Utilities to seek 7.4% rate hike to cover interim cost of replacing Drake powerThe following press release from Colorado Springs Utilities outlines the likely increases in customer bills as a result of the city-owned enterprise having to find alternative power sources in the wake of the Drake Power Plant fire May 5: “Until last week's fire, the Martin Drake Power Plant provided nearly one-third of the community's power needs at some of the lowest cost per kilowatt hour. That electricity is being replaced by Colorado Springs Utilities' own natural gas-fired plants and purchased power from other electric providers in the region. The additional cost for the replacement power is estimated at $3 million per month depending on the natural gas market and summer electric demand.
“To recover the additional costs, Utilities will submit a request to increase the Electric Cost Adjustment (ECA) rate to City Council at the May 27, 2014 meeting. The ECA rate would increase to $0.0102 per kWh and would be effective June 1, 2014.
“If approved, the change would increase the typical residential customer monthly bill by $5.34, or 7.4 percent. The typical residential customer uses 600 kWh per month. Commercial and industrial customer bills would increase by 10.5 percent to 11.2 percent depending on electric usage.
“The proposed rate increase is not designed for and is not needed to cover the cost to repair the Drake Power Plant. Utilities has adequate insurance coverage to get the plant up and running again. Insurance does not cover replacement power costs.
From a press release