient means of providing electric service
to customers. Wheeling, such as is proposed here, avoids needless duplication of electric
infrastructure and, as a result, provides additional cost benefits for customers in the form of
lower operation and maintenance (O&M) costs due to a reduced number of lines, lower
depreciation expense, and lower return on overall investment. This is particularly so,
considering that the Citys proposed wheeling arrangement is designed to ensure cost
comparability in terms of the cost for PSCo to serve the PSCo Customers in the Acquisition Area
using PSCo-owned facilities, as compared to the cost for PSCo to serve those same customers
over the same facilities when owned by the City. Mr. Beauchamp explains the Citys proposal to
charge PSCo a regulated, cost-based rate for wheeling distribution service comparable in design
to rates PSCo currently charges its customers for PSCos self-provisioned distribution service.
Mr. Beauchamp will show that the rates that the City intends to charge PSCo, which
presumably will be passed on to PSCos customers, are comparable to PSCos current cost to
serve these customers. As a result, Mr. Beauchamp testifies that if the Citys approach is
adopted, PSCo customers throughout the state, including PSCos Customers in the Acquisition
Area, will be unharmed by the approval of Boulders proposed transfer of assets, and may
actually enjoy certain cost benefits and advantages from the wheeling arrangement that are not
available to them today.
Boulder has not yet developed an initial rate or a formula by which to calculate this rate
for several reasons. First, the City must still negotiate the terms and conditions of its wheeling
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arrangements with PSCo. Second, Boulder has not finalized its acquisition of the facilities
located within the City, and thus has not finalized the corresponding debt service levels. As a
result, a final budget has not been (and cannot be) established at this stage to allow proper
determination of revenue requirements. Third, the City is unable to calculate the rate because it
lacks some specific information that PSCo possesses with respect to the facilities to be
transferred as well as usage information for all the customers. Once this information is known,
and once the above-referenced wheeling arrangements are negotiated, the City can calculate its
initial formula rate for wheeling distribution service and set the formula for changes to that rate
going forward. Of course, given PSCos role in negotiating and providing pertinent cost
information, a cooperative and collaborative approach with PSCo would help Boulders efforts
to develop a reasonable rate. Having said that, if negotiations are unsuccessful, the City would
intend to file a tariff for this wheeling service with the Commission to set the applicable rates,
terms, and conditions. Either way, the City will seek Commission approval before this charge is
implemented.
VI. THE CITYS COMMITMENT TO SERVICE QUALITY,
SAFETY AND RELIABILITY
The City has developed a plan for the Startup, Transition and Ongoing Operations
periods (each defined in the Direct Testimony of Boulder witness Robert J. Harberg). This plan
identifies the key tasks necessary to prepare the City to operate the electric distribution system.
It continues to evolve as circumstances change and more information becomes available. The
plan was developed based on the requirements of Article XIII of the Boulder Home Rule
Charter, which states:
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The utilitys foremost responsibilities will be to provide electric power that is high quality and dependable, support economic vitality, prevent service outages, and respond promptly to any service outage.
The plan, however, is not being presented to the Commission for approval at this time.
Boulder hopes to successfully negotiate the terms of a transition plan with PSCo. If the plan is
successfully negotiated with PSCo, the plan will be submitted to the Commission for its
approval. If negotiation is not possible, the City intends to submit its own transition plan to the
Commission for review and approval prior to the conclusion of a condemnation case.
Boulder intends to employ a combination of in-house resources and personnel, along with
contracted resources and personnel, to perform the tasks needed during Startup, the Transition
Period and Ongoing Operations. This is common practice with all utilities. Mr. Harberg
describes just some of the Citys existing capabilities that can be leveraged and extended to
Boulder Light & Power.
The City is committed to providing reliable and safe electric service. Mr. Harberg
explains the reliability measurements that Boulder Light & Power will use to measure the
performance of the system: total duration of interruption during the year (SAIDI), frequency of
outages during the year (SAIFI) and average time required to restore service (CAIDI), and the
metrics the City will use to determine whether its goal of providing safe, reliable electric service
has been met. Mr. Harberg also discusses the Citys focus on resilience, its emergency
management capabilities and its plan to enter into mutual aid agreements with neighboring
utilities. He further provides evidence that municipal utilities can provide service that is at least
as good as the service provided by PSCo.
The City is particularly concerned with reliability when providing distribution wheeling
service to PSCo for the PSCo Customers in the Acquisition Area. To allow PSCo to satisfy its
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Quality of Service Plan obligations to PSCos Customers in the Acquisition Area and assure the
Commission of the Citys commitment to service quality, the City is willing to commit that the
ongoing reliability of the distribution wheeling service the City provides PSCo for its continued
provision of retail service to the PSCo Customers in the Acquisition Area will be the same as or
better that the reliability those customers currently enjoy. The City proposes that the particulars
of this commitment be resolved in negotiations between PSCo and the City or, if necessary, by
the Commission as part of the transition plan filing or separate rate filing.
Boulder witness Dennis Eastman specifically discusses service to the PSCo Customers in
the Acquisition Area. Mr. Eastman concludes, based on his review of Boulders plan, that once
Boulder Light & Power is up and running, both Boulder Light & Power customers and PSCos
customers in the Acquisition Area will experience service quality, reliability and safety that
meets or exceeds the service they presently receive from PSCo.
