City electric customers to see 2 percent hike |

City electric customers to see 2 percent hike

GLENWOOD SPRINGS, Colorado – City electric customers will likely see a series of rate hikes over the next few years as the city looks to absorb an expected 22 to 25 percent increase in its wholesale power costs starting in 2013.

Glenwood Springs City Council on Thursday OK’d a 2 percent increase in residential and commercial electric rates, starting with the July billing.

The rate hike will mean the average residential electric customer who is now paying $52.57 per month will see an additional monthly charge of about $1.05. The average small commercial customer will see an increase in their monthly bill from $189 currently to about $193.

A recent review of all city utilities, including electric, water and wastewater services, projected that a 5.5 percent electric rate increase would be needed by 2013, according to Glenwood Springs Public Works Director Robin Millyard.

At an April work session, city council indicated it would prefer to gradually impose that increase over several years.

The rate hike is needed in part to begin preparing for a significant wholesale cost increase under a new contract with the Municipal Energy Agency of Nebraska (MEAN). The existing MEAN contract expires at the end of this year, and the new 10-year deal is projected to result in as much as a 25 percent increase in the city’s wholesale rate.

A possible 30-year contract continues to be explored with MEAN, which would result in an increase of about 20 percent in the wholesale rate. However, concerns were raised earlier this year with language in the longer-term deal that would limit the amount of local power generation the city or other entities could pursue, including renewable energy projects.

MEAN officials have indicated that the city could switch to the lower rate option at any time, if an acceptable agreement can be reached.

Existing debt payments and planned construction of a new office/warehouse for the city electric department on Devereux Road are also factored into the customer rate increase, Millyard said.

City electric rates increased 3 percent in 2011. The additional 2.5 percent recommended increase from the utility survey could be levied next year or spread over the next two years, city officials said.

Millyard pointed out in a memo accompanying the electric rate proposal that a recent survey of municipal electric systems in Colorado ranked Glenwood Springs’ residential rate the fourth lowest in the state.

In other business at the Thursday meeting, council:

• Approved an appropriation of $1.95 million in city funds to supplement funding from the Downtown Development Authority for the $4.5 million parking structure at Ninth and Cooper. The city’s share is about $950,000 more than originally budgeted before actual costs were determined. The DDA is expected to pick up $2.6 million of the construction cost.

• Heard conceptual plans for the planned new High Country Honda dealership, to be located on about 2 acres along Highway 6 in West Glenwood, near the Village Green Apartments. A new driveway access will need to be provided for the apartments as part of the site development plan.

David McDavid of Dallas is the new owner of the local Honda franchise. The dealership is to be located adjacent to the site where the new Mountain Chevrolet dealership was approved.

A formal development application is expected to be submitted sometime this summer.

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