Editor's note: If you listened to this story on "Colorado Matters" at 10 a.m. Tuesday, responses from the Public Utilities Commission and Black Hills Energy were not heard due to a technical error. You can hear the full audio by clicking the "Listen" button above.
Ever since Black Hills Corp. became the power company for tens of thousands of customers in southern Colorado in 2008, advocates for the poor have complained. They say the elderly, disabled, ill and working poor are having a tough time keeping up with some of the highest utility bills in the state.
And, for some of those on low or fixed incomes, keeping up is sometimes impossible. Advocates for the poor claim the utility has contributed to poverty and one state legislator is trying to make sure consumer interests are better accounted for when utilities raise rates.
Sister Nancy Crafton, one of the region’s leading advocates for the poor, says her charity Pueblo’s Centro de Los Pobres is stretched from efforts to help people who can't pay their Black Hills bills.
“In the last four years since Black Hills Energy has arrived in our community, our very small nonprofit has paid over $388,800 in Black Hills Energy fees,” Crafton says. “This is a whopping amount of money for a small nonprofit. We cannot continue at this rate to be helping our families.”
She says her organization doesn't have the resources to help everyone who asks.
Rapid City, South Dakota-based Black Hills Energy serves about 138,000 customers in southern Colorado.
Since 2008, Black Hills’ stock has risen steadily and public officials in the region have taken note as they've heard constituents complain about rising utility bills and people who can't afford to pay them.
State Rep. Leroy Garcia, a Pueblo Democrat, says a recent town hall took place to discuss issues residents are having with Black Hills.
“There are homes without electric during the winter; there are homes without heating,” Garcia says. “You know, Pueblo can get a little warm in the summer; sometimes around 100 degrees. And when you’re having to plug in an extension cord to your neighbors to have a little electric refrigerator running, it’s really sad.”
Throughout Colorado, Black Hills' utility bills are among the highest for consumers, according to data from the Colorado Association of Municipal Utilities, a nonprofit trade organization.
Black Hills Energy customers pay significantly more on bills than Public Service Co. customers, the Xcel Energy subsidiary that is the state’s largest utility. In the past year, Black Hills' customers paid 19 percent more per kilowatt hour and 85 percent more in service and other charges than Public Service customers, according to data from the state's Public Utilities Commission.
However, Black Hills says its higher rates are typical of Colorado's rural areas, and the region it serves outside Pueblo is rural.
The company also says that the number of people losing electricity for failing to pay bills has declined. About three years ago, approximately 500 Black Hills customers each month were shut off for failing to pay their bills. Since then, shut offs for that reason have declined by 23 percent, Black Hills says.
“We have worked very hard to identify the lowest cost alternatives for our customers with respect to meeting the mandates and with respect to delivering a safe and reliable source of power," Black Hills spokesman Bret Jones says.
He adds that the company has programs to help low-income customers, including one that waives deposits for customers that in the past have had trouble paying bills and are making renewed efforts to be on time.
“We have worked in earnest, and will continue to do so to try to address the needs of the lower income community," Jones says.
In 2008, Black Hills bought several utilities from Aquila Inc. including aging and "crumbling" facilities in Colorado that were in need of replacement or repair, a company spokesman says. The company is also striving to meet mandates for renewable energy.
But Black Hills has increased rates in recent years with permission from the governor-appointed Public Utilities Commission. Garcia alleges the PUC has rubberstamped the increases to the detriment of consumers, but the PUC rejects that idea.
"For a statement to be made that the PUC just rubberstamps whatever request a company is making I think that’s -- that’s inaccurate," PUC spokesman Terry Bode says.
Though the PUC has granted Black Hills three rate increases for electricity and two for gas since 2008 (totalling nearly $35 million), Bode says those increases are lower than what Black Hills sought. He adds that the PUC has a public input process and keeps consumer interests in mind.
“PUC staff has a balance between -- as it looks at what is best for consumers; what is best for [a] company -- it is kind of advocating the public interest and that is ultimately what the commissioners have to decide," Bode says.
Garcia says some increases have hurt his constituents, and during the last legislative session, he introduced House Bill 14-1397 to create a “counterweight” to the PUC rate increase process. The bill seeks to extend the powers of the state’s Office of Consumer Counsel, allowing that office to intervene in PUC rulemakings when utility costs are deemed to affect consumers. The bill also calls for a study of rate disparities.
“When you’re able to have some of the highest rate increases in the Front Range and you’re able to get these at the approval of the Public Utilities Commission, I think one should ask, ‘Is this process fair, currently?’ and ‘What criteria are you using to allow this to exist?’” Garcia says.
Garcia's bill failed to advance in the House amid heavy opposition lobbying by the energy industry, including by Black Hills. That leaves Garcia with plans to renew it in the Capitol in January 2015. Yet it is unclear how Garcia, who is running for state Senate, would proceed.