Mr. Eastman explains that most municipal utilities have a successful track record of
providing high quality service to their customers and that most meet or exceed the service quality
provided by investor-owned utilities. Given Boulders focus on safety, reliability and service
quality, along with the work it has already done to prepare to operate an electric distribution
utility, Mr. Eastmans opinion is that Boulders plan will, at the very least, maintain the current
level of safety, reliability and service quality of the distribution system. As Mr. Eastman
concludes, it is more likely that Boulder will improve upon that system to the benefit of all
customers within the Acquisition Area.
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VII. TRANSITIONAL POWER SUPPLY ARRANGEMENT
Boulder has developed a plan for acquiring power as a municipal electric utility that is
not only not contrary to the public interest, but could benefit both PSCo and its ratepayers
outside of Boulder financially and environmentally.
Boulder proposes to depart from the PSCo system in a gradual manner, designed to
minimize any burden on PSCos customers. Specifically, Boulder plans to reduce its demand on
the PSCo generation system over time, and pursuant to a negotiated wholesale power supply
agreement with PSCo for a designated period of time, would continue to purchase power that
PSCo acquired in part to serve Boulder. Boulder would release the energy and capacity it
currently uses back to PSCo as that energy and capacity becomes needed elsewhere on PSCos
system in a manner that is coincident with PSCos stated future resource need. This approach
helps to protect PSCo and its customers by promoting a least cost approach that avoids
unnecessary investment in duplicative facilities or contracted generating capacity. If this plan is
approved by the Commission, Boulder would remain a wholesale customer of PSCo until such
time and to the extent forecasted increases in PSCos native load, or projected resource needs
related to power purchase agreements that are terminating, require PSCo to acquire or invest in
additional generation sources.
By gradually departing from the PSCo system, Boulder absorbs the excess capacity that
could result from its complete, immediate departure. This approach protects against added costs
for other ratepayers and ensures that PSCos capacity remains used, useful and of value to its
ratepayers. Boulder developed this transitional power supply plan to avoid unfairly shifting
Boulders share of the carrying costs for existing PSCo generation to its other non-Boulder
customers.
Application for Approval of the Proposed Transfer of Assets City of Boulder
July 7, 2015 Page 20 of 34
According to PSCos 2014 Progress Report submitted in connection with its 2011
Electric Resource Plan, PSCo does not anticipate needing any additional capacity to meet its
project resource need until 2020. In that year, PSCos resource need will grow by a modest 34
MWs. PSCos projections indicate resource need of 104 MW in 2021 and 435 MW in 2022. In
2022, Boulders retail peak demand is estimated to be 262 MW. In the testimony of Boulder
witness Jonathan Koehn, Boulder proposes a mechanism to determine when and to what extent
the City may depart from the PSCo system as PSCos need for additional capacity is forecast to
increase over time. Boulders proposed mechanism relies on forecasts that are as accurate as
possible, while providing both PSCo and the City with information about how much capacity
each utility needs to acquire to serve their respective customers resource needs and sufficient
lead time for both utilities to acquire any needed capacity at costs and under terms that are
reasonable.
Boulder is requesting an order from the Commission finding that it is appropriate for
PSCo to use electric energy and capacity released by Boulder on a schedule that aligns with and
accommodates increases in PSCos native load or projected resource needs require PSCo to
acquire additional generation sources, as presented in greater detail in the Citys prayer for
relief.
VIII. INFORMATION REQUIRED BY RULE 3104
(I) The information required in rules 3002(b) and 3002(c), as pertinent to each party to the
transaction.
Please see the information provided below.
Application for Approval of the Proposed Transfer of Assets City of Boulder
July 7, 2015 Page 21 of 34
(II) A statement showing accounting entries, under the Uniform System of Accounts,
including any plant acquisition adjustment, gain, or loss proposed on the books by each party
before and after the transaction which is the subject of the application.
The City is unable to provide this information until the negotiated acquisition terms are
known or the condemnation action in Boulder District Court has been completed.
(III) Copies of any agreement for merger, sales agreement, or contract of sale pertinent to the
transaction which is the subject of the application.
There is no contract for sale of assets between the City and PSCo.
(IV) Facts showing that the transaction which is the subject of the application is not contrary
to the public interest.
Please see Section X. below, as well as the Testimony and Attachments of the witnesses
filed on behalf of the City in support of this Application.
(V) An evaluation of the benefits and detriments to the customers of each party and to all
other persons who will be affected by the transaction which is the subject of the application.
Please see the Testimony and Attachments of the witnesses filed on behalf of the City in
support of this Application. Further, the City notes that it does not, at this time, possess all of the
information required to perform this evaluation.
(VI) A comparison of the kinds and costs of service rendered before and after the transaction
which is the subject of the application.
Please see the Testimony and Attachments of the witnesses filed on behalf of the City in
support of this Application. Further, the City notes that it does not, at this time, possess all of the
information required to perform this comparison.
Application for Approval of the Proposed Transfer of Assets City of Boulder
July 7, 2015 Page 22 of 34
(c) An application to transfer a certificate of public convenience and necessity, an application to
transfer assets subject to the jurisdiction of the Commission, or an application to transfer or
obtain control of the utility may be made by joint or separate application of the transferor and
the transferee.
