Colorado regulators seek options for Black Hills’ expiring Pueblo power contract

Colorado Public Utilities Commission commissioners agreed to seek an analysis of Black Hills Colorado Electric’s options for continued access to 200 megawatts from the Pueblo Airport generating station after its power contract expires at the end of 2031. The options include extending the agreement or buying the facility, and the commission wants comparisons of their potential effects on customer rates and the utility’s resource needs, the Oct. 21 meeting recording shows.

Commissioners agreed to add questions about the contract to a retention order in Black Hills’ 2026 resource-plan case, which the order will send to an administrative law judge. They asked the utility to provide the contract and explain whether it could extend the agreement or buy the facility. They also requested comparisons based on an escalated version of the current contract price or adding the facility to the utility’s rate base at its depreciated value, and asked what the utility’s affiliate plans to do with the 200 megawatts after the contract ends.

Black Hills’ 2026 resource-plan case identifies a preferred portfolio of about 424 megawatts of new wind, dispatchable gas and storage resources, with a later competitive solicitation planned. At the meeting, staff said the contract’s expiration is one reason the company says it needs new resources. Black Hills projected a 7.9% increase in customer bills from 2026 through 2030 if its preferred portfolio and related plan were approved. That projection covers the broader plan, not either option for the Pueblo facility.

Black Hills’ prior resource plan describes the agreement as a 200-megawatt combined-cycle power purchase agreement and gives its expiration as the end of 2031. The commission’s requested analysis has not established a rate estimate specific to extending the agreement or buying the facility. The resource-plan case is separate from Black Hills’ base-rate case and does not change current customer rates.