It’s not like there’s any love lost between Rapid City, S.D.-based Black Hills Energy and the city of Pueblo, to which the investor-owned public utility provides power. The city’s elected leadership, including its City Council and legislative delegation, long have been at odds with Black Hills over its repeated rate hikes in recent years. The city has a reputation for paying some of the highest power rates in Colorado.
So, you can imagine the reaction among Pueblo City Council members when they learned this week that an upgrade to city’s street lights a few years ago as a cost-saving measure recommended by Black Hills — which owns the lights and charges the city to use them — could now cost the city a lot more under a pending rate request by Black Hills to state regulators. In fact, as the Pueblo Chieftain’s Peter Roper reports, Black Hills “wants to more than double the annual cost of the city’s high-efficiency LED street lights — a $1-million increase that would erase the savings from the low-energy street lights.”
The council is furious, with Council President Steve Nawrocki calling the request “a slap in the face,” Roper reports.
Here’s some background details, courtesy of Roper:
Essentially, the utility wants to double the cost of what it charges the city to use its poles, electric lines and other infrastructure, even though the LED lights were installed to save power and money.
Back in 2014, council entered into a $4.2 million contract to install some 8,000 high-efficiency LED street lights because they would lower the annual charges from Black Hills. The financing came from Wells Fargo with the understanding the city would pay off the debt with savings from the LED lights. As collateral, the city listed its fire stations.
Even though the city paid for the new LED lights, Black Hills still owns them and the street light system. The city simply pays to use them.
In its filed testimony (to the Colorado Public Utilities Commission), Black Hills officials argue they need to get more revenue from city’s street lights — which they own. The mistake was to set the monthly costs for the new lighting too low from the start, according to testimony.
“In our discussions before the Phase 2 filing, we determined the company has not been charging enough to cover its fixed costs for the street light system after the city installed the LED lights,” a senior Black Hills expert wrote.
Oops. Now, the state-regulated utility’s mistake could cost Pueblo, again, if the PUC goes along with the request. And, again, Pueblo feels betrayed.
Gov. John Hickenlooper’s July 11 Executive Order puts Colorado on the path to meet America’s commitment to the Paris Agreement of reducing greenhouse gas emissions 26 percent by 2025. It does this by building on the clean energy progress we have already achieved as a state, and by prioritizing working with utilities to achieve these goals.
This is a smart economic move. The International Finance Corporation estimates the Paris Agreement will create $23 trillion in investment opportunity, which means Colorado can create good jobs by working toward the Paris target. This is also a realistic move. We can meet these goals today, while decreasing consumer costs and generating new investment for our workers and communities by working with utilities and industry.
Renewable power is now the cheapest new source of electricity for power customers. Colorado has proven we can harness our abundant wind resources while maintaining grid reliability and low costs. Building renewables is a winner for consumers because it avoids buying fuels and helps reduce pollution. The real challenge is managing the transition from older, less efficient power plants to a clean fleet while addressing local economic consequences, including job losses caused by these closures.
When power plants are retired, they often have residual value. They are called “stranded assets” because the plants and equipment, already included in consumers’ rates, still need to be paid off. This is exactly what is happening in Colorado and around the country to old generation plants and we must be prepared.
Fortunately, there is a proven solution to repay the utility without creating additional burdens on ratepayers: refinancing these stranded assets at a much lower interest rate using ratepayer-backed bonds. This approach is time tested, and has been employed in more than 20 states since 1997. Consumers save a bundle as these low-cost bonds replace more costly capital payments. Utilities’ shareholders benefit as their capital is returned immediately and reinvested into more efficient and clean energy investments. Finally, some of the significant savings generated by the plant retirements can be used to assist displaced workers and communities.
During the 2017 legislative session, state Rep. Daneya Esgar and I introduced HB17-1339 to bring this refinancing approach to Colorado. The bill authorized ratepayer-backed bond refinancing and detailed what the Colorado Public Utilities Commission (PUC) would need to consider to approve a utility’s use of the bonds. It also directed that 15 percent of the savings from the refinancing be earmarked to help workers transition and communities recover. Workers, consumer representatives, and communities all offered support for HB17-1339. The bill cleared the House, but died in the Senate based on opposition from coal mining interests.
Gov. Hickenlooper is looking for ways to meet his climate goals without costing taxpayers money. Our approach can do this while also reducing costs for customers and putting private dollars to work in communities where plants close in a “win-win-win” solution. It’s a win for electric consumers who save money by lowering interest costs and by avoiding buying fossil fuels. It’s a win for utilities and their shareholders; they get to recycle their investment capital into more productive new clean energy investments at a fair return. And in a first in the nation, Colorado will have resources to help communities and workers when power plants retire without needing additional tax dollars or expenditures.