The City is not seeking to serve customers outside its jurisdictional boundaries. Upon the
completion of the Citys acquisition of the assets proposed for transfer, PSCo and/or the City will
file an application to amend the PSCo service territory to exclude service within Boulder.
(d) When control of a utility is transferred to another entity, or the utilitys name is changed, the
utility which will afterwards operate under the certificate of public convenience and necessity
shall file with the Commission a tariff adoption notice, shall post the tariff adoption notice in a
prominent public place in each local office and principal place of business of the utility, and
shall have the tariff adoption notice available for public inspection at each local office and
principal place of business. Adoption notice forms are available from the Commission. The tariff
adoption notice shall contain all of the following information:
(I) The name, phone number, and complete address of the adopting utility.
(II) The name of the previous utility.
(III) The number of the tariff adopted and the description or title of the tariff adopted.
(IV) The number of the tariff after adoption and the description or title of the tariff after
adoption. Code of Colorado Regulations 25
Because control of a utility is not being transferred to another entity, this provision is not
applicable.
(V) Unless otherwise requested by the applying utility in its application, a statement
that the adopting utility is adopting as its own all rates, rules, terms, conditions,
Application for Approval of the Proposed Transfer of Assets City of Boulder
July 7, 2015 Page 23 of 34
agreements, concurrences, instruments, and all other provisions that have been filed or
adopted by the previous utility.
This provision is not applicable to the City since it is not an adopting utility.
IX. Information Required by Rule 3002(b)
(b) In addition to the requirements of specific rules, all applications shall include, in the
following order and specifically identified, the following information, either in the application or
in appropriately identified attached exhibits:
(I) Name and Address of Applying Utility
Boulder Light & Power 1777 Broadway Boulder, CO 80302
(II) Name under which the applying utility is, or will be, providing service in
Colorado.
Boulder Light & Power
(III) The name, address, telephone number, facsimile number and email address of the
applying utilitys representative to whom all inquiries concerning the application
should be made.
Heather Bailey, Executive Director, Energy Strategy and Electric Utility Development 1101 Arapahoe Avenue Boulder, CO 80302 303.441.1923 (phone) baileyh@bouldercolorado.gov
(IV) A statement that the applying utility agrees to answer all questions propounded by
the Commission or its Staff concerning the application.
Please see the statement in response to (VII), below.
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July 7, 2015 Page 24 of 34
(V) A statement that the applying utility shall permit the Commission or any member
of its Staff to inspect the applying utility's books and records as part of the
investigation into the application.
Please see the statement in response to (VII), below.
(VI) A statement that the applying utility understands that, if any portion of the
application is found to be false or to contain material misrepresentations, any
authorities granted pursuant to the application may be revoked upon Commission
order.
Please see the statement in response to (VII), below.
(VII) In lieu of the separate statements required by subparagraphs (b)(IV) through
(VI) of this rule, a utility may include a statement that it has read, and agrees to
abide by, the provisions of subparagraphs (b)(IV) through (VI) of this rule.
Boulder has read and agrees to abide by the provisions of subparagraphs
(b)(IV) through (VI) of Commission Rule 3002.
(VIII) A statement describing the applying utilitys existing operations and general
service area in Colorado.
Boulder does not currently operate an electric utility within the state of
Colorado. Boulders proposed service area is coterminous with its jurisdictional
boundaries.
(IX) For applications listed in subparagraphs (a)(I), (II), (III), (V), and (VI) of this
rule, a copy of the applying utility's or parent companys and consolidated
subsidiaries most recent audited balance sheet, income statement, statement of
Application for Approval of the Proposed Transfer of Assets City of Boulder
July 7, 2015 Page 25 of 34
retained earnings, and statement of cash flows so long as they provide Colorado
specific financial information.
The titles of government financial statements differ from the financial
statements of private entities. The following chart explains these differences:
Financial Statement Titles Type of Statement Type of Fund Name of Statement Balance Sheet Government-Wide Statement of Net Position
Governmental Funds Balance Sheet
Proprietary Funds Statement of Net Position
Income Statement Government-Wide Statement of Activities
Governmental Funds Statement of Revenues, Expenditures and Changes in Fund Balance
Proprietary Funds Statement of Revenues, Expenses and Changes in Fund Net Position
Statement of Retained Earnings *NA see above Income Statements
Statement of Cash Flows Government-Wide **NA
Governmental Funds **NA
Proprietary Funds Statement of Cash Flows
*NA Governmental entities do not have retained earnings. The fund equity is referred to as fund balance for Governmental Funds and Net Position for Proprietary Funds. The statement of changes in these financial statement elements are accounted for in the preceding income statements. **NA In accordance with GAAP, governmental funds do not prepare a cash flows statement nor is a government wide cash flow statement prepared. Proprietary Funds do prepare a Statement of Cash Flows as required by GAAP.
With this Application, Boulder is providing the following documents:
Statement of Net Position; Statement of Activities; Net (Expense) Revenue and
Changes in Net Assets; Balance Sheet, Governmental Funds; Statement of
Application for Approval of the Proposed Transfer of Assets City of Boulder
July 7, 2015 Page 26 of 34
Revenues, Expenditures and Changes in Fund Balances, Governmental Funds;
Statement of Net Position, Proprietary Funds; Statement of Revenues, Expenses
and Changes in Fund Net Position, Proprietary Funds; Statement of Cash Flows,
Proprietary Funds. These documents are provided in a consolidated fashion as
Attachment 5. They are excerpted from Attachment 6, the Citys
Comprehensive Annual Financial Report for the fiscal year ended December 31,
2013.
