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

Posted at 6:22 PM, Sep 18, 2019
and last updated 2019-09-18 20:30:07-04

PUEBLO — Black Hills Energy says it's going to cost Pueblo big time, that is, if the city decides to switch to a public power utility.

A new study commissioned by Black Hills that was released on Wednesday claims that making this move would significantly increase rates for customers.

Based on that study, developed by Concentric Energy Advisors, Black Hills says if Pueblo becomes a public power utility it will cost the city more than $400 million to buy the company's system. Combined with the rate increase, they believe it's a big risk.

"We thought it was really important to get the facts out there," said Vance Crocker, vice president of operations at Black Hills Energy.

"It shows that rates would significantly go up with the city running this utility, not only now, but in the future those rates would continue to go up."

The study says that it will cost over $400 million for an initial investment. Rate increases would range from about $138 more per year in the first year to $330 more per year 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."

Bottom line - he still has a lot of questions.

City Councilman Mark Aliff said, "This study, in my opinion, shows that they'll stop at nothing to show that Black Hills Energy is the way to go."

To remind people of why this whole situation started in the first place he said, "We're here because our rates are astronomical and in my opinion we're being taken advantage of by a for-profit utility."

Black Hills says it wants to get in front of city council and the public to get feedback.

For city council members - they'll be reviewing and comparing the Black Hills study to the city's Phase 2 study which they should get by the end of this month.

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.