Greg Lefcourt says he runs a tight ship.
He co-owns Boulder’s Beleza Coffee Bar with his wife, Nafisa. By keeping a close eye on waste, costs and their bottom line, he said the shop survived the COVID-19 shutdowns and is weathering persistent inflation.
“Everything is more expensive now, and we can't raise our prices fast enough to cover the same margins as when we opened seven years ago,” he said.
Their most lucrative weekend is right before Christmas, when people are off work and shopping for the holidays — those sales can buoy their revenue for the entire year.
But in late December, Xcel Energy shut down power to huge swaths of the Front Range — at its peak, 115,000 homes were without power. Ferocious winds, combined with bone-dry grass, led to an exceptionally high fire risk. Around 60% of Boulder lost power, according to the city, while some neighborhoods were dark for nearly a week.
Lefcourt’s coffee shop lost power for 61 hours — almost three days — so he had to junk spoiled food. He estimates he lost $15,000 in sales, cutting into his already razor-thin margins.
Luckily, no major fire erupted, a huge relief given that the devastating 2021 Marshall Fire sparked under similar conditions.
Unluckily, small businesses lost millions of dollars in income and inventory, with no clear path to recovering their losses. Several owners said they called Xcel to request a repair or get an estimate on restoring power, but found the company’s response inaccurate or unhelpful as the outage stretched on for days.
“Everybody wants to blame Xcel, and their communications could have been a whole lot better,” said Mark Heinritz, co-owner of the Boulder restaurant The Sink. Heinritz lives in Louisville, near a neighborhood scorched by the Marshall Fire.
“I also think that this community should be building for resiliency instead of waiting for the next power shutoff,” he added.
Xcel’s “Public Safety Power Shutoffs” may become more common, as Colorado contends with drought and record-high winter temperatures that are making fire “season” a year-round trend. High winds are also nothing new to Boulder.
The difference is that now, steps taken to prevent fires are challenging the already tenuous footing of many small businesses.
The outages affected hundreds of businesses in Boulder; some reported losing more than $100,000, according to a survey conducted by the nonprofit Boulder Chamber, an advocacy group.
In a statement, Xcel acknowledged that being without power for any time is inconvenient and that it gave the public a few days' notice so that residents and businesses could prepare.
Xcel unlikely to provide widespread support to small businesses
In a December press conference, Xcel Energy-Colorado President Robert Kenney said that businesses could go to Xcel’s website to submit a claim for their losses.
However, there are ample strings attached. An Xcel spokesperson said the company does not compensate businesses for lost revenue during power outages, whether that’s caused by storms or Public Safety Power Shutoffs.
Colorado’s Public Utilities Commission regulates Xcel. Rules updated last year say the utility is not liable to customers when it proactively cuts power, or for any injuries, losses or damages that occur when the power goes out because of storms or equipment breakdowns.
Xcel is responsible for losses that occur if it’s negligent. For instance, the company has settled hundreds of claims because its equipment may have sparked Texas’s largest wildfire.
Xcel did not respond to questions about how many claims it’s received so far, or how much it has paid to Coloradans affected by power shutoffs.
The city of Boulder is also not providing financial assistance to individuals to cover losses, according to a city spokesperson.
Insurance can be a tricky business
Businesses with insurance can file a claim for their losses. But that’s no sure bet, either.
Heinritz, The Sink co-owner, said he was prepared for a 24-hour outage. But when it stretched for longer, he bought dry ice and rented a refrigerated truck to store food. A power line had also snapped near his restaurant, cutting him off even as nearby businesses got their power back.
His power wasn’t fully restored for around four days, and only then because he flagged down an Xcel truck, which then repaired his line. He estimates he lost between $35,000 to $40,000 in inventory, sales and other expenses.
His business insurance has a high deductible, so he decided it wasn’t worth filing for lost food. He did file a “business interruption” claim, though, which can help cover losses when shops have to shut down.
But that ended up being a bust. Heinritz had not purchased the specific insurance required when an overhead power line goes down.
“We did not collect any insurance on anything,” he said. “We’re just trying to recover during a slow time of year.”
Crippling impact
On January 12, Boulder city councilmembers began a two-day retreat to set policy priorities for the year. The city is contending with affordability issues and a mountain of logistics related to next year’s Sundance Film Festival.
But after the retreat, the council emerged with consensus that dealing with Xcel would be their top priority, according to councilmember Tara Winer.
“For all council members, all nine of us, the number one priority was Xcel, and what are we gonna do about these wind events?” she said. Winer added she was very upset about the impact on city businesses.
Winer said council members would meet with Xcel to understand what infrastructure work the utility is planning, and then craft their own plan to help residents better prepare for outages.
“We can’t have people go through this over and over,” she said.
Brett Zimmerman has owned Boulder Wine Merchant, right next door to Lefcourt’s Beleza Coffee Bar, for more than 15 years. Losing power for days was “crippling,” he said, because the weekend before Christmas is their busiest period. He’s still tabulating the losses, but estimated it was between $55,000 to $80,000.
“We can't pay vendors, we're struggling to take care of sales tax,” he said of the impact.
Without accurate information about when power would be restored, Zimmerman borrowed a few generators and a Starlink internet connection to keep the lights on for a few hours.
That allowed him to compete with other shops in town that had their power restored. But the jerry-rigged set-up left much to be desired.
“It was like setting up a wine shop at a campsite … it didn’t feel inviting, it didn’t feel festive,” he said.
With their business already on the back foot in the new year, Zimmerman said he hoped insurance would help out.
“ We'll do our best to try to see if there's any sort of insurance option,” he said. “Certainly, Xcel’s not going to do anything.”
