May 15, 2014 11:52 PM by Kelsey Kennedy
Colorado Springs Utilities says it will cost $3 million a month to buy the electricity Drake Power Plant would have normally generated.
That change would translate to to an increase on the average residential bill by 7.5%, or about five dollars per month, depending on usage. Commercial and industrial customer bills would increase by 10 to 11%.
According to Sonya Thieme, the Rate Manager for Colorado Springs Utilities, the increase is not meant to cover repair costs. The company has coverage to get the plant up and running, which she says, could take up to a year. However, the insurance the company uses doesn't cover replacement power costs.
"The fire at the power plant is covered by insurance, and the property damage will be covered by that," she says. "This rate increase is associated with the cost of fuel and replacing the fuel that drake power plant can no longer generate."
Fuel cost replacement insurance is available, but Thieme says it's too expensive.
"The cost of that far exceeds the benefit that we would receive in the unlikely event of a fire," she says. "So over the last several years, to be able not to incur a cost of a million or two million dollars for that type of insurance, allowed us to keep our rates lower in the past."
Colorado Springs Utilities will ask city council for the proposed rate increase at their May 27th board meeting.
If you're having trouble paying your utility bill, Colorado Springs Utilities offers rate assistance.