Boulder staff outline Xcel Energy franchise review, highlight emissions progress and reliability concerns

City staff told the Boulder Environmental Advisory Board that the five‑year milestone in the city’s 20‑year franchise with Xcel Energy will prompt a March 13 study session with City Council to assess the partnership’s progress and next steps.

Carol Neland, senior manager for energy systems in the Department of Climate Initiatives, said the franchise—approved by voters in 2020 and effective in 2021—includes performance‑based emissions milestones and five‑year exit points that allow the city to opt out if it chooses. “These milestones present a great opportunity for us to pause and reflect,” Neland said.

Why it matters: the city’s franchise and associated partnership agreements are the primary formal mechanisms through which Boulder seeks to influence Xcel’s investments and operations in the community. Staff presented both progress on grid emissions and ongoing challenges on reliability and wildfire risk—issues residents have flagged repeatedly.

Most notable numbers and milestones

- The franchise is a 20‑year agreement that includes five‑year review/opt‑out points; the end of the first five years is the coming anniversary staff will bring to council. - Neland said Xcel’s most recent plan—the company’s “just transition solicitation” for replacing retired coal plants—projects system‑wide emissions reductions exceeding the statutory 80% target measured against a 2005 baseline and could reach over 90% if implemented as proposed. - Staff said about $16 million has been spent on four city‑directed undergrounding projects tied to the franchise fund so far (examples cited: North Broadway, Nineteenth Street/Broadway multiuse path, East Arapahoe, and Chautauqua projects). - City staff estimated that fully undergrounding Boulder’s remaining overhead distribution network would be on the order of hundreds of millions to roughly a billion dollars; staff emphasized that undergrounding must be prioritized strategically.

Reliability, wildfire mitigation and vegetation management

Neland and other staff described a continuing emphasis on reliability and wildfire mitigation. Staff said Xcel has proposed undergrounding in targeted areas as part of its wildfire mitigation plan and has increased vegetation management budgets. Neland cited recent vegetation work in mountain areas—including roughly $18 million spent clearing a line near Nederland—and said Xcel has proposed “hundreds of millions” for vegetation management over the next three years.

At the same time, staff warned that vegetation work on private property presents coordination and resourcing challenges that slow progress. “Going on to private property remains a significant challenge,” Neland said.

Undergrounding funding and constraints

The franchise contains a provision under which Xcel reserves up to 1% per year of revenues for community‑directed undergrounding projects in the public right‑of‑way. Staff described how those dollars have been applied to transportation reconstruction and multiuse path projects to allow utilities to be buried as part of capital projects. Staff also said Xcel’s regulated cost‑recovery model and the higher upfront cost to underground versus replace aerial lines limit the pace of system‑wide undergrounding.

Battery storage, virtual power plants and grid modernization

Staff said Xcel and the city are exploring distributed resources including batteries, virtual power plants and microgrids. Neland said pilot programs and Department of Energy grants studying virtual power plants could help clarify how distributed storage contributes to community‑level reliability and resilience, though she cautioned there is not yet a single widely accepted solution.

What council will consider March 13

Staff said the March 13 study session will present the partnership’s accomplishments and the opportunities staff and the community see going forward; council could ask for more analysis, direct additional staff work, or choose to pursue a ballot measure. Under local rules, City Council can opt out by a two‑thirds vote or place an opt‑out question on the ballot; a citizen petition can also place the question before voters.

Caveats and next steps

Staff emphasized that an opt‑out does not immediately change service providers. If the city pursued municipalization, staff said the likely implementation timeline would span years and possibly a decade, because of necessary engineering, asset purchases and potential litigation over acquisition terms. Meanwhile, Xcel would continue to serve customers during any transition period.

City staff said they will bring materials to the Environmental Advisory Board’s March meeting so the board can provide input before the Council study session and that a staff advisory panel—composed of resident and institutional seats including a Boulder Chamber representative and a University of Colorado seat—has been providing ongoing feedback to the partnership.

Ending

Staff asked the board for any issues they wanted added to the March 13 discussion; board members raised questions about enforcement of partnership commitments, the scale and prioritization of undergrounding and vegetation management, and options for leveraging distributed storage and sectionalization to improve resiliency.