News Column

Colorado Springs electric rates could soon be 36-cents less than before Drake fire

August 27, 2014

By Monica Mendoza, The Gazette (Colorado Springs, Colo.)



Aug. 27--A second turbine at Martin Drake Power Plant has powered up and that coupled with lower natural gas prices means residential Utilities customers might soon pay 36 cents less a month for electricity than before the fire at the plant.

Electric rates

In June, residential electric rates increased 7.4 percent, which was a $5.34 a month increase for a typical customer that uses 600 kilowatts of energy a month.

In July, one of three units at Drake was powered up and rates were rolled back by 2.2 percent, which was $1.68 per month for a typical residential customer.

In August, a second unit at Drake was powered up and in September the City Council will consider lowering electric rates by 5.3 percent, which is $4.02 for a typical residential customer.

Colorado Springs Utilities CEO Jerry Forte said a second of three turbines at the downtown coal-fired plant is running so he will ask the City Council at its Sept. 9 meeting to lower electric rates by 5.3 percent, which would be $4.02 per month for a typical residential customer. A typical residential customer is defined by Utilities as using 600 kilowatts of energy per month.

Electric rates were increased by 7.4 percent in June, following a May 5 fire inside the downtown coal-fired power plant. The fire shut down all operations at the plant, which includes three main turbines. Drake supplies about one-third of the electricity used by Colorado Springs Utilities customers. After the fire, Utilities had to purchase power on the market at an estimated $3 million a month.

City Council members, who double as the board of directors of Utilities, said the 7.4 percent rate hike -- which was $5.34 a month on a typical residential customer bill -- would be temporary, until the power plant was back on line.

Forte said that if council approves the proposed rate change in September, a typical residential customer will pay 36 cents less per month than before the fire, even with one of the three turbines still down.

The reason customers will pay less, Forte said, is because gas prices are lower than Utilites expected. Utilities uses a mechanism called Electric Cost Adjustment, which allows it to react to market changes and increase or decrease rates.

Meanwhile, Utilities crews and contractors have worked at Drake around the clock since the fire, Forte said. He said firing up the second turbine at Drake is slightly ahead of projections.

One of the turbines, called unit 5, was damaged by the fire. Two of the turbines were damaged when they were abruptly shut down. Those two have been repaired and are now operational.

"Once we got unit 6 up, we had the experience," Forte said. "We had the extra support, crews, contractors, cranes repaired -- having that base background enabled us to fly through repairing Drake (unit) 7, carefully and intentionally."

Crews continue to assess the damage to the unit that burned. Forte said he expects the council to receive an update about the unit, whether it can be repaired or needs to be replaced, by the end of September.

So far, the cost to repair and restore Drake is about $15.4 million, which is covered by insurance, Forte said. Money from the May electric cost adjustment rate increase was not used for repairs. It was used only the cost of buying fuel, he said.

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Contact Monica Mendoza: 636-0187

Twitter @ Mendo1987

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(c)2014 The Gazette (Colorado Springs, Colo.)

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Source: Gazette (Colorado Springs, CO)


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