NewsCovering Colorado


Pueblo moves forward with plan to unplug from Black Hills

Posted at 6:47 PM, Nov 21, 2019
and last updated 2019-11-21 21:09:25-05

PUEBLO, Colorado — It's no secret that Puebloans pay high electric bills. The city's provider, Black Hills Energy, received approval from the Colorado Public Utilities Commission for multiple rate increases where it passed on costs of new power generation investments like the $500 million Airport Generating Station and Busch Ranch Wind Farm.

Steve Andrews of the local advocacy group Pueblo's Energy Future said the utility company's disconnect and reconnect fees are also burdensome for consumers.

"People were having trouble not only paying their utility bills, but charities were having difficulty coming up with enough money to help keep them from having the electricity shut off and eventually losing their homes," Andrews said.

His group supports public policy that focuses on rate-payers and consumers. To that end, they've been closely watching the city's Electric Utility Commission which gave unanimous backing on Thursday to a plan to end the service agreement with Black Hills and have the city create it's own electric utility.

The service agreement is a type of legal monopoly. The 20 year deal between the City of Pueblo and Black Hills started in 2010. State law gives cities the ability to vote their way out service agreements at the 10 and 15 year marks.

Recent polling suggests as many 70 percent of voters favor ending the agreement with Black Hills.

However, Councilman Mark Aliff, the co-chair of Electric Utility Commission, points out those same voters have doubt's about the city's ability to run a power company.

"They don't want City Council run a utility, they don't want the Mayor's Office to run a utility," he said. "So, that's a huge question in the mind of the voter."

The proposal put forward Thursday seems to answer that question by seeking an agreement from a third party to run the utility. Under this plan, Pueblo would condemn and acquire all of Black Hills' transmission lines, transformers, customers meters and other infrastructure that make up the local grid.

Aliff explained that the City would then buy electricity on the open market where, according to recent feasibility studies, rates are substantially lower.

"The phase two study showed anywhere from 10 to 33 percent in savings to the rate payers, which is huge not only for the homeowners, but huge for business owners and for our economic development rates and things like that," he said.

The public-owned utility would be overseen by an independent board, structured in a similar way as the Pueblo Board of Waterworks. That board could then contract the day-to-day maintenance and operations.

Earlier this week, executives with San Isabel Electric Association made a presentation to City Council offering to do just that.

"That's what we do on a day to day basis is run the local retail, the distribution side of the business and that's what we're offering to do," explained General Manager Reg Rudolph.

In a statement, Black Hills Energy spokesperson Julie Rodriguez pointed out the high acquisition of the city's plan and criticized the move as a government takeover.

"The presentation from San Isabel does not change the fact that the City of Pueblo would be attempting a government takeover of a private business," Rodriguez wrote. "The City of Pueblo still will have to complete a government takeover to proceed with the proposed plan and that remains a costly, risky, and a lengthy endeavor.

San Isabel is an electric co-op and currently provides electricity to Pueblo West and rural parts of Pueblo County. The proposal referred by the Electric Utility Commission calls for a public-owned electric utility with a service area that covers all of Pueblo County.

Councilman Aliff is expected to introduce the proposal and the next City Council Work Session on Monday. If the council decides to pursue the termination of the service agreement, the question must be put to the voters before August of 2020.