The push to seek voter approval this fall for Minneapolis to form its own utility is slowing down, as Xcel Energy has vowed to collaborate with the city on its energy goals and key supporters say they’d like to give the issue more time.

In a letter to Mayor R. T. Rybak this week, Xcel CEO David Sparby pledged to work with the city on increasing renewable energy sources and energy efficiency programs, particularly for streetlights, and deliver regular reports on the reliability of the company’s electric service and how it will invest in its electric grid. He suggested forming a joint committee to explore how to reach Minneapolis’ goal of reducing greenhouse gas emission by 30 percent.

Sparby concluded that if Minneapolis created a utility “it would be difficult to move forward” with those proposals.

Rybak responded appreciatively, saying the city should not preempt these conversations by putting a question about a municipal utility takeover on the ballot in November.

Council Member Cam Gordon, who has led the municipal utility effort, agreed.

“Maybe we can give this some time and see what kind of partnership evolves,” he said in an interview Friday.

He said he no longer plans to introduce the resolutions he authored to put the municipal utility question on the ballot at next Thursday’s Committee of the Whole meeting, when council members were to take a vote after listening to comments at an Aug. 1 hearing. The majority of people at the packed event opposed a city utility, or at least putting it on the ballot in just a few months instead of working more closely with Xcel.

The debate has intensified as Minneapolis leaders decide how to proceed when the city’s 20-year franchise agreements with Xcel and CenterPoint Energy expire at the end of 2014. Those agreements give the utilities public rights of way in exchange for millions of dollars in fees for providing electric and natural gas service across the city.

Minneapolis Energy Options, an environmental coalition, has pressed officials to explore alternatives to signing another 20-year agreement in order to more aggressively pursue the city’s greenhouse gas reduction plans. In addition to weighing the creation of a municipal utility, officials are also considering shorter-term franchise agreements with the utilities that demand more renewable energy sources.

Most of the discussion has centered on Xcel. CenterPoint last month reached an understanding with Minneapolis Energy Options after also committing to work together on energy goals.

Dylan Kesti, campaign coordinator for the coalition, said Minneapolis Energy Options wants to continue educating residents around the city about energy goals, and wait to see how Xcel will work with Minneapolis.

“This is a pretty small first step - they’re not giving a lot - but this is a step forward, so we’d be willing to see how this goes but keep the energy options open,” he said.

Read Sparby's letter to Rybak here, and read Rybak's reply to Sparby here.

