San Isabel Electric offers to run Pueblo’s proposed public electric utility

In an effort to decrease rates, the city of Pueblo has discussed leaving its current electricity provider, Black Hills Energy, and forming its own public utility for electricity.

Now, San Isabel Electric has thrown their own hat in the ring to help with that endeavor.

During a work session at Pueblo City Hall Monday night, San Isabel Electric told city council they should hire them as a contractor as the city makes the transition to a public utility.

“We would provide the services to operate on a day to day basis," said Reg Rudolph, San Isabel Electric's General Manager. "Maintaining the poles and wires, doing the billing, all those administrative functions that we’ve done for the past 81 years."

Monday night, San Isabel said the city doesn’t have the expertise to properly form an electricity utility all by themselves. They believe San Isabel’s help and insight into this business could go a long way.

“We’ve heard from the public and they are worried there is no plan [for municipalization]," said Rudolph. "What is the plan the city has for the voters?"

As its own electric utility, the city of Pueblo would set its own prices. San Isabel believes rates on Puebloan's electric bills could go down 15% over time if municipalization goes forward.

'The study conducted by the city of Pueblo also shows about a 15% rate reduction," said Rudolph. "So the benefit to the city is the economic development and saving of ten of millions of dollars to the local community every year."

The offer also includes San Isabel Electric agreeing to finance the legal fees and startup costs if the City of Pueblo did choose to form a public utility. The money borrowed would be paid back to San Isabel Electric by the new public utility as part of their contracted services. 

San Isabel says this agreement would be a win-win for the city of Pueblo and San Isabel Electric. They believe this would improve the local economy but also reduce rates for existing San Isabel customers.

It is unclear what the contract between San Isabel electric and the city of Pueblo would function, or how much the city would pay.

Not everyone on city council is ready to leave Black Hills Energy so quickly though.

“My gut reaction is it made this issue more complex,” said Pueblo City Council President Dennis Flores, when asked about San Isabel Electric's offer.

Flores says the city will still need to acquire Black Hills Energy’s assets. He believes this process could cost Pueblo millions in litigation fees and take years to complete.

Plus, Flores is not confident that a public electric utility could provide 15% decrease in rates.

“There’s no one that could guarantee 5, 10, 15, 20 years out what those rates are going to look like," said Flores. "We do have an offer on the table right now from Black Hills that they would freeze the rates. That’s the closest of a guarantee of anything.”

Two weeks ago, Black Hills Energy offered to not only freeze their rates for customers, but they would invest millions into clean energy sources in an effort to stay in Pueblo.

Black Hills Energy issued a statement to KRDO regarding San Isabel Electric's proposal: “San Isabel’s presentation does not change the fact that city of Pueblo would be attempting government takeover of a private business, which would be costly risky and a lengthy endeavor.”

The city must come to a decision on moving forward with transitioning to a public electric utility from Black Hills Energy before the end of this year if they hope to have this issue on the March special election ballots.