Boulder and Xcel review five-year energy partnership; council presses on wildfire risk, undergrounding and decarbonization progress

At a study session, Boulder city staff and leaders of Xcel Energy reviewed five years of the city's franchise and energy partnership and discussed wildfire mitigation, targeted undergrounding projects and progress toward local renewable and emissions targets.

City officials said the partnership, which took effect Jan. 1, 2021, includes a 20-year franchise with opt-out checkpoints at the five-, 10- and 15-year anniversaries. Council and staff framed the meeting as an update to inform whether the city needs additional analysis to decide whether to continue the franchise.

"Tonight's study session is an important opportunity to reflect on the city of Boulder's partnership with Xcel Energy as we marked 5 years since the franchise agreement was signed," City Manager Nuria Rivera Vandermeid said at the start of the presentation. Jonathan Cohen, director of the city's Climate Initiatives Department, told the council staff's goal was "to provide an update on the partnership activities, where we are today, looking at some opportunities for improvement, and again...look to the future state of the partnership to make sure we continue to serve the needs of Boulder residents, businesses, as well as Xcel."

City staff and Xcel officials reviewed the governance and program work that has flowed from the agreement. Carolyn Elam, senior manager overseeing the partnership for the city, outlined projects funded through the agreement's undergrounding program and other partnership initiatives. She said the city and Xcel have advanced multiple undergrounding projects timed to public works work, noting North Broadway, 19th Street and East Arapahoe projects, and a new Chautauqua project the city described as focused on community resilience and wildfire-risk reduction. Elam said those projects, together with others, "will represent at least the 16 plus million dollars that were part of the first 5 years."

Xcel executives described how wildfire mitigation, system hardening and communications were being advanced across their service territory, and how those tactics fit into broader decarbonization plans. Robert Kenny, president of Xcel Energy's Colorado operating company, said Xcel has grouped its wildfire work into situational awareness (weather cameras and detection), system hardening (targeted undergrounding, covered conductor and conductor upsizing), and operational mitigations (enhanced power-line safety settings and the public-safety power shutoff or PSPS). "We've only employed PSPS once," Kenny said, and he acknowledged that communications after the single April PSPS event "had significant opportunity for improvement," which Xcel said it has tried to address in its wildfire mitigation plan.

Xcel emphasized a number of other partnership accomplishments and plans discussed in staff materials: the city's targets for 100% renewable electricity and 100 megawatts of local installed generation by 2030, an inventory of partnership focus areas (efficiency, electrification of buildings and transportation, local generation and storage, and resilience), and partnership projects including a Department of Energy-funded virtual power plant pilot in Boulder. Xcel also outlined its distribution-system planning and an electric resource "Just Transition" solicitation that it said could add thousands of megawatts of new wind, solar and storage to replace retiring coal plants.

Council members pressed Xcel on several topics. Multiple council members cited the April PSPS event and asked how Xcel will shorten restoration times and provide better advance notice. Kenny said Xcel's intent is to give layered notice (72, 48 and 24 hours as forecasts firm up) and to preposition crews and use drones so that restoration will be faster and safer, but he added that exact restoration timelines depend on the scope of any event and the number of line miles to be patrolled. Several council members also asked for additional clarity on costs and pace of undergrounding: Xcel said undergrounding costs vary widely by topography and whether lines are distribution or transmission.

Council members and staff also asked Xcel for more information on a short list of items staff and council said they needed to evaluate the franchise at five years, including: - a clearer, Boulder-specific list and schedule of wildfire mitigation and undergrounding projects that affect the city; - more precise estimates of customer cost impacts over time tied to specific project and resource portfolios, including how tax credits and avoided fuel costs affect rates; and - whether Xcel will provide additional monitoring and reporting for the Valmont ash cleanup and any other environmental remediation projects that affect Boulder residents.

Xcel said it would follow up. Regarding federal funding, Kenny said the DOE virtual power plant grant was in hand and under way, and he described federal tax credits under the Inflation Reduction Act as an important driver of project economics. Xcel described its clean heat plans and other filings to expand electrification programs and said it had included substantial funding in a recent filing to support customer electrification and beneficial electrification programs.

City staff and council members said they will use the next weeks to identify any additional analyses they need to inform a future decision on the franchise opt-out available at the five-year checkpoint. Council members asked staff to return with a clearer timeline for the opt-out process and with the list of Boulder-specific projects and further economic and operational detail from Xcel.

What happens next: staff said they will consolidate council's requests for more information and follow up with Xcel on specific items (air and groundwater monitoring for the Valmont project, an itemized Boulder project list and more specific cost and timeline estimates for undergrounding and resilience projects). Xcel said it would provide follow-up materials after the presentation and looked to continue the partnership work on the items identified tonight.

Ending: Council did not take a formal vote on the franchise at the session; the meeting was an informational study session and staff said additional information and follow-up briefings will be provided to the council to inform any future decision about the franchise.