(X) A statement indicating the town or city, and any alternative town or city, in
which the applying utility prefers any hearings be held.
Boulder prefers that hearings are held in either the Commissions
hearing room in Denver, Colorado, or in Boulder, Colorado.
(XI) Acknowledgment that, by signing the application, the applying utility
understands that:
(A) The filing of the application does not by itself constitute approval of
theapplication.
(B) If the application is granted, the applying utility shall not commence the
requested action until the applying utility complies with applicable
Commission rules and any conditions established by Commission order
granting the application.
(C) If a hearing is held, the applying utility must present evidence at the hearing
to establish its qualifications to undertake, and its right to undertake, the
requested action.
Application for Approval of the Proposed Transfer of Assets City of Boulder
July 7, 2015 Page 27 of 34
(D) In lieu of the statements contained in subparagraphs (b)(XI)(A) through (C)
of this rule, an applying utility may include a statement that it has read, and
agrees to abide by, the provisions of subparagraphs (b)(XI)(A) through (C) of
this rule.
Please see the attestation at the conclusion of this application.
(XII) An attestation which is made under penalty of perjury; which is signed by an
officer, a partner, an owner, an employee of, an agent for, or an attorney for the
applying utility, as appropriate, who is authorized to act on behalf of the
applying utility; and which states that the contents of the application are true,
accurate, and correct. The application shall contain the title and the complete
address of the affiant.
Please see the attestation at the conclusion of this application.
(c) In addition to the requirements of specific rules, all applications shall include the
information listed in subparagraphs (a)(I) through (V) of rule 1310. Applying utilities
may either include the information in the application itself, or incorporate the
information by reference to the miscellaneous docket created under rule 1310.
1310. Information Regarding Regulated Entities.
(a) A regulated entity may maintain information regarding the regulated entity in an
administrative proceeding created for that purpose. A regulated entity may incorporate by
reference, in any application, petition, or motion, the information maintained in such an
administrative proceeding, provided that the regulated entity also attests that the most current
information is on file. In the application, petition, or motion, the regulated entity shall state the
date the incorporated information was last filed with the Commission. If a regulated entity
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July 7, 2015 Page 28 of 34
chooses to maintain information in an administrative proceeding, the following information may
be filed:
(I) a copy of the regulated entitys applicable organizational documents (e.g., Articles of
Incorporation, Partnership Agreements, Articles of Organization);
(II) if the regulated entity is not organized in Colorado, a current copy of the certificate
issued by the Colorado Secretary of State authorizing the regulated entity to transact
business in Colorado;
(III) the name, business address, and title of each officer, director, and partner;
(IV) the names and addresses of affiliated companies that conduct business with the
regulated entity; and
(V) the name and address of the regulated entitys Colorado agent for service of process.
(b) If the information regarding the regulated entity changes, the regulated entity shall make a
subsequent filing within a reasonable time to update the information previously filed.
Boulder is a Colorado home rule municipality that intends to operate a municipal
electric utility. Neither home rule cities nor municipal electric utilities are regulated entities
pursuant to Title 40 of the Colorado Revised Statutes.
X. BOULDERS PROPOSALS ARE NOT CONTRARY
TO THE PUBLIC INTEREST
Boulder is requesting that the Commission approve the transfer of assets identified in
this Application and the method proposed by the City that will allow Boulder Light & Power
and PSCo to be interconnected in such a way as to ensure continuity of reliable service in a safe
manner. Boulder has the authority under both the Colorado Constitution and the Boulder
Home Rule Charter to create a municipal electric utility and to acquire the assets necessary for
Application for Approval of the Proposed Transfer of Assets City of Boulder
July 7, 2015 Page 29 of 34
the operation of that utility. Boulder has created a plan for interconnection that it believes will
maintain the level of safety, reliability and service quality that both Boulder Light & Power and
PSCo customers presently enjoy. As such, Boulders request for the transfer of assets and its
interconnection plan are not contrary to the public interest.
Because Boulder is not seeking to provide retail electric service to PSCo Customers in
the Acquisition Area, Boulder is proposing that PSCo wheel power across Boulders distribution
facilities to the PSCo Customers in the Acquisition Area. This is a common practice in the
utility industry. Boulder further proposes to develop in the future a Commission-approved
distribution wheeling agreement that will include a charge for wheeling services that is designed
to ensure cost comparability with rates PSCo currently charges its customers for PSCos self-
provisioned distribution service. If the Citys approach is adopted, PSCo customers throughout
the state, including PSCos Customers in the Acquisition Area, will be unharmed by the approval
of Boulders proposed transfer of assets, and may actually enjoy certain cost benefits and
advantages from the wheeling arrangement that are not available to them today. This approach is
not contrary to the public interest.
Boulder has developed, and continues to refine, a transition plan that will permit a
seamless transition for Boulder customers and for PSCos customers within the Acquisition
Area. Boulder would like to work with PSCo to develop a full, comprehensive transition plan
and asks the Commission to order PSCo to work with the City to this effect. Certainly, the more
seamless and transparent the transition can be for customers, the better. In this regard, Boulders
plan is not contrary to the public interest.
