People in south-central Colorado are putting up a big fight against a proposed electric-rate increase

No electric rate increase for Black Hills Energy. Absolutely none. Zip. Nada. 

That’s the resounding message to the Colorado Public Utilities Commission from people living in a swath of south-central Colorado served by the South Dakota-based for-profit utility company. 

The clarion call came from city and county governments, industry, nonprofits, unions and small businesses. Eighteen entities are official “interveners” that can enter evidence in the complicated rate case before the PUC, which regulates utilities in Colorado. 

The call also came from dozens of individuals who pleaded with the PUC through emails, voicemails and public comments at meetings.

People like the Pueblo security guard who is working four jobs but still living paycheck-to-paycheck. The retirees on meager fixed incomes worried about how they would find $20 more a month for electricity. The Cañon City School District finance guy who pointed out that the $82,536.86 more they would pay for electricity was equivalent to the salary and benefits of an experienced teacher or two paraprofessionals.

Or the young Cañon City carpenter who stopped into a hearing on her way home from work and read some thoughts she had jotted in her carpenter’s notebook about the snowball effect of an electric bill increase: Businesses will raise their prices to cover the cost, so residents will not only pay more for electricity at home but also will pay more for goods and services.

Sister Nancy Crafton, Sisters of Charity, testified Oct. 11 before the PUC in Denver and spoke at a meeting in Pueblo on behalf of an estimated 900 families in southern Colorado served by El Centro de Los Pobres (The Center for the Poor) in Avondale, east of Pueblo. 

In October, she provided a chart to PUC commissioners that showed her mission had doled out more than $517,000 in 10 years to help families keep the lights on.

“We cannot afford Black Hills Energy,” she said, eliciting applause from those attending the public hearing in Pueblo.

Most commenters have asked the PUC to deny any increase, noting the Black Hills Energy customers already pay the highest electric rates in the state. 

The three members of the commission, Chairman Eric Blank and members Tom Plant and Megan Gilman, are expected to make their decision in March.

The public outcry

On June 14, Black Hills filed its request with the PUC for a $36.7 million electric rate hike, which would have meant an 18% hike for residential customers, or about $20 more per month. In its filings the company said capital improvements made since 2016 were the primary reasons behind the proposed base rate hike. Five months later, it reduced the ask to $25.1 million, which would mean a rate increase for residential customers of 13.8%, or about $15 a month.

The outcry was immediate, especially coming after Black Hills in March had added a $1.50 monthly surcharge, or rider, to bills to pay for its state-mandated Clean Energy Plan. During a May presentation to the Cañon City City Council, Black Hills said because it is adding renewable energy the rates would go down, said Emily Tracy, a council member who started Cañon City’s Energy Future seven years ago. 

An overwhelming number of documents fill the online PUC case file: testimony from hearings; exhibits; rebuttal testimony; public comments; transcripts of voicemail comments; charts and graphs, and more. The monthslong court-like process for consideration of a rate increase is described as 12 steps on the PUC website. 

The city of Pueblo, Pueblo County and the Pueblo Economic Development Corporation joined forces July 12 to file a motion to intervene in the case, meaning they can actively participate in evidentiary hearings.  

By early August, several other entities had done the same. The towns of Florence and Cañon City in Fremont County jointly hired an expert to manage their arguments. Other interveners in the case include: Energy Outreach Colorado; Laborers International Union of North America; Holcim (U.S.) Inc; Western Resources Advocates; the Sierra Club; the Fountain Valley Authority; Solar Energy Industries Association; and Colorado Solar and Storage Association.

Residents have bristled about Black Hills Energy for a while, and in 2020 nearly two-thirds of Cañon City voters rejected a new franchise agreement. Just a few months earlier, Pueblo voters went the opposite direction, soundly rejecting a plan to drop the franchise and form a municipal utility.

But, dropping the franchise didn’t mean Cañon City could or would find a new provider, and the cost of forming a municipal utility is prohibitive. The infrastructure belongs to Black Hills, and four years after the vote the issue is at a standstill.

“Black Hills is not a willing seller,” Tracy said.

Outside help

Others have recognized the disconnect between Black Hills high rates and the low incomes in the areas it serves.

Cindy Schonhaut, director of the Colorado Office of the Utility Consumer Advocate, told the PUC in Oct. 11 testimony that the office recommended no rate increase. The UCA  intervened in the case.

“The Commission should not approve any rate increases in this case based on its mission and obligation to serve the public interest,” she testified. “The Commission should rule that affordability is the basis for its determination that no classes of customers of Black Hills Colorado Electric, LLC (“BHCOE” or the “Company”) will receive a rate increase as a result of this proceeding. The Commission can base this outcome on its commitment to affordability as a critical part of its regulation of utilities.”

Representatives from other intervening entities also have spoken at public meetings and have encouraged individuals to submit comments to the PUC. There have been meetings to teach people how to comment and voluminous social media posts to encourage participation.

Joseph Pereira, deputy director of the Consumer Advocate office, met with citizens in Cañon City ahead of a public hearing to help them understand the PUC process and how to submit comments.

“It’s really important that the public weighs in,” he said at the Nov. 14 meeting.

