Supporters of public power are being outspent 50 to 1. Can the underdog win on Tuesday?
by Steve Andrews
Bring Power Home 2020
In the battle by proponents in Pueblo to break away from the high rates of electricity supplier Black Hills, a perfect analogy is David vs. Goliath. Will David prevail this time?
Proponents of the break-away have long-standing public opinion on their side. Community outrage with Black Hills’ high rates hit a fever pitch during August 2016. More than 500 people jammed a hearing by the Colorado Public Utilities Commission in Pueblo’s convention center. Fifty testified before the PUC, 47 strongly against Black Hills.
Professional public opinion surveys taken during 2017 and 2019 confirmed that Black Hills was an enormously unpopular electricity supplier. “In nearly 30 years of polling for embattled electric utilities around the country on hostile takeovers, territorial fights, rate changes, transmission line siting, renewables issues and other controversies, we have never seen a utility as strongly disliked as is Black Hills Energy in Pueblo,” said the Ma6 2017 executive survey. Double-ouch!
Black Hills earned an 83% negative rating on working to keep rates low—more than double the normal score—plus a 75% negative rating on providing fair value for the dollar.
In September 2017, after Black Hills appeared to double-cross the City by first encouraging Council to upgrade street lighting efficiency and then changing the economics of the deal, City Council voted 7-0 to create an Electric Utility Commission to hire consultants to study the feasibility of leaving Black Hills.
Beginning in March 2018, Black Hills responded with a charm offensive. It increased community donations 40%, to $393,000 in 2018. The advertising budget ballooned from $14,000 during 2017 to $455,000 during 2018.
Two opinion surveys during the summer of 2019 revealed minor inroads by Black Hills. Those surveyed said Black Hills was a bad electric utility partner by a margin of just over 2-to-1, down from 3-to-1 two years earlier.
Black Hills cranked up its offensive last fall and early winter. It commissioned its own feasibility study that, no surprise, contradicted the energy-savings projected by the City’s consultant. Black Hills offered the City a suite of promises—more renewable energy, more investment in the community, etc.— that it asserted was worth hundreds of millions. But the promises would only be redeemed if the City shunned the breakaway proponents.
By early January, community leadership appeared split on the issue. The mayor, a strong proponent of public power, teamed up with Pueblo’s Board of Water Works (BOWW) to propose a change to the city charter. While the city council voted 7-0 to send the proposed amendment to the voters, the council voted 4-3 against supporting the amendment.
The last public survey showed that public power advocates maintained a still-shrinking lead, by just under a 2-to-1 margin. But a notable fissure had appeared: voters under age 45 favored leaving by a 4-to-1 ratio, while those over age 65—and most likely to vote—favored staying with Black Hills by a 58%-to-42% margin.
A real game-changer hit in January when a new lobbying outfit called Pueblo CARES (Clean Affordable Reliable Energy Solutions) started spending what is now $1.5 million to fight 2A. Pueblo CARES’s ads started appearing on the Internet in February, then got onto prime-time TV during March. Full-page ads in the newspaper, at $5,000 a pop, showed up regularly. By early April the onslaught included full-color 4-page mailers.
Their narrative revolved around scare tactics: it’s a risky government takeover, the buyout will cost over $1 billion, taxes will increase, electric bills will jump, reliability will decline, etc. Such tactics range from mostly misleading to definitely false (e.g., no taxes involved).
Everyone assumes the Pueblo CARES war chest came from Black Hills, though through artful design of organization structures, that assumption can’t be proven; no disclosure of the funding source is required…at least during the current coronavirus-induced shutdown of local courts which might rule otherwise. Historically, investor-owned utilities outspend efforts to form breakaway public power utilities by a 10-to-1 margin. In Pueblo, supporters could only dream of such a competitive scenario.
The funding to fight 2A dwarfed funds available to the citizen activist group, Bring Power Home 2020 Campaign. Supporters amassed a kitty of around $12,000 when Pueblo CARES got its first $750,000. Cash-strapped, they had money only to place 525 yard and street signs, to boost video and written messaging on social media platforms and to write op-eds and letters-to-the-editor in the Pueblo Chieftain.
Coronavirus has worked against the breakaway. Volunteers had eagerly signed up to participate in several public debate forums, only to see most of them canceled by the pandemic. Proponents’ main strength—numbers of volunteers to canvass neighborhoods, talk to homeowners, distribute door hangers and stand on busy street corners with signs—was eviscerated by community lock-down rules.
Proponents for public power received a late surge when several manufacturers quietly made donations, growing BPH2020’s total to $30,000 plus, and several business leaders spoke out strongly for the breakaway. Pueblo’s Chamber of Commerce also supported 2A. A list of who’s who of current and former elected officials signed on. The most notable voice to join the fray was former PUC Commissioner Frances Koncilja.
That said, the community’s current leaders remain split. Two current council members co-chaired the Pueblo CARES campaign, while two others sided publicly with the mayor. In a city that switched from a city council/city manager to a strong-mayor form of government in 2019, six of the loudest voices against the mayor’s breakaway plan ran against him during November 2018 and lost. Unshaken, the Mayor continues to assert that this is likely the most important financial decision that Pueblo will have made in its history. He’s probably right.
So, the day of reckoning is almost here. Will Goliath, with its $1.5 million campaign succeed in scaring the locals to remain with the highest electric rates along the Front Range? Will David, outgunned financially by 50-to-1, prevail? In this case, Goliath looks tough to bet against. My bet is…….
Steve Andrews is a retired energy consultant and Black Hills customer living in Florence.