Holy Cross rates go up May 5
Holy Cross Energy’s 34,000 customers can expect rate hikes averaging 7.38 percent starting May 5.The not-for-profit utility, with accounts in Eagle, Garfield, Gunnison and Pitkin counties, announced the hike Monday, citing the increasing costs of doing business.The hike would bring an end to almost 15 years of providing service without an increase in basic electric rates.During the 1990s, rates actually fell once, in 1996. Starting in 2002, Holy Cross began imposing a power cost adjustment to pass along increases in the wholesale price it is paying Xcel Energy for electricity. Those increases result largely from rising natural gas prices and growing reliance on natural gas for power generation. However, the basic electricity rate Holy Cross charged for the operational costs of providing electricity remained unchanged.”Over this nearly 15-year period, we have effectively managed the ever-increasing cost of labor, electric system maintenance and improvements, material, equipment, fuel, etc., without increasing our rates,” Holy Cross chief executive Kent Benham said. “But now, as much as the board of directors and I dislike rate increases, we need to increase our revenues to preserve our quality of service and the financial well-being of Holy Cross.”Combining the proposed rate hike and the recent power cost adjustments, the increase in Holy Cross Energy’s rates is still half of the amount the Consumer Price Index has risen since 1990, Benham said.The power cost adjustment has resulted in customers paying a total of about 14 percent since its inception, Holy Cross spokesman Bob Gardner said.Although the new rate increase also includes an adjustment for the increasing cost of power, Holy Cross will continue to impose the power cost adjustment as required. Unless energy cost trends change, customers should expect the adjustment to continue its climb.”That’s gone up I think every month since it went into effect in April 2002,” Gardner said.However, if the cost of gas falls, the adjustment would go down instead of up, he saidHoly Cross is a member-owned energy cooperative, with its members consisting of its customers. As such, it reinvests the margin left over at the end of the year into its operations, but returns that margin later to all who were customers at the time. This year, it will make equity payments to those who were customers in 1994.Gardner said those payments have averaged probably $4 million to $5 million per year over the last 10 years, but probably will go down as expenses grow and margins decline.Vail, Colorado
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