Town Hall Community Questions
On August 1, 2019, the EUC held a public Town Hall Event. During the meeting, the public was able to submit questions about the Energy conversation to be answered by the EUC members. Below, find the community questions and the answers below.
Community Questions from the Town Hall Event held August 1, 2019
How long will it take to see savings?
The Feasibility Study conducted by EES indicates residents would see a rate reduction almost immediately after a public power utility is established.
Does the 10-20 percent reduction in rates factor in the purchase of infrastructure, and if not, what would the rate reduction be after purchasing the infrastructure?
The Phase I Feasibility Study does take into effect the possible purchase of infrastructure, and still indicates that rate reductions could be up to 10 percent.
The Phase I study was released to a small group of people months before the community saw it. Will the same thing happen with Phase II?
The main purpose of the Phase I feasibility study was to determine whether it is financially and logistically possible for the City to create and operate a municipal electric utility.
The EUC and City Council initially reviewed the draft feasibility study before it was made public to all residents to make recommendations for additional clarification and information so that the final report was accurate. We anticipate that the same steps will be taken with the Phase II Study. Know that once the information is verified, we will share the second feasibility study with the public.
What do you expect to learn from Phase II? When will the public see the report?
The Phase II study will shed light on more of the specifics associated with establishing and operating a public power utility. Phase II includes:
- A step-by-step analysis of potential regulatory filings.
- A detailed analysis of the power distribution system to ensure its proper value and functionality.
- A business plan to estimate power costs, fees associated with the existing Black Hills facilities and the cost of serving the entire region with public power.
- A Phase II study includes detailed options for providing power independent of Black Hills under three scenarios: for the City only, for Pueblo County only and for the full Black Hills service area.
Phase II is expected to be released to the public during the Fall of 2019.
Will the Phase II study be the end? Or will there be more steps?
There may be a need for a Phase III study, which could explore options to buy and sell Black Hills assets.
If the Phase II study reaches a similar conclusion as Phase I, how will we get a vote to exit the Black Hills franchise?
The recommendation will go to City Council, who will then vote to put it on the ballot for the citizens of Pueblo.
When will the EUC make its final recommendation? Have you already made up your minds?
The EUC is still receiving the relevant information to the decision-making process and does not yet have a recommendation. The timeline for a final recommendation will depend on when the feasibility studies are complete. We are in Phase II, and there may be a need for a Phase III.
When might this go to the public for a vote?
We’re required to have the vote before August 10, 2020. It is likely that the election will take place in the Spring of 2020.
How will the ballot question be formulated and revised and chosen?
City Council works with the City Attorney’s office to come up with the most accurate and clear language for ballot questions. The final question is voted on by the Council in a public forum.
If the voters say yes to a public power utility, what is the time frame for a recommendation and implementation? Who would make the recommendation and do the citizens vote on that?
The EUC is working to make the official recommendation in time for City Council to make a decision for the ballot in 2020. There is no specific deadline for the recommendation, but we are working backward from the election date.
Can the recommendation be to acquire part of the network rather than the entire network?
The City is working with EES, an expert consultant, to explore every option.
What do you think would be the structure of the new public power utility?
It’s too early in the process to know. We are still gathering information to determine if a public power utility is the best option for Pueblo. After that decision is made, and if it’s voted for by the citizens of Pueblo, then decisions about its structure will be discussed. It has been suggested that the municipal electric utility enterprise be governed by an independent board elected by Pueblo voters, similar to the Board of Water Works.
In your opinion, what will be the largest obstacle to creating a new public power utility?
The largest obstacle will be deciding as a community on what option is best for everyone, and working out all of the various financial, logistical and legal details.
Can you explain the condemnation process?
Condemnation is an authority that cities have to acquire private property when the best interests of the citizens supersede the private interests of a property owner. The City would only enter this process very cautiously and utilize legal counsel. Experts would be called on to determine the value of all assets involved, which takes into account the purchase price less depreciation.
How are condemnation legal costs determined and who pays them? Is it the ratepayer or the taxpayer?
Condemnation requires that a lawsuit be filed in court. The court decides who is responsible for paying legal costs.
What makes this process in Pueblo different from the one in Boulder?
Boulder was the first entity to go through this process in Colorado, and we have the benefit of learning from their process. Additionally, Boulder’s primary goal was environmental, whereas our top priority is the economic benefit for citizens of Pueblo (followed by the environment and local control). So we’ve had different primary considerations from the start of the process and have learned from Boulder’s experience.
Boulder has spent over $20 million in their process so far. They don’t have a utility yet. I understand they have spent most of that on legal costs. Will Pueblo have similar costs?
While it is not possible to predict exactly what costs Pueblo may have at this time, we are doing a lot of research and planning to make sure we make a financially sound decision and won’t repeat any mistakes that were made in Boulder. We are entering this process more cautiously and well-prepared, which is why we’re spending so much time on the feasibility studies.