Finally, in keeping with the proposals Boulder has been making during Commission
proceedings for several years, Boulder is proposing that it gradually reduce the energy and
Application for Approval of the Proposed Transfer of Assets City of Boulder
July 7, 2015 Page 30 of 34
capacity it takes from PSCo, linking that reduction to increases in PSCos native load elsewhere
on its system and PSCos need for additional resources. By forming a new electric utility and
being responsible for meeting its own energy and capacity needs, Boulder will be mitigating the
need for PSCo to acquire new sources of energy and capacity to serve its non-City native load
customers as well. It is even possible that the Citys departure from the PSCo system will reduce
the overall cost of the pool of new resources that PSCo must acquire in order to serve its non-
City native load customers. As such, the Citys proposal will have a minimal, and potentially
beneficial, impact on PSCos non-Boulder native load customers and will not be contrary to the
public interest.
XI. CONCLUSION
It has become increasingly clear that the existing energy system is undergoing a historic
transition. Various innovations and challenges have begun to shift the local and global energy
landscape, including the expanding use of distributed generation, the increasing frequency of
extreme weather events, and emerging clean technologies that have the potential to remake our
energy system. Efficiency, conservation, and local generation have begun to undercut utility
revenue and rooftop solar is eroding electricity demand right at the source.
Harnessing innovation and addressing Boulders challenges requires a flexible approach
and an understanding that success takes time. Here in Boulder, and around the globe, there is a
rapidly growing discussion about the utility of the future and the role of end-users. This
energy system transformation has been guiding Boulders activities, including the role its electric
utility plays in our climate commitment and drive to design a more resilient energy system.
This means that the utility of the future cannot look like the utility of the past or present,
but must take a new form to remain relevant in a democratized system. For example, the present
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July 7, 2015 Page 31 of 34
regulatory system was designed with the assumption that customer energy usage is inelastic and
that the most efficient system is one that is almost entirely dependent on large, central station
power plants. Today, that is no longer the case. While central power plants and the transmission
network are and will remain the vital backbone of our electric system, technology has
significantly advanced and prices of distributed solutions are rapidly declining, enabling greater
control and ownership opportunities for customers and communities. The energy utility of the
next century will implement strategies to:
Improve energy affordability;
Provide a more resilient and flexible power grid;
Give customers more control over their energy use;
Significantly reduce energy consumption through efficiency and conservation;
Significantly reduce emissions through a switch from fossil fuels to renewable energy;
Increase grid efficiency via a two-way networked smart system that uses demand
response, local generation and other local resources;
Increase grid flexibility to integrate large quantities of variable (distributed and utility-
scale) renewable energy; and,
Facilitate a coordinated energy plan that delivers electricity, heat, water, communication,
land-use, and transportation systems.
Under todays regulations, not all of these can be pursued at a local level. For example, if
a group of customers wanted to be served by a local generation resource, like a backup generator
and be connected via a micro grid, to insure a higher level of reliability while minimizing cost, it
would be prohibited under current regulation unless owned by the utility.
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July 7, 2015 Page 32 of 34
In contrast to these regulatory restrictions, many utilities, regulators, communities and
even customers across the US are beginning to adapt to the new energy paradigm. Boulders
efforts have illustrated that in addition to providing reliable and affordable electricity to its
customers, the utility of the future must be just one part of an energy system that is innovative,
sustainable, and reliable. This evolution will take into account advances in energy technology
and market changes, and will allow communities and individual customers a higher level of
engagement and choice. Under a local electric utility, this might include more flexible options
for customers to sell and receive power.
XII. HEARING, VERIFICATION, AND REQUEST FOR RELIEF
If there are no protests or interventions, or if such protests or interventions do not
properly request a hearing, Boulder requests that the Commission decide this matter pursuant to
its modified procedures, without a hearing, in accordance with Rule 1403 of the Commissions
Rules of Practice and Procedure, 4 C.C.R. 723-1-1403.
In the event that the Commission deems a hearing necessary, Boulder will present
competent evidence at the hearing to demonstrate that the relief requested isnot contrary to the
public interest and to justify granting this Application.
This application is verified by the attached affidavit of Heather Bailey, Executive
Director of Energy Strategy and Electric Utility Development for the city of Boulder.
WHEREFORE, Boulder respectfully requests that the Commission enter an Order
granting this Application and providing the following specific relief:
a. Approving the transfer of the facilities and properties described in this
Application and the supporting testimony from PSCo to the City;
Application for Approval of the Proposed Transfer of Assets City of Boulder
July 7, 2015 Page 33 of 34
b. Authorizing the methodology proposed by the City in this Application and the
supporting testimony that will allow Boulder Light & Power and PSCo to be
interconnected in such a way as to ensure continuity of safe and reliable service;
c. Ordering PSCo to work with Boulder to develop a PUC-jurisdictional distribution
wheeling agreement applying a formula rate for the delivery of electricity to PSCos
customers within the Acquisition Area over facilities owned by Boulder;
d. Ordering PSCo to work with Boulder to develop a transition plan that will permit
a seamless transition for Boulder customers and for those PSCo customers who will be
served over Boulders distribution lines; and
e. Finding it is appropriate for PSCo to (1) use the electric capacity released by
Boulder over time to serve PSCo remaining native load customers load growth and
capacity needs, (2) sell such capacity released from Boulder to PSCos remaining native
load customers at PSCos then-authorized retail rate, and (3), in future rate cases and in
lieu of incurring costs for additional new resources, seek to recover from its non-Boulder
native load customers the costs associated with the capacity that was once used to serve
Boulder but which will, in the future, be used to serve PSCos remaining native load
customers. The findings requested in this subpart (e) may be used to inform anticipated
decisions on stranded costs.
