The Colorado Springs Utility Board ()AKA City Council will meet Wednesday afternoon at 1 p.m., with the agenda and associated attachments already online. Here are the most significant items, including forecast electric and gas rate increases and the expected length of the Martin Drake Power Plant outage.
In what is presumably a worst-case scenario, Utilities CFO Bill Cherrier will base a forthcoming request for an across-the-board electric rate increase upon a 12-month Drake shutdown in the aftermath of the May 5 fire at the plant.
Such an outage would result in increased 2014 replacement power costs of $23 million, spiking in the summer months. If that’s not a sufficiently dismaying prospect, Cherrier also expects that gas rates will have to increase sharply on Sept. 1, raising residential bills by 12.9 percent.
From the agenda:
Utilities will submit a Consent Agenda Request to consider an increase to the Electric Cost Adjustment (ECA) Tariff to City Council at the May 27, 2014 meeting. The ECA rate will increase by $0.0089 resulting in a rate of $0.0102 per kWh. Proposed rates are effective June 1, 2014.
The monthly electric bill impact is:
Typical residential bill at 600 kWh = $5.34 or 7.4%
Typical commercial bill at 6,000 kWh = $53.40 or 10.4%
Typical industrial bill at 400,000 kWh = $3,560.00 or 11.2%
ECA Rate Drivers
– Increased Replacement Power Cost approximately $3.0 million per month
• Drake lower cost baseload coal-fired generation compared to higher cost gas-fired generation and purchase power
– Current forecast assumptions:
• Drake 5, 6, and 7 outage for 12 months
• Replacement power primarily provided by Front Range Power Plant
• Front Range gas-fired costs reflect current forecasted gas prices
GCA Comparison to Prior Month
– April actual results decreased the under collection by $0.1 million to a current balance of $2.5 million under collected
– Higher natural gas cost increased forecasted under collection to $11.7 million at year-end 2014
– September 1, 2014 rate increase of $0.1046 resulting in GCA rate of $(0.0520) per Ccf may be needed
• Impact to total typical gas bill:
– Residential 12.9%
– Commercial 17.0%
- Industrial 17.5%
Things look good for water, though. Thanks to abundant winter snowfall in the mountains, we won’t see mandatory water use restrictions. But the revenue side may not be so cheerful.
“Water – lower than planned sales in the first quarter and a forecasted sales reduction for the irrigation season to account for a drought shadow are driving revenues below budget.”
Long-term forecasts suggest that this may be a comparatively wet summer in Colorado Springs, driving forecast demand down even more.
And here’s a final tidbit, sure to drive activist Douglas Bruce into a frenzied anti-tax tirade.
“The Northfield Caretaker House project ($596,857) is to rebuild the Northfield Caretaker’s home and garage. The home was damaged beyond repair as a result of the flooding from the Waldo Fire. The house will be built within the Northfield Watershed so that we can house a permanent caretaker on site for the watershed. The project will include new permitting for the house and garage with the Forest Service.”
But don’t worry – Utilities management is subject to broad executive limitation mandates. Here’s one:
“Global Policy Prohibition: The Chief Executive Officer shall not permit the Board to be uniformed or unsupported in its work.”
Speaking only for myself, I think that Council uniforms would be a good idea. Maybe “Game of Thrones” would have some suitably warlike costumes left over…