Taking Back the Grid

Taking Back the Grid

Three years after Boulder citizens voted to de-privatize their electricity and create a public utility, the city’s effort remains stalled. Can the municipalization experiment still succeed—and provide a model for other U.S. cities seeking to go green?

There’s a government takeover of the energy industry brewing and it’s not in Venezuela or Greece—it’s in Boulder, Colorado. In late 2011, the progressive town (squeezed “between the Rocky Mountains and reality,” as a local saying has it) scored two ballot initiatives empowering city hall to pursue “municipalization” of its electricity grid. The voters’ justification? Ditching fossil fuels and going solar, as the private utility that currently supplies Boulder’s energy, Xcel Energy, refuses to do.

Boulder is in many ways a natural setting for a voter-led experiment in wresting the grid back from corporations and going green. Residents of this college town, which is also home to the National Center for Atmospheric Research, are accustomed to regional jibes about their cultural isolation from the rest of the state: there’s a Buddhist university that Allen Ginsberg helped to start; people with dogs, by law, are not owners but “guardians”; and one would be forgiven for not knowing that marijuana has only been legal for a year. Eccentricities aside, the Boulder-Denver economy is booming and the area boasts among the highest levels of personal health and happiness in the country.

Moreover, the Rocky Mountain West has always had a strong constituency of environmentalists; those living at the foot of the mountains see how much there is to lose without strong laws in place to protect open space and wildlife from private exploitation. In 1967, environmentalists pushed Boulder to buy a “green belt” of protected lands to guard the city from overdevelopment, and the city borders one of the United States’ largest continuous stretches of national forest. Little wonder that Boulderites are trying to dissociate themselves from a regional and national energy politics dominated by coal lobbyists, climate deniers, and arctic drillers. Lucky for them, local geography is also on renewable energy’s side: despite snowy winters and a high elevation, the Boulder-Denver area is among the sunniest places in the United States.

Yet three years after its citizens voted overwhelmingly for a pair of ballot initiatives in favor of energy municipalization, Boulder’s plan to de-privatize its grid and create a public utility remains stalled. Onlookers from both left and right are watching with rapt attention to see if the experiment can still succeed—and if it can be replicated elsewhere.

Until about the 1980s, most cities in this country had public utilities. However, the lingering effects of the 1970s energy crisis, which brought power consumption to a low, and the privatization and deregulation frenzy of the Reagan and Clinton years led many cities to sell their power plants and distribution grids. Since then, they’ve overwhelmingly handed the reins to large energy conglomerates, most of which are hooked on coal-fired power. Investor-owned utilities provide more than 70 percent of the electricity in the United States, and their nature has changed from grid administrators—barely able to eke out a profit—to mega-earners that are among the worst polluters in the country. Duke Energy alone spills about as much CO2 into the atmosphere as the entire Czech Republic. Today, as progressives in urban environments seek to take action on carbon emissions independently of gridlocked state and national legislatures—and of big energy’s bottom line—an increasing number see re-municipalization of private utilities as a critical step forward.

The fight in Boulder has been brewing for almost a decade. Local greens have long argued that the city should take advantage of Colorado’s copious sunshine to quit carbon, go solar, and ditch big energy in the process. The first municipalization task force was started in 2004 and has picked up support as feasibility studies have turned out promising results and as voters have grown increasingly frustrated with current provider Xcel Energy’s refusal to prioritize alternative energy. Now, Boulder’s citizens have granted their government approval to de-privatize the electricity grid, if the city can offer Xcel a fair price for the buyout (Boulder has set a limit of $214 million), and to fund the process of researching and implementing the change.

Unlike other cities that have attempted to take their grids back from private companies in response to price-gouging and poor service, Boulder is pursuing municipalization primarily as a path toward environmental sustainability. Already, the city has budgeted $1.9 million a year, under one of the twin ballot initiatives for municipalization, toward exploring the potential buyout of Xcel. The company, which poured millions into fighting the ballot initiatives, has balked at the proposal and made clear that they won’t leave Boulder with less than $1 billion.

Boulder’s grassroots organizing tenacity has taken big power by surprise. Xcel Energy is not Halliburton. In fact, it is one of the nation’s leading wind providers and has developed alternative energy with Boulder for decades. But residents say the company has not lived up to its promises when it comes to developing solar power.

