Aspen `green’ power will be used to light up Burlingame
September 4, 2003
The city of Aspen, rather than Holy Cross Energy, will provide electricity to the planned Burlingame Ranch housing development under the terms of a deal that was finalized this week.
The city will ask voters to approve a new 20-year franchise agreement with Holy Cross in November, but the deal will include a key provision to expand Aspen power to housing projects outside the city utility’s normal service area.
Aspen’s old franchise agreement with Holy Cross expired in July; negotiations on a new deal have been under way since January. The city’s ability to serve the planned 330 units at Burlingame and other housing projects has been a point of contention in the talks, according to John Worcester, city attorney.
“That was the major sticking point,” he said. “What it means to them is they’re giving up potential customers and revenues.”
The City Council met behind closed doors with Holy Cross representatives on Tuesday and finalized the provisions of the franchise agreement.
The new agreement will allow the city to provide electricity to its own facilities outside Aspen utility’s service area, such as the Aspen Recreation Center, and to up to 500 affordable housing units that are outside the city’s service area, but within the urban growth boundary. That area encompasses the Burlingame housing site west of town.
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The council has committed to making city affordable housing projects as environmentally friendly as possible. It was anxious to provide city electricity to users like the recreation center and future Burlingame homeowners because 57 percent of Aspen’s electricity comes from renewable sources – hydro- and wind-generated power.
“I don’t know that you’ll find many municipalities that have 57 percent renewable energy, which is pretty cool,” Worcester said.
Holy Cross estimated between 10 and 20 percent of the power it provides comes from renewable sources.
Aspen’s ability to provide electricity to both city facilities and the 500 housing units will mean about $300,000 in annual revenue will go to the municipal utility rather than Holy Cross.
The city’s utility provides electricity to a service area mainly in Aspen’s core, while Holy Cross provides power in areas not covered by the electric department.
The franchise agreement gives Holy Cross the exclusive right to provide power within the city but outside the municipal service area.
Holy Cross will pay 3 percent of its gross revenues from Aspen customers as a franchise fee that is turned over to the city, under the terms of the proposed new agreement. The fee is collected from its customers.
It amounts to about $150,000 to $175,000 a year that the city uses to augment its ability to purchase renewable energy, Worcester said.
The franchise fee from Holy Cross has been 3 percent for the past 25 years, he added.
Holy Cross customers have not been paying the fee since the old agreement expired in July; it will be reinstated if the new agreement is approved in November.
In addition, the city would receive money from Holy Cross’ Community Enhancement Fund. The company will pay the city an amount equal to 1 percent of gross revenues, which can be used for certain designated purposes, including beautification projects, energy conservation, equipment and technology upgrades for schools, scholarships, acquisition of parks and open space, sponsorship of community events and the undergrounding of overhead lines.
The ordinance granting the new franchise agreement will go to the council for final approval on Monday.
The ballot question before voters in November will ask if the city should be authorized to grant a franchise to Holy Cross Energy for 20 years for the provision of electricity in Aspen upon the conditions set forth in the ordinance.
[Janet Urquhart’s e-mail address is email@example.com]