Investing in our future: why rate increases are crucial now

As a four-service utility, our pipes, wires and plants occupy large geographic areas both inside and outside of Colorado Springs. In fact, portions of our water system stretch across 11 Colorado counties.  

The many miles of infrastructure that deliver water, wastewater, electric and natural gas services to you requires ongoing maintenance and replacement to maintain reliability, ensure safety and meet regulatory requirements.  

Occasionally, these needs are far greater than normal and that is the case now. Changing regulations, technologies and customer demands, along with aging infrastructure, are quickly converging in a way that presents major challenges for our customers and organization.  

Five-year financial and rates plan 

To meet this unparalleled convergence of needs, we recently presented the specifics of a proposed five-year financial and rates plan.  

The plan transparently outlines how your rates are projected to change over the next five years and how your rate dollars will be invested to meet regulations; provide reliable and safe energy and drinking water; and prepare our growing community for new demands and emerging technologies.  

We understand these proposed rate increases come at a time when many of you are struggling financially amid national inflation.  

Consequences of deferring rate increases 

Considering the current regulatory climate and essential needs across all four services, delaying or canceling the investments outlined in our five-year plan would have severe consequences: 

• Regulatory – Failure to comply with state regulatory mandates and timelines for energy-related emission reductions would result in either fines or state-prescribed solutions that would be far more costly for you. 

• Reliability – Failure to fund essential water and energy projects would have major impacts on our ability to deliver reliable services in the years to come.  

•  Safety – Failure to invest in equipment, facilities and pipe upgrades would compromise the safety of our natural gas system, drinking water, wastewater system and electric service. 

• Financial Implications – By not meeting goals in any, or all, of the above categories we could lose our strong credit ratings. This would cause our cost to borrow to increase and lead to even greater rate pressure for our customers. 

Lessons learned from prior efforts to defer rate increases 

In the early 2000s, major parts of our wastewater system required substantial upgrades or replacement following a significant flood in 1999.  

The City Council of the late 1990s/early 2000s requested a cap on rate increases to alleviate the financial burden on customers amid a struggling economy. 

The results were devastating, particularly for the wastewater system. In the years that followed, rain and hailstorms broke exposed wastewater pipes that crossed local waterways. As a result, hundreds of thousands of gallons of untreated sewage reached the environment.  

The outcome of these wastewater spills included lawsuits and fines, and a compliance order by the state. This compliance order featured strict and aggressive timelines for system improvements at much higher costs – costs that ultimately resulted in far greater rate increases than those originally proposed. 

Moving forward 

Case studies like the one above illustrate why rate increases are not optional. Our five-year plan is the most financially responsible path forward and carefully balances rates with reliability and regulatory demands. Alternate paths, to include deferring projects or canceling rate increases, would be far more impactful to your utility rates.