A complete analysis will include a full risk assessment that includes recognizing and addressing a variety of outcomes. Will a full risk assessment be completed?
This information will be made public by the Mayor and City Council through the Phase II feasibility report and subsequent public meetings.
Will any ballot question be written such that nuclear power could be a source of energy for Pueblo?
Nuclear energy is not a viable energy option for Pueblo because of the extremely high cost of building a nuclear power plant facility, the challenge of storing the radioactive waste produced and the real and perceived risks associated with nuclear energy.
Are there any power wholesale companies based in Pueblo or Southern Colorado?
The wholesale power industry is currently going through a lot of change and growth. Many wholesale providers are paying a lot of attention to Pueblo and what we do as a City. If we decide to create a municipal public utility, there will be options for wholesale partners.
Wholesale power providers always look for long term contracts. What preventive measures are the EUC considering to avoid the fate of Georgetown, TX, a city that signed a long-term contract and wholesale prices are now lower?
Wholesale energy providers need contracts to recoup investments in infrastructure, so there is always a little bit of risk involved in power purchasing. However, there is an optimal timeline for these contracts and to mitigate the risk of paying more than wholesale, which we’ll definitely research thoroughly if we choose to create a municipal public utility.
Does the present franchise agreement allow for a micro-grid to be carved out of Black Hills Energy service area to allow for competition?
No. Under the current franchise agreement, Black Hills has a monopoly on electric utility service in the City.
Black Hills limits the solar homeowners capacity to produce at 120%. Does the PUC have the ability to eliminate this restriction?
This question is unrelated to the City forming its own municipal electric utility enterprise and is best answered by the PUC.
Do you think Black Hills or a new public power utility would be more likely to help us achieve 100% renewable energy by 2035 as the City Council has pledged?
Having a local power utility gives our community more control over how we source our energy.
There are a lot of renewable energy projects in Pueblo right now, and it’s very possible we’ll be able to meet our 2035 goal if things continue to progress in the direction they’re headed.
Where does Black Hills produce the energy we use? Do they own the facility or do they buy brokered power?
As a general matter, Black Hills produces the electricity used by its customers but sometimes buys electricity on the open market to meet peak demand.
When Pueblo’s electric service provider was changed in the past, what happened to the linemen and other workers during the transition?
In the past, employees have all had the opportunity to work for the new service provider, and this case would be no different. We would need skilled workers to run the new utility.
The City would work hard to make the transition as smooth as possible for the citizens of Pueblo and Black Hills Energy’s current employees to ensure there is no economic or service disruption.
What is the CPCN? How does this affect the transition to a new Public Power utility? How has the transition worked in the past?
When Black Hills Energy purchased the electric service assets of Aquila in 2008, the CPCN (Certificate of Public Convenience and Necessity) was transferred by the PUC to Black Hills. Under state law, the City of Pueblo has the right to acquire Black Hill’s electric utility facilities and form its own municipal electric utility.
For Mr Aliff: You said that Black Hills Energy has not been forthcoming with data. Can it be subpoenaed?
Pueblo’s City Council has full investigative powers which include the power to subpoena. It would take the majority of the City Council to support such action. If Black Hills Energy failed to honor the subpoena from City Council, the dispute could only be resolved in court.
For Ms. Vetter: What considerations have been given to Pueblo West’s interest in Black Hills Energy off-ramp?
Any decision regarding the future of electric utilities in the Pueblo region will affect the Pueblo West community. The Pueblo West Metro District is thankful for the opportunity to participate in the Electric Utilities Commission as it does impact us. This project and undertaking was initiated by the City of Pueblo and remains their decision. However, serving on the Electric Utilities Commission allows Pueblo West to provide input on the process and ensure that Pueblo West voices are heard as this moves forward. Pueblo West looks to work collaboratively with the City, Pueblo County and other entities on this important issue.
Since Black Hills Energy is not helping the EUC by providing data for a better decision, what are the consequences?
We do think it’s an obligation for Black Hills to share the information they’ve withheld from us. The City’s option is to file a lawsuit against Black Hills to compel disclosure. The Mayor and City Council have not ruled out taking Black Hills Energy to court.
What is Black Hill’s response to the possibility of losing the City franchise? What legal recourse might they use to retrain the franchise, or delay the implementation of a public utility?
Like all companies, Black Hills owes it to their investors to do the best they can to make money and stay in business. We believe they will do everything they can to protect that, including filing a lawsuit against the City.
What role or contribution does the exclusive, non-competitive contract have in the current situation? Can any changes be made while it’s in place?
No changes can be made to the franchise agreement while it’s in place unless Black Hills Energy agrees. It’s a legally binding contract.