I invite the governor to consider using ratepayer backed bonds as one tool in the toolkit he is assembling to address our climate goals. Now that new, cleaner options cost less than running older more polluting plants, it is time to seize the economic opportunity at hand and make the switch.
Updated: Julie C. Rodriguez, a spokeswoman for Black Hills Energy, got back to us with a response to Sen. Leroy Garcia’s withering view of the company’s rate-hike request. Here it is (with the original story below).
“In short, the Phase 2 filing is not a request for a rate increase, it is simply a plan to appropriately allocate among customer groups the revenue that was approved by the PUC in December 2016 (and implemented on January 1, 2017) as part of our Phase 1 filing,” she said. “The proposed Phase 2 changes to customer bills must be approved by the PUC and are revenue-neutral, meaning they would not result in any additional revenue for Black Hills Energy. We expect any changes in bills associated with this filing will not become effective until March 2018. Through smart meter data, we found that residential customers, making up 90 percent of Black Hills Energy customers, are responsible for more energy use than is recovered in their current rates. As a result, other customer groups, like business customers, have been paying a disproportionally greater share of the cost of service. This prompted the proposed changes to customer groups.”
Sen. Leroy Garcia is infuriated that energy customers in southern Colorado face a rate hike, when they already pay some of the highest rates in the state.
In the last session, Garcia asked to create a legislative committee to hold public meetings before the next session to evaluate Black Hills Energy rate increases, but Republicans shot down the proposal on a party-line vote.
The Democratic senator from Pueblo is riled up that South Dakota-based Black Hills is asking the state Public Utilities Commission for a package of rate hikes to pay for a gas-fired generator in Pueblo. That facility replaces a coal-fired plant in Cañon City, which closed in 2012 under pressure for clean-air advocates. Part of the reason for the high cost — and The Washington Post in 2014 noted there were several — is Colorado’s Clean Air-Clean Jobs Act, which passed the legislature easily with bipartisan support in 2010.
Black Hills wants to create tiered rates for customers who use higher amounts of energy, similar to the summertime rates charged by Xcel Energy. Black Hills, which powers 52 southern Colorado communities, also wants to raise its minimum monthly residential rate from $16.89 to $20.13. The minimum charge covers fixed cost such as a connection, meter and billing to extend service to a home, separate from the amount of energy used in the home.
Net-metered solar customers could pay up to 50 percent more. The utility is asking for a monthly charge of $25.45 to recover the cost of a second meter, which measures solar energy production, as well as a higher energy use charge.
“Energy to cool our homes, heat them during the winter, keep our rooms lit, and cook our meals is a basic need that shouldn’t be held hostage by a big corporation trying to line its pockets with mysterious fees,” Garcia said in a statement Monday afternoon.
“Coming out of a legislative session of pushing back against rate increases, it is especially insulting to see Black Hills try to get rate increases and new fees tacked onto energy bills when they think no one is looking. The PUC needs to think long, and very hard, before they consider rate increases and new fees that will stretch the budgets of hard-working people and their families even thinner.”
Garcia sponsored Senate Bill 105, signed into law in May, to make monthly bills from investor-owned utilities (namely Black Hills and Xcel) easier for everyday folks to understand, including line-item billing and easier-to-grasp visual elements about energy use each month.
He also co-sponsored House Bill 1323 to prevent anyone who had a recent affiliation with a regulated utility from serving on the Public Utilities Commission. The bill died in the Senate State, Veterans and Military Affairs Committee on a 4-1 vote on May 4.
Garcia noted that Wendy Moser, a former lawyer for Black Hills Energy, was appointed to the PUC in January.
The rate hikes are part of the utility’s effort to recoup the cost of the new generating station. After examining costs the Public Utilities Commission lowered the amount Black Hills could recoup from ratepayers from $8.5 million to $636,267. Black Hills has appealed that amount to the courts.
The PUC could hold a hearing to accept or adjust the proposed package of rate increases or ask administrative law judge to hold the hearing and consider the judge’s recommendation, but that decision hasn’t been made yet, said Cindy Schonhaut, the director of the Colorado Office of Consumer Counsel.
The PUC will take public comments until at least November, depending on when the hearing is set.
Comments can be emailed to dora_PUC_complaints@state.co.us, or mailed to 1560 Broadway, Suite 250, Denver, CO 80202.
