House committee wants “cooling off” before utility reps could serve on PUC

Author: Joey Bunch - April 5, 2018 - Updated: April 12, 2018

AFL-CIO scorecard(Photo by Joey Bunch/Colorado Politics)

DENVER — Pueblo officials are so mad about high electricity rates that they want to clamp down on how soon industry officials can serve on the state Public Utilities Commission in the future.

House Bill 1281 would establish a four-year “cooling-off period” before anyone who has been an officer or director for a regulated utility could serve of the commission that rules on rate requests.

The PUC’s three members are appointed by the governor and confirmed by the state Senate, but otherwise decide rate requests outside the control of the legislature or local governments.

Rep. Daneya Esgar, D-Pueblo, said her bill would help prevent conflicts of interest on a board vilified by angry ratepayers in one of the state’s poorest regions who pay some of the state’s highest electricity rates.

The PUC approved those hikes for Black Hills Energy, so that the company could recoup the costs of its investments in the region, as it is legally entitled to do.

“This is about saying if you’re going to go directly from an industry that is regulated by a commission to that commission, maybe we should have a cooling off period in between to ensure there’s not going to be any conflicts of interest,” she told the House Transportation and Energy Committee.

The Democratic majority gave the bill an 8-7 approval in its first hearing, but Republicans were unified in opposition, characterizing it as an unnecessary requirement that would rule out people with recent industry experience and clear the way for people who oppose the industry.

The Republican majority in the Senate is likely to kill the bill, as it does most legislation that GOP members deem to be anti-energy.

Rep. Paul Lundeen, R-Monument, tried to include an amendment to apply the same four-year period to PUC members who have ties to environmental organizations or consumer advocacy groups, as well.

The Democratic majority on the committee wouldn’t allow it, however, because the title of the bill applies only to regulated utilities and the legislature has a rule that each bill can deal with only one subject.

The bill is a byproduct of a war of words between Black Hills and Pueblo leaders, explained by Colorado Politics contributor Mark Jaffe last week.

In 2016, state legislators from the Pueblo area called for an investigation or some other action on electricity rates. In response, Frances Koncilja, a Denver attorney originally from Pueblo, was appointed to the PUC. Then Gov. John Hickenlooper named Wendy Moser, a former Black Hills attorney, to the three-member panel.

Koncilja went after Black Hills, calling it a “colonial power that can loot the citizens of southern Colorado” and said it spent money “like a drunken sailor.”

When Black Hills sought to have Koncilja recused from their rate case, Moser backed the move. At the same time, Pueblo County wanted Moser recused.

That $8.5 million rate case is still pending in Denver District Court.

Koncilja testified in favor of Esgar’s bill Wednesday.

“You want commissioners who will stand up to the utility,” she said, saying that had not happened in the past.

Heidi Wagner Morgan, the manager of state government affairs for Black Hills Energy, said the company faced the same regulations as any other utility before the PUC, with no undue influence on the process.

“Additionally, our rate increases over the years, approved by the PUC, have been necessary for infrastructure needed to maintain reliable service, meet state requirements and are comparable to our neighboring utilities, while our recent total-bill changes are comparable to the remainder of the utilities in the state,” she said.

“All of this should be placed in the context of our constant efforts improve the way we do business and further partner with the southern Colorado community.”

Esgar said her request was not about Moser and wouldn’t apply to her even if the next governor wanted to reappoint her next year, since it would be more than four years since Moser was Black Hills’ lawyer. She said PUC members before Moser had been “rubber-stamping rate increases.”

Rep. Jon Becker, R-Fort Morgan, pointed out past commission members who had consumer advocacy backgrounds served on the commission when the PUC approved the increases that are upsetting ratepayers.

“If we’re talking about bias from an industry or from insiders, that comes from both sides,” he said. “If you look at the bios of past commissioners, many of them come from a group that benefited from what they’re (the PUC) doing.”

PUC director Doug Dean told the committee that ethics requirements, including prohibitions against conflicts of interest, already are in place, more so than perhaps any other state agency.

“Utility regulation is very complex and this bill would make the PUC the first agency where relevant experience actually disqualifies an applicant for a position,” he said. “We believe knowledge and experience should be encouraged and not used as a basis for disqualification.”

A handful of Pueblo officials testified in favor of the bill. Pueblo City Council President Chris Nicoll said leaders there are looking at severing ties with Black Hills to form a municipal utility because of the rate hikes.

“Ethics and potential conflicts of interest have real impacts on Colorado residents, low-income families, seniors and businesses.” he said. “Our city has been caught up in the outcome of these decisions.”

Joey Bunch

Joey Bunch

Joey Bunch is the senior political correspondent for Colorado Politics. He has a 31-year career in journalism, including the last 15 in Colorado. He was part of the Denver Post team that won the Pulitzer Prize in 2013 and is a two-time Pulitzer finalist. His resume includes covering high school sports, the environment, the casino industry and civil rights in the South, as well as a short stint at CNN.