2C: Public Service Company of Colorado (Xcel Energy) Franchise

According to the 2019 Community Energy Report, business customers represented 80% of total community electricity consumption

•  For the year (1,004,603,905 kWh of 1,256,916,867 total electricity consumption).
• The city does not possess annual electricity consumption data for individual customers.
• The city also does not have any information about any customer plans to install solar plus storage and to no longer remain a customer of Xcel.

There is nothing in the settlement that addresses the cost or payment structure of undergrounding the final connection. It will be determined under the partnership as it develops, if passed by voters.

Thanks for your question. Can you provide additional clarification or do you have a specific question about the ballot item?

Xcel is probably a better source for this data, but we there is some information we can provide.   

We are not sure what you are defining as “PSCo’s distribution system asset value.”  You could be seeking: 

1. The percentage from the amount of the asset value Xcel reports to the state for property tax purposes; or
2. The percentage from the amount of the asset value Xcel reports in its FERC-1; or 
3. The percentage from the amount of the asset value Xcel reports to shareholders or for other purposes.

While we know that, depending on the methodology, Boulder represents about 4% of Xcel's customers, revenue and kwh sales, we cannot simply apply a 4% calculation to the numbers Xcel reports to the state, FERC or shareholders. Put another way, Boulder probably does not account for 4% of PSCo's distribution system asset value. This is in part because Boulder's distribution system is much older than the statewide average (large parts of Boulder's system are 40 to 70 years old, while much of Xcel's system statewide is newer). Due to depreciation of these assets, Boulder likely represents less than 4% of PSCo's distribution system asset value. 

Council member Mary Young asked a similar question on the carbon emissions that would result from only achieving an 80% renewable electricity mix rather than the current goal of 100% renewable electricity in 2030. Here was staff’s response: 

Staff utilize a greenhouse gas emissions (GHG) model that forecasts electricity use based on current community growth trends and anticipated successes of city programs such as the Building Performance Ordinance. Based on this model, achieving only an 80% renewable electricity grid in 2030, rather than the 100% renewable electricity mix that is the current estimate for municipalization and a stated city goal, would result in approximately 215,000 metric tons of GHG annual emissions that would need to be offset through other means, such as carbon sequestration and/or increased reductions in natural gas and transportation fuel use.

There is growing agreement that the most viable path to deep emission reductions in the next 10 years is the conversion of 80% or more of all energy use—in buildings, transportation and business processes—to electricity generated from clean, renewable energy sources.

Boulder’s Climate Commitment establishes a series of objectives to reduce fossil fuel demand from buildings and transportation; rapidly transition to an energy system and economy that is powered 100% or more by renewable clean electricity with 50% or more of that produced locally by 2030. The city remains committed to reaching its goals whether through the formation of a local electric utility or a future partnership with Xcel Energy.

Boulder has established high-impact action priorities to achieve these objectives, particularly the 100% renewable electricity and local generation targets. Those actions are outlined under the “Clean Energy Sources” tab at the City’s Climate Commitment page: https://bouldercolorado.gov/climate/energy-future.

Xcel Energy reports direct methane emissions from stationary combustion for electric generation under The Climate Registry’s (TCR) Electric Sector Protocol and that can be found in their publicly available TCR summary reports under Scope 1 emissions.  

According to Xcel Energy, the delivery of natural gas, or other fuels, to the electric generating facility is not directly associated with the generation of electricity sold, therefore not included in CO2e reported to TCR under the Electric Sector Protocol which accounts for emissions at the generating plant.   

The current separation plan does not include simultaneous undergrounding of existing facilities. It entails approximately 66 miles of new distribution feeder construction. This is a relatively even split between new construction for PSCo and new construction for Boulder Light and Power. Aside from a few isolated instances, almost all of the new construction will be underground.  In many instances, this is new underground infrastructure that parallels the existing underground infrastructure (that the other entity would operate after separation) and does not represent undergrounding of any existing overhead facilities.  Specific undergrounding outside of the purposes of separation was not contemplated or included in the separation plan.    

• Staff has not conducted any analyses of stranded cost for a scenario in which the franchise is adopted.

Based on the information that is currently available, the current estimate for separation costs is approximately $187M. This estimate is in 2020 dollars and includes:

1. PSCo’s 2020 construction cost estimate, which includes:
   1. Separation Construction Costs as directed by the Agreement for Payment of Costs, which is inclusive of: 
      1. Internal Labor
      2. Consulting/Contracted Services
      3. Materials/Expenses
      4. Land Acquisition
2. Substation Separation Costs
   1. These are based on partially complete engineering designs for four of the six necessary substation sites which PSCo has agreed to honor the facilities studies for
3. Boulder’s Distribution Separation Construction Estimate, which includes:
   1. Boulder’s 2018 estimate for distribution separation applies to the separation plan outside of substations, inflated to 2020 dollars
   2. The distribution detailed designs will be complete in the coming month and the City subsequently anticipates receipt of a more updated and accurate number at that point in time.
4. Boulder’s Substation Separation Construction Estimate, which assumes a similar arrangement to what was negotiated in the 2020 settlement would be agreed upon between the parties and includes:
   1. Boulder’s estimate for the separation work that PSCo will conduct at the remaining two substation sites to effectuate separation. This work was not included in PSCo’s estimate.
   2. Boulder’s estimate for the work that Boulder would conduct to effectuate separation at all six substation sites.  This includes the construction of the three new substations and some form of separation at the other three. 

Each of these categories has various ranges of contingencies applied by either PSCo or Boulder to account for the degree of uncertainty of each cost estimate.  This figure does not include other costs, such as, but not limited to: 

• Estimates for capital costs PSCo will incur for which the City will pay from the date of valuation until the date of cutover as provided in the agreement for payment of costs.
• Start-Up and Transition Costs
• Acquisition Costs
• Stranded Costs