As Colorado Springs competes with other cities to attract business, officials are asking how the city's utilities can be used to boost economic development.
It's a question raised by Mayor Steve Bach who has asked, "Should utilities play a role in economic development?"
Colorado Springs City Council, which doubles as the board of directors for the publicly owned utilities, said it's worth review but incentives to business should not be offered at the expense of ratepayers.
Councilors have formed utilities finance and budget committees and, among other issues, will consider utilities' place in economic development.
"I think utilities do play a role," said city councilor Jill Gaebler. "It's not the primary role. We have fabulous utilities that are very responsive. Whether it should be more is the big question."
In May, Colorado Springs Utilities formed an economic development department with the idea that utilities should be more proactive when it comes to attracting business. The department is a one-stop shop for businesses that are quietly researching utility rates and possible incentives as part of their relocation or expansion decisions.
"Absolutely utilities should be involved and it is a role that really has a great benefit, not only to the community but to our customers," said Bill Cherrier, utilities chief financial officer.
The more rates get spread to more customers, the better the rates will be, Cherrier said.
"The whole idea with economic development, as you are adding new capital, as you are adding to infrastructure, it is better to spread the cost over a larger base of customers to help take the pressure off rate increases," he said.
Business leaders may have a different take. Low rates could be the deciding factor in why a business relocates to the Springs, said Cindy Newsome, utilities manager, office of economic development.
Before the recession, companies looked to cities for big incentives, and utilities were an afterthought - even for companies that use a lot of power. But now that cities are in no position to wheel and deal, utilities often is the first call a company makes when considering new locations or expansion, Newsome said.
"We can be the make-or-break decision before it even gets to the table - before it becomes a community-wide package," she said.
Colorado Springs Utilities does not deal on rates or the supply of power lines, she said. Utilities might work with a company, like a large data center, to share the cost and use of power lines, but rates are the same for every business.
Bach and business leaders have met with utilities to discuss the city's economic goals and possibly design a more aggressive agenda where utilities is an economic driver. But discussions are in the early stages, said Aimee Cox, the city's senior economic vitality specialist.
"City economic vitality is focused on improving the business climate in Colorado Springs with reasonable regulations, fair costs, vibrancy and building community," Cox said.
It is possible for the utilities board to change its policies to include utility incentives for business, said Jerry Forte, utilities CEO. But he said using utilities for economic development is a balancing act. Utilities do not want to be an obstacle to attracting business, he said. But the city has a responsibility to ratepayers.
"We can't cut deals," he said. "We can't do it. We can do what we can to make it easy for business."
Council president Keith King said low utility rates ought to be the only economic incentive.
"The better way to incentivize is have low rates," he said. "If we were to subsidize or offer business incentives, someone is paying for that."