Earlier this year, we noticed that the residents of Boulder, Colorado have been moving forward with a plan to break away from their current electricity company, Xcel Energy, in order to establish a new municipal utility. The goal is for the city to provide its utility customers with more wind power and other forms of clean energy. In the latest development, just last week the Boulder City Council voted to move ahead with the final steps.
The Boulder renewable energy plan is somewhat ironic, considering that Xcel pioneered the development of wind power in Colorado back in the 1990’s and is now a leading force in the national clean energy landscape. However, apparently Xcel is not moving fast enough for Boulder, particularly considering that local governments have the potential to compete against each other to attract new businesses using clean energy as an incentive.
One way or another, Boulder wants more clean power
David Shaffer has been following the story for the Star Tribune, and in an updated article on April 17, he notes that even as Boulder moves forward with its plans, it is still open to discussing alternatives with Xcel.
With the company’s franchise up for renewal in 2014, one option would be to forgo the municipal utility idea in favor of reaching an agreement with Xcel to provide more renewable energy in its mix.
That would certainly seem to make things easier on Boulder which, as Shaffer details, has already sunk ten years of effort and more than $3 million into studying the break. If the plan goes through, Boulder is facing even more potential time and financial obstacles battling Xcel over ownership of utility poles and other infrastructure, as well as possible legal action involving the company’s generating facilities among other issues.
Inventing a better mousetrap, renewable energy-wise
On the other hand, the saying goes that if you build a better mousetrap, the world will beat a path to your door, and that’s where the Boulder plan could end up being well worth the risk.
In the first place, as Shaffer notes, the city’s analysis indicates that Boulder customers would see their rates drop under the plan.
With the lure of utility-supplied renewable energy, the already-attractive city could also prove to be an irresistible draw to green-minded companies looking to boost their sustainability profile. It’s an elegant solution that would enable companies to obtain access to more renewable energy with no upfront investment.
That could be particularly tempting for the many businesses that don’t have the opportunity or the resources to install solar panels and other forms of renewable energy on their property, that don’t own property, or that don’t have the opportunity to rent space in a property with on-site renewable energy.
Boulder and the Google solution
Boulder’s eagerness to ditch fossil fuels is a public sector reflection of a problem identified by Google. In a blog post last week, Google’s Director of Global Infrastructure, Gary Demasi, argued that utility customers like Google are eager to use more renewable energy, but conventional rate structures present a huge obstacle.
Traditionally, utility rates or tariffs are based on classes of customers, such as residential, commercial or industrial. As described by Demasi, Google’s solution is for utilities to develop a new tariff based on energy preferences, namely for renewable energy.
Google anticipates that there is enough demand in the business community for a renewable energy tariff to make sense. Under Google’s plan, companies would pay a premium for the special tariff, but they would realize an overall bottom line benefit by enhancing their marketing and sustainability profile.
Between Google and Boulder, what this all boils down to is the emergence of new opportunities for green-minded businesses to vote with their feet, and take the availability of clean energy into consideration when making plans to relocate.
[Image: National Wind Institute by Dave Dougdale]