(PUEBLO, Colo.) — The Pueblo City Council voted six to one on Monday, Feb. 24, to add a question to the May 6 ballot asking whether voters want to opt out of the Black Hills Electric agreement and create a municipal electric utility.

The current franchise agreement with Black Hills Electric expires in August 2030, but every five years, the City has the ability to choose to terminate the agreement and establish its own utility, according to the City Council meeting agenda. The city is considering terminating the agreement because Black Hills is seeking a significant rate increase from the Public utilities Commission in August 2025.

In response to negative customer feedback, Black Hills lowered its proposed rate increase in November by about 32% from the original proposal of roughly $20 a month more per residential customer to about $15 more a month.

In December, the City Council approved the retention of a company to perform a study providing information to the City as to how feasible it would be to acquire Black Hill’s generation, distribution and transmission assets to form a municipal utility.

A spokesperson for Black Hills Energy gave the following statement:

“A rushed feasibility study is unlikely to provide credible answers.  More than 90 percent of government utility takeover attempts fail due to the high costs and risks.”

FOX21 News will be meeting with Mayor Heather Graham on Friday to discuss the City Council’s decision.