Aug 23, 2014 12:34 AM by Maddie Garrett

CSU Looking at Rate Increases, Staff Decreases in 2015 Budget

Colorado Springs Utility users can expect to pay more for electricity next year, as the Utility company is facing lower revenues, expensive capital projects and budget cuts for 2015.

CSU has about $77 million less to work with for the 2015 budget compared to last year's budget. The overall budget is just over a billion dollars.

A mild, wet summer is partially to blame for the lower revenue.

"We've actually had what I would say most people think is a great summer," said CSU CFO Bill Cherrier. "As a consequence of that we're not selling as much electric power and as much water."

But that's not the only reason revenues are down. Cherrier said the economic recovery is still impacting sales.

"Our sales for electric really haven't grown to the normal expected levels," he explained.

Another big cost will be new scrubbers going in at Drake and Nixon coal-fire power plants, which will bring the emissions up to federal environment standards. The price tag for the scrubbers in 2015 is about $71 million, and customers will help foot the hefty bill through electric rates.

Cherrier said water, gas and fuel rates are not expected to increase for residents, but electric rates will go up about 5%. But he said when you combine that increase with the other services, the hit to your wallet won't actually be a 5% increase on your total bill.

"Then it's more like under 2% impact for their total bottom line bill," Cherrier said of rate payers.

As for the fire at Martin Drake Power Plant this summer, Cherrier wanted to make clear to customers that the fire has almost no impact on costs or budget cuts going into 2015.

"With our insurance we had a million dollar deductible, otherwise all the costs are covered," said Cherrier.

The rate increases that resulted from buying power off the grid while the power plant was down, are about to go down to lower than pre-fire rates. But Cherrier said customers can expect to see that electric rate increase take effect in January as the new budget kicks in.

CSU is also looking to save by eliminating 100 positions on its staff. But Cherrier said there won't be any lay-offs, instead CSU won't fill vacant positions and the company has some flexibility to move positions around to make the reductions.

This proposed budget isn't finalized yet, the CSU Board will go over it on September 17, where Cherrier will make a formal Utilities budget presentation.

City Council will then have a budget hearing on October 8 at City Hall, and the final Utilities budget will be approved on November 10.



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