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By Mark Chediak

Boulder, Colorado, voters will decide today whether to publicly take over their local electric utility, effectively ending one of the most high-profile "smart grid" projects in the country.

The referendum comes after Xcel Energy spent more than $44.8 million, exceeding its original budget estimate of $15 million, according to regulatory filings. The initiative is one of the nation's first "smart grid" pilot projects, designed to help customers reduce power use and cut down on greenhouse gas emissions. Xcel raised $950,000 for its campaign to keep the Boulder utility private, compared with $88,500 spent by backers of the referendum, according to city records.

Supporters of the public take-over say Xcel, based in Minneapolis, isn't adding renewable energy fast enough and seek greater control over the local power grid. "Boulder felt Xcel wasn't up-front about costs and about the potential benefits of the pilot," said David Parker, a utility analyst with Robert W. Baird. The project began when "smart grid" technology was considered "the hottest thing in the world," in 2008, Parker said. Then, after the recession hit, customers started asking why they were spending money on upgrades with unproven benefits.

A takeover could lead to spiraling costs, as the city issues bonds to buy the infrastructure, according to Xcel. The company says it's already on its way to boosting the amount of power it supplies from wind turbines and solar farms to 30 percent by 2020 from about 11 percent, as required by state law.

"This was an innovative project, and there was a lot of hope and excitement," Michelle Aguayo, an Xcel spokeswoman, said in an interview. "Customers wanted to see results right away," she said. "You have to allow time to figure out what works and what doesn't."

The idea behind building so-called smart grids is to use better sensors and meters to help customers and utilities manage electricity more efficiently. The expense of building a fiber-optic network, instead of using cheaper wireless technology, to monitor energy use helped drive the cost of the project above expectations, according to Xcel.

The utility is still studying how the smart-grid technology affected energy consumption and plans to release a report on the first phase of the project in the next two weeks, Aguayo said. Early findings show the technology helped Xcel to respond faster to power outages and deliver power with fewer interruptions.

The smart grid backlash hasn't been limited to Colorado. Customers in California recoiled at the rollout of devices there, with a group of PG&E customers complaining about their accuracy and about the potential health effects of the wireless radio frequency emissions from the utility's smart meters.

PG&E has said its meters are accurate and safe. Still, California regulators are considering allowing customers to choose a traditional meter instead of a digital one.

-0- Nov/01/2011 18:56 GMT

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