Colorado Springs Utilities is spending an extra $3 million a month to replace the electricity that isn't being generated at the fire-damaged Drake power plant, and says it will have to pass some of that cost on to its customers.
Colorado Springs City Council approved a rate increase on May 27, 2014.
Beginning June 1, the typical residential customer's monthly bill will increase by $5.34, or 7.4 percent.
Commercial and industrial customer bills will increase by between 10.5 percent and 11.2 percent depending on electric usage.
Colorado Springs Utilities says the rate increase has nothing to do with covering the cost to repair the plant. It says those costs are covered by insurance, but that insurance does not cover replacement power costs.
The utility also says that the specific part of your bill that is being adjusted is designed to fluctuate based on changing coal, natural gas and purchase power costs, and that it has lowered the rate in past years when market conditions allowed.
Drake provided nearly one-third of the community's power before the May 5, 2014 fire. Now it isn't producing any.
The extra $3 million is being spent on generating electricity at two natural gas-fired power plants, which Colorado Springs Utilities owns, and by purchasing power from other electric providers in our area.
Colorado Springs Utilities is a not-for-profit entity and sets rates only high enough to cover the cost to provide service.
The rate was approved with a 7-2 vote. Council members Keith King and Helen Collins votes against it. During the meeting, a letter from the mayor was read asking council not to approve the increase, saying it will cost the city $295,000.