Previously, Xcel offered a very popular rebate to Boulderites who installed solar panels on their roofs, making them more affordable for middle-income residents not already convinced of their potential for savings. In 2007, Xcel also began working with the city to develop a “smart” computerized grid, which it argued would boost energy efficiency and allow for more solar power input, before jettisoning most of the plans two years later—but not before foisting $27.9 million in costs onto Colorado ratepayers. This unsuccessful effort, on top of the company’s unwillingness to decommission a local coal power plant, has fueled deep animosity toward Xcel in Boulder, leading to a failure to renegotiate their municipal franchise in 2010. Now, the company’s contract is renewed on a year-to-year basis, which in any other market would mean that Boulder could freely switch to another provider—or, in this case, become its own provider. But Xcel still owns the grid, and is not eager to give it up.

Blake Jones, the president and CEO of Namasté Solar, a major alternative energy company based in Boulder, says that “Xcel Energy has a good track record of deployed solar and wind . . . [but] they wouldn’t have done any of this if they hadn’t been forced to do so by the legislature, voters, and/or public pressure.  They’ve spent millions of dollars opposing renewables, and while their PR machine touts their accomplishments and support in regards to renewables, they continue to throw up roadblocks.”

Now, Xcel is on the offensive against Boulder environmentalists and their amply paneled roofs. In 2013, it spent hundreds of thousands of dollars backing a ballot initiative aimed at blocking municipalization, which lost by a 2 to 1 margin. Then, in an attack aimed at fueling the anger of red-state Coloradans against the blue enclave of Boulder, the company announced in early 2014 that it would limit its solar rebate program; it argues that Boulderites have reaped disproportionate rewards from the solar program compared to other Coloradans, and enjoy the benefits of being hooked into the grid while not paying enough to maintain it. But the mayor called the new limits an act of “bullying” and retribution for the city’s push toward municipalization.

Moreover, the company’s overt response to voters’ call for municipalization has been to launch a major legal battle—one requiring multiple state and national rulings and apparently designed to accrue massive legal fees. Xcel’s tenacious legal campaign seems to be directed in part at other cities that might follow Boulder’s lead, for example Santa Fe and Minneapolis—Xcel’s home town—which have both flirted with the idea of municipalization at the urging of left-leaning environmental groups and city council members.

So far, the city of Boulder has diligently fought Xcel’s lawsuits in court. But despite the significant resources it has devoted to the court dispute—it has already spent several million dollars in legal fees alone, out of nearly $10 million in new taxes that voters approved—the city is still struggling to parry Xcel’s legal moves. Xcel contests Boulder’s right to buy back its energy grid and has filed legal challenges to that effect. The city has countered that it will exercise the right of eminent domain to get the grid back. In July 2014, it began the process of condemning Xcel’s assets, but has since been stalled by a district judge. Boulder now must convince the Public Utilities Commission of Colorado of the worthiness of its plan, while Xcel carries out a three-pronged legal battle—in district court, at the level of the state energy commission, and at the Federal Energy Regulatory Commission. It’s hard to imagine many municipalities signing up for such a legal tangle, especially poorer ones: the least affluent communities are not only most vulnerable to the whims of monopolistic utility companies (think of the water shutoffs in Detroit last summer), they are also at the greatest disadvantage against deep-pocketed corporate adversaries in court.

Another obstacle preventing poorer cities from following Boulder’s lead are the likely initial costs associated with “greening” the grid. For most cities, the appeal of cheap energy trumps the noble, but often expensive, goals of the anti-carbon movement. Yet advocates insist that clean energy won’t mean higher energy bills, at least in the long term—and that municipalization could help cities go green without going broke. A 2013 New York Times article noted that “According to data from the federal Energy Information Administration, municipal utilities over all offer cheaper residential electricity than private ones” in roughly two-thirds of cases. The Institute for Local Self-Reliance argues that big grids are not only woefully underusing wind and solar but that their scale has many hidden management and energy transportation costs that are off-loaded on the consumer. And Blake Jones, of Namasté Solar, adds that cities larger than Boulder, such as Austin and Sacramento, have successfully operated their own utilities while vigorously pursuing green energy policies.

There’s no telling yet when, or even if, Boulder will be joining them. But for all the obstacles, we should hope that its municipalization effort succeeds soon. It’s high time that U.S. cities break with both Congress, which continues to suffer from both legislative sclerosis and a bad case of climate change denial, and regressive statehouses like Oklahoma’s, which recently mandated a fee to penalize homes for installing wind turbines or solar panels, to declare that some services are too valuable to be monopolized by corporations.

Max Holleran is a PhD candidate in sociology at New York University.