Hickenlooper backs Xcel franchise deal

Denver residents to vote on plan that would add to bill

Alan Gathright, Rocky Mountain News

Published July 21, 2006 at midnight

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Mayor John Hickenlooper calls a proposed 20-year franchise agreement with Xcel Energy a "better deal for Denver" that would help low-income families with utility bills, boost energy conservation and save the city tens of millions of dollars on utility relocation costs.

Now, Denver residents have to decide whether the deal is good enough to add $9 a year to the average electricity and natural gas customer's bill. They will vote on the franchise agreement, called Measure 1A, on Aug. 8.

It is the only city question on the primary ballot and has no known organized opposition.

Unaffiliated voters, who typically don't vote in primary elections, will be able to vote on Measure 1A.

State law allows Denver to charge Xcel a franchise fee to use public lands for its gas and power lines. The utility passes on the cost to consumers.

But residents get a return on the fee, which this year is expected to put around $22 million into the city's general fund. That helps pay for police, parks and recreation, snow plowing and other services.

The cost to consumers would increase slightly under the proposed agreement because Denver would stop excluding the first $12.50 of gas and electricity bills from the 3 percent franchise fee.

Denver began the exclusion decades ago under the premise that it would help poor customers proportionally more to exempt the first chunk of their bill. But the break applies to every ratepayer in the city - millionaires and poor people alike.

Eliminating the exclusion would generate $2.1 million a year, which the city would use to help an estimated 4,000 to 5,000 low-income residents with their utility bills next year.

"It allows us to better target those dollars to help low-income residents through conservation, sustainability and other programs," said Cole Finegan, the mayor's chief of staff and city attorney, who spent two years negotiating the new agreement.

Xcel would partner with the city and the state on a pilot program to help poor residents buy energy-saving appliances and participate in home insulation programs.

The utility also would share its expertise to help Denver harness fast-changing technologies and strategies to save on energy and water in existing facilities.

In addition, Xcel would collaborate on Hickenlooper's recent promise to make new Denver facilities, like the planned Justice Center complex, more cutting-edge "green buildings" that conserve energy, employ recycled materials and reuse waste water for irrigation.

The next step is to encourage large commercial building owners to buy into the green building movement.

"It's good for business and is economically viable in ways that it maybe wasn't years ago," said Scott Johnson, an assistant city attorney who helped hammer out the franchise agreement.

Meanwhile, officials say the agreement would end the friction between the city and Xcel over who pays for moving utility lines during government construction projects, something that has generated lawsuits in the past.

Xcel would pay the entire cost of utility relocations on city projects that are at least 50 percent government funded, including Regional Transportation District construction. Finegan said this alone would save the city tens of millions of dollars on construction of the $4.7 billion regional FasTracks transit project.

Under the agreement, Xcel is committed to meeting new performance deadlines for fixing burned-out street lights, installing traffic signals and doing emergency repairs on critical facilities, as well as relocating facilities and burying utility lines.

Measure 1A is that rare fee increase with no organized opposition. At a City Council meeting in May, business and environmental leaders, labor groups and advocates for low-income residents all endorsed the agreement.

Plugging into Measure 1A

Denver's proposed 20-year franchise agreement with Xcel Energy by the numbers:

• $9: Average annual increase to residential electric and natural gas bills.

• $2.1 million: Amount the city would use to help low-income residents pay their utility bills.

• $22 million: Amount the franchise agreement fee raises for the city's general fund.

Under the deal, Xcel would be required to:

• Share its expertise to help Denver improve energy and water conservation in municipal facilities and construct cutting-edge "green buildings" that save energy, employ recycled materials and reuse waste water for irrigation.

• Pay the cost of utility relocations on construction projects that are at least 50 percent government funded, saving the city tens of millions of dollars on major projects such as the regional FasTracks transit project.

• Commit to new deadlines for fixing burned-out street lights, installing traffic signals and making emergency repairs on critical facilities, as well as moving facilities and burying utility lines.

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