Both City Councils Extract Major Additional Concessions From Xcel Energy
by Charles C. Bonniwell
Safe & Reliable Energy: Xcel Energy crews work from bucket trucks to repair and maintain electrical equipment on a utility pole. The work is part of ongoing efforts to maintain reliable electric service and infrastructure in the area.
Once every 20 years certain utility companies are required to get the approval of municipalities to use their streets, rights of way and other easements for their transmission lines and the repair of the same. Both cities require the approval of the respective city councils and the voters of each jurisdiction.
Both Denver and Glendale last approved these contracts back in 2007. The municipalities receive in exchange for use by Xcel important financial compensation over the 20-year period, which in the case of Denver alone is $180 million in the form of general revenue, dedicated underground funds, and infrastructure savings.
But cities also view the negotiations as a rare opportunity to extract additional concessions from the public utility. Last year Mayor Johnson’s administration took the lead in the negotiations to obtain additional concessions.
Last year, by a 7 to 6 vote, the City Council refused to refer the proposed Franchise Agreement for various reasons, including the failure of the Johnson administration to include council members and their staffs in negotiations with the utility.
The council members who were against referring the Franchise Agreement to the voters said they wanted to have additional time to receive public input. They also believed that not enough was accomplished for clean energy and climate resilience goals.
Minimum Disruptions: It was important for Glendale during negotiations to get assurances that repairs would not interrupt the flow of traffic and have the least amount of disruptions.
Moreover, some council members wanted better equity guarantees and utility cost protections for working-class and low-income households.
After months of tough negotiations, a new Franchise Agreement was presented to the Denver City Council on July 27th, which was composed of a Franchise Agreement as well as a companion document titled “Energy Partnership Agreement,” which encompassed many of the new concessions regarding the transaction.
The revised agreement sailed through the city council vote by a 10 to 2 margin, apparently fully satisfying even many of its former vociferous critics.
In Glendale the negotiations were somewhat smoother but not without sticking points. Of significance to Glendale was obtaining broader discretion on how the so-called 1% fee to underground utilities could be utilized by the city. After a great deal of back and forth, a compromise acceptable to Glendale was provided by Xcel.
Glendale stressed Xcel reimbursing the city for its m
aintaining smooth surfaces on city streets, as well as expert coordination on repair of outages and mandating the quick updating of Xcel’s electric and gas network as it applies to Glendale.
Moreover, Glendale insisted on methods to ensure the mitigation of traffic delays when Xcel is working on streets in Glendale.
The vote was unanimous at the August 4th meeting of the Glendale City Council to send the Franchise Agreement to the voters. In addition, the Greater Glendale Chamber of Commerce approved a resolution urging Glendale voters to approve the submitted Franchise Agreement.
With a broad consensus that the Franchise Agreements are positive developments for both Glendale and Denver, it is anticipated that the voters of both municipalities will approve the Franchise Agreements. Those agreements will go into effect on January 1, 2027.