ATTESTATIONS
I, Heather Bailey, as Executive Director for Energy Strategy and Electric Utility
Development, having read subparagraphs (b)(XI)(A) through (C) of Commission Rule 3002, do
hereby represent that the city of Boulder agrees to abide by the provisions of subparagraphs
(b)(XI)(A) through (C) of that rule.
I, Heather Bailey, as the Executive Director for Energy Strategy and Electric Utility
Development for the city of Boulder, and under penalty of perjury, attest that I am authorized to
act on behalf of the city of Boulder and do hereby state that the contents of this application are
true, accurate and correct.
ARTICLE XIII. - LIGHT AND POWER UTILITY
FOOTNOTE(S):
--- (16) ---
Further amended by Ordinance 7838 (2012).
--- (17) ---
On November 1, 2011, voters approved amending the Charter to change "qualified electors" to
"registered electors" under Ordinance 7801.Further amended by Ordinance 7838 (2012).Further
amended by Ordinance 7975 (2014)
Sec. 178. - Creation, purpose and intent.
(a) The city council, at such time as it deems appropriate, subject to the conditions herein, is
authorized to establish, by ordinance, a public utility under the authority in the state
constitution and the city charter to create light plants, power plants, and any other public
utilities or works or ways local in use and extent for the provision of electric power. The city
council shall establish a light and power utility only if it can demonstrate, with verification
by a third-party independent expert, that the utility can acquire the electrical distribution
system in Boulder and charge rates that do not exceed those rates charged by Xcel Energy at
the time of acquisition and that such rates will produce revenues sufficient to pay for
operating expenses and debt payments, plus an amount equal to twenty-five percent (25%)
of the debt payments, and with reliability comparable to Xcel Energy and a plan for reduced
greenhouse gas emissions and other pollutants and increased renewable energy; and
(b) The governing body of the electric utility enterprise shall be the city council. The council
may, by ordinance, delegate responsibility to the electric utilities board or the city manager
as appropriate.
(c) The people of Boulder seek electric power supplied in a reliable, fiscally sound, and
environmentally responsible manner. Therefore, the utility will be operated according to the
following guiding principles.
(1) Reliable Energy: Community safety, convenience, and prosperity all depend on the
reliable delivery of electric power. The utility will deliver reliable electric power. The
utility's foremost responsibilities will be to provide electric power that is high quality
and dependable, support economic vitality, prevent service outages, and respond
promptly to any service outage.
(2) Fiscal Responsibility: The cost of electric power is a significant portion of business and
household budgets. The utility will operate in a fiscally responsible manner, always
being mindful that every expenditure will be reflected in customers' rates and will affect
household budgets and business profitability. The utility will, while always honoring its
Application for Transfer of Assets Attachment A-1
Page 1 of 10Co
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obligations to bondholders, strive to maintain rate parity with any investor-owned utility
whose service area would include the City of Boulder.
(3) Clean Energy: Climate change and diminishing fossil fuel supplies, combined with the
high cost of those fuels, are significant factors leading to the creation of the utility. The
utility will strive to reduce reliance on fossil fuels, focus on sustainable alternatives, and
seek new opportunities for producing clean energy.
(4) Ratepayer Equity: The utility will direct its efforts to promote ratepayer equity in all
aspects of its operations. Rates charged by the utility will be designed to create a fair
and equitable distribution among all users of the costs, replacement, maintenance,
expansion, operations of facilities, energy, and energy conservation programs for the
safe and efficient delivery of electric power to city residents and other customers. The
utility will consider the effects of its programs, policies, and rates in the development of
programs for low-income customers.
(5) Environmental Stewardship: Preserving and protecting our natural environment goes
well beyond producing clean energy. The utility will be a good environmental steward
by working to reduce the environmental impact of its operations, including working to
reduce the demand for electricity. Energy and power that is produced in an
environmentally responsible manner requires that the city balance environmental factors
as an integral component of planning, design, construction, and operational decisions.
(6) Enterprise: The city will deliver electric power services by means of an enterprise, as
that term is defined by Colorado law. The city further declares its intent that the city's
electric utility enterprise be operated and maintained so as to exclude its activities from
the application of Article X, Section 20 of the Colorado Constitution. (Added by Ord.
No. 7804 (2011), 2, adopted by electorate on November 1, 2011.)
Sec. 179. - Definitions.
Unless the context specifically indicates otherwise, the following words and phrases shall
have the following meanings as used in this article:
(a) "Electric Utility Activity" includes, but is not limited to, the provision of electric power to
customers within its service area.
(b) "Electric Utility Enterprise" means the electric utility business now or hereafter owned by
the city, which business receives under ten percent (10%) of its annual revenues in grants
from all Colorado state and local governments combined and which is authorized to issue its
own revenue bonds pursuant to this article or other applicable law.
(c) "Electric Utility Facilities" means all real and personal property utilized by the city in
connection with the generation, transmission, provision, distribution and conservation of
energy, electricity, light and power for the city, now or hereafter owned or operated by the
city.
