OK likely for Utilities budget, rate hikes
The city’s elected leaders are poised to approve a $941 million budget for 2006 for city-owned Colorado Springs Utilities, an increase of $76 million over this year’s budget.
base rate for wastewater service would increase 19 percent for residential customers, or an additional $3.99 a month for a typical home.
Small nonresidential wastewater users would see their rates increase 22 percent, or $12.96 a month, and the bills of large nonresidential users would rise 8 percent, to $69.36 a month.
Council members also ex-The Colorado Springs City Council, during daylong meetings Wednesday, also expressed no opposition to rate increases for wastewater service and natural gas, both effective Jan. 1.
If the increases are approved during the council’s formal meeting Tuesday, the pressed no opposition to what the utility calls a cost adjustment for natural gas, designed only to recover the cost the utility pays on the market to buy the fuel.
The cost adjustment also has to be formally approved Tuesday. If it is, owners of typical homes will see a 5.3 percent increase in gas costs, or about $3.95 more a month.
The bills of small commercial customers of natural gas would rise 5.6 percent, or $52.70 a month. Gas costs for large commercial users would rise 6 percent, or $527 a month.
Utility officials estimated the increases would push the monthly utility bill on a typical home from $183 to $191.
The utility used hedging — including buying natural gas at favorable long-term rates — to keep the gas hikes reasonable, utility officials said.
They said Xcel, which serves the Denver metro area, has raised its gas prices 54 percent in 2005; Aquila, which serves some areas outside Colorado Springs, expects to raise its gas prices 34 percent to 37 percent. Nationwide, utility officials said, natural gas prices are expected to soar 41 percent this coming year.
In Colorado Springs, there will be no increase for electricity, and there will be no increase in the cost of water.
The rate hikes will support a budget that the utility’s interim chief executive officer, Jerry Forte, said signifies a “crossroads” for the organization.
He said an analysis showed that normal spending by the utility in the next few years would send typical residential utility bills from a current monthly average of about $185 a month to about $235 a month by 2010.
Forte said that annual growth rate in the budget — about 4.8 percent — would be “unacceptable.” He said his staff pared expenses to lower the annual growth rate to 2.8 percent, which if carried through in coming years would result in an average residential utility bill in 2010 of about $212.
Still, Forte said the utility faces a variety of challenges. Among them: soaring costs of fuel, concrete and steel; aging power plants and water and sewer lines; an order by the state to improve the sewage system to prevent spills; and the need to build the $1 billion Southern Delivery water system by 2012 to provide enough water to the city through 2040.
He said the utility will need to spend about $1.6 billion in the next five years to either build new infrastructure to serve growth or to rehabilitate aging utility facilities that serve current customers.
The 2006 budget anticipates that total labor and benefits for the utility’s 2,054 employees will rise 2.8 percent.
The proposed sewage and natural gas increases and the 2006 budget did not draw opposition from utility customers during the two meetings.
But Dave Gardner, founder of the advocacy group Save The Springs, asked the council to consider ending what he calls subsidies for developers by increasing tap fees for water and wastewater services and imposing development fees for electrical and natural gas services to cover the actual cost of serving new growth.
He also called on the council to end an estimated $250,000-ayear utility payment to the private Greater Colorado Springs Economic Development Corp. He called the group a tool of developers that seeks subsidies for the development industry and incentives for new businesses, both of which he said increases utility rates for current customers and businesses.
Mike Kazmierski, chief executive officer of the Economic Development Corp., rejected Garner’s assertions. He said reasonable utility connection fees are an important tactic for luring employers who can provide well-paying, stable jobs.
He said a recent survey of residents showed they ranked good jobs as the city’s third priority, just behind responsive police and fire protection.
He also said the relatively small payment by the utility to the development corporation provides a public-private partnership that saves the city and utility from funding their own economic development efforts.
In an unrelated matter, the council directed the utility to prepare a rate case for May 1 to change how customers are charged for water.
Currently, the utility charges customers more if they use more water — but only in the summer.
The council directed the utility to begin preparing to move to what is called a year-round inclining block structure.
The system would continue to feature the current three rates for water use. But the baseline for increased water charges would be lowered — from 3,000 cubic feet to 2,500 cubic feet a month — and the price of water in the second and third blocks would increase. The cost of water for those who use less than 2,500 cubic feet a month would drop slightly.
Many council members have said they think pricing is a better way to encourage conservation than mandatory watering restrictions.
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TUESDAY’S VOTE
The Colorado Springs City Council is expected to vote on the 2006 budget for Colorado Springs Utilities at its regular meeting at 1 p.m. Tuesday at City Hall, 107 N. Nevada Ave.
The council also is expected to decide at the same meeting whether to approve an increase in the base rate for wastewater service and a cost adjustment for natural gas.
