Colorado Springs Utilities is one of about 2,000 community-owned utilities in the United States. But what does that mean to you, the citizen-owner?
As a community-owned enterprise, we operate as a nonprofit, meaning our rates are designed to bring in only enough to cover costs and reinvest in keeping the utility system reliable. Our customers are our shareholders, and profit from their ownership of Colorado Springs Utilities through local control, greater reliability and lower rates. The way our community receives utility services has served our residents and businesses well since 1925.
A benefit of community ownership expected by our customers is that our utility will act as an economic driver for our community. Providing sufficient capacity and reliable service at a competitive price is a vital part of our community’s foundation to facilitate economic development as we retain, grow and attract new businesses and employers to Colorado Springs.
Maintaining competitively-priced rates is a top priority for the Utilities Board.
Our electric rates continue to be competitive with neighboring utilities, and only those Front Range utilities that are more dependent on coal with less diversity in their supply portfolio are lower than us. We are proud of our efforts to keep commercial and industrial electric rates as an economic driver for this community, which are approximately 20 percent lower than Xcel’s in Denver. Our residential rates are lower than Xcel’s, as well.
Keeping rates competitive requires effective cost management and responsible budgeting across the organization. The Utilities Board Finance Committee and staff have been diligent in seeking alternatives to accomplish projects and activities that optimize the use of our resources. The successful result is a leaner budget that makes the most of every customer dollar.
The City Council approved the budget of $1.083 billion for 2015, a decrease of $70.7 million from the 2014 budget. The Finance Committee met twice monthly since May and reviewed three budget drafts. The Utilities Board held a budget workshop in August and ultimately provided direction to Utilities staff.
The budget was pared down significantly between the first and final drafts. Thanks to everyone’s hard work, we have been able to reduce non-labor expenses by $23.5 million. This has been accomplished by evaluating service levels and prioritizing programs and projects. Lower construction costs for the Southern Delivery System also contributed to the reduced budget.
To fund environmental clean air investments required in electric, we will continue construction on power plant emission controls at a cost of $71 million next year. An electric rate increase, if approved by City Council, would mean an approximate 5.5 percent increase in the typical residential electric bill effective Jan. 1, 2015.
The total increase to the overall residential utility bill would be about 2 percent. Typical commercial and industrial customers will see increases of approximately 2.5 percent and 4.6 percent respectively.
The Utilities Board is working diligently to ensure our organization is operating as efficiently as possible.
The 2015 budget funds system improvements for all four utility services with no rate changes planned for natural gas, water and wastewater.
We have already begun looking ahead to the 2016 budget with initiatives to lower labor costs with a 100-position reduction and sustainably removing $35 million in business expenses moving forward.
Our efforts are no different than most other energy and water utilities across the nation that are looking at new ways to lower costs because of additional regulatory requirements, increasing capital and infrastructure needs and relatively flat sales. For Colorado Springs Utilities to continue providing safe, reliable, competitively-priced services, we are committed to finding ways to reduce our costs.
In the coming months, I will be providing further and more detailed updates on these and other issues such as Utilities governance, resource planning through the Electric Integrated Resource and the Integrated Water Resource Plans, reliability, and our local community priorities.
Colorado Springs Utilities Board and staff are committed to providing transparency to our customers and working together with our community partners to continue providing safe, reliable, and cost-effective utility services.
Jerry Forte is the CEO of Colorado Springs Utilities.