Community-Owned Water & Power
Frequently Asked Questions
On February 10, Pueblo City Council will vote on an ordinance that calls for a public vote to allow the Pueblo Board of Water Works to also run an electric utility and to terminate the City of Pueblo’s franchise agreement with Black Hills Energy and to purchase/condemn Black Hills Energy’s Colorado assets.
In June 2019, a poll asked Puebloans if Black Hills Energy should continue providing electric service, or if it is time for a change to San Isabel Electric. The survey resulted in 64% of voters choosing San Isabel Electric, 27% chose Black Hills Energy, and 9% were undecided.
Will Pueblo's City government oversee the new electric utility?
No, the public utility would be owned by the community and governed by Pueblo Water. The public power model proposed by Pueblo Water could give the citizens of Pueblo the opportunity to have a seat on a board, local voice in rate setting and the utility’s oversight, similar to the Board of Water Works.
The proposed public power model takes the burden of starting and running a municipal electric utility from Pueblo’s City Council, allowing city council to focus on overseeing their current responsibilities – public safety, roads, animal control, code enforcement, etc.
How does the offer benefit Pueblo?
The community-owned utility model could give Puebloan’s the level of transparency and local control they’re looking for. The board of the community-owned public utility would give Pueblo local decision-making authority, the ability to set it’s own rates and the public utility’s profits would stay within the community of Pueblo.
Who gets to decide?
If Pueblo City Council approves Pueblo Water’s proposed ordinance on February 10, Pueblo voters will have the opportunity on May 5, 2020 to decide to allow Pueblo Water to form a community-owned municipal electric utility, and to end the City of Pueblo’s franchise agreement with Black Hills Energy.
What is the Regional Distribution and Power Supply Authority? How are they different?
The Regional Distribution Authority would oversee the contract system operator’s maintenance of the electric grid and administrative services. The Regional Power Supply Authority would oversee the negotiation and compliance of the public utility’s power-supply contract.
Who would be members of the distribution and power supply authorities?
The Regional Distribution Authority and Power Supply Authority would give communities the opportunity to join Pueblo’s community-owned public power utility, while having a local voice in the utility’s oversight. The authorities would allow communities of interest to join the public utility and create larger economies of scale, spreading costs over more meters, creating downward rate pressure for all of southern Colorado and attracting new and retaining existing economic development opportunities.
Will this cost Puebloans or San Isabel Electric members and how much?
No, the purchase/condemnation of Black Hills Energy’s assets would be covered by the Board of Water Works through franchise fees, sales tax and earnings from electric utility bills. The public power model has a lower cost of doing business. Because public power utilities are not-for-profit, they are exempt from corporate taxes, and have a lower cost of debt. Spreading costs over more meters also creates lower power supply costs—all resulting in downward rate pressure.
How will this affect rates for the San Isabel Electric membership?
Serving more electric consumers could reduce overhead costs by spreading them over more consumers, which equates to lower costs to our existing members, and downward rate pressure, if San Isabel Electric is chosen as the contract system operator.
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 community-owned municipal utility customers become co-op members?
No, the community-owned 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 could act 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 City Council of Pueblo have a seat on either board?
No. Pueblo’s City Council has no voice in the Pueblo Board of Water Works or San Isabel Electric’s governance. Under the public power model, customers of the community-owned utility could qualify to be elected to a seat on community-owned utility’s board, in the same way that members served by San Isabel Electric can qualify to be elected to a seat on the co-op’s board.
Who sets rates and tariffs?
The public utility sets their own rates and tariffs.
Does Pueblo Water have the expertise to run the public utility?
Does San Isabel Electric have the expertise to be the operator of the public utility?
Absolutely! Due to efficient operating practices, San Isabel Electric members have enjoyed rate stability since 2009 with only one rate increase in 2014 and has been serving seven counties, including portions of Pueblo County, since 1938.
Who will be the public utility’s power supplier?
The power supplier will be a major piece of the economic justification. The Regional Power Supply Authority would manage the power-supply selection process, and the power-supply contract, which would include details about the renewable generation mix, but ultimately it is the community-owned utility’s decision.
What is the make-up of the board of the community-owned public utility?
This would be determined by Pueblo Water. The public utility would be owned by the community and governed by Pueblo Water. Members of the existing Pueblo Water Board are elected by the citizens of Pueblo.
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. Pueblo Water will decide the governance structure of the public utility board. Even if Pueblo Water chose to hire San Isabel Electric as the contract system operator of the public utility, San Isabel Electric would not have a voice in the public utility’s governance, and the new public utility would not have a voice in San Isabel Electric’s governance.
What will happen to the Black Hills Energy employees?
San Isabel Electric is happy to hire all the local Black Hills Energy employees, if we are chosen to be the contract system operator.
How does the cooperative business model fit the proposed business venture?
The City of Pueblo wants local ownership and control. The community-owned public power business model provides the transparency they’re looking for. A public power model is a first cousin to a cooperative. The public utility, Board of Water Works and San Isabel Electric would have separate local governance boards and separate budgets. The chosen contract system operator 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.