Colorado Springs Utilities (month-to-month, home, incomes)

[Vision67]

Colorado Springs Utilities announces Kelker Substation expansion

https://www.csindy.com/news/colorado...17bf7875b.html

"Colorado Springs Utilities is moving forward with plans to retire the coal-fired Martin Drake Power Plant and replace it with six individual gas-powered GE turbines. Eric Gray, CEO of GE Gas Power, said the units are expected to arrive by the end of the year. As part of the transition, CSU will expand the Kelker Substation, adding additional power lines and equipment to the existing site, located along South Academy Boulevard between Hancock Expressway and Astrozon Boulevard. Electrical substations transform voltage from the main power station before it is sent to consumers.

“Kelker is our substation that has many lines coming and going out of that station,” said CSU CEO Aram Benyamin during a Feb. 10 press conference. “When we built the station we built it to a certain configuration. We have to expand that capacity. We have many assets we’ll add to it: a new line, a high voltage position that we’ll add, a transformer, and we will build redundancy into the system, adding breakers into the substation.”

Construction is expected to begin in September 2021 and be completed by December 2025, according to a news release from CSU. The transition away from a coal-powered plant will help CSU meet its goal of an 80 percent reduction in emissions by 2030. Benyamin says the transition will also lead to savings for CSU customers."

[Vision67]

February freeze will lead to higher bills

https://www.koaa.com/news/covering-c...o-higher-bills

"COLORADO SPRINGS, Colorado — The frigid blast of polar air that hit Southern Colorado on Valentine's Day is going to cost customers higher utility bills for months to come. In order to prevent service disruptions during the dangerous cold, many providers bought natural gas at a time when prices skyrocketed.

Colorado Springs Utilities leaders discussed strategies for how to mitigate that unexpected expense at a special board meeting Wednesday.

"Our reliability and the supply to the city is the number one priority that we have; the safety of our public, and the safety of our employees," CEO Aram Benyamin told reporters after the meeting.

"These things are non-negotiable, we will do everything possible to make sure we cover that."

CSU doesn't produce its own natural gas. So, every purchase they make is passed onto customers. Benyamin explained that the city-owned utility typically purchases natural gas through long-term contracts with supplies to avoid wild price fluctuations. However, demand during the storm outpaced the available supply.

The typical price for a standard unit of natural gas is roughly $2.50. During the peak of the storm, prices surged to nearly $200. CSU was able to sell some of its excess supply during this same time. However, early estimates indicate a $95 million loss.

Chief Financial Officer Scott Shewey said they plan to repay that debt through a temporary rate adjustment, likely appearing on monthly bills beginning in April.

A 12-month rate adjustment is currently estimated to cost customers roughly $20 more per month. A 20-month adjustment would cost an extra $12 per month.

"The longer we spread it, the lower the monthly impact will be, but the slower financial recovery the utility will have," Shewey said.

Julie Rodriguez, a spokesperson for Black Hills Energy said in a news release that customers in Pueblo will not see a rate increase in March. However, like CSU, Black Hills also needed to purchase natural gas to ensure system reliability during the storm.

Rodriguez wrote that company is currently working with the Colorado Public Utilities Commission to come up with a plan to recover those costs. Black Hills Energy did not disclose how much gas it purchased during the storm.

Governor Jared Polis has asked the PUC to investigate natural gas purchases made between February 13 and February 16. That regulatory commission has asked the private utility companies to provide documentation about their purchases and their emergency plans prior to the storm by next Friday, March 4."

[otowi]

I'm glad they kept things running but them having to buy at that higher price sounds like price gouging and I think there should be some push back there.

[LHS79]

Originally Posted by otowi

I'm glad they kept things running but them having to buy at that higher price sounds like price gouging and I think there should be some push back there.

My thought too- assumed CSU bought huge amounts of gas when the prices were cheap like last summer.

[wong21fr]

Originally Posted by LHS79

My thought too- assumed CSU bought huge amounts of gas when the prices were cheap like last summer.

Utilities aren't going to hedge fuel purchases 100%, there's always a bit of exposure to the spot market, and your hedges only cover up to x amount of your system's average consumption. What this really is about is gas demand by utilities across the entire Central US shooting through the roof due to increased heating and electrical consumption so they had to increase their market purchases at the same time that gas supply constrained cuz the OG boys don't feel that it's necessary to harden their delivery systems against cold weather. So there's price gouging in the sense that natural gas producers aren't required to ensure delivery for market purchases as far as I know.


