COLORADO SPRINGS, Colo. (KRDO) -- The Colorado Springs City Council approved Colorado Springs Utilities' rate increase request Tuesday to pay for a huge increase in costs incurred during one winter storm event in late February.
The council unanimously approved a rate increase of $21.99 for the next 14 months, going into effect on March 11.
The average cost per Colorado Springs resident works out to about $308 over the 14 months. It's an even bigger increase for commercial and industrial customers.
This comes after we reported that CSU was looking into how it would pay for a big shift in natural gas costs in late February. When the winter storm hit, many natural gas lines froze and limited supply, driving up wholesale costs. The utility company says that because it's a nonprofit, it passes the costs onto customers whether they go up or down.
During a normal time period, natural gas would be purchased at about $2.50/Dekatherm, but it spiked up to nearly $200/Dekatherm, according to CSU.
The council ruled out Option 1, which would have required customers to pay more over a shorter time period, and initially discussed Option 3, in which customers would have paid less over a longer time period.
"I just read an article this week about home prices again reaching record highs," said Councilman Don Knight. "If we are serious about helping people get into homes, this is one area where we can really make a difference and have some discretional spending, as far as how soon we're going to spread it out."
"This is not what the people in my district need, with the pandemic and people unemployed or working less," said Councilwoman Yolanda Avila. "They're struggling as it is, and this rate increase will only make things worse for them."
However, Option 3 failed by a 5-4 vote and the council ultimately passed the remaining option unanimously.
"What Utilities has presented today, as far as presenting Option 2, is probably the best balance for our community and for our Utilities really managing this fiscally and responsibly," said Councilwoman Jill Gaebler.
The council also debated whether a similar situation could happen again in the future, with some members saying that CSU should be prepared for the possibility and others believing the situation was only a rare event.
In two weeks, the council and CSU will gather again to decide on an increase in electric rates also tied to the February cold spell.
"But that one won't be as much as the natural gas rates," said Utilities' CEO Aram Benyamin. "For residential customers, it'll probably be less than $10 a month."
On the same day the rate hike was approved, Colorado Attorney General Phil Weiser issued a news release urging federal energy regulators to protect Coloradans from the costs due to those spikes. Weiser said he has concerns about reports that an investment bank "benefited from a $210 million 'windfall' from the gas and electricity price swing."
AG @pweiser today urged federal energy regulators to protect Coloradans from utility bill spikes in the wake of the February winter storm in a letter he sent to the Federal Energy Regulatory Commission: https://t.co/j4vu7Ubww0 pic.twitter.com/MKEfuoFLXw— CO Attorney General (@COAttnyGeneral) March 9, 2021
CSU said that it will suspend disconnects until further notice and offered resources for customers who need assistance.
This is a developing story, check back for updates.