(d) "Grant" means any direct cash subsidy or other direct contribution of money from the state
or any local government in Colorado which is not required to be repaid. "Grant" does not
include:
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Page 2 of 10
(1) any indirect benefit conferred upon the electric utility enterprise from the state or any
local government in Colorado;
(2) any revenues resulting from rates, fees, assessments, or other charges imposed by the
electric utility enterprise for the provision of goods or services by such enterprise; or
(3) any federal funds, regardless of whether such federal funds pass through the state or any
local government in Colorado prior to receipt by the electric utility enterprise. (Added
by Ord. No. 7804 (2011), 2, adopted by electorate on November 1, 2011.)
Sec. 180. - Powers of the electric utility enterprise.
In addition to any of the powers it may have by virtue of any of the applicable provisions of
state law, this Charter, and the Code, the electric utility enterprise shall have the power under this
article:
(a) to acquire by gift, purchase, lease, or exercise of the right of eminent domain, to construct,
to reconstruct, to improve, to better and to extend electric utility facilities, wholly within or
wholly without or partially within and partially without the territorial boundaries of the city,
and to acquire in the name of the city by gift, purchase, or the exercise of the right of
eminent domain lands, easements, and rights in land in connection therewith;
(b) to operate and maintain electric utility facilities for its or the city's own use and for the use
of public and private consumers and users within and without the territorial boundaries of
the city;
(c) to accept federal funds under any federal law in force to aid in financing the cost of
engineering, architectural, environmental, or economic investigations or studies, surveys,
designs, plans, working drawings, specifications, procedures, or other action preliminary to
the construction, operation or remediation of electric utility facilities;
(d) to accept federal funds under any federal law in force for the construction, operation or
remediation of electric utility facilities;
(e) to prescribe, revise, and collect in advance or otherwise, from any consumer served by a
electric utility activity, rates, fees, and charges or any combination thereof for the services
furnished by, or the direct or indirect connection with, the electric utility facilities; and in
anticipation of the collection of revenues of such electric utility facilities, to issue revenue
bonds to finance in whole or in part the cost of acquisition, construction, reconstruction,
improvement, betterment, or extension of the electric utility facilities; and to issue
temporary bonds until permanent bonds and any coupons appertaining thereto have been
printed and exchanged for the temporary bonds;
(f) to pledge to the punctual payment of said bonds and interest thereon all or any part of the
revenues of the electric utility facilities;
(g) to make all contracts, execute all instruments, and do all things necessary or convenient in
the exercise of the powers granted in this section or elsewhere in state law, the Charter, or
the Code, or in the performance of its covenants or duties, or in order to secure the payment
of its bonds if no encumbrance, mortgage, or other pledge of property, excluding any
pledged revenues, of the electric utility enterprise or city is recreated thereby, and if no
property, other than money, of the electric utility enterprise or city is liable to be forfeited or
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taken in payment of said bonds, and if no debt on the credit of the electric utility enterprise
or city is thereby incurred in any manner for any purpose;
(h) to issue refunding bonds pursuant to this article or other applicable law to refund, pay, or
discharge all or any part of its outstanding revenue bonds issued under this article or under
any other law, including any interest thereon in arrears or about to become due, or for the
purpose of reducing interest costs, effecting a change in any particular year or years in the
principal and interest payable thereon or effecting other economies, or modifying or
eliminating restrictive contractual limitations appertaining to the issuance of additional
bonds or to any electric utility facilities; and
(i) to begin operations of the municipal utility at such time as the city council may by ordinance
provide.
(j) Any ballot measure related to the light and power utility, including without limitation
measures related to debt, may be placed on a ballot at any election, including without
limitation a special election, a general municipal election or a special municipal election.
(k) The light and power utility's service area may include customers outside of the city to the
extent that such a service area shall assist with the provision of a safe and reliable system for
service to the utility's customers. (Added by Ord. No. 7804 (2011), 2, adopted by
electorate on November 1, 2011. Amended by Ord. No. 7920 (2013), 3, adopted by
electorate on November 5, 2013.)
Sec. 181. - Revenue bonds.
(a) In accordance with and through the provisions of this section, the electric utility enterprise,
through its governing body, is authorized to issue bonds or other obligations payable solely
from the revenues derived or to be derived from the functions, services, benefits or facilities
of such enterprise or from any other available funds of such enterprise. Such bonds or other
obligations shall be authorized by ordinance, adopted by the governing body of the electric
utility enterprise in the same manner as other ordinances of the city. Such bonds or other
obligations may be issued without voter approval, notwithstanding the provisions of Section
2(d) of the charter, provided that, during the fiscal year of the city preceding the year in
which the bonds or other obligations are authorized, the electric utility enterprise received
under ten percent (10%) of its annual revenue in grants or, during the current fiscal year of
the city, it is reasonably anticipated that such enterprise will receive under ten percent (10%)
of its revenue in grants.
(b) The terms, conditions, and details of said bonds, or other obligations, and the procedures
related thereto shall be set forth in the ordinance authorizing said bonds or other obligations
and said bonds, or other obligations may be sold in accordance with the provisions of the
charter. Each bond, note, or other obligation issued under this section shall recite in
substance that said bond, note, or other obligation, including the interest thereon, is payable
from the revenues and other available funds of the electric utility enterprise pledged for the
payment thereof. Notwithstanding any other provision of law to the contrary, such bonds, or
other obligations may be issued to mature at such times as are authorized by the charter,
shall bear interest at such rates, and shall be sold at or above the principal amount thereof,
all as shall be determined by the governing body of the electric utility enterprise.
