Rising fuel costs are part of higher utility bills in Colorado Springs

At the beginning of October, the average household in Colorado Springs saw their utility bill go up by nearly $9 a month. Colorado Springs Utilities CFO Tristan Gearhart said that's because the price of natural gas goes up in the winter months.

“The natural gas that goes to heat people's homes and to run our electric generating plants– we're having to buy at a higher price,” he said. 

The city-owned utility tries to align rates on customer’s bills with the fluctuating cost of gas. And while there have been increases, according to Gearhart, there have also been a number of decreases during the last couple of years.

“The fuel commodities that we buy are really pass-through costs that we adjust on a quarterly basis through electric cost adjustments and gas cost adjustments,” he said.

Natural gas is used both for heating and various appliances, like stoves. It’s also part of producing electricity, so electric rates are also affected by fluctuations in natural gas costs. 

Gearhart noted the intense winter storm in 2021 radically spiked the cost of natural gas, from $2 per unit of gas to $150 per unit. 

“Huge increases for one weekend happened,” he said. ”The costs were extreme. We spread out paying back those costs over about 14 months.”

He said that was not typical though. “We try to keep things kind of current inside of the next quarter,” he said. “We look at the forecast for the next quarter and we try to adjust our rates where they're going to hit as close as they can to that.”

Now Colorado Springs Utilities is also asking the city council to raise the base rates that pay for new infrastructure and maintenance. If that increase is adopted, the average household utility bill will go up by about $14 a month on Jan. 1, 2025, with additional annual increases each year for five years. So as proposed, by 2030 the average residential bill will have risen by about $85.

Gearhart said despite increasing utility rates, Colorado Springs customers still have combined bills that are about 10 percent less than the average on the Front Range.

“The other utilities that we're pricing against on the Front Range are facing a lot of the same regulatory pressures that we are," he said. “We anticipate that they have rate increases that are coming as well. One of the things that we firmly believe as an organization, as a not-for-profit organization is we should be able to keep our prices at a place that's better than the investor-owned. We should be able to find a way that we bring value back to the community, to our customers through our rates.”

Utilities data shows customers have reduced their overall usage of all four utilities through efficiencies, especially water. The current population of the city is using about the same amount of water as in the late 80s and early 90s, when the population was much smaller, according to Gearhart. But the costs of water rights and infrastructure continue to increase, he said.

“Part of what we have to do for a water standpoint is make sure that we're looking at at least 50 years and what water supplies do we need to make sure that we can continue to have that water supply for our customers,” he said.

The utility’s current program that allows customers with smart meters to adjust their electric use to periods of low demand is helping to make usage more efficient. The Energy-wise rates that will be proposed in 2025 and could go into effect next fall will further this effort, according to Gearhart.

“Move when you're drying your laundry,” he said. “Just a couple loads a month could end up actually saving you significantly by moving those off those peak times.”