May 23, 2014 12:32 AM by Maddie Garrett

CSU rate increase could hit commercial users hard

Utility rates could go up for thousands in Colorado Springs, due to the shut down at Drake Power Plant after a fire earlier this month. For the average customer, who uses about 600 kilowatt-hours a month, it will only be about $5 or $6 more a month.

But for major commercial users, the increases could be in the hundreds of thousands of dollars a year, such as at hospitals, military installations, schools, big businesses and the City of Colorado Springs itself.

The increase is to offset extra costs Colorado Springs Utilities is paying to bring in power from outside of Drake.

"We're going to have to make some adjustments in our budgets to cover this," said Brian Burnett, PhD, Sr. Executive Vice Chancellor of Administration and Finance at UCCS.

UCCS is looking at an additional $180,000 a year for utilities if rates are raised. That's about an 11.5% increase.

"I mean we have to pay the utility bill, whatever it comes in at, if I don't pay the utility bill then they turn us off," said Burnett.

Bill Cherrier, CSU's Chief of Planning and Finance said they understand the increase could hit hard for big customers.

"Some of our largest industrial customers will see a pretty substantial rate hike as a result of this," he said.

The fire at Drake Power Plant was unexpected, and big utility users weren't planning on paying more because of it. Burnett said for UCCS, it's already very late in the budgeting process.

"Notification of a potential rate increase of this magnitude this late is just not easy for us," Burnett said.

That's because UCCS already set tuition rates for next year, and the amount it gets from the state is already set in stone. So budgeters will have to take a little from here and there to adjust for the rate increase.

"There's some pieces of our utility's budget we may have to postpone and hope this isn't going to be a permanent thing for very long," said Burnett.

Other major utility customers will have to adjust budgets as well. A spokesperson with Memorial Hospital said they estimate an annual increase of $337,666 for utilities. The City of Colorado Springs is looking at an increase of $295,982, according to its budget office. Fort Carson, one of the biggest utility users, will likely be out even higher amounts.

"We're all now going to have to make some adjustments, and potentially they (CSU) need to make some adjustments to limit this cost to us as much as possible particularly for us for the ones that are big users in town and economic engines to the city," Burnett added.

Cherrier points out that these rate increases are not going to permanent.

"This is temporary until we have some or all of the units coming back online," he said of Drake.

But even if the increase is temporary, commercial users will have to budget the increase for the whole year, because they don't know when rates will go back down.

City Council is voting on the rate increase next Tuesday, that would cover the costs of buying power while Drake remains shut down.



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