I have been working for nearly two and half years in garnering as much information on the move in our community to “municipalize” our electric system. I am totally convinced that this is a very risky move for Pueblo. I am urging citizens to vote “no” on ballot question 2A.
My background as a risk manager for more than 42 years helps me in my analysis of the “risk” involved in this decision which revolves around the cost to our community, impeding our ability to get to clean energy quickly, potential issues with reliability of service and the loss of good jobs.
The condemnation of Black Hills assets will not only be long and protracted, it will be very costly. We literally do not know what this is going to cost. If the proponents move to include the entire grid in the Black Hills Energy territory, the cost of litigation will increase.
The Public Utilities Commission and the federal government will want to make sure the surrounding areas will not be hurt. All of this is assuming the other areas including Pueblo County are receptive to this idea. With 27 other entities of small towns, counties and businesses, you can expect lawsuits if they feel they will be harmed by Pueblo’s municipalization efforts.
The question of loss of tax revenue is real. During my research, I have discovered that if we municipalize our electric utility, the city of Pueblo would forego an estimated $8,455,000 in direct property taxes, sales and use taxes and franchise fees. Pueblo County would lose $9.8 million in taxes. The taxes collected by the county include $4.8 million for Pueblo School District 60, $664,000 for our library district and other smaller districts.
The new Pueblo electric utility could backfill these losses in taxes and fees by providing “payments in lieu of taxes.” If it does, expect the utility to include these payments into our electric rate structure.
We have been assured by the proponents that “if acquisition costs become unreasonably high and rate savings are unattainable, we will suspend acquiring BHE.” It can be reasonably ascertained that the $10 million budgeted for legal costs alone will not be enough.
The model provides for the Pueblo water board to take over this process, which means that it will not have any taxing authority. I am assuming that the water board will be using assets to pay for all of the costs of municipalization ― assets owned by the citizens of Pueblo for a water utility, as was originally intended, and not acquisition of an electric utility.
A recent report by the city of Boulder broke down the costs for acquisition, separation construction, transition and power supply. After 10 years, Boulder still is talking about the cost of purchasing and acquiring Xcel Energy assets and using terms like “city is working prior to the community decision in determining what this price is.”
The separation or transition costs have been explained as follows: “City is working to get an accurate picture of these costs.” At this point in time, no one can tell our Pueblo citizens what this is all going to cost and it will take years to have a definitive number.
I will take the liberty of modifying the late U.S. Senator Everett Dirksen quote in stating that “a million here, a million there, pretty soon, you’re talking real money.”
Please vote “no” on 2A. It’s too costly and too risky.
Dennis Flores is the president of the Pueblo City Council.