City Council should notify Black Hills Energy it is considering a divorce.

That's the advice of the local citizens group Pueblo's Energy Future, which has been researching other power options. The notice to Black Hills could be as simple as a council resolution saying Pueblo is investigating the costs and opportunities of a city-run utility.

"The sooner the city announces that intent, it would absolutely lower the final cost of any future divorce from Black Hills," insists Susan Perkins, a utility lawyer assisting the local group.

That resolution would put Black Hills on notice that future investments would be at its own risk and not necessarily added to the future cost of creating a city utility.

Council President Steve Nawrocki announced last month that city staff -- at his request -- has been reviewing reports and making cost estimates for creating a city utility. The city considered that option back in 2005, but voters turned it down.

"That was before Black Hills became our utility and we faced much higher rates," said Nawrocki. "I'd like to put that question in our next city survey."

Perkins says the sooner the better.

In the March 5 issue of The Pueblo Chieftain, Perkins and retired utility analyst Steve Andrews wrote that Pueblo needs to find a new source of electricity -- a view loudly endorsed at a crowded Colorado Public Utilities Commission hearing last year in Pueblo.

Perkins and Andrews say there are other options, including buying from other utilities or cooperatives, or creating a city or regional utility. Or some other mix.

Currently, the city has a 20-year franchise contract with Black Hills, but state law allows the city to take an "off ramp" to leave the agreement after 10 years, and that's in 2020. Miss this ramp and the city can't leave again until 2025.

Pueblo's Energy Future includes local residents, low-income advocates, energy activists, retired and current elected officials and even ministers. It isn't recommending a specific alternative.

Perkins said the electric industry is changing so fast the city will have a variety of options besides just contracting with another utility.

For example, Southern California Edison is bringing three massive storage batteries on line this year to deal with peak demands for power. That utility has the goal of having enough battery storage by 2020 to equal three nuclear power plants, according to industry reports.

"Batteries are expensive, but with Southern California buying them instead of peak-power plants, that will push the battery industry forward," said Andrews, who lives in Florence.

Pueblo ratepayers know about peak-power plants. Black Hills still wants an $8.5 million revenue increase to pay for a $61 million peak-power turbine that will only run a few days a year.

"Peak-power plants are becoming obsolete," Perkins said. "That's how fast the future is arriving in energy."

One reason Black Hills had PUC approval to buy the peak-power turbine is state law allowed utilities to build new-generation systems to replace old, coal-fired plants. How much ratepayers will pay for that $61 million turbine is one of the issues in Black Hills' demand to have the PUC reconsider its 2016 rate request.

If Pueblo ended its franchise agreement with Black Hills, the only part of the utility's infrastructure it would essentially need to purchase is the local distribution system within the city; not the $570 million Pueblo Area Generating Station that ratepayers are already paying for. That power plant belongs to Black Hills, and if it were not producing power for Pueblo, it would be selling it to other customers.

Once the city created its own power utility, federal law would allow it to purchase from other sources and "wheel" power to the city over the big transmission lines that crisscross the country. Where that power is generated isn't that important.

Being a municipal utility would also take the city's power operation out from under the PUC's oversight.

Perkins said buying Black Hills would be expensive, but the monthly bills paid by city ratepayers would provide the cash flow to finance any change.

Andrews said it's also important to bring communities like Canon City, Florence and the other Black Hills customers into the conversation. While Pueblo residents are the majority of Black Hills 94,000 ratepayers, those other communities may want to take part in creating a utility with Pueblo.

"What my own hopes are is for a non-profit utility that has humane policies for dealing with low-income people and is open to the growing supply of power from renewable energy," Andrews said.

Perkins and Pueblo's Energy Future are confident that solar and wind power are becoming a bigger and cheaper part of the electric grid each year.

At the urging of the Sierra Club, council recently endorsed a resolution calling for the city to get all of its power from renewables by 2035. But that kind of policy can only be enacted if the city controls its power supply, not just buys it.

What city residents should be thinking about is what kind of power they want in the future, Perkins said, adding the city's economic future will depend on it.

"You want the curve of Pueblo's future power costs to curve downwards in the future," she said. "That's not going to happen with the status quo."

proper@chieftain.com