Utilities' budget-billing customers get surprise charge 

If you're one of the thousands of Colorado Springs Utilities customers who take part in budget billing, be aware you've been paying an undisclosed 8 percent charge just for the privilege of being in the program.

Based on the current typical residential customer's bill of $193.49 a month, that charge would amount to $185.75 a year. And the charge likely will go up next year to offset rate increases and weather anomalies that weren't accounted for when customer budget-billing calculations were made, Utilities officials say.

Budget billing averages your previous 12 months' charges and allows you to pay the average amount every month, easing the pain of winter months (characterized by high gas usage) and summer months (high water usage). At year's end, any over- or under-collected amounts are applied to the next year's calculation, meaning you won't see an actual refund check (or another bill) unless you stop Utilities service.

Of Utilities' roughly 201,000 customers, 14,502 residential customers and 139 commercial customers are in the program.

One of those is not Bob Nemanich, who recently explored the possibility and balked when he learned of the 8 percent charge. He says it was revealed only after several conversations with Utilities representatives, when he found that his 12-month computation was $11 lower per month than Utilities' computation.

"It's a penalty," he says. "The biggest issue is, they're not saying anything to us, who are essentially the owners of the utility company. Therefore, this is a fundamental trust-in-communication problem."

Utilities' website doesn't mention the 8 percent charge, and a recent newspaper ad termed the budget-billing program "FREE."

Utilities spokeswoman Patrice Quintero admits in an e-mail that failing to mention the 8 percent charge, up from 5 percent in 2008, was an "oversight on our part."

"We intend to correct this on our website and other communications where it makes sense," she says. "We are also working with service representatives so that they may help explain the percentage to customers interested in participating."

But Quintero argues the charge is appropriate and necessary to guard against higher-than-expected usage that results from weather extremes, or unanticipated rate increases that follow the annual calculation. She notes that other utilities impose such charges.

Others don't, however. Xcel Energy, which serves the Denver area, has no such additional charges for its averaged monthly payment customers, but reviews accounts quarterly to assure the monthly amounts are adequate to cover usage, an Xcel customer representative says.

Quintero notes that Springs Utilities' 8 percent add-on has actually fallen short of protecting against weather and rate-change variables. Because of that, the fee is due for a review for 2011.

"For example," she says, "Colorado Springs had a cold winter and dry summer this summer. Given those conditions and related customer consumption, the 8 percent was not enough and we are currently under-collected with most customers at a time that we should be over-collected as we go into winter months."

When Nemanich told City Councilor and Utilities Board member Jan Martin last week about the charge, which doesn't require Council approval, it was news to her. But after Utilities officials explained it, Martin says there's no need for concern.

"I am comfortable they are keeping an eye on it, and they are doing the best they can to level out the payments for ratepayers," Martin says. She adds that although Council has final say over rates, "the details of how those rates are collected, we just don't get into that level of detail."


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