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Colorado Springs utility rate proposal compared with other cities

By: Rob Larimer,
November 11, 2013 Updated: November 11, 2013 at 12:04 pm
Caption +
The Martin Drake Power Plant. (Photo by Mark Reis, The Gazette)

Editor's Note: Some of the rate information in the story and in the chart at the bottom of the story was wrong in the original version of this story.

Will Colorado Springs residents pay less for utilities in 2014 than other cities in the state?

Depends on whom you ask.

The Colorado Springs City Council will vote Tuesday on Colorado Springs Utilities' proposed 2014 electric and gas rate increases. If approved, customers will still pay less for electricity than neighboring Colorado cities, but more for natural gas, water and wastewater services.

Comparing regional utility rates, however, is a tricky game, said Xcel Energy spokesman Mark Stutz.

"The challenge there has always been setting the baseline for the comparison," he said. "What's the standard? Every utility, public or private, calculates things in different ways. How much gas am I getting for my rate versus your rate?"

He also said there are numerous fees and taxes that some companies or entities are not required to report.

"Not all parties report the same," he said "It's not only an apples-to-oranges comparison. It's more like an apples-to-oranges-to-bananas comparison."

Stutz said that's why Colorado's Public Utilities Commission stopped tracking rates about 15 years ago. It just became too difficult to calculate a fair comparison.

Colorado Springs Utilities is seeking a 3.4 percent increase for electricity rates and 2.2 percent increase for natural gas, which will bring the new rates to a monthly average of about $70.60 for electricity and $47.65 for gas.

The new electricity and gas rates will bring ratepayers' four-service bill average, which includes electricity, gas, water and wastewater, to about $201.85 a month, said Springs Utilities interim pricing manager Henry Henderson.

Other Colorado cities -- Denver, Pueblo, Aurora, Fort Collins and Lakewood - pay a combined average of $180.52 a month, according to a mix of figures, some provided by Springs Utilities and some provided by individual utility entities.

City Council will host a public hearing about CSU's proposed 2014 budget, including the rate increases, before voting on the measure.

The regular council meeting begins at 1 p.m. Tuesday at City Hall, 107 N. Nevada Ave. A second and final vote is schedule for Nov. 26. If approved, the new rates will become effective Jan. 1.

The regional average electricity rate is $75.20 a month compared with the new Colorado Springs rate of $70.60 a month, roughly a 6 percent difference. However that analysis does not include any rate increases other regional cities might be proposing.

Springs Utilities' analysis shows residents in Monument, Black Forest, Falcon and Fountain, who are served by Mountain View Electric, pay the most for electricity, an average of $93.34 a month.

Denver and Aurora customers who rely on Xcel Energy for electricity pay an average of $69.25 a month, and Fort Collins customers, who use a municipal utility, pay an average of $69.46 a month.

When it comes to natural gas, however, Springs Utilities customers pay nearly 9 percent more than other Colorado cities. Springs Utilities' proposed natural gas rate of $47.65 a month is about 8.9 percent more than the regional average of $42.29 a month.

Lance Smith, a Strategic Financial Planning Manager for Fort Collins Utilities, said one reason rates can vary so frequently is because entities are replacing infrastructure at different rates.

He said most utility companies are replacing aging infrastructure at about 1 percent a year.

"We're asking for modest increases just to do that," he said, "and you can see that at that rate, it will take 100 years to replace everything."

Smith said that Loveland was once the envy of the state because it didn't raise utility rates for 10 years straight.

Now, they've realized how much infrastructure they need to replace and are facing rate hikes of at least 10 percent a year for the next 10 years, he said.

CSU's Henderson said Springs Utilities asks for rate hikes annually because gas and electricity rates are always fluctuating and rate hikes are needed to stay ahead of the curve.

He also said infrastructure needs are always growing.

"We're really just trying to provide reliable service, Henderson said. "And to do that we have to make sure our facilities are as up to date as possible. "It's really just an attempt to keep in prime condition."

Henderson, who has been on job for about 16 years, also said he expects City Council to approve the proposed rate hikes.

"In all my time here, I've only see them say no once," he said.

































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Colo. Springs






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