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Some utility rates increasing

 

Last updated 3/17/2021 at 11:18am

Karin Hill

A view of Fountain from Widefield during a recent cold snap. Utilities customers in some areas may see rate increases as a result of the extreme weather this winter.

Last week the Colorado Springs City Council voted to increase natural gas rates for Colorado Springs Utilities (CSU), which affects many customers in Security as well.

The increase is a result of February's winter storm impacts. The sample residential monthly bill will increase by about $21.99 per month, according to CSU. Bills are determined by usage, so the amounts may be more or less than this example.

However, CSU has paused disconnects for customers who cannot pay their bills at this time. Those who need assistance are urged to contact customer service.

Each bill is determined by use, so it may be more or less than the sample amount. This is not a flat rate fee. As a not-for-profit utility, CSU passes changes in fuel costs – up or down – to its customers.

"Our priority is to provide safe, reliable services," a CSU statement read. "During the extreme weather event last month, we were able to provide consistent electricity, natural gas, water and wastewater services without interruption.

"The bitter cold that affected much of the country caused high demand and decreased supply for natural gas and electricity, which, in turn led to a short-term spike in fuel prices."

CSU said it took steps to protect customers from the price spike by taking advantage of the natural gas pricing available through its long-term contracts, using natural gas from storage; using the propane air plant to stretch supplies; and selling some of its natural gas supply on the market toward the end of the extreme weather period.

"While much of the natural gas supply is used for home heating, natural gas is also used to generate electricity," CSU said. "We were able to use our diverse electric portfolio during this time to lessen the amount of natural gas used. ... Despite our planning and mitigation efforts, we were still subject to natural gas market volatility like other gas buyers."

CSU said it hopes to lessen the impact on customers by spreading the cost recovery period over 14 months.

Natural gas use is typically higher during colder months and lower during warmer months. Therefore, CSU estimates that residential customers will see their April-September bill impact to be about $12, while their November-March bills could be about $44 higher. 

Assistance programs, such as the Low-Income Energy Assistance Program (LEAP), Project COPE and Energy Outreach Colorado, are available for those who need help paying bills. Customers also are encouraged to explore payment plans, Budget Billing, and other tools to manage payments.

CSU noted that the next quarterly filing for an electric cost adjustment is expected to be considered at the March 23 Colorado Spring City Council meeting for an April 1 implementation.

Meanwhile, Black Hills Energy – which provides natural gas to many customers in Widefield and Fountain – said it anticipated that increases in its bills this month would be due primarily to customers' increased use.

Usage is the single largest portion of energy bills and weather is the biggest factor in increased usage, Black Hills officials said. When temperatures are exceptionally low and usage increases dramatically across the country, the law of supply and demand created a temporary increase in commodity prices.  

"Customers can expect to see an increase in March bills directly related to their increased consumption of energy in February," a Black Hills statement said. "This increase would be attributed to the additional usage as a result of extreme temperatures, and not related to the increased natural gas or electric prices during the winter event. We will work closely with the Colorado Public Utilities Commission to determine the best path forward to manage the long-term impact of increased pricing for our customers, which will take more time."

Customers worried about affording their bill are encouraged to log into their account through the Black Hills Energy website and enroll in Budget Billing, which is a free payment plan that averages the amount you pay each month. This budget option supports customers looking to avoid the seasonal increases in bills that result during extreme weather by averaging out usage during the past year. Customers can also seek out other assistance options such as United Way's 211 to get access to emergency utility assistance services like Black Hills Cares, by visiting Assistance Programs on the website.

Electric rates

CSU also announced it would consider an electric rate hike next month, and a vote on that is expected next week.

But Fountain Utilities assured customers its rates are not changing as a result of the weather. In a letter to the public posted on the city's website, Utilities Director Dan Blankenship said Fountain's long-term contract with Xcel Energy includes a fixed price for electricity delivery to the Midway substation south of town. The purchase agreement is valid through 2027.

"Because we have a fixed price contract that does not contain an adjustment factor for changes in fuel prices, our cost to purchase electricity during this extreme weather event did not change, as it does not throughout the year," Blankenship said. "Therefore, your cost as a city of Fountain electric customer did not change because of the extreme winter weather."

In addition, local infrastructure has been shown to be up to the challenge of weathering the elements, in part due to partnerships among regional entities including Fort Carson that contribute to systemwide redundancy and reliability. Still, the city has a week spot: lack of a second electric connection point. The city approved an electric rate hike this year, the primary purpose of which is to help pay for that second connection to further expand system capabilities and ensure future reliability.

To read Blankenship's full letter, visit: https://www.fountaincolorado.org/government/city_departments___divisions/utilities/news_and_notices/what_s_new/a_letter_from_utilities_director__dan_blankenship

 

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