According to her blog post, that was supposed to have been accomplished during the regular 2017 session that concluded last week. The vehicle, Cooke writes, was going to be an amendment inserted into a bill introduced late in the game, Senate Bill 301, sponsored by Republican state Sen. Ray Scott of Grand Junction.
On its face, that bill involved a sweeping reconfiguration of the much-debated Colorado Energy Office and also included a provision that would have permitted investor-owned utilities to own natural gas reserves. The bill got mired in late-session politics and was scuttled in the end amid tit-for-tat pushing and shoving between Scott’s Republican-run Senate and the Democratic-controlled House.
So, the special session would pick up where the originally intended effort left off, Cooke writes. SB 301’s natural gas provision was the tip of the iceberg, she seems to think:
Sources tell me that Governor John Hickenlooper really wants the state legislature to anoint in statute Xcel’s big plans for industrial wind, and he is trying to get the oil and gas industry to support it as well, likely because natural gas is the preferred back-up generation for industrial wind.
“… this language blesses Xcel to build and majority own industrial wind and natural gas back up, build and own all of the infrastructure, and pass all the costs along to ratepayers. It would complete the process of converting Xcel from pig to hog status.
Cooke, who is the libertarian-leaning institute’s executive V.P. and heads its Energy Policy Center, is a frequent critic of Minneapolis-based Xcel and other investor-owned public utilities given their status as regulated monopolies. Independence and other critics of the system don’t like how it uses Public Utilities Commission-granted rate hikes in part to subsidize the transition to what the critics contend are costlier alternative energy sources like wind and solar power.
We reached out to Hickenlooper Press Secretary Jacque Montgomery for a comment on Cooke’s assertions. She followed up with this response — neither a confirmation nor an explicit denial:
The Governor has shared what his top issues are when considering a special session: infrastructure and health care. At his end-of-session news conference, he called out these as well as the funding for the energy office.
Few things get as superheated in Pueblo these days as the city’s ongoing grudge match with its principal power supplier, Black Hills Energy. For years, local government and other critics have railed against the Rapid City, S.D.-based utility over a succession of electricity rate hikes, and they have chided the Colorado Public Utilities Commission (PUC), as well, for approving the increases. Pressure has been mounting to rein in Puebloans’ power bills, which, by many accounts, are among the highest in the state.
So the city cheered last year when Gov. John Hickenlooper named Pueblo native Frances Koncilja to the quasi-judicial PUC as one of its three commissioners. The blunt-spoken attorney didn’t waste a minute before going after Black Hills and calling it on the carpet.
Her approach struck the company as so aggressive, it claimed bias and filed a request with the PUC earlier this month asking her to recuse herself from deliberating on its latest request for a rate hike (to be exact, it’s a request for reconsideration of the PUC’s decision to scale back Black Hills’ previous request for a rate hike). She refused to step aside, and the company asked the full board to vote her out of the deliberations. It voted 2-1, including Koncilja’s own vote, against the unusual Black Hills request.
Now, Pueblo County is pushing back even further. Reports the Pueblo Chieftain, the county government has filed a request to the PUC to remove recently appointed Wendy Moser — the one commissioner who had voted with Black Hills against Koncilja — from deliberations on the same pending rate case from which Black Hills had sought to remove Koncilja. Moser, an attorney named to the commission in January, is a former staff counsel to Black Hills.
Writes the Chieftain’s Peter Roper:
Pueblo County…argues that Moser has a conflict of interest because she has extensive knowledge of the many components in the Black Hills rate request from when she was a lawyer in its regulatory office from 2011-2014.
In its motion, the county quotes state law that says a commissioner can be disqualified if they have served as a lawyer on a matter before the commission.
Moser, who at her Senate confirmation hearing in January had faced some of the same questions about her history with Black Hills, contended then she has no conflicts of interest on any matters pending before the PUC.
As ColoradoPolitics.com’s Peter Marcus reported previously, the bias accusations against Koncilija were a lot more colorful than those against Moser:
Black Hills’ motion to disqualify Koncilja was based on alleged bad behavior, using terms like “despised company” “drunken sailor” and “colonial power” to describe the utility.
And Moser’s decision to openly champion Black Hills’ motion against Koncilja led to a wince-worthy exchange not often associated with a staid and deliberative governing body heavy on regulatory procedure and light on drama:
“Commissioner Koncilja … is the one who raised the idea of, it’s Commissioner Moser that you need to be concerned about, not her. This is not about me or my relationship with Black Hills,” Moser said. “One must ask why Commissioner Koncilja would shift the discussion away from the pending motion and make it about me.”
