Public Power Partnership
Frequently Asked Questions
Who gets to decide?
Pueblo voters would have to approve to separate from Black Hills Energy and form a public utility. Or, Black Hills Energy could willingly sell their assets in Pueblo and/or the surrounding areas they serve to the City of Pueblo. Once a public utility is formed it would be up to the Pueblo City Council, or an entity formed by the Council, to decide whether to hire San Isabel Electric as the contract system operator.
Will this cost San Isabel Electric and how much?
Any services provided by San Isabel Electric would be reimbursed through a contractual obligation with the governing body of the new electric utility.
How will this affect rates for the San Isabel Electric membership?
Serving more electric consumers can reduce overhead costs by spreading them over more consumers, which equates to lower costs to our existing members, and downward rate pressure.
How does the offer benefit Pueblo?
The public utility model is a close cousin to the electric cooperative model, giving Puebloan’s the level of transparency and local control they’re looking for. If San Isabel Electric was contracted to operate the utility the public utility would still be responsible for local decision-making authority, would have ability to set it’s own rates and the public utility’s profits would stay within the community of Pueblo.
Will this change anything for our current members?
No! Members of San Isabel Electric will be served completely separate from a City of Pueblo utility. San Isabel Electric has been serving southern Colorado for eighty-one years and will continue to be dedicated to our members. Current and future members would enjoy long-term cost savings and likely future rate reductions because we’re spreading existing costs over more people.
Will the public utility’s customers become co-op members?
No, the public utility’s customers would not become members of the existing San Isabel Electric membership because San Isabel Electric and the public utility would remain as separate entities, with separate governing boards and budgets. The co-op would be acting as a contract service provider to maintain poles, wires and other electric equipment, respond to outages, and to provide billing, human resources and other administrative services.
Will the public utilities customers get capital credit checks?
No, customers of the public utility would not be eligible to earn capital credits because they are not members of the cooperative. (SEE Above)
Does San Isabel Electric have the expertise to be the operator of the public utility?
Absolutely! San Isabel Electric was founded in 1938 by a small group of rural neighbors in Beulah, Colorado after investor-owned utilities declined to service the then-rural area due to the high costs and low profits involved because of the small number of meters per mile. Since its inception the cooperative has grown to include members in seven southern Colorado counties and is governed by the people who use the power the cooperative provides. Due to efficient operating practices, San Isabel Electric members have enjoyed rate stability since 2009 with only one rate increase in 2014.
How does the cooperative business model fit the proposed business venture?
The City of Pueblo wants local ownership and control. San Isabel Electric’s not-for-profit business model provides the transparency they’re looking for. A public utility model is a first cousin to a cooperative. The public utility and San Isabel Electric would have separate local governance boards and separate budgets. The public utility’s customers would not be electric cooperative members of San Isabel Electric. The co-op would be acting as a hired contractor to maintain poles, wires and other electric equipment, respond to outages, and to provide billing, human resources and other administrative services.
Why is San Isabel Electric making this offer?
We’re offering our services with the goal of spreading overhead costs over more consumers, which equates to lower costs to our existing members, downward rate pressure and improving the economy in southern Colorado.
What will happen to the Black Hills Energy employees?
San Isabel Electric is happy to hire all the local Black Hills Energy employees.
Will assets be appraised by third party for value?
San Isabel Electric isn’t buying any assets, just providing a contract for service.
What is the makeup of the Board of the public utility?
This would be determined by the City. The public utility would be owned and governed by the City. San Isabel Electric would operate the contract per mutually agreed upon terms.
Will San Isabel Electric be represented on the public utility board and will the public utility be represented on the San Isabel Electric Board?
No. The City of Pueblo will decide the governance structure of the public utility board, but as a contractor to the public utility, San Isabel Electric does not have a voice in the public utility’s governance, and the public utility does not have a voice in San Isabel Electric’s governance.
Does City Council of Pueblo have a seat on either board?
The City can decide the governance structure of the public utility. They have no voice in San Isabel Electric’s governance, because customers served by the public utility are not cooperative members. Only cooperative members can qualify for a seat on San Isabel Electric’s board.
Who sets rates and tariffs?
The public utility sets their own rates and tariffs.
Who will be the public utility’s power supplier?
The power supplier will be a major piece of the economic justification. San Isabel Electric may be party to the process, including managing the power-supply selection process, and the power-supply contract, which would include details about the renewable generation mix, but ultimately it is the City of Pueblo’s and the public utility’s decision.