What does defeat of the public utility mean for Pueblo?

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After Pueblo Cares spent $1.5 million to defeat a public utility with dark money, partly shielded by Pueblo City Council, voters resoundingly decided to keep Black Hills Energy by a large margin.

Background: The business community in Pueblo is adamant that Black Hills Energy has held back development and growth in the 2010s, but how much Black Hills has kept Pueblo stagnant while Colorado boomed is up for debate. 

For residential ratepayers, Pueblo pays the highest rates along Colorado’s front range, adding economic pressure to Pueblo’s working class, poor and minorities.

After ten years of Black Hills Energy holding the franchise agreement, energy costs continued to rise even though pro-Pueblo Public Utility Commissioners such as Francis Koncilja, local businesses, and other leaders fought Black Hills and campaigned the PUC for lower energy rates.

The Vote: 
For 2A (to form Pueblo Water & Electric) : 6,846
Against 2A: 21,286

What’s next: Pueblo Mayor Nick Gradisar is hopeful they can work with Black Hills Energy to develop attractive economic development energy rates to attract companies. What’s uncertain is how the residential and commercial ratepayers find relief from the highest energy rates in the state of Colorado. 

On the table is a 5-year rate freeze and Black Hills 2019 proposal to invest in renewable energy for cheaper energy costs. 

Why dark money matters this time?
Money in politics is nothing new, but what is new is that the Pueblo City Council had an opportunity to shine a light into the darkness and allow Black Hills Energy ratepayers to see who was funding Pueblo Cares, the anti-public utility campaign. 

Instead, the city council decided by a vote of 4-3 to shield the group from scrutiny.

Pro- public utility campaigners may cry over the $1.5 million spent but it could be city council’s vote on dark money that will have a lasting impact.

While not every local ballot initiative or candidate race will see expensive races raising $1.5 million from outside money, there’s little stopping it after this.

It was a chance for Pueblo to lead the state in dark money to say it has no place inside city limits but the 4-3 vote could open a Pandora’s box where another future council will have to close it. Next time it could big business buying off the mayoral race, or maybe council seats are bought en masse – whatever the race, the public would be in the dark on who exactly is spending big.

Insults ahead of negotiations
As both sides, Black Hills Energy and pro- public utility supporters traded barbs in the final days of the campaign – only time will tell how this impacts negotiations. 

Pueblo Cares was playing off the recent fiasco where the city council awarded animal control services to PAWS For Life and not the long-standing provider Humane Society of the Pikes Peak Region. After extreme conditions were exposed under the PAWs managed animal services the contract was terminated, and HSPPR was awarded the contract again.

Maybe in another time, city council would have unanimously taken action in disgust of a misleading campaign calling them incompetent when the charge was blatantly false since they don’t manage animal services.

Pressure on council
With council members Dennis Flores and Lori Winner opposed to the public utility takeover, this defeat now puts the pressure on them to deliver on lower energy rates for Pueblo in 2020. 

Big Picture: How will Black Hills use this win? There are three scenarios going forward. They can now claim their Southern Colorado customers are happy with Black Hills giving them a stronger position when it comes to a rate increase proposals to the PUC.

The second scenario is that the city will be able to negotiate with Black Hills for competitive economic development rates and lower consumer rates to make Pueblo a competitive energy city. 

However, in the first decade of the Black Hills Energy franchise agreement, the City of Pueblo hasn’t been able to get lower energy rates. A dominant anti- public utility vote doesn’t change that dynamic.

The final option would voting to disconnect from Black Hills in 2025 or in 2030.