Pueblo businesses are at a severe economic disadvantage because of the high electric rates they pay Black Hills Energy, several told City Council at its work session Monday night.

"How can we survive?" Ambarish Dave, of the local JM Eagle plant, asked council. "We get beat by companies shipping (PVC) pipe 600 miles away."

Dave said the Pueblo plant -- at 11 cents per kilowatt hour -- is paying twice the cost of its competitors for electricity.

That was echoed by Micah Langston, of Pueblo Wood Products, which mills wood for pallets. She said the company's electric rates have grown by more than 20 percent while it can't afford to raise the price of its product more than 6 percent.

"We need help with Black Hills," she said. "We're thinking about buying diesel generators and just going off the grid."

Council has heard many times about how high electric rates have affected residential costs. What they heard Monday was from business owners.

Dr. Malik Hasan, who owns several marijuana businesses at NuVue Pharma, said Black Hills uses a policy of charging businesses a peak-power rate that governs the entire bill.

"So I pay that rate for 12 months," Hasan said. "They have a racket going. Pueblo is the poorest major city in the state, yet we have the highest electric rates. How would you ever attract a technology company to move here?"

Hasan said council needed "a spinal transplant" to face the fact the city should create its own utility, even if it means buying out Black Hills.

"It's not like the solution isn't there," he said. "Otherwise, this city isn't going to make it."

Council President Steve Nawrocki said the city is researching what it would take to create its own municipal utility but hasn't much power to change Black Hills' policies or rates except through the Colorado Public Utilities Commission.

District 2 Councilman Larry Atencio told the witnesses that he is organizing a group of commercial customers to talk to Black Hills about its pricing and other practices.

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