…with Koncilja countering:
…“The decisions we make here affect real people, and regardless of what Black Hills thinks about me or this commission, the rates down there continue to cause real heartburn, and I think the problem we’re going to have going forward is that there is a perception in that community that you have your fingerprints on a lot of the decisions that have created the pain,” Koncilja addressed Moser.
We’ll stay tuned for the next salvo — and be ready to duck.
Bipartisan legislation allowing cell-phone and broadband service providers better access to municipal markets won approval in the House Tuesday. House Bill 1193, sponsored in the lower chamber by Reps. Jon Becker, R-Fort Morgan, and Tracy Kraft-Tharp, D-Arvada, should translates to faster and better upgrades to cell-telephone service.
From a press statement by the House GOP:
The bill streamlines broadband and cell providers’ ability to access a local municipality’s light poles, light standards, traffic signals, or utility poles to install small cell signal transmitters, or “micro cell technology.” Micro cell technology is associated with improving 4G and carrying 5G service in Colorado.
The bill also clarifies that the right-of-way access available to telecommunications providers extends to broadband providers and includes small cell facilities.
Becker, quoted in the House GOP statement, said the bill helps make way for next-generation technology:
“Micro cell technology is replacing traditional cell towers, and this bill is a building block for better partnerships between the state and providers to improve cell service throughout the state…I am encouraged by the steps this bill takes to reduce regulations for broadband providers, and look forward to working with rural communities to do something similar to get reliable, high-speed internet and cell service to all of Colorado.”
Ratepayers steamed at their local public utilities likely will cheer an effort that advanced at the Capitol Thursday requiring greater accountability on monthly power bills.
Senate Bill 105, which easily passed the state Senate 26-9 with bipartisan backing, requires investor-owned, state-regulated public utilities like Xcel Energy serving the Denver area and Black Hills Energy in Pueblo to provide their customers with “comprehensive billing statements.” Utility bills would have to meet a range of standards set out in the proposal, including a line-item representation of all monthly charges and credits; a breakdown of controversial tiered rates, and the rate and usage for the current month and each of the previous 12 months.
Whether the proposal winds up being more substance or sop for consumers — we’re unsure at the moment how many power bills around the state may already conform to some of the bill’s requirements — the measure’s author, Sen. Leroy Garcia of Pueblo, clearly was hoping to address ratepayer discontent in his hometown. There, power rates are by many accounts among the highest in Colorado, and the community has been the scene of ratepayer outrage more than once in recent years in the face of successive rate hikes.
Garcia’s legislation doesn’t directly tackle the utility rates themselves — those are governed by the Colorado Public Utilities Commission — but it does at least seek to provide a dose of accountability ratepayers may feel is missing.
The legislation, which now goes to the House, follows the state Senate’s confirmation earlier this month of Gov. John Hickenlooper’s two picks — Jeff Ackermann and Wendy Moser — to fill two openings on the three-member Public Utilities Commission. Both nominations had been given a grilling earlier in committee, and Garcia was among a handful of senators who opposed both to the end. He told the Denver Business Journal of his disappointment at their approval:
“I believe that we have a responsibility to ensure that the PUC is acting in the best interests of the rate payers…In southern Colorado we are paying some of the highest electric rates in the state, and they have allowed Black Hills Energy to pass these increases to customers.”
Senate Bill 89 before the Senate Business, Labor and Technology Committee Wednesday afternoon would make it easier to collect energy for later in a home battery. Sponsored by Democratic Sen. Steve Fenberg from Boulder and Republican Rep. Kevin Lundberg of Berthoud, the legislation allows homeowners to store up to 25 kilowatts, and assures that utilities […]
Nearly two dozen AARP Colorado volunteers plan to track legislation and either support or oppose bills the organization has identified as important to older adults and their families during the 2017 legislative session, an AARP Colorado spokeswoman said.
Close to 2,200 taxi, shuttle and limousine drivers will likely face fewer regulations in the New Year, when the City and County of Denver is expected to stop requiring them to qualify for and obtain “Herdic” licenses.
Such licenses were named for the Herdic cab, a horse-drawn carriage invented by Peter Herdicin in 1881. Herdic cabs were designed as passenger vehicles for public transportation, often painted bright yellow, and were predecessors to the modern taxi cab.
The Denver City Council's Business, Arts, Workforce and Aeronautical Services Committee, at its Wednesday, Nov. 30, meeting, sent an ordinance repealing the Herdic license portion of the municipal code to the full council for consideration. Once approved, the city attorney's office will drop an appeal to the Colorado Supreme Court of a state preemption ruling against the city regarding the rules and regulations.