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Pueblo government considering new plan to leave Black Hills Energy, form public utility

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PUEBLO, Colo. (KRDO) -- More than two years of debate, research, and discussion boils down to Monday night.

Pueblo City Council and Mayor Nick Gradisar are set to hear a first reading on an ordinance at Monday's regular session. The ordinance deals with a potential special election on May 5 asking voters to keep or discard Black Hills Energy as the city's electricity provider.

If voters approve the new charter on May 5, the city would authorize the Pueblo Board of Water Works to operate as both the city's water and electric works.

Back in September 2017, Pueblo City Council first declared intent to leave Black Hills Energy and and form its own public electric utility by August of 2020. Two months later city council formed the Electric Utility Commission (EUC) to advise the city and mayor on the matter.

In October 2019, a consultant to the city who was studying the feasibility of forming a public electric utility in Pueblo, claimed municipalization would provide city customers with a retail rate saving approximately 10% if the city purchased or condemned Black Hills Energy's assets. The consultant then claimed that the city customer could potentially save 12% if the city simply acquired the assets in the city and county.

Black Hills Energy refutes these rate saving claims.

"The City of Pueblo would be attempting a government takeover of a private business. The process of which is a costly, risky and a lengthy endeavor," said Julie Rodriguez with Black Hills Energy in a statement to KRDO. "The Concentric Energy Advisors study clearly shows the acquisition costs would be over $400M and would result in higher costs if the city formed an electric utility, not savings."

Black Hills Energy has also made it's own offer to stay in Pueblo. It promised Pueblo customers a freeze in rates until Jan. 1, 2025 and a 100% renewable energy municipality by 2035. Black Hills argues their investments into renewable energy could save Pueblo customers hundreds of millions of dollars in rate payments over the next 20 years.

Black Hills Energy says the offer remains on the table even if the matter is taken to a special election and Puebloans vote to remain with Black Hills Energy.

On November 21st 2019, the EUC unanimously recommended Pueblo leave Black Hills Energy, condemn its assets, and form its own public electric utility.

Time is of the essence if Pueblo wishes to leave its 20-year contract with Black Hills Energy, which ends in 2030. The 10-year off ramp to leave the contract expires Aug. 10, 2020.

The group 'Bring Power Home 2020' is set to sponsor a rally in front of Pueblo City Council Monday evening around 5:30 p.m. The group says they want Pueblo to break away from Black Hill's Energy's "control and unfair practices." The group plans on wearing green in support of leaving the franchise and forming a public electric utility.

News / Pueblo / State & Regional News

Dan Beedie

Dan is a bureau reporter based out of Pueblo. Learn more about Dan here.