Pueblo isn’t Boulder
Why Pueblo Has Negotiating Power
Lori Winner cites some facts in her editorial “Pueblo must weigh all facts in a city-owned utility move” (1/28/18). But she left out two critical points:
First, Winner warned Pueblo not to repeat Boulder’s costly example as it works to break away from Xcel Energy. Fair enough. But Boulder’s case differs dramatically from Pueblo’s on one key point: Boulder reportedly makes up just under 5% of Xcel’s service territory. Pueblo makes up just under 50% of Black Hills Energy’s (BHE) service territory. That puts Pueblo in a stronger negotiating position.
Second, like Pueblo’s utility attorney Bill McEwan, Winner focused on the costs of breaking away from BHE. And like McEwan, she ignored the benefits. The annual electric bill that Pueblo’s residents, businesses and industries pay BHE is around $115 million. Assume that changing to a new electricity provider cuts Pueblo’s tab by 20% by purchasing power on the open market, avoiding corporate taxes, etc. That’s around $22 million per year saved.
But then Pueblo will have to spend some of those savings to finance the break-away effort. Assume that Council decides to commit up to 75% of that savings to pay down debt service. The community still comes out way ahead.
So let’s plan for success, rather than fearing failure, in the upcoming battle with BHE. Remember that BHE’s corporate headquarters is not, first and foremost, on your side. They deliver your electricity to make a profit for themselves and their shareholders. And that won’t change.
Steve Andrews (Retired Energy Consultant), for Pueblo’s Energy Future email@example.com
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