A Tale of Two Clean Energy Cities: Boulder and Minneapolis

The city of Minneapolis, Minnesota has just entered into a first-of-its kind Clean Energy Partnership with its two utilities, Xcel Energy and the natural gas company CenterPoint. The new agreement renews the city's franchise agreements with both utilities to include more consumer choices for clean energy, more support for renewable energy development in Minnesota, an increased focus on energy efficiency, and a more vigorous program to transition municipal facilities into more clean energy and improved efficiency.

Assuming that both of the utilities deliver on their promises, Minneapolis energy consumers can probably thank the good people of Boulder for helping to bring the Clean Energy Partnership into being. Boulder also has Xcel as its utility, but Boulder voters have taken an entirely different route toward bumping their energy supply into 21st-century renewable sources. It seems that Xcel is determined not to let the same thing happen in Minneapolis.

Boulder vs. Xcel Energy

Along with New York City, Philadelphia, and many other cities, Boulder has been looking to adopt a green brand that can attract new businesses and residents.

Many aspects of this kind of effort fall within local or state control, but for better or worse, energy supply can be a sticking point. In a best case scenario, if the local utility is on board with renewable energy, then a good working relationship can enhance a city's green brand while improving the long term outlook for price stability, and potentially limiting or reversing future rate increases.

Xcel has actually been doing a good job of transitioning itself into a renewable energy model. However, apparently the pace of change has not been fast enough for Boulder voters, who see a pile of green goodies in Colorado's vast wind power potential.

In 2011, Boulder voters approved a ballot measure empowering the city to explore severing its ties with Xcel. By April 2013, the Boulder City Council set the wheels in motion for the final steps toward accomplishing that.

The last time we checked, this past summer Boulder was fighting legal action by Xcel while moving forward with plans to acquire the utility's distribution network through condemnation.

Meanwhile, back in Minneapolis...

Now compare the contentious relationship between Boulder and Xcel with the optimistic outlook expressed by Minneapolis Council President Barbara Johnson (here's that link to the Xcel press release again):

There's no other partnership like this in the country. Although we've worked collaboratively with the utilities before, we'll now be teaming up with them to meet the city's clean energy goals. We stand to accomplish more together than on our own.

From the outside looking in, it's difficult to understand why Boulder and Minneapolis took two such divergent paths in dealing with the same company.

However, Minneapolis has published some handy FAQ sheets on energy franchise agreements and the Clean Energy Partnership that offer at least two clues.

First, the FAQs make the point that "municipalizing" an existing private utility is a costly endeavor. Boulder voters and their representatives have apparently decided that the effort is worth the financial risk, and only time will tell if their assessment was well thought out.

Of more interest in terms of the transition to clean energy is the second clue offered up by the FAQs. They describe a strong state-level legislative framework that promotes clean energy and energy efficiency, including several recent bills supported by the city of Minneapolis.

Specifically, last year the state legislature passed a new Omnibus Energy bill, part of which requires electric utilities to sell a certain percentage of their in-state retail sales in the form of solar energy.

That provision alone could have been enough to motivate Xcel to work more proactively with Minneapolis, especially after its experience in Boulder.

Also helping things along could have been provisions in the Omnibus Bill aimed at bumping up energy conservation goals, and for streamlining the PACE program, which enables municipalities to create bond-backed loan pools for property owners to invest in energy efficiency upgrades and renewable energy systems.

If it the Minneapolis experiment does pan out, it could mean that Boulder was a learning experience for Xcel, and it could provide a blueprint for other utilities that are making the painful transition toward embracing a wider range of energy-related services.

Image credit (cropped) m01229 via flickr.com, creative commons license.