The answer to whether the city of Boulder can replace Xcel Energy, Colorado’s largest electricity provider, with its own utility is in the numbers. But there’s serious dispute around town about what, exactly, those numbers say.

“When we started, there were a lot of unknowns,” Boulder Mayor Matt Appelbaum said. “But as we’ve gathered more information and gotten more technical, the results have been better and better.”

Others don’t see it that way.

“Based on our reading, it looks like a 50-50 bet that the city can achieve its goals and keep rates comparable to Xcel’s,” said Angelique Espinoza, public affairs manager for the Boulder Chamber of Commerce.

Boulder is exploring whether to sever ties with Xcel and create its own municipal utility in an effort to meet the city goal of cutting its greenhouse gas emissions.

The price tag for a municipal electricity system — including buying up all of Xcel’s assets like lines, poles and substations that serve the area — is put at between $2.4 billion and $3 billion over 20 years, according to a 287-page analysis done by the city.

For the money, the city could maintain a system that is reliable, cost competitive with Xcel and gets more than half its power from renewable sources, according to the study compiled by a battery of consultants and community working groups.

“It is an optimistic picture, but it isn’t clear how they get there,” said City Councilman Ken Wilson. “It is the dream utility everyone is fantasizing about.”

On Tuesday, the City Council is set to decide, based on the study, whether to continue with the municipal utility project — which in the last three years has already cost Boulder $3.3 million. The council will vote on whether to continue with its studies and also hire an outside consultant to review the city’s analysis.

Boulder’s climate action plan aims to cut Boulder’s greenhouse-gas emissions to 7 percent below 1990 levels. The problem for Boulder is that about half of Xcel’s generation comes from coal-fired power plants — a prime emitter of the gases, which have been linked to climate change.

A decision to show Xcel the door and start its own utility could ripple far beyond the city limits as Boulder would become the largest municipality in decades to take that path. The investment community is also watching because Colorado has in the last two years provided about 50 percent of all the earnings for Minneapolis-based Xcel.

“This could have an impact on shareholders,” said Travis Miller, a utility analyst with Morningstar Investment Services. “It will depend upon whether Xcel gets a fair value for their assets.”

That brings the question back to the 287-page cost analysis.

The study’s financial and operating scenarios are based on a broad set of assumptions covering items from the cost of natural gas to the interest rates Boulder would pay on bonds to finance the utility.

More than 700 combinations of those variables — from highest cost to lowest cost — were run through a model, and the results showed that in the majority of cases Boulder could cut both greenhouse gas emissions and costs.

“We have fundamental question about the analysis,” said David Eves, chief executive officer of Xcel’s subsidiary Public Service Co. of Colorado or PSCo. “It is unrealistic.”

Boulder officials say that they have be cautious and conservative in their calculations.

“If Xcel has some data to share, we’d be happy to consider it,” said Sarah Huntley, a Boulder spokeswoman. “We want as fair a comparison as possible.”

Both Boulder and Xcel, however, have kept some data confidential since they may be facing each other in court over the issue.

In February, Xcel filed an open-records request asking Boulder to share the models it used in its analysis. Boulder argued, however, that the data is not a matter of public record.

“Between Boulder and Xcel, there is a lot information that simply isn’t out there,” said Kent Taylor, a Boulder-based energy consultant not involved in the utility planning.

All sides, however, agree that a key financial pressure point is how much Boulder will have to pay Xcel for its equipment.

“Clearly, that’s the single largest number in the calculation,” said Boulder’s Appelbaum.

Xcel has put a $150 million price tag on its lines, transformers and substations, and that is the figure used in the analysis.

A more contentious figure is “stranded costs,” which is the lost revenue on the Boulder investments Xcel has made.

Boulder officials say the stranded costs are zero; Xcel places them at a minimum of $255 million. So the total tab ranges from $150 million to $405 million.

That range — represented as low, medium and high costs — was applied against three scenarios: a gradual transition from Xcel, a low-cost option and a low-cost option with no coal.

Boulder City Charter requires that a municipality utility start with rates equal to those of Xcel.

In the city’s analysis, there is a high likelihood the city would outperform Xcel on rates between a 2017 start and 2037 even if stranded costs rise to $277.5 million for the low-cost scenario.

The performance falls as the cost that Boulder has to pay Xcel rises, and if Boulder uses no coal-fired power.

Espinoza, of the chamber of commerce, has handicapped the scenarios a bit differently — of the nine possibilities, three have a less than 50 percent chance of beating Xcel rates and two just a better than 50 percent chance.

Rate parity and reliability are big concerns for the business community, which consumes 70 percent of Boulder’s electricity, Espinoza said.

“We are naturally concerned about how municipalization would impact our costs,” Roz Brown, spokeswoman for Ball Aerospace, one of the city’s largest electricity customers, said in a statement.

“Like others, we want to be convinced that the gains outweigh the risks,” Brown said.

Boulder helps itself on the rate comparison by adding a range of carbon taxes from as low as $1.18 in 2017 to as high as $48 in 2037 per ton of emitted carbon dioxide.

This tax — which does not at present exist, but many believe is likely in the future — hits Xcel, with its coal plants, more heavily than a projected Boulder utility.

“There may be a carbon tax or carbon trading, something that puts a price on carbon,” Xcel’s Eves said. “But in its models, Boulder just adds that cost to PSCo as if we wouldn’t adapt, and that is their biggest driver in PSCo rates.

“Put in enough of a carbon cost and Boulder will always have the lowest rate,” Eves said.

Boulder officials acknowledged that they did not account for any changes in the way Xcel would generate electricity if carbon taxes were implemented.

Like carbon, there are a number of other calculations such as the cost of buying wind power and integrating it into the grid for which Boulder has failed to properly account, according to Xcel.

“Put all those together and Boulder’s rate is 29 percent higher,” Eves said.

While it is true some costs end up higher, it is also true that some may end up lower and “push the needle in the other direction,” said Jonathan Koehn, Boulder’s regional sustainability coordinator.

In addition to Tuesday’s vote on whether to continue with the municipalization effort, Xcel executives, city officials and community representatives are meeting in a working group to see if the city’s goals can be met without creating a municipal utility.

The consultant’s report — should the council vote to move forward — and the working group recommendations are due in July. In August, the City Council would have to decide whether to approve a resolution condemning Xcel’s line and equipment.

The value of those assets, if Boulder and Xcel can’t agree on a price, will be settled in a court case. Xcel’s other business interest would be determined in a case before the Federal Energy Regulatory Commission.

“When it comes to the condemnation resolution, that’s when everyone is going to take to take a deep breath,” the chamber’s Espinoza said.

Mark Jaffe: 303-954-1912, mjaffe@denverpost.com or twitter.com/bymarkjaffe