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Xcel Energy is on track to miss its 2024 carbon emissions targets laid out in the Boulder/Xcel franchise agreement, just as it did in 2022, according to a company presentation to the Xcel community advisory panel earlier this month.
There are no penalties against Xcel for missing targets, other than the city being able to revisit the idea of trying to make its own power utility.
In 2020, Boulderites voted to end that yearslong effort for “municipalization,” where the city would split from Xcel to become its own utility.
As part of this decision, the city entered into a new franchise agreement with Xcel Energy, which specified commitments from the utility in exchange for dropping the legal fight. Those commitments involved incorporating benchmarks into Xcel’s legal obligation to reduce its Colorado carbon emissions by 80% from 2005 levels — with specific targets for 2022, 2024 and 2027.
Another was that Xcel would help the city reach its goal of running on 100% renewable electricity by 2030, closing the 20% gap between the city’s goals and Xcel’s.
Boulder’s main lever of accountability is the option to leave the franchise agreement and restart municipalization efforts at several points before the agreement expires in 2041. In 2025 and 2028, the city is allowed to exit if Xcel fails to meet its emissions requirements. (It was also allowed to terminate the deal in 2023.)
In 2026, 2031 and 2036, the city can leave for any reason.
To provide input for the partnership, the city formed a community advisory panel of 18 Boulder residents. The panel has met quarterly since July 2021 to review Xcel’s progress and make recommendations to the project oversight team. The oversight team comprises three City of Boulder staff and three Xcel staff, who manage day-to-day aspects of the partnership, including ensuring Xcel remains accountable to agreed-upon priorities.
At the Feb. 5, 2024, meeting, Xcel presented panel members with a graph showing the utility missing targets mandated in the franchise agreement for 2022 and 2024. The 2022 target was missed by 300,000 tons of carbon dioxide emissions, equivalent to the annual emissions from over 50,000 gasoline cars. Xcel estimates missing the 2024 target by more than five times that amount.
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According to the presentation, however, Xcel will more than make up the difference soon, though some panel members remain skeptical. Xcel estimates it will beat the 2027 target by 4.9 million tons, emitting only 6.6 million tons compared to the target of 11.5 million.
“The one measure we have thus far, we missed. And the next measure we’re going to miss,” Andy Sayler, a panel member and Boulder-based computer scientist, said during the meeting. “Maybe there’s some magical thinking in that line suddenly starting to track by 2027?”
Xcel representatives attributed the failure to meet targets to various factors, including lower-than-expected production from renewables, namely solar and wind.
In Colorado, wind performance was down 1,700 gigawatt hours in 2022, compared to the company’s forecast, said Jeff Lyng, an area vice president for Xcel. He said energy models often overpredict the production of wind farms. On the solar side, Lyng blamed pandemic-induced supply chain issues.
A cold winter in 2022 also increased customer energy use by about 1%, Lyng said. Gas, a fossil fuel, made up for the shortfall.
The projected catch-up by 2027 relies on Xcel’s Colorado Clean Energy Plan that the Public Utilities Commission approved in 2022. The plan includes steps like quitting coal by 2030 and adding “unprecedented amounts of renewable energy resources to the grid.” The federal Inflation Reduction Act is providing an $8 billion tax credit to Xcel for its clean energy plan.
The approved portfolio will add about 6,100 megawatts of new generation, Xcel’s website says.
“We’re highly dependent on this [clean energy] plan for the third [target] in 2027,” said panel member Jack Vultaggio at the meeting. Vultaggio works at IBM where he leads energy management efforts. “What are our biggest risks and how are we trying to control those? Because it doesn’t seem like we have much leeway to slip.”
As of 2024, nearly half of Xcel’s Colorado portfolio is fossil fuels. By 2027, Xcel predicts that will be down to 25%, with wind and solar each seeing double-digit increases.
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Back in 2022, Boulder advisory panel members expressed frustrations over Xcel’s delays in presenting a roadmap for emissions reductions per the agreement. Now, there are questions about the panel’s effectiveness given the enormity of the challenge.
“I don’t know that I would say that the panel has been a significant driver of change,” Sayler said. “I do think they do take our opinions into consideration. But the other factors at play here are so large and so significant that at best we’re kind of chewing around the edge.”
The city council will be hearing a presentation from Xcel on on Feb. 15.
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