Pueblo’s Energy Future Pueblo City Council Work Session, Monday, April 10, 2017, 6:00 p.m., 1 City Hall, Place, Pueblo, Colorado Pueblo’s Energy Future

A Better Energy Future. . .That’s Our Ask We urge Pueblo City Council to formally resolve to take back its right to provide electric utility service in Pueblo in the year 2020 under the ten- year “off-ramp” provision authorized by Colorado state law. A final decision in 2020 to exit Pueblo’s franchise agreement with Black Hills Energy would be subject to an assessment of various options available to the city that best address lowering energy bills and providing better service.

Background of Colorado Law The Colorado Constitution and Colorado state law puts the PRIMARY RESPONSIBILITY on home rule cities and towns for providing electric utility service within their boundaries. Home rule cities MAY OUTSOURCE their responsibility to provide electric service to a for-profit utility under a franchise agreement, but NOT FOR MORE THAN A TWENTY-YEAR TERM. Home rule cities MAY RECLAIM THEIR RIGHT to provide electric service at the end of the franchise agreement, OR IN YEARS TEN AND FIFTEEN OF THE FRANCHISE AGREEMENT. We are referring to this legal right as an “OFF-RAMP.”

Pueblo’s Exit From the Franchise Agreement Pueblo outsourced its right to provide electric utility service to Black Hills Energy on August 11, 2010, for a term of 20 years. The ten-year “off-ramp” is exercised by giving Black Hills Energy notice of the City’s desire to purchase or condemn the city-wide electric distribution system within Pueblo’s boundaries. Pueblo’s first, ten-year “off-ramp” occurs in 2020, just three years from now.

Advantages of Taking the Off-Ramp NO RIGHT OR OBLIGATION TO PURCHASE BLACK HILLS’ GENERATION EQUIPMENT (a $500 million+ investment). Right to purchase power generated by third parties, to purchase or build generation, and to transmit power across high-voltage transmission lines. Right to set electric rates so as to stabilize and reduce energy bills, and to create low-income service policies that reflect Pueblo’s social values. RIGHT TO BE FREE FROM REGULATION BY THE COLORADO PUBLIC UTILITIES COMMISSION.

What Steps It Would Take Identify and assess various possible options available to the city that best address lowering energy bills and providing better service. Determine the legal, financial, and operational feasibility of the best options. Variables include: Cost of the local distribution system; Purchased or generated power; Financing terms; Operations management; City Council and voter approval.

A Better Energy Future. . .That’s Our Ask Moving Forward

The Franchise Off-Ramp Opportunity We urge Pueblo City Council to formally resolve to take back its right to provide electric utility service in Pueblo in the year 2020 under the ten-year “off-ramp” provision authorized by Colorado state law. A final decision in 2020 to exit Pueblo’s franchise agreement with Black Hills Energy would be subject to an assessment of various options available to the city that best address lowering energy bills and providing better service.

Pueblo’s Energy Future www. pueblosenergyfuture Pueblo’s Energy Future www.pueblosenergyfuture.org City Council Work Session Monday, April 10th, 6:00 p.m. 1 City Hall Pl. - 3rd Floor