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Wellington trustees approve first reading of 20-year Black Hills Energy gas franchise
Summary
On March 25 the Wellington Board of Trustees approved on first reading Ordinance 02-2025 to grant Black Hills Energy a 20-year natural gas franchise with a 3% franchise fee; staff says the change replaces a $20,000 occupation tax and would raise average customer charges about $1.64 per month.
WELLINGTON, Colo. — The Wellington Board of Trustees on March 25 approved on first reading Ordinance 02-2025, granting Black Hills Colorado Gas Inc., doing business as Black Hills Energy, a 20-year natural gas franchise and authorizing a 3% franchise fee on gas sales.
The ordinance passed unanimously on a roll-call vote. Town Administrator Patty Garcia told trustees the proposed franchise would replace an existing occupation tax of $20,000 a year and provide an estimated $105,000 in annual revenue to the town. Garcia said the change would translate to an average customer cost of about $2.04 per month and, because the current occupation tax equates to roughly 40 cents per customer per month, would represent a net increase of about $1.64 per month for the average account.
The franchise agreement requires Black Hills Energy to maintain and upgrade its facilities, coordinate with town departments to minimize disruption during public works projects and bear the cost of town-initiated utility relocations; developers would remain responsible for relocation costs triggered by private development, Garcia said. She described the 20-year term as consistent with Wellington’s existing utility franchise arrangements with Xcel Energy and Poudre Valley REA.
Tom Henley, Black Hills Energy senior public affairs program manager, described the fee structure as usage based: “These franchise agreements, just so we’re, all aware, it’s a 3% fee based on how much energy you use. So it can vary based on the person’s size of home or business.” Henley also said the franchise provides the company a long-term ability to recover investments in infrastructure.
Trustees discussed the local impact and options. Trustee Wiegand asked whether the town could secure the same protections without increasing customer costs; staff responded the franchise replaces the occupation tax and standardizes requirements and protections in the agreement. Several trustees said the revenue could help fund new services, including a possible additional school resource officer, and noted the fee was comparable to franchise rates in nearby municipalities.
The ordinance was publicly noticed for two readings; the board set a second reading for April 8. Staff and Black Hills representatives said changes could be made before second reading, but any revision that alters the published document would require republication and could delay the schedule.
The first reading motion passed by unanimous roll call: Trustee Cannon — yes; Trustee Daley — yes; Trustee Moyer — yes; Trustee Teets — yes; Trustee Wiegand — yes; Mayor Pro Tem Paton Mason — yes; Mayor Schoese — yes.
Patty Garcia said staff will report back to the board if the Larimer County Sheriff’s Office request for an additional school resource officer formalizes and when discussions with Poudre School District and LCSO conclude.
