For years I have been arguing the merits of community owned renewable power generation and many communities have seen fit to establish their own utilities, not because of anything I have written, but because it makes sense economically. Cities determined to lower their carbon footprint or simply eager to stabilize energy costs for their citizens have almost been forced to eject the investor owned utilities in favor of a public solution. Boulder Colorado is in the process of doing this now.

The city’s decision to consider replacing Xcel Energy’s exclusive electricity franchise with a municipal utility has already drawn concessions.

Xcel’s offer to build 200 megawatts of wind energy for Boulder comes after company officials said they couldn’t make a special deal with one community.

“Boulder brought the 800-pound gorilla to the table,” said Susan Perkins, an attorney who has represented Colorado towns in franchise talks with Xcel, the state’s largest utility.

A decision to move ahead with its own utility — focusing on renewable power and energy efficiency — may have an even bigger impact.

“If Boulder can achieve stable rates and a new energy mix, other communities will start asking questions as their franchises come up,” said Perkins, who is not involved in the Boulder initiative.

The prospect of Boulder turning out a major, investor-owned utility and creating a municipal operation is being watched across the country.

“If a large community like Boulder can do it, it sets an example for everyone,” said Ursula Schryver, a vice president at the American Public Power Association, which represents the country’s 2,000 municipal electric utilities.

There have been 16 municipal utilities set up in the past 10 years — mostly small communities, Schryver said.

The Boulder City Council begins final deliberations July 19 on what path to ask voters to go in November.

A change to a municipal utility would not be easy financially or politically.

The beauty of locally owned power generation is that it is tailored to the unique needs and features of the area. Gone is the one-size-fits-all model of service typical of the investor owned utility and gone too are many of the costs associated with centralized power delivery including the environmental footprint associated with long distance transmission.

IF BOULDER CREATED a municipal utility, its rates would be comparable or a little below Xcel’s between now and 2020, according to Boulder’s consultant Robertson-Bryan.

That, however, is based upon the city paying zero for “stranded costs” — investments Xcel made outside Boulder — such as a new power plant — that it expected city customers would help pay for. Xcel puts those costs at $355 million. The actual price would have to be negotiated or litigated.

Most importantly, when dealing with essential services, taking profit out of the equation allows more room for delivering clean and reliable service to the ratepayer. Boulder, if it can pull this off, will be able to control rates for its citizens, particularly businesses which in Boulder account for 75% of their power consumption. At the same time the city will be adding the healthy mix of renewable energy sources the people are demanding.