Black Hills Energy’s Charm Offensive:
Source: Pueblo’s Energy Future—7/30/18
Last September 25, Pueblo’s City Council voted 7-0 to study the City’s options for an early departure from their franchise agreement with Black Hills Energy (BHE). BHE fired and replaced their head of operations in Colorado and embarked on a strategic “charm offensive” to overcome the anger of its customers and the ill will that BHE had generated over the previous seven years. That “charm offensive” is also playing out in Canon City.
In mid-March, BHE ramped up this campaign, embarking on changes that BHE was either obligated to do anyway, or that BHE took credit for changing after resisting taking action for years. Those actions make them look less like bad guys. But the backstories behind this charm offensive tell another story, exposing mostly smoke and mirrors. The basic driver of BHE’s business has not changed—to maximize profits.
POINT #1: In March, BHE softened their harsh reconnection policies for disconnected customers.
But did you know? For years, BHE rejected requests to make these changes. Then Pueblo City Council voted 7-0 last September to study ways to leave BHE. Suddenly…change happened.
POINT #2: In May, BHE bragged about “bringing more renewable energy to Colorado.”
But did you know? BHE’s new wind farm just brings them into minimum compliance with Colorado law.
POINT #3: In July, BHE surprisingly joined a community coalition fighting to preserve old downtown power plants 5&6.
But did you know? Previously BHE wanted to demolish the old plants. Why? They would be paid millions, from your bills, for demolition and clean-up. After the 7-0 vote, their tune changed…again.
POINT #4: In mid-March, to promote their charm offensive, BHE began a series of mostly full-page ads in the Pueblo Chieftain. The regular price for a full-pager is $8,000.
But did you know? You are paying for those ads. Yes, BHE’s lawyers and accountants will say shareholders pay for those ads, but it’s a shell game; without customer revenues, those ads don’t run in any paper.
Points 5 – 8 below relate to BHE’s July 1, 2018 recent and on-going rate case before the Colorado Public Utilities Commission (CoPUC) that changed your rates July 1.
POINT #5: BHE celebrates—”we cut the monthly residential fixed charge by 50%.”
But did you know? BHE’s proposal last July would have increased monthly charges to every customer in every rate class!! Higher fixed charges are bad for customers, good for utilities. The CoPUC forced the change to lower fixed charges. It was not something BHE did to show a “change of heart.”
POINT #6: BHE’s new rates eliminate the “demand charge” for small commercial customers. (“Demand charge” indicates your highest rate of use. BHE’s demand rates are very expensive.)
But did you know? BHE’s original proposal in 2017 left in place the demand charge for all small commercial customers. Once again, the CoPUC mandated the change; no “change of heart” by BHE.
POINT #7: BHE’s Vance Crocker wrote a note to Canon City’s City Council on June 27, 2018, describing the new rate designs, and leading with this: “All customers will receive a credit that reflects 100% of the corporate tax savings resulting from legislation enacted earlier this year.”
But did you know? Crocker’s lead point has nothing to do with BHE’s redesigned rates. This change stems from the 2017 federal corporate tax cut, totally outside the recent rate process. And the CoPUC required the credit. Mixing the tax cut benefit with the recent rate redesign is like a rooster taking credit for the sun rising.
POINT #8: Crocker’s next point states “the quarterly Energy Cost Adjustment (ECA)—a rider on your bill every month–taking effect on July 1, 2018, will result in additional savings to customers.”
But did you know? Adjustments to the ECA are totally outside of the Phase 2 rate case. These “pass-through costs” happen four times a year. They reflect the recent cost of natural gas to BHE. When natural gas costs more, the ECA on your bill increases; when the cost of natural gas declines, so does the ECA on your bill.
BOTTOM LINE: DON’T BE FOOLED BY BHE’S CHARM OFFENSIVE!!
[Source: Pueblo’s Energy Future]