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Seeking a long term commitment, Black Hills Energy makes offer to freeze electricity rates in Pueblo for 5 years

Posted at 8:01 AM, Nov 13, 2019
and last updated 2019-11-13 17:41:50-05

PUEBLO — Black Hills Energy says they want to keep the City of Pueblo as a client and they put a deal on the table to do it. The reaction isn't likely what the energy provider expected.

As we've reported, the city is exploring whether to open its own power company saying Black Hills charges too much for electricity.

In response, Black Hills has proposed freezing rates in Pueblo for the next five years and investing more in the community, including renewable options to try and lower rates long term.

The proposal states:

  • No base rate changes before 2024, while: adding more renewable energy to save money for customers; work to maintain a top 25% nationwide reliability
  • $200 million investment in Southern Colorado system to better serve customers
  • $7.5 million in community contributions over 10 years
  • $6 million investment in economic development to create jobs
  • Making Pueblo energy portfolio one of the cleanest in the nation under this agreement
  • Prepared to go outside the traditional process to deliver additional renewables, leading to more savings and solutions for Pueblo customers
  • Partnering with Pueblo to help achieve the 100% renewable energy goal
  • Saving customers money with additional low-cost renewables (Busch Ranch II: $240 million savings over 25 years)
  • Adding six more community solar gardens
  • New Pueblo citizen advisory group to ensure Black Hills Energy is responsive to the community
  • Host a Black Hills Energy board of directors meeting in Pueblo and build relationships

Mayor Nick Gradisar explains there wasn't much excitement about the concept. "You saw at city council's reaction last night to what the offer was to freeze rates. That they are not very excited about it and neither is the community very excited about freezing rates when they are at the highest level on the Front Range."

Black Hills Vice President Vance Crocker explains the energy provider's position. "We are just offering a better path for a better collaboration that is much safer and much better for our community."

The company released a study this fall claiming it would cost the city more than $400 million of an initial investment buy Black Hills equipment to get started with a municipal utility, along with rate increases from $138 per customer, per year in the first year to $330 more in the 20th year.

Pueblo City Council President Dennis Flores says they have their own numbers. "The original Phase 1 study had the purchase price somewhere around $326 million I believe...we've been told by the people that are working and putting that study together that the city could save anywhere from 10% to 12% percent in utility costs."

The ultimate decision to become a municipal electric utility lies with the citizens of Pueblo and that will only happen if city council decides to put this question on the 2020 ballot.

The Electrical Utility Commission and city officials are hosting meetings to get feedback on the issue. Nov 13, 6-7pm, Fire Station 3, 729 E Gold Drive, Pueblo WestNov 15, 6-7:30pm, Patrick Lucero Library, 1315 E Seventh St, PuebloNov 19, 6-7:30pm, Pueblo Community College, 900 W. Orman Ave.

Switching to public power utility will cost Pueblo more than $400 million, study says

Black Hills Energy polling customers on trustworthiness of groups, elected leaders