Colorado Springs Utilities asking to raise rates 3 percent

February 21, 2014 Updated: February 22, 2014 at 5:12 am
photo - The Martin Drake power plant just southwest of downtown Colorado Springs Thursday, January 24, 2013. Photo by Mark Reis, The Gazette
The Martin Drake power plant just southwest of downtown Colorado Springs Thursday, January 24, 2013. Photo by Mark Reis, The Gazette 

Blame it on the cold weather, but Colorado Springs Utilities electric and natural gas rates could jump again - this time by 3 percent.

Recent weeks of cold weather across the U.S. have forced up natural gas prices, said Dave Grossman, a Utilities spokesman. Electricity costs also have risen since natural gas is used to generate power.

"Wholesale natural costs have risen due to increased demand this winter in the Midwest and eastern U.S." Grossman said. "The extreme cold causes furnaces to run longer and more often just to keep the temperature the same at home and at businesses."

The proposed rate increases are meant to keep Utilities from "under collecting" for fuel costs. Without the increase, Utilities could under collect by $9.2 million in natural gas fuel costs and $11.4 million in electricity costs by the end of the year, according to a memo to Colorado Springs City Council from Utilities CEO Jerry Forte.

City Council will consider the proposed rate increases at its meeting Tuesday.

If approved, a typical residential customer's natural gas bill will increase 3.6 percent or $1.70 per month. A typical residential electric bill will increase about 3 percent, or $1.38 per month. Combined, that is an increase of about $37 a year.

The amount of energy used varies by customer and by season, Grossman said. But a typical residential customer uses about 600 kilowatt hours of electricity per month and 60 hundred-cubic-feet of natural gas.

The proposed increases come on the heels of base rate increases approved in November to cover millions in on-going Utilities operations and maintenance costs, including $131 million in upgrades to Martin Drake coal-fired power plant to meet federal emission control standards.

In those base rate increases, typical residential customers saw a 3.4 percent increase for electricity starting in January and a 2.2 percent increase in natural gas rates - or about $3.38 increase per month for both. With those increases plus an 11.7 percent water rate increase that also kicked in Jan. 1, the typical residential customer is paying about $9.37 more a month in utilities in 2014, or more than $112 a year.

In a residential customer's bill, about 24 percent of the typical residential electric bill is fuel costs and about 54 percent of the natural gas bill is fuel costs. In November, the council voted to decrease natural gas fuel rates. Fuel prices are increased or lowered based on the market, Grossman said. In November, gas prices were dropping, and the lower rates were passed to the customer.

This winter, however, natural gas prices have spiked in the Rocky Mountain region going from about $4 to as much as $26 per British thermal unit, Grossman said.

"Over the last two years, Springs Utilities has reduced the gas fuel rates on four different occasions," Grossman said. "Electric fuel rates have been lowered twice over the same period."

If approved, the new rates kick in March 1

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