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News for Norther Colorado and the world

Thursday, August 21, 2014

Powering Up: Xcel Franchise in the Air

By Shari Phiel
Berthoud Recorder

As the Town of Berthoud continues to face declining sales revenues, down about 15 percent this year, the Board of Trustees continue to look for ways to generate sustainable income for the Town’s general fund.

One of the options currently under consideration by the board is the signing of franchise agreements with both Xcel Energy Company and Poudre Valley Rural Electric Association, which would provide the town with “3 percent of all revenues received from the sale and transportation of gas and electricity.”

That 3 percent increase, which would add an estimated $120,000 to Town coffers, would come directly from an increase to existing customers’ utility bills. Coming on the heels of a Xcel’s recently requested rate increase, this proposal doesn’t sit well with many Berthoud residents.

On June 30, Minneapolis-based Xcel submitted an application with the Public Utilities Commission for an electric rate increase that will raise residential customers’ bills by $8.55 per month, or about 12 percent, and industrial customers’ rates by 10 to 14 percent. This comes on top of an earlier increase approved by the PUC in May which raised residential rates by $2.94 per month.

Berthoud resident Dorian Ryan expressed her concerns about the rate increases and how it would impact funding for other projects at the trustees’ July 21 meeting. “I personally think that Aims Community College should have first priority. We’re looking at an increase in our Xcel bill this month, another in January and a 3 percent on top of that? I think it’s going to hurt Aims.”

Trustees were scheduled to vote on the Xcel franchise agreement during the July 28 meeting but will not be able to due to lack of required notice on the part of Xcel. Instead, a public hearing will be held at the trustees’ July 28 study session. 

This is not the first time the Town has looked at signing a franchise agreement with Xcel. After Berthoud’s franchise agreement expired in 1993, Berthoud formed and Electric Enterprise Fund in 1997 for the purpose of providing municipal electric services to area residents. A subsequent ballot put before voters in 1998 to allow the Town to issue bonds to acquire distribution facilities failed. The Town franchise agreement with PVREA expired in 2007.

Although, as Trustee Glen Buckingham noted, the board has “been deliberating about it for months,” real estate developer Scott Sarbaugh would like to see the trustees capitalize on the work being done in other communities in regards to franchise agreements.

The City of Boulder, whose franchise agreement with Xcel is scheduled to expire in 2010, has already been in negotiations for more than a year. In early June, the Boulder city council announced that negotiations would likely continue on into next year as they push for the company for more flexibility to take advantage of Smart Grid and “green energy” projects like solar gardens and community purchasing programs.

“The whole catch is that Xcel Energy can only do large scale solar farming, solar gardens, with a bid process for net purchasing the power at wholesale [prices],” said Sarbaugh. For Sarbaugh’s Prairie Star net-zero energy planned community in Berthoud, this has a tremendous impact.

In a letter sent to the Berthoud trustees on June 23, Sarbaugh outlined his concerns about signing the franchise agreements. Chief among that in signing the franchise agreements, Berthoud will limit its ability to take advantage of “’cutting edge’ green technology” and would the “marketing edge for economic development and growth would be no different than the competing communities surround Berthoud.”

Trustee Jeff Hindman, who already stated he is in favor of signing of the franchise agreements, noted, “I look forward to discussing the pros and cons at the public hearing.” He went on to add, “We don’t ever make a decision until after we get the public input.”

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