Black Hills is using the COVID pandemic and Governor Polis’ executive order of March 20, 2020, to push COVID-19-related costs onto ratepayers while pocketing any savings for their investors.


They are trying to get the Colorado Public Utilities Commission (PUC) to approve certain accounting orders on an expedited basis. It is time for community leaders and consumers — residential and businesses — to submit comments to the PUC because these accounting orders are not in the public interest.


Polis entered his executive order on March 20, 2020, directing all gas and electric utilities to pause all disconnections of electric and gas service to residential and small businesses for failure to pay bills; to suspend service disconnections for delayed or missed payments; to waive reconnection fees and suspend accrual of late payment fees; and to reinstate service for customers disconnected for nonpayment or arrearage


The ink was barely dry on the executive order when Black Hills Gas and Electric (along with the four other investor-owned utilities in Colorado), filed an application with the PUC requesting permission to set up a "regulatory asset". Similar to other companies in this pandemic downturn, the utilities expected significant increase in arrearages and uncollectible expenses as well as other costs such as outside contractors, equipment, personal protective equipment, paid time off, etc.


Black Hills and the other utilities, however, asked for permission to track these bad debts and other costs attributable to COVID as a regulatory asset starting on March 1, 2020 through the end of the year so that ratepayers would later pay them.


A "regulatory asset" is used to track costs a utility might incur so that the utility can later request that those costs be included in customers’ rates. A "regulatory liability" is used to track benefits that a utility might receive, for example reduced income taxes, reduced operating costs, and or a reduction in interest rate on the large debt the utilities carry.


The items tracked in the regulatory liability can be later be used to request reductions in customers’ bills. For obvious reasons, Black Hills wants to create a regulatory asset which will benefit investors.


They do not want a regulatory liability which will benefit customers.


Unfortunately, the Unanimous and Comprehensive Settlement Agreement agreed to by Staffof the PUC ("Staff) and the Office of Consumer Counsel ("OCC") , filed on July 18, agrees that the utilities have the right to create a regulatory asset to track the bad debts. There is no requirement that they also create a regulatory liability to track any reduced operating costs, reduced interest rates or even any amounts the utilities or their affiliates or independent contractors might receive from the various COVID relief bills.


Further, Staff and the OCC agree that they will not seek to create a regulatory liability in the future, because they agree that the settlement is a "full and complete resolution of all issues that have been raised or could have been raised."


This phrase or a version of it is included in the Settlement Agreement in four different places. A waiver such as this is typically used in personal injury or contract disputes. It has no place in regulatory proceedings. This phrase will prohibit Staff and the OCC from raising at a later time the issue of creating a regulatory liability for the benefit of ratepayers.


A quick analysis shows that the interest savings alone, could be huge. In the 2016 Black Hills electric rate case, the PUC authorized Black Hills to include in rates an interest rate of 5.29% on debt of $350 million. As it now stands, if Black Hills obtains a lower interest rate on this debt, it pockets the savings, which then go to investors. Customers will receive no benefit from lower interest rates.


The time for intervening in this application is over. Neither the City of Pueblo nor the County intervened. However, customers can still file comments with the PUC asking to reject the settlement and to create a regulatory liability to track all cost savings, reduced interest costs, reduced taxes and the benefits of any COVID-related laws passed by Congress.


Use the homepage of the PUC website —"File a Comment or Complaint" and reference Proceeding Number 20V-0159EG


Frances Koncilja grew up in Pueblo, a graduate of SCSC (now CSU-Pueblo) and CU Law School. She practiced law in Denver for 40 years until Gov. John Hickenlooper appointed her to the in PUC January 2016 and she was required to close my practice.


She served until March 2020, and has opened a law firm to help smaller companies and communities navigate complicated government bureaucracies such as the PUC.