Could Pueblo create a new electric utility by finding a wholesale power provider that would partner with San Isabel Electric Association — replacing Black Hills Energy?
That was the question discussed Tuesday night when the community group Pueblo’s Energy Future hosted a discussion with officials from Guzman Energy LLC, a wholesale power company, and San Isabel officials.
San Isabel has previously made a $1.1 billion offer to buy the regional Black Hills electric utility but the investor-owned company answered that it was not for sale — and questioned San Isabel’s ability to afford it as well.
But the Pueblo Electric Utilities Commission is looking at whether to break away from Black Hills, which would likely mean the city condemning and acquiring all or part of the Black Hills network here. That may or may not include the $580-million Pueblo Area Generating Station.
Chris Miller, the chief operating officer at Guzman, told the audience at Pueblo Community College that creating a city utility would be “thorny and difficult” but worthwhile in the end because it would give the community control over its energy prices.
“The price of energy is directly related to the economy of your community,” he said.
Guzman is a wholesale power company, meaning it brings electricity to retail utilities. In Pueblo’s case, Black Hills Colorado Electric is both the retail provider as well as the power generator.
Miller said that poses a double challenge for Pueblo ratepayers in acquiring it but said Guzman would “love to bring the power” to a city-owned utility.
San Isabel General Manager Reg Rudolph repeated the cooperative’s position that it has the financial ability to purchase Black Hills and in the long run, that would lead to double-digit rate cuts because cooperatives are nonprofits and owned by their customers.
“And we have bank approval for that entire (purchase) transaction,” Rudolph said with Black Hills officials listening in the audience.
But when asked if the city of Pueblo could use San Isabel’s financial guarantees to help it condemn and purchase Black Hills assets, he stepped back.
“We’re looking for a transaction involving a willing seller,” he said.
Rudolph and Miller fielded a number of questions about how they would treat solar-power users and gave assurances those would be respected.
“One of the reasons we are predicting a zero increase (in power demand) is because of all the solar panels out there,” Jeff Heit, Guzman’s managing director, said.
But the heart of the meeting was to discuss whether Pueblo can create some kind of partnership with a utility or wholesale company to replace Black Hills, which serves 94,000 customers in the region.
Steve Andrews, a retired energy consultant and group member, noted that Black Hills had recently changed some of its policies to become more customer-friendly — changes he attributed to City Council’s decision last year to establish the local utilities committee and look at creating a city utility.
“They’ve launched a charm offensive,” is how Andrews put it.
Pueblo’s Energy Future intends to host a series of town hall meetings to continue looking at options for the city.
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