“The commissioners understand the public isn’t used to doing this,” he continued as he offered an outline on how to comment. The tips included: use notes, speak naturally, say how a rate increase would impact you and tell them what you want them to do.

Although only about a dozen people attended that meeting, it was recorded and shared on social media. The commenting tips also were widely shared.

The turnout

Back-to-back public hearings in Pueblo drew a little over a hundred people, a turnout that disappointed Pueblo officials, who recalled that more than 500 people turned out in 2016 when Black Hills last asked for a rate increase.

Among the attendees at every meeting was retired energy consultant Steve Andrews of Florence. He decried the impact of high utility bills on small businesses, pointing out that “on page 300” of a Black Hills financial form it shows the utility served 551 fewer businesses in December 2023 than it did in December 2022.

“The impact of already high electrical bills on small businesses is huge,” he said. At a Canon City’s Energy Future meeting he answered questions, offered to help people decipher the charges on their electric bills and pointed them to specific documents on the PUC’s website.

“The burden of this increase on the city’s most vulnerable residents and the city itself is too great to ignore,” Andrew Hayes, Pueblo’s director of public works, said at a PUC public hearing Oct. 29 in Pueblo attended by about 50 citizens. He noted the “unified opposition” to a rate increase for a company that has not provided the city with the best service despite its high cost.

Pueblo Councilman Joe Latino, who represents District 2, told PUC commissioners at least one-quarter of his district is low income and people “struggle to put food on the table.”

Tracy also spoke at the Pueblo hearing, saying that all of the Black Hills service area in Colorado is low income. Cañon City’s median income is 39% below the state’s median and yet it has the highest electric costs, she said.

Tracy also discovered computational errors in the notices sent to ratepayers in June and pointed them out to the PUC and Black Hills. 

Several parties, including the Office of the Utility Consumer Advocate, filed a motion requesting a corrected notice, but the PUC commission decided that was not necessary.

“Overall, we find that the Company’s original Customer Notice was sloppy and contained several regrettable errors,” the PUC wrote in an Oct. 25 decision that is posted in the case file. “The Company could have avoided these errors with better attention to detail, or at the very least could have addressed the errors more expeditiously after it was alerted to the errors. However, we find that the original Customer Notice contained enough information to allow potentially interested persons to be reasonably informed of the substance of the Proceeding.”

The commission noted that it was aware that Black Hills planned to modify its request in a Nov. 8 rebuttal filing, so it could ensure that correct information was provided to customers with a new notice on the changes. 

“The Company shall also, at its own expense, mail the corrected notice in the same manner as the original Customer Notice was mailed to customers,” the decision says. “BHCOE shall ensure the updated notice is mailed within one week of its rebuttal testimony submission.”

On Nov. 8, Black Hills reduced its revenue request to $25.1 million, which would mean a rate increase for residential customers of 13.8%, or about $15 a month.

At a Nov. 19 public hearing in Cañon City that drew about 75 people, Tracy told the commission that the revised rates proposed by Black Hills should have restarted the 12-step PUC process.

“I do not find the revised case any more acceptable,” she said. “I ask that you deny the Black Hills rate increase and not lead us to the poorhouse.”

She also said that Black Hills had emailed some customers a link to the new proposal, but she did not believe notices were mailed as ordered within a week of the announced changes.

Bob Stovall, chairman of the government affairs committee of the Royal Gorge Chamber Alliance, said he opposed the proposed increase and is concerned about the impact it would have on businesses.

“Even the reduced request is excessive,” he told the commissioners at the Nov. 19 public hearing. And he reminded the commissioners that the PUC “is the substitute, if you will, for competition.”

Kirk Suther, who serves on Cañon City’s Energy Franchise Committee, called the case a justice issue for customers who have no choice in who provides their electricity and asked the PUC to be the protector of the public good.

“Black Hills is a regulated monopoly,” he said. “They’re also investor owned. They want to make sure they make as much money as they can.”

Sister Nancy was struggling with the justice issue, too, as a line formed outside her office at Los Pobres.

“These people are working,” she said. “They are farm workers, roofers, construction workers, home care, cleaning. They usually have to have two jobs and then they’re just making it.”

It just takes getting behind on one bill to put them behind, and then they’re socked with late fees and threats of eviction or having the electricity cut off.

That was the case for Brian Soto, a 37-year-old single father of two boys. He came in clutching an overdue Black Hills bill for $1,196.57. 

He works at CS Wind in Pueblo but “everytime I get paid it’s gone” as he pays the rent, the utilities, groceries. “I’ve tried to get ahead of it,” he said, shaking his head. “I work as much overtime as I can. It’s insane.”

It was his first visit to Los Pobres, and he had to take a day off work to make the visit. 

Sister Nancy took the bill and told him she’d take care of it and urged him to try to stay ahead to avoid late fees. But she, too, knows that’s an uphill battle for a single parent.

“We would like to have a utility that’s not for profit,” she said.

One last chance

A final, virtual public hearing is set for 4-7 p.m. Dec. 5, and the commission will continue to take written or oral comments until testimony concludes, likely in early December. 

Instructions on registering for the virtual meeting, which will be streamed live on the PUC’s YouTube channel, or submitting comments can be found at https://puc.colorado.gov/comments. 

The Black Hills rate case reference number is 24AL-0275E.