Co-op offers to run Pueblo utility | SIEA

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For release:

5:00 p.m.Monday, November 18, 2019

A plan that addresses three core concerns regarding the City of Pueblo municipalizing electric service was unveiled in a public work session at Pueblo’s City Council meeting on Monday, November 18.

San Isabel Electric offered to become the contractor for the public utility which addressed three common concerns shared by Pueblo residents:

The City of Pueblo doesn’t have the expertise to run an electric utility.
The City can’t afford to purchase Black Hills Energy’s assets.
The City doesn’t have the money for the fight.

San Isabel Electric General Manager Reg Rudolph explained San Isabel Electric’s 80-plus year history, reputation and not-for-profit business model provides a level of transparency the city is looking for.

San Isabel Electric was founded in 1938 by a small group of rural neighbors in Beulah, Colorado after investor-owned utilities declined to electrify 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.

Before a public utility could be formed, 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. 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 contracted system operator. 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 its own rates and the public utility’s profits would stay within the community of Pueblo.

The affordability of starting up a public utility and the costs of a legal fight were also addressed. San Isabel Electric has agreed to finance the legal fees and startup costs if the City of Pueblo did choose to form a public utility. The money borrowed would be paid back to San Isabel Electric by the new public utility as part of their contracted services.

As the public utility’s contracted operator, the public utility and the electric cooperative would remain separate entities, with separate governing boards and budgets. San Isabel Electric would operate the public utility; meaning the co-op would maintain the poles, wires, and electrical equipment, respond to outages, as well as manage billing, human resources and other administrative services.

Rudolph explained the motivation to purse the contract is to spread the co-op’s costs among more electricity consumers, which would lower overhead costs to co-op members and public utility customers and ensure long-term steady rates. Lower costs and steady rates would also be a boon to southern Colorado’s economy, helping communities retain and attract businesses.

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

If the co-op were to be awarded the contract, co-op members and public utility customers would enjoy a large, locally owned and locally governed cooperative, creating economies of scale, downward rate pressure, and improving the economy in Southern Colorado.

A summary of a June 2019 poll asking if Black Hills Energy should continue providing electric service or if it is time for a change to San Isabel Electric is available at siea.com/pueblopartnership, as well as more information about this proposal. 

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As a not-for-profit cooperative utility, San Isabel Electric provides affordable, reliable electricity with exceptional service to communities throughout southern Colorado. Serving nearly 20,000 member-owners and 24,000 meters, San Isabel Electric has been keeping the lights on since 1938. We don’t just serve communities. We are part of communities.