Gazette, The (Colorado Springs), Nov 20, 2008 by R. SCOTT RAPPOLD
A recent drop in energy prices has softened the blow, but Colorado Springs residents and businesses can still expect a big hike in their utility bills next year.
The city-owned utility will seek an 18.9 percent rate increase — $29.09 a month for the average household, from $153.97 to $183.06.
The increases are across the board: 6.8 percent for electricity, 18.8 percent for natural gas, 44.9 percent for water and 17.2 percent for wastewater.
For commercial customers, rates would rise 5.3 percent for electricity, 22.9 percent for natural gas, 44.9 percent for water and 17.2 percent for waste water.
The new rates would take effect in January and February. They were included in the 2009 budget Utilities officials presented
Wednesday to the City Council, which
serves as the utility’s board.
“We don’t like this any more than you like it, but we know it’s necessary if we’re going to maintain the viability of this organization,” Utilities Chief Executive Jerry Forte told council members.
Officials originally projected a 23 percent rate increase, but they said coal and natural gas prices have dropped in recent weeks.
Utilities is seeking council approval for a $1.12 billion budget, up $170 million from this year’s budget. Officials said the increase reflects $105 million in projects, including the proposed Southern Delivery System, and $57 million in increased coal and gas costs.
Through attrition, Utilities will cut staff by 60 out of a current 1,962 positions in 2009, on top of 92 jobs eliminated since 2007. Despite the cuts, labor costs are expected to rise in 2009, from $175 million to $178 million, because of increased benefits costs.
Utilities also proposes to delay numerous maintenance projects, including work on dams, water tanks, hydrants, manholes, underground cables and natural gas mains.
“With this budget, we’re going to be able to deliver services and manage our infrastructure, but we have deferred some important maintenance work that can’t be delayed much longer,” said Bruce McCormick, chief water services officer.
The largest proposed rate increase is in water, which officials said is because of a slowdown in the housing market. The utility collects fees to connect new houses.
While some projects are being delayed, others are going forward in 2009, including the Southern Delivery System, a $1 billion proposed water pipeline between Pueblo Reservoir and Colorado Springs. There is $98 million in the budget earmarked for the pipeline.
Fuel is another driving factor in the proposed rate increase. Coal and natural gas account for 40 percent of Utilities’ budget, and officials said the price of each is expected to rise dramatically for 2009.
Two low-cost coal contracts are expiring in 2009 and 2010, which will double coal costs.
The cost for natural gas is expected to rise 20 percent in 2009.
The council is expected to vote on the 2009 budget Dec
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