$95M isn't too bad. I believe Xcel took a $1.2B short-term convertible loan to cover the cost of gas increases during the freeze for their entire service area (CO and the other states)

[LHS79]

Originally Posted by wong21fr

Utilities aren't going to hedge fuel purchases 100%, there's always a bit of exposure to the spot market, and your hedges only cover up to x amount of your system's average consumption. What this really is about is gas demand by utilities across the entire Central US shooting through the roof due to increased heating and electrical consumption so they had to increase their market purchases at the same time that gas supply constrained cuz the OG boys don't feel that it's necessary to harden their delivery systems against cold weather. So there's price gouging in the sense that natural gas producers aren't required to ensure delivery for market purchases as far as I know.


$95M isn't too bad. I believe Xcel took a $1.2B short-term convertible loan to cover the cost of gas increases during the freeze for their entire service area (CO and the other states)

Good info thank you.

I just remember CSU stating they hedged when they could.

[TCHP]

Interesting. On February 23rd, the place I work received a notification from our account manager that Cos City Council approved rate reduction effective Feb 1 in both electric and gas.

[Vision67]

Colorado Springs Utilities weighs natural gas price hikes

https://gazette.com/news/colorado-sp...413fbaa61.html

"Colorado Springs Utilities customers will likely be paying off the natural gas needed to get through February's deep freeze until next year or possibly January 2023.

The Utilities board, which is also the Colorado Springs City Council, will consider a range of price hikes in early March from $11.45 per month for the average residential customer to about $36.43 per month. Customers could see the hikes on their April bills, according to a news release.

The Utilities finance committee on Thursday leaned toward a midrange increase of about $18.10, or a 7.8% increase on the average residential bill, a Utilities statement said. The favored option for a commercial customer would increase their natural gas costs by about $373.98 per month. If the midrange price increases are approved, they would show up on bills through April 2022. If the board approved lower price hikes, they would be in place longer, possibly through January 2023.

The price hikes are needed because the widespread frigid weather this month from Feb. 13 through 16 drove up natural gas prices from $2.50 to nearly $200 per dekatherm -- the equivalent of 1,000 cubic feet of gas. As a result, Utilities paid millions more for fuel than anticipated, said Scott Shewey, chief finance officer, in a news conference. Those costs need to be paid by customers, but Utilities plans lessen the blow by stretching the payback plan over time.

"We know the impact can be big and we want to spread that out as much as we can," Shewey said.

The cost increases were driven by demand and by equipment failures that cascaded through the supply chain, Utilities CEO Aram Benyamin said.

Utilities relies on natural gas for both heat and electricity and they were able to soften the blow of the high prices by generating electricity through its other sources, including wind, solar, hydro and coal, he said. Utilities also had some natural gas supplies on hand and was able to make some natural gas from its propane stores, he said.

If Utilities was not diversified and did not have supplies on hand it could have paid $212 million to $215 million for natural gas during the cold snap, he said. Instead Utilities spent $134 million over four days, Shewey said. The difference would have translated into Utilities needing to hike prices at a rate nearly double what's proposed, Benyamin said.

Since more extreme weather is likely in the future, Utilities staffers plan to study the event and learn from it, Benyamin said.

"This is the time we really have to look back at how did we perform," he said.

Utilities could examine locking in natural gas prices through contracts, to help protect it from big spikes in the future, he said. However, locking in prices can be a double-edged sword, if the cost of natural gas falls below the price Utilities has agreed to pay, he said.

The city-owned utility will also look at how it can invest in infrastructure to ensure it is ready for extreme weather and has more built-in redundancies, he said. "

[YoYoSpin]

There is zero justification for a $2.50 to $200 overnight price increase. Price gouging like this used to be a crime. Pretty hard evidence that deregulation and small/no government oversight has unintended consequences.

[CARas2020]

Originally Posted by otowi

Well, TX had other issues of which solar/wind was a very small part - they disconnected themselves from the national grid, and their oil/gas, which is still like 80-something percent of their power, also failed, because they did not develop infrastructure for any of their power network for this kind of scenario, opting instead to line a few pockets a bit more.

Yay CSU!

YEP Texas did it to themselves so they can cry all they want but it was the utilities and maybe voters voted that crap in I don't know or care. Renewable energy is the future if you think otherwise you are a part of the problem. I know they are doing some research on using wave power off the coast. Not sure how that works but it is worth at least looking into that. I had a few classes at PSU and learned much about renewable energy, power grids and energy consumption. Some I hated because we had to calculate energy costs etc. and I am not good at math.

When I become a home owner I will be looking into using solar. It has been becoming more and more economical. Oil. coal and gas cause devastation to the environment.