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Gas, electric rates climb; more Colorado Springs Utilities rate increases on tap

October 25, 2016 Updated: October 26, 2016 at 12:34 am
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As predicted, electric and gas rates for Colorado Springs Utilities customers will go up Nov. 1, the City Council decided Tuesday.

Rates likely will rise again for many customers, too, if Utilities gets council approval Nov. 8 to adjust its base rates. That annual undertaking is to cover the costs of infrastructure - all the machinery and pipelines needed to provide gas, electric, water and wastewater services.

The rate hikes approved Tuesday, by contrast, are sought quarterly to reflect the changing cost of fuels, Utilities says.

But the anticipated increase in base rates raised concerns for Manitou Springs officials and business leaders.

Manitou Mayor Nicole Nicoletta asked, on behalf of her city and its residents, that the rates be increased over two years rather than one.

Shelley Cobau, who handles public services for Manitou, said residents there already pay twice what Colorado Springs residents do, and the projected contract rate on wastewater will raise the city's costs by 12 percent.

"If it can be spread for two years or longer, it would be very beneficial to our citizens," Cobau said.

For digital-sensors manufacturer dpiX LLC, the increased base rates would cost an extra $205,000 a year, said Chief Financial Officer Jason Lachance.

"That translates to four production people on our line," said Lachance, whose business employs about 130 people. "Our even greater concern is for the competitiveness of our community. We benchmark across the country; CSU typically has compared competitively. This makes us less competitive."

Microchip, which acquired Atmel in April, is paying $11.1 million a year to Utilities and foresees anteing up $1.4 million more under the proposed base rates, said Dan Malinaric, vice president of operations.

Water and electric rates in areas around Phoenix and Portland, Ore., are much lower than those in Colorado Springs, he said.

But while the base rates proved contentious, the approved quarterly changes to gas and electric rates drew no public comment at the council's regular meeting.

Under those changes, the average resident can anticipate paying $3.18 more a month for electricity plus $2.68 a month extra for gas. The rate increases are 4.2 percent for electricity and 7.4 percent for gas.

Commercial entities will face, on average, an extra $31.80 a month for electricity and $55.43 for gas, commensurate with rate increases of 6.3 percent and 10.7 percent, respectively.

Industry will pay an average of $2,120 more a month for electric service and $554.28 for gas; those rates are climbing 6.8 percent and 11.9 percent, respectively.

Those rate increases passed on a 6-2 vote, with council members Helen Collins and Keith King dissenting. Councilman Bill Murray was absent.

As for the base rates, to be decided Nov. 8, no electric rate increases would be imposed on residential customers and small commercial and industrial customers or industrial services with large power and light usage.

Classes paying less than the cost of electric service - certain groups of commercial and industrial customers - will see electric rate increases ranging from 2 percent to 12.5 percent.

Residents using the optional "time-of-day" rates, helping to reduce peak demand, could see their electric rate drop by 15.2 percent. But commercial time-of-day customers could see an 18 percent increase.

Almost everybody will see their water rates rise, though, by an average of 6 percent. Residents' rates will go up 5.1 percent; nonresidential, 6.2 percent; military contract rates, 10 percent; large nonseasonal users, 9.7 percent; and nonpotable water users, 12 percent.

Wastewater rates, by contrast, will drop 1.5 percent for residents, increase 4 percent for nonresidents, and rise 11.6 percent for contract services outside city limits.

For full details of Utilities' complicated set of tariff charges and other rate changes, visit www.csu.org/CSUDocuments/2017ratecase.pdf. The Nov. 8 council meeting starts at 1 p.m. in City Hall, 107 N. Nevada Ave.

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