Minnesota company interested in buying Colorado Springs Utilities' electric division

July 10, 2014 Updated: July 10, 2014 at 6:43 pm
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The Martin Drake power plant just southwest of downtown Colorado Springs Thursday, January 24, 2013. Photo by Mark Reis, The Gazette

Xcel Energy has an interest in buying Colorado Springs Utilities' electric division, which includes the controversial Martin Drake Power Plant.

The Minneapolis-based company, which has Colorado operations, asked Colorado Springs Utilities if it would entertain the idea of selling its electric generation fleet, including Ray Nixon coal-fired plant, the city's natural gas-fired plant, its hydroelectric facilities and its backup generators.

In a June 27, letter the company offered to have closed-door discussions with Utilities about a possible sale.

One Colorado Springs City Council member expects the council's reaction to be "thanks, but no thanks." The council, which doubles as the Utilities board, will discuss the offer at a July 16 Utilities board meeting.

One year ago, the board decisively said it had no interest in selling the city's electric division. In April 2013, the Utilities Policy Advisory Committee, a seven-member group that studies policy and makes recommendations to the Utilities board, recommended spending $500,000 to hire NewGen Project Management to study the sale or lease of the city's electric assets. It was the first Utilities board meeting with the "freshman six" - the newly elected City Council members.

Councilman Merv Bennett, who serves as the chairman of the Utilities board, explained to the new members that the Utilities board gave UPAC the assignment of studying a possible sale because there had been an ongoing community discussion about the city getting out of the utilities business.

It was an issue raised in the 2013 City Council election campaigns.

The newly elected council members said then that the community did not support selling or leasing any division of the city's Utilities and voted unanimously to drop the study.

"We heard loud and clear from voters, 'You will not sell our utilities,'" said council member Andy Pico, one of the freshman six who is now vice-chairman of the Utilities board.

Pico said he's still not interested in selling any part of the city's Utilities.

"Not on my watch. Not a chance," he said.

Xcel Energy is a U.S. electric and natural gas company, providing energy in eight states. In Colorado, the company has 1.4 million electricity customers and 1.3 million natural gas customers.

Gabriel Romero, a spokesman for the publicly traded Xcel, declined to comment on the company's interest in Colorado Springs Utilities.

"We don't have a comment on the letter," he said. "It speaks for itself. It's just a chance to discuss things with Colorado Springs Utilities, nothing more."

Sam Masias, who regularly attends Utilities board meetings asked the board to close the downtown coal-fired Drake plant. He called Xcel's interest in the city-owned electric division "great news."

"Xcel would be buying obsolete assets and replacing them with modern generation facilities like the Comanche facility in Pueblo," he said. "The new EPA rules allow for a statewide solution on emissions. Since Xcel is the biggest they could close Drake in the short-term."

The City Council cannot sell any part of the city's Utilities without approval from voters, according to the city's charter.

Bennett said now is not the time to entertain a sale.

"The biggest concern I have, is that right now we have control of our rates the best we can," Bennett said. "If we sell, we have no control of it. The money goes into the pocket of the investors. It's not a good business model."

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