Colorado Springs Utilities is moving to lower electric rates for the second time this year, crediting membership in a regional power pool for generating savings that officials say exceeded early expectations.
The proposed rate reduction of 2.1 cents per kilowatt-hour is projected to reduce the average customer's power bill by $1.54 a month, beginning Oct. 1. The rate change will go to the Colorado Springs City Council for final approval at its Sept. 22 meeting.
Utilities Rates Manager Scott Shirola told the Utilities Board that the savings have come since the municipality joined the Southwest Power Pool in April — a regional organization of electrical utilities spanning 17 states between Montana and Louisiana — which has led to an estimated $7 million in savings for Utilities during the first three months of its membership. Shirola said the savings came from Utilities being able to purchase cheaper power at some times and sell off excess power that it produced to other utilities. Shirola said he wasn't sure which aspect had been the bigger cause of the savings.
The Colorado Springs City Council, which also serves as the Utilities Board, had previously approved a larger cost adjustment to both electrical and gas rates in March, meant to reduce the average customer's bill by more than $9 a month. The power pool's performance has outpaced what planners anticipated when that earlier reduction was set. "When we brought that to the council, we had intended to keep that in place until March 2027. You can say the pool has gone better than we anticipated," Shirola said.
If approved, the cost-adjusted rates would take effect at the same time as the seasonal switch for Utilities' Energy Wise rates, with October marking the end of the four-month summer window when customers have paid more for power used during peak evening hours and throughout the day. Utilities Board chairman Dave Donelson said the combination should cause bills to "trend downward significantly" through the end of the year.
The City Council's Sept. 22 vote will determine whether the proposed decrease takes effect as scheduled on Oct. 1.