Work to DateSelected team and began recruiting participants for stakeholder and technical advisory teams

Charter Metrics• Worked with stakeholder team to develop metrics that

quantify charter goals–Business–Academic–Activists

• Presented to council on October 16• Metrics available at BoulderEnergyFuture.com

Work to Date: MetricsCharter

RequirementProposed MetricThe proposed city

utility will demonstrate:

Comments

Rates do not exceed rates charged by Xcel at time of acquisition

Average cost per kilowatt hour (kwh) of electricity by sector (residential, commercial and industrial) compared to Xcel’s average cost per kwh

Calculation of the average cost is based on an overall revenue requirement calculation that includes all elements that are currently included in rate-payer costs such as operations & maintenance, fuel costs, purchased power, and capital costs (debt service).Note: If cost allocation by rate class data is available from Xcel, the city would try to model at that level.

Work to Date: MetricsCharter Requirement Proposed Metric

The proposed city utility will demonstrate:

Comments

Rates produce revenues sufficient to pay for the new utility’s operating expenses and debt payments plus an amount equal to 25% of debt payments

Debt service coverage ratio (DSCR) will be measured by dividing net operating income by the total debt service (Operation& Maintenance, annual debt service payment) plus 25%

DSCR is measurement of a utilities ability to generate enough revenue to cover the cost of its debt payments. It is calculated by dividing the net operating income by the total debt service. The Charter requires that the new utility have a debt service ratio of 1.25, meaning that it generates 25% more revenue than required to cover its debt payment.

Work to Date: MetricsCharter Requirement Proposed Metric

The proposed city utility will demonstrate:

Comments

Reliability comparable to Xcel A new utility will have: 1. comparable electric equipment,

facilities and services as those of Xcel at time of acquisition;

2. an adequate reserve margin (tentative target 15%); and

3. meet North American Electric Reliability Corporation (NERC) compliance requirements

1. “Comparable services and facilities” means that the city will include plans for any crews, staffing, etc. to support the customers at the same or better level as Xcel. In addition, the physical configuration of the system acquired (may include additional capital investment) will provide the same reliability to customers as they receive from Xcel.

2. A reserve margin or “reserve capacity” is an amount of electricity capacity above the anticipated load. 15% is the accepted industry practice.

3. NERC is the electric reliability organization (ERO) certified by the Federal Energy Regulatory Commission to establish and enforce reliability standards for electric utilities.

Work to Date: MetricsCharter Requirement Proposed Metric

The proposed city utility will demonstrate:

Comments

Reduce greenhouse gas (GHG) emissions and increase renewable energy

The short-term plan will demonstrate that emissions will be reduced and renewables increased proportionally beyond the levels that would have been otherwise achieved by staying with Xcel. The long-term plan will demonstrate that the city’s carbon intensity from electricity in its portfolio will be less than Xcel’s, and renewables (on a proportional basis) will be greater than Xcel’s.

The specific metrics for showing measurable reductions will minimally include metric tons of carbon dioxide equivalent (MtCO2e), which is used to convert all green house gases into a single measure, such as CO2, NOX, and any other pollutants associated with generating electricity.Given that reductions are to be made over time, the comparison to Xcel must use the same load growth assumptions Xcel is using to define their future resource requirements and portfolio.

Work to DateFinancial Evaluation• Issued RFP for financial advisor specializing in

public power financing, expect to make selection in next few weeks

• Evaluated financial modeling tools and data requirements, moving forward with an Excel spreadsheet based format

• Will be forming a team of stakeholders to vet model assumptions

Work to Date

Asset Acquisition and Reliability• Forming team of staff and technical experts– Includes engineers, appraisers, GIS data analysts,

former utility (including Xcel) experts• Held kick-off meeting to vet plan and approach• Identified and collecting data for use in

valuation, able to leverage off of existing records• Issued Engineering RFP – responses to Oct. 29

Work to DateResource Mix• Evaluated resource planning and optimization tools,

selected one that already has 70% of what we need• Forming technical team to help develop electric

resource options and cost• Recruiting experts in energy efficiency, demand side

management, renewables, distributed generation, fossil fuel based generation, and transmission. Most from our local business community and CU.

Work to DateLegal• Evaluating various legal strategies, but to

maintain the city’s negotiating position, these have to be kept confidential

• Looking at options to mitigate litigation risks, including stranded costs

• Continue to be open to discussions with Xcel

Evaluation of Risk & Benefits/Impacts

Risk Assessment is part of work plan – critical to understanding impact of various strategies–Risks associated with both municipalizing and staying with Xcel

• Strategies will be vetted for economic and community benefits/impacts

• Risks will be identified, as well as ways to mitigate • Risk areas include: – Financial – Environmental – Separation – Reliability – Time

• Modeling value and risk with assistance from a top economic expert in this field

Evaluation of Risk & Benefits/Impacts

Part of risk assessment is looking at what other municipalities have done, both successfully and unsuccessfully.–Longmont, Ft. Collins and many others have successful municipally operated electrical utilities–Also look at places that have experienced issues with their municipal utilities for lessons learned

Reliability Comparison

Rate ComparisonColorado Association of Municipal Utilities (CAMU) survey results – Jan. 2012

Rate Comparison

What’s Next• Intensive work plan analysis over the next five

months• Community review of all work• Strategy presentation to City Council in the

first quarter of 2013• Council will advise on moving forward• Will also be an opportunity to take an “off-

ramp”• Third party review

What’s Next• OFF RAMPS– 1st Off Ramp in 1st Quarter of 2013– Off ramps after the outcome of each major

litigation point (throughout Phase 2)• Final analysis and recheck of assumptions at

the end of Phase 2• Visit www.BoulderEnergyFuture.com to

review the work plan.

Work Plan Analysis Areas• Consultants, technical engineers, local academics,

community stakeholders and other interested individuals all contributing to analysis

• Teams– Work Plan Creation and Vetting – Financial – Metrics and Criteria Development– Resource Mix– Technical – Facilities Managers Stakeholders– Legal

We Need YouHow you can participate:• Become part of an advisory team• Follow us at BoulderEnergyFuture.com • Sign up for e-mails and monthly newsletter on project

website• Provide feedback to specific questions at

InspireBoulder.com • Invite us to your meetings for regular updates • Call or email me if you have questions:

baileyh@bouldercolorado.gov, 303-441-1923