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Utilities CEO says customer rate hikes not tied to $16 million in employee raises for 2022

CSU: Higher utility bills driven by rising fuel costs, not labor costs
Posted at 3:01 PM, Feb 07, 2022
and last updated 2022-02-07 19:25:52-05

COLORADO SPRINGS — One month after Colorado Springs Utilities (CSU) raised rates for customers, the company gave out large employee raises totaling millions of dollars.

A viewer-initiated news tip asked our KOAA 5 investigative unit to look into whether higher utility bills went to pay for those employee raises.

Public records we reviewed on CSU's web site reveal the utility increased its base salary budget by more than $16 million in 2022.

We later learned through an interview with CEO Aram Benyamin that some employees received raises of more than 13-percent.

Aram Benyamin
Aram Benyamin, CEO

Benyamin stands by the raises and explained the salary adjustments were needed to attract new employees and retain quality workers. He also said that the raises he signed off on have absolutely nothing to do with the higher utility bills customers may have received over the last couple of months.

As we reported on Nov. 9, 2021, the Utilities Board approved a customer rate hike for natural gas and electricity---driving up the average bill for a homeowner by approximately $28.52.

One month later on Dec. 8, 2021, an open records request confirmed the Utilities CEO sent an internal memo to employees about base pay salary increases taking effect on Dec. 26, 2021.

Benyamin says the timing of the customer rate increases and salary raises is a coincidence and that there's no correlation between the two adjustments.

"That adjustment (Nov. '21 rate hike) had nothing to do with the labor markets that we are trying to complete with in the region," Benyamin said.

Understanding the CSU billing rate structure:

"We have two parts of our rate structure," Benyamin said. "We have a base rate---the rates that we keep constant and then we have a variable portion of our rates which are fuel cost adjustments based on electric generation and gas distribution."

Fixed v. Variable Rates
Fixed v. Variable Rates (CSU)

Benyamin says the rate increase from November of last year solely went to make up for the rise in fuel costs. It was the second rate hike utilities passed on to customers in 2021.

Turning to employee salaries, Benyamin says they did a market analysis and made salary adjustments to keep up with current market trends.

"This is basically for recruiting, retaining, training and holding onto the workforce that we need to operate the utilities," he said.

News 5 asked, "Prior to this salary market adjustment rate, did Utilities have a problem with retention?"

"Yes," Benyamin said. " We have seen employees choose to go to entities which actually have those adjusted salaries."

Utilities board member and Councilman Wayne Williams also agrees that raises were needed.

Wayne Williams
Wayne Williams, CSU Board Member

"We need to be able to make sure that we attract and retain good employees," Williams said via Zoom.

You may agree that with inflation, the dollar doesn't stretch as far as it used to when compared to prior years.

However, one concern raised by the viewer who tipped us off to this story had was that if these raises weren't connected with higher utility rates, why not be transparent about it and discuss the raises in an open setting?

News 5 shared this concern with Benyamin.

"Was there a board meeting that specifically addressed the salary adjustments that took effect in December (2021)?"

"So when the board approves the budget, the budget is under the Chief Executive Officer," Benyamin said.

The short answer is no----which Benyamin did address later in his answer.

Aram Benyamin
Aram Benyamin, CEO of Colorado Springs Utilities talking with Chief Investigative Reporter Eric Ross

"Because it's not an approval item, we didn't have it on the board agenda as an approval item because our budget as a whole gets approved."

To elaborate on Benyamin's statement, the Utilities board works on a general budget around August of every year. Salaries are part of the overall budget. However, when it comes to specific modifications or adjustments to salaries, there's no requirement for CSU to discuss or approve those modifications in a public (board) setting.

Williams also confirmed this information.

"The board for CSU sets the budget," Williams said. "Specific decision within that budget are up to the CEO and the executive leadership team."

While the Utilities board always signs off on a general budget, Benyamin does have final say on how certain buckets of money are allocated.

"The CEO is in charge of managing the approved budget based on operational needs," Benyamin said. "That decision making is all on me. I want to have the best workforce out there that is best trained, best equipped, and the most effective workforce that we can create and this helps us in getting that accomplished."

The very next day following our interview with Benyamin, the Utilities board met and approved a rate decrease for customers. Benyamin says you can expect to save on average about $15 on your next bill.

He also says that the Utilities board will likely consider another rate decrease in April.

To learn more about CSU's residential rates and fees, click here.

To read more about how CSU is addressing market competitiveness, click here.

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