Proposed decrease in gas, electric utility rates approved Tuesday by Colorado Springs City Council

COLORADO SPRINGS, Colo. (KRDO) -- As expected Tuesday, the City Council unanimously passed a reduction in electric and natural gas rates for customers of Colorado Springs Utilities.

The decrease means an average monthly decrease of $15 on the bills of residential customers, with even more savings for business and industrial customers.

The lower rates will take effect next week, on Feb. 1., with more decreases expected in May.

But Councilwoman Nancy Henjum expressed concern about the higher bills that customers have paid since the November rare increase and will continue paying for at least one more billing cycle.

"People are asking me why the ratio of our increase was so high and how does it compare to other utility providers," she said.

The city auditor analyzed the rate increase and said that there was nothing improper about it.

"Our rates were lower than other providers in our region and elsewhere in the country," said Councilman Wayne Williams. "I realize that doesn't help some customers who are struggling to pay bills, but that's why there are several programs to provide assistance."

But one woman who spoke during public comments said that many needy families aren't eligible for those programs.

"We know of families where two of the parents are not documented residents but they have children who were born in the U.S.," she said. "So these are American children who are suffering because their parents can't pay the electric bill or the gas bill."

But utility spokesman said Tristan Gearhart said that officials decided it was better for customers to pay more over a shorter time period than to stretch lower increases out over a longer period.

"We'll essentially be finished with the impacts of last year's two rate increases by later this spring," he said. "For a lot of other providers, their customers will be dealing with it for years to come."

The primary factor in utility rate fluctuations is natural gas, which had record demand last winter and was expected to be high again this winter; however, the area's mild late fall and early winter weather reduced demand more than Springs Utilities expected.

PREVIOUS STORY -- Two months after the City Council approved a temporary winter rate increase for Colorado Springs Utilities, customers may get some relief sooner than expected.

At Wednesday's meeting of the Utilities Board, members moved a step closer to reducing rates for electricity and natural gas; if approved, the decrease will be voted on by the Council next week and take effect Feb. 1 through the end of April.

As shown on the chart below, the average monthly reduction would be around $15 for residential customers -- essentially cutting November's $30 increase in half.

The Council approved a rate increase last November to offset what Springs Utilities expected to be greater demand for and higher costs of acquiring and producing energy; that followed another increase last February after extremely cold weather in parts of the country caused energy costs to skyrocket.

The increase was supposed to continue into this spring, but Springs Utilities said that warmer weather from October through December reduced the demand for natural gas, thereby lowering prices.

Springs Utilities expects even more savings staring in May, with natural gas prices possibly falling an additional 36% and lowering the average utility bill by $24, as fewer people heat their homes.

Despite the good news, board member and Councilman Tom Strand expressed concern.

"I know the average bill went up $30 a month but mine wasn't anywhere near that low," he said. "My bill tripled in two months. I can afford to pay it, but what about people who are retired or on limited incomes? Are they having to go without prescriptions or other needs to pay their utility bills?"

Strand also said that he has a relatively small home and hasn't increased his energy usage, although he uses natural gas for cooking and heating.

Springs Utilities said that with natural gas prices so high, even using the same amount, or having a poorly insulated home, will lead to high bills.

The utility has programs to help customers conduct energy audits on their homes.

"I definitely will be doing that," Strand said.

Since late November, more than $2 million in utility bill assistance has been made available, through Springs Utilities or other sources.

The discussion on utility rates lasted an hour.

In other matters, Springs Utilities determined that the cost of repairing damage from the Dec. 15 windstorm is $3 million

The board heard what the utility learned in responding to the storm and how it can better respond to and prepare for future storms.

Also on the agenda was an analysis of how the ongoing drought in Colorado is affecting the utility's water storage and supply, revealing that despite some capacity being slightly below normal, the water supply is in good shape.