If one is able to own instead of rent a property or business, it is usually better.
The risk to the Pueblo community and outlying Black Hills Energy service areas is to continue renting power from Black Hills if ballot issue 2A does not pass.
Television and social media advertisements state that BHE customers have already paid $400 million for BHE current operations. The fact is, we have paid more than that in rent to power from providers in the history of Pueblo and surrounding areas.
Ratepayers will continue to pay rent if ballot issue 2A does not pass.
These ads also state that current ratepayers in BHE service area will not have input on rates and operations if 2A passes. Ratepayers have never had input on the BHE board of directors representation or on the setting of rates.
If 2A passes and ratepayers do not agree with the way the public power utility is being operated, they can choose not re-elect board members when their terms are up. That opportunity comes every two years. Ratepayers also may have direct input at monthly meetings of the local utility.
If 2A passes, the new power utility will be a public entity.
The economic advantage of this is that it will not have to pay state taxes, federal income tax or provide a return to shareholders.
The costs to acquire BHE assets will be determined by an appraisal and the approval process will include the Colorado Public Utilities Commission, the federal Energy Regulatory Commission and the district court. There is no "blank check" as the ads would have you believe.
This process will take several years. The longer it takes, the lower the price of the assets will be, due to depreciation.
If 2A passes, the Pueblo Board of Water Works will finance entire costs to acquire BHE assets through revenue bonds. Using revenue bonds will not affect Pueblo water rates. It simply uses the rates we already are paying to fund the acquisition of the assets.
Interest rates will be much lower as a government entity than what BHE public entity currently pays.
If 2A passes, the new power utility will pay the same franchise fee BHE pays and will make payments in lieu of taxes to offset property taxes.
The new power utility will be able to purchase power on the open market and hire a third-party contractor to operate and maintain the system.
Based upon the current BHE financials, there is enough excess revenue to put up to $30 million annually to upgrade and maintain system as well as pay for revenue bonds. BHE’s last offer to the city was to put $20 million annually to improve and maintain the system for 10 years.
The passage of 2A will not negatively impact local jobs or union labor. It simply removes the large corporate overhead allocated from South Dakota.
There will be no disruptions in service. There also will be a significant renewable energy component in the new utility’s portfolio.
Under the current BHE financial model of billing $260 million per year in our region, a savings of 10 percent would mean an additional $26 million coming back into our region.
For more information please go to Pueblowater.org.
Thomas Autobee has been a member of the Pueblo Board of Water Works since being elected in 2005.