Pueblo City Council Work Session February 8, 2016 5:30 pm Susan Perkins, David Cockrell and Anne Stattelman
Pueblo s Energy Future is a grassroots network of concerned citizens, business owners, service organizations, the faith community, clean energy advocates and others. Our mission is to secure a clean, affordable, sustainable and just energy future for all of Pueblo.
The Colorado Public Utilities Commission (PUC) approved the pass-through to ratepayers of the premium acquisition costs paid by BHE for Aquila in 2008. Rates have increased dramatically since 2010 due to BHE building new generation assets, adding tariff riders, and increasing other charges. Pueblo has the highest electric rates of the 20 largest municipalities in Colorado.
Data prepared by Al Logan, former BHE employee, Feb. 14, 2015 based on company tariffs provided on company websites.
Increased demand for services from Posada, El Centro de Los Pobres, Catholic Charities, County Social Services; and pressures on landlords and public services Colorado s disconnect policies are among the worst in the nation, allowing families to have their electricity disconnected in subzero temperatures. Disconnecting a family s electricity results in loss of heating.
Black Hills Energy Assistance Program (BHEAP) In 2012, Black Hills Energy implemented a Low Income Energy Assistance Program, mandated by the Public Utilities Commission and paid for by Black Hills Energy customers and yet, approximately 1,600 households per quarter are disconnected in Black Hills Territory.
BLACK Hills Energy Electric Shut Offs and Reconnections Source NARUC Reports 2014 to 2015 Colorado PUC Electronic Filing System Proceeding # 08M-305EG 2000 1800 1649 1787 1698 1600 1532 1400 1365 1200 1000 1043 967 997 868 800 781 731 744 731 600 634 535 400 200 0 4 QTR 2014 1 QTR 2015 2 QTR 2015 3 QTR 2015 4 QTR 2015 Electric Accounts Terminated Electric Accounts Reconnected Electric Accounts Remaining Disconnected
Rates have consistently gone up and will continue to rise. The Public Utilities Commission has been a rubber stamp and has not stood up for Pueblo rate payers. Electric rates in Pueblo are among the highest in the state. BHE business model and policies are unjust and lead to economic hardship for people and businesses.
The key to understanding the problems for businesses is demand charges Demand is the peak rate at which electricity is used for 15 consecutive minutes each month. Measured in kilowatts (kw; a toaster draws about 1 kw while it s on) Demand Charge = 46% to 69% of bills evaluated Fuel and Energy Charge make up less than 20% Customers struggle to understand demand rate schedules Demand rates hurt our local economy; Xcel s rates are much better; Our case studies support this broad assertion
Why are so many small offices penalized by being included in a demand rate that begins at such a low threshold, compared to the other investor-owned utility in the state? Taking this small-demand user (6 kw to 13 kw) off the demand rate would reduce their bill by 15%-20% Dr. Highfill s comment: I would also like City Council to know that my overall [electricity] charges have gone up 300% in five years! For example, May 2010 averaged 49.34 kwh/day and cost $5.24 a day; May 2015 averaged 43.97 kwh/day yet cost $14.78 a day. How can a 300% increase be justified? Customer Profile 916 Indiana Ave, Suite 110 Established in 2004 3,163 ft2 office space, built in 2004 Main electrical uses: lighting, air conditioning, medical equipment $5,055 annual electric bill 59% is for demand charge; energy charge 2%; ECA 17%
Why are so many organizations and businesses penalized by a ratchet in the demand rate, such that they pay a considerable amount for a demand rate that they normally don t reach during nearly the entire year? Since the church s peak demand load has come in well above 50 kw, that shoves it into a demand rate schedule (CO720) that not only costs more per kw but doesn t allow less than a 50 kw demand charge per month.ever. Not the church shown here Customer Profile Size: est. 30,000 to 35,000 ft2 Built: 1890, then 1926, plus newer additions $28,744 annual electric bill Demand charge: 60% of bill Intermittent use = high rate ($0.25) per kwh
This building s economics suffer from BHE s overall high rates In any other of the 20 largest municipalities in Colorado, the electricity bill would have been lower, often considerably lower, due to more favorable rate structures offered by utilities serving those territories. Customer Profile Co-owner Louie Carleo: When you look at all the expenses for the building property taxes, maintenance, renovations, water, natural gas, snow removal, etc. it is the largest single expense by far. 503 N. Main St. Opened in 1914 150,000 ft2 of office space with two-meter electric system $265,000 electric bill in 2015 = 35% of building operating expenses ($710,000/yr) Demand roughly 50% of bill; 4% energy usage; 30% fuel cost Ratchet on air conditioning meter keeps demand cost high 12 months
The company s all-in per-kwh fee $0.33 is the highest we surveyed by roughly one-third, in large part due to the demand rate approach BHE shifted to during 2013, whereby a customer pays more per kw of demand and a decreasing amount for energy usage. This is especially striking when compared to Xcel s demand rate structures for industrial customers. Owner Jim Warren: Their [BHE s] electric rates are enough to break us. We also have a yard in Albuquerque and we aren t on a demand rate there. Customer Profile 1801 S. Lacrosse Ave. Established in 1981 Warehouse, office, sizeable equipment on the site $767,000 electric bill during 2015 $525,000 is the demand portion (69% of total bill) Largest energy demand (2,700 kw) is for the auto shredder Highest rate surveyed per kwh: $0.33+
1)Demand charges dominate the bills; 2) Some per-kwh usage rates are very high; and 3) BHE s high rates hurt all participants in Pueblo s economy.
The primary responsibility for assuring that Pueblo residents and businesses have access to reliable, cost-effective and sustainable energy rests with the City, not with Black Hills Energy.
The parties agreed to regular meetings with a Pueblo Liaison. Pueblo reserved the right to generate or aggregate its power. BHE agreed to negotiate ways to reduce the City s power costs. BHE agreed to be proactive about environmental issues. Pueblo reserved the right to intervene in PUC proceedings. The City of Pueblo has the right to terminate under certain circumstances
Activate the Pueblo City Liaison s role to advocate for fair lowincome, arrearage, and deposit policies that do not shift social costs to city and county governments, and for rates that support Pueblo s economic development. Assess franchise effectiveness and compliance to date as well as PUC reaction to BHE requests. Intervene in PUC dockets in the public interest. Support efforts to make energy efficiency, low-cost renewable energy, and sustainability solutions available to governments, residents, and businesses. Create a Citizen's Electric Utility Advisory Board as a resource to the Council Franchise Liaison, and to the Office of Consumer Council