Notwithstanding anything in this section to the contrary, in the case of short-term notes or
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other obligations maturing not later than one year after the date of issuance thereof, the
governing body of the electric utility enterprise may authorize enterprise officials to fix
principal amounts, maturity dates, interest rates, and purchase prices of any particular issue
of such short-term notes or obligations, subject to such limitations as to maximum term,
maximum principal amount outstanding, and maximum net effective interest rates as the
governing body of the electric utility enterprise shall prescribe. Refunding bonds of the
electric utility enterprise shall be issued as provided in Part 1 of Article 56 of Title 11,
C.R.S. The powers provided in this section to issue bonds, or other obligations are in
addition and supplemental to, and not in substitution for, the powers conferred by any other
law, and the powers provided in this section shall not modify, limit, or affect the powers
conferred by any other law either directly or indirectly. Bonds, notes, or other obligations
may be issued pursuant to this section without regard to the provisions of any other law.
Insofar as the provisions of this section are inconsistent with the provisions of any other law,
the provisions of this section shall control with regard to any bonds lawfully issued pursuant
to this section.
(c) Any pledge of revenue or other funds of the electric utility enterprise shall be subject to any
limitation on future pledges thereof contained in any ordinance of the governing body of the
electric utility enterprise or of the city authorizing the issuance of any outstanding bonds or
other obligations of the electric utility enterprise or the city payable from the same source or
sources. Bonds or other obligations, separately issued by the city and the electric utility
enterprise, but secured by the same revenues or other funds shall be treated as having the
same obligor and as being payable in whole or in part from the same source or sources.
(Added by Ord. No. 7804 (2011), 2, adopted by electorate on November 1, 2011.)
Sec. 182. - Utility service standards.
(a) Customer Benefit: The utility shall conduct its business and affairs for the benefit of its
customers and the city.
(b) Cost Effective Service: The utility will provide the electric power requirements of the
customers within the service areas in a reliable, cost-effective, and environmentally
responsible manner.
(c) Energy, Energy Efficiency and Renewable Energy: The utility will engage in business
activities related to the provision of electric power services, which may include but are not
limited to investment in conventional electric generation, generation using renewable
resources, energy efficiency measures, demand side management, and associated
communication systems.
(d) Rates: The council will by ordinance fix, establish, maintain, and provide for the collection
of such rates, classes of rates, fees, or charges for electric service and other utility services
furnished by the city. Prior to changing rates, classes of rates, fees, or charges, the utility
advisory board will review changes and provide a recommendation to the council, based on
the criteria in this section. The council will consider the following factors when setting
utility rates:
(1) The utility will produce revenues at least sufficient to pay the cost of operation and
maintenance of said utilities in good repair and working order; to pay the principal of
and interest on all bonds of the city payable from the revenues of the utility;
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(2) The utility will provide and maintain an adequate fund for replacement of depreciated
or obsolescent property, and for the extension, improvement, enlargement, and
betterment of the utility; to pay the interest on, and the principal of, any bonds issued by
the city to extend or improve the utilities;
(3) The utility will consider electricity rates of surrounding and similarly situated
communities and use best efforts to set competitive utility rates; and
(4) The council will fix rates for which electric service will be furnished for all purposes,
and rates shall be as low as good service will permit, consistent with the guiding
principles set forth in section 178 (c)(1) - (6).
(e) Budget and Appropriations: The council, by ordinance, will approve the budget and
appropriations as required by Charter Art. VI.
(f) Accounting Standards: All revenues and expenditures of the city's electric system will be
considered revenues and expenditures of the utility and shall be audited and accounted for in
a manner that is consistent with charter 127.
(g) No Free Service: No free energy or power shall be given to any person, firm, corporation, or
institution whatsoever.
(h) Payments in Lieu of Taxes and for Services Rendered - City: The utility may only transfer
funds for another governmental purpose within the city if:
(1) a service is provided to the utility by another department within the city; or
(2) in lieu of tax or franchise fee payments that a similarly situated private utility would
have been required to pay taxes to the city. The maximum payment in lieu of taxes shall
be limited by an estimated amount of property, sales or use tax, and a payment in lieu of
a franchise fee not to exceed four percent of annual revenues.
(i) Payments in Lieu of Taxes and for Services Rendered - Other Governmental Entities: The
utility shall annually transfer funds to the Boulder Valley School District in an amount the
city council determines will approximate property taxes that a private utility would have
paid to the School District on property owned by the electric utility enterprise. The utility
may transfer funds to other governmental entities in lieu of property taxes that would have
been paid if a similarly situated private utility would have been required to pay property
taxes to the other governmental entity or for up to the value of a service rendered.
(j) Preferences Prohibited: The utility shall not make or grant any preference or advantage to
any corporation or person or subject any corporation or person to any prejudice or
disadvantage as to rates, charges, service, or facilities, or in any other respect including
without limitation whether the customer is inside or outside the city limits.
(k) Advantages Prohibited: The utility shall not establish or maintain any unreasonable
differences or undue preferences as to rates, charges, service, facilities, or any respect as
between any class of services including without limitation whether the customer is inside or
outside the city li