PUEBLO — A new study shows it is not feasible for the City of Pueblo to create their own city-run utility. However, the Director of Pueblo Public Works, Andrew Hayes, said there are other options the city could look into for a different electric utility service that is not Black Hills Energy.
The city began looking for different options after Black Hills Energy proposed a base electricity rate increase and several customers complained they would not be able to afford paying a higher bill.
The City of Pueblo hired an outside consulting firm to do the study, looking into how a split from Black Hills Energy would work and if it makes financial sense.
Hayes said a separation from Black Hills Energy is still possible, even without a city utility.
From turning on the lights, heating up the stove and changing the thermostat, daily tasks all day drive up the electric bill. For people in Pueblo, their electricity comes from Black Hills Energy, but that could change.
According to the new feasibility study from GDS Associates, creating a city only utility by acquiring Black Hills assets within the city limits and setting up a system that would only serve city residents is not a feasible option. Hayes says it's because of the costs.
“High startup costs, costs to acquire those assets, get everything up and running, establish a new utility. And so there are some feasibility challenges with that particular option. If the city were to acquire Black Hills distribution and transmission and generation assets within the city, those costs of establishing that would likely result in higher rates to city ratepayers and so that's not in our minds a feasible option,” said Hayes.
Hayes said there are alternative options to the city owned utility.
“Well, one might be the city partnering with other governmental entities to establish a multi jurisdictional public utility. There's also alternatives there, where the city might partner with or work with cooperative utilities, or even make way for a third party buyer, a cooperative or even another investor owned utility could potentially come in if they could do this better. And so we want to make sure we're investigating all options, and we're trying to make sure that transparently, voters have the information they need to make the decision here coming up at the election on May 6,” said Hayes.
On May 6, a special election will be held. Voters in Pueblo will make a decision on Ballot Question 2A, which asks:
“Should the City of Pueblo cancel its franchise agreement with Black Hills Colorado Electric LLC and acquire the generation, transmission and distribution assets of Black Hills Colorado Electric LLC if determined feasible.”
A yes vote means the city would cancel the agreement with Black Hills Energy and continue to look for other options for an electric utility.
“By voting yes, it doesn't mean that, you know, May 7 the lights turn off. It doesn't mean that the city is going to be operating a utility on May 7. It just starts a process by which the city gets to continue to investigate alternatives that are going to be best for the citizens,” said Hayes.
A no vote means the city would maintain their current agreement with Black Hills.
“A no vote would retain the status quo. That's essentially what a no vote would mean,” Hayes said.
Pueblo City Council is discussing the feasibility study at their Monday night work session.
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