Minneapolis could seek voter input on municipal utility

A key Minneapolis City Council committee took the first steps Thursday toward allowing a ballot question in November on whether the city should nix Xcel Energy Inc. and Center­Point Energy in favor of a municipal utility, voting 7-4 to set up public hearings on the possibility.

The move came the day before the council is slated to vote on a $250,000 study to explore that idea, along with other ways of achieving the city's renewable energy goals when agreements giving Xcel and CenterPoint exclusive rights to provide electricity and natural gas expire at the end of 2014.

Council President Barb Johnson questioned the timing of holding a voter referendum before the report, due in February, could be completed, and questioned whether doing away with private utility service even made sense in light of the recent storm that knocked out power across the city.

"We just lived through a storm where Xcel had a thousand trucks in our community … to get our city up and running," Johnson said during the Committee of the Whole meeting.

"Where would we come up with 1,000 trucks? Where would we come up with 500 trucks?"

Council Member Cam Gordon said that before the public hearings on Aug. 1, the city would draft language for a ballot measure that authorizes the city to set up its own utility. But even voter approval would not bind the city to take over electric and natural gas services, he emphasized.

"Let's … see what voters think," Gordon said. And if the ballot question fails, he added, that would also give the city a clear message on how to proceed.

Council Member Gary Schiff backed Gordon, saying the city wants to negotiate with Xcel and CenterPoint with all the leverage it can. He said it would be a mistake to walk into talks about renewing the 20-year franchise agreements with "arms tied behind our back, acting like we have no other options."

The Minneapolis Regional Chamber of Commerce has already raised doubts, and an executive at Xcel said Thursday that asking the public to vote on the issue is a "very serious step" that would take up time and attention that could go toward Xcel and the city working together on achieving the city's energy goals.

"This all happened very suddenly, very quickly. … There are big implications, not only the cost, but really running a utility company is complex," said Laura McCarten, regional vice president of Xcel. "We've got expertise; we've been doing it for years."

Xcel has fought a similar effort in Boulder, Colo., where voters approved creating a municipal utility in 2011.

Council Members Kevin Reich, Diane Hofstede and Sandy Colvin Roy joined Johnson in opposing the measure. The council president said she would make a motion at Friday's meeting to spend the $250,000 allotted for the energy study on repairing potholes instead.