Colorado Springs Utilities proposed gas rate decrease will have a substantial effect on commercial gas customers, according to utilities analyst Jim VanderWal.
The decrease, which will lower gas rates anywhere from 8% to 8.9%, will have the biggest impact on manufacturing companies, which use an extensive amount of natural gas in their production.
The City Council will vote on the proposed decrease Sept. 18.
The gas rate decrease was proposed because rates have dropped since the Colorado Springs Utilities last gas rate change in 1983. The gas department’s overall expenses have also dropped: from $89.4 million in 1983 to $64.9 million in 1996.
Dennis Senger, rate division manager, said revenue has declined since customers are using less gas and some large commercial customers are buying gas from other suppliers.
"When we calculated our projected revenues with the lower gas rates," Senger stated, "we then determined we could effectively reduce rates for our customers."
"Although we’re seeing an overall decrease in gas rates, each customer group will be impacted differently," said Senger. "We’re trying to level the playing field so that customers are only paying their share of the costs associated with providing gas service."
According to a survey conducted April 1 by the American Gas Association, Colorado Springs Utilities are 31 % below the average of 131 major U.S. gas utilities. Commercial gas rates in the Springs are 23% below the average.
In other utility news, a wastewater increase went into effect Sept. 1. The increase was passed in order to gradually recover higher costs associated with treating wastewater in order to release it safely back into the environment. This increase includes development fees to help pay for the system expansion.