Inaugural State of the Utility address highlights needed investments in Colorado Springs infrastructure

Changing state and federal utilities regulations, evolving technology and limited resources are impacting how water and energy services are delivered in Colorado Springs — with a hefty price tag. But the city-owned utility will continue delivering reliable services while managing rates, its chief executive officer said Thursday.

Over the next five years, Colorado Springs Utilities must double or triple its capital investment, to up to between $450 million and $800 million a year, to maintain much of its current infrastructure and meet new state and federal regulations for clean energy, among others, the agency’s CEO Travas Deal told a crowd of more than 100 people at the inaugural State of the Utility event.

At the same time, Utilities has planned and begun new projects to help electrify the Colorado Springs grid, diversify its energy portfolio, and secure more water as the community continues growing, he said.

“All of those folks that are living in Colorado Springs … we have an obligation to serve them. So we want to make sure that we have the utilities, the water, the infrastructure, and then we need to make sure we meet those (needs),” Deal said.

Held at the COS City Hub, Thursday’s first-time event served as a report card for the 100-year-old agency that highlighted its history and outlined its future. Dozens of residents and several state, El Paso County and Colorado Springs elected officials attended.

The utility must meet ambitious new state requirements, such as reducing carbon emissions 80% by 2030, Deal said. The city has already made strides to meet new utilities regulations, ensure it is keeping up with fast-paced growth and maintain service quality and reliability, but the massive cost of upgrading current infrastructure means ratepayers can expect higher rates over the next five years, he said.

Colorado Springs Utilities is committed to keeping rates competitive, however.

Utilities customers already pay 15% less for electricity, 36% less for natural gas and 15% less for wastewater than other ratepayers across the Front Range, Deal said. Colorado Springs Utilities customers pay about 15% more for water than other utilities users because Colorado Springs is not near a natural water source and delivers most of its water from the Colorado River on the West Slope.

“We are going to continue to stay competitive, but there is no way to do what we’re talking about doing today and looking at the longevity of our community without making sure we have rate (adjustments). So we’re always going to be thoughtful in the process … but we do have to invest,” Deal said.

Colorado Springs Utilities has transformed its electric service in general by beginning to demolish and decommission the nearly 100-year-old Martin Drake Power Plant downtown, a year-plus process that began last summer. The plant’s demolition came as a response to utilities regulations as well as customer wants and needs, Deal said.

After it is completely torn down, the City Council and Utilities will work with the U.S. Environmental Protection Agency and go through a public process to determine next steps for the site.

Six natural gas generating units are now on the site, helping fill peak demand on the community’s hottest and coldest days. The modular units help Colorado Springs Utilities manage its electric grid and diversify energy resources, Deal said. The city is looking into purchasing additional units as well, he said.

Twenty percent of Colorado Springs Utilities’ natural gas fleet is made up of hydroelectric, wind and solar power. That percentage will grow over time as new regulations go into effect and customers continue looking for cleaner energy sources. Utilities will also ensure it has a reserve of fossil fuels to keep electricity reliable, Deal said.

At the end of December, Utilities announced Pike Solar, the Pikes Peak region’s largest solar facility, is now online. The 175-megawatt solar array located on 1,310 acres in El Paso County just south of Colorado Springs generates and delivers electricity to more than 46,000 homes and allows the city to continue meeting greenhouse gas reduction targets, Deal said.

Colorado Springs Utilities wants to nearly triple its electric generation and add up to 1,700 megawatts of new electric generation to keep up with rapid growth and regulatory requirements, Deal said.

“That is a huge transformation of the electric system,” he said. 

The city will also join the Southwest Power Pool’s expanded resource provider network by April 2026. The network will provide Colorado Springs Utilities more access to buy and sell renewable energy from a larger market and continue saving customers potentially millions of dollars over time, Deal said.

Utilities plans to purchase additional water rights for its current and future customers. It is rehabilitating some critical reservoirs, like the Montgomery Reservoir in Park County, to increase water storage and continue ensuring service reliability, he said. 

Educational efforts and new city requirements implemented over the last several years have also saved water.

Since the 1980s, Colorado Springs’ population has doubled in size but the amount of water the community uses has remained the same thanks to “water wise” rules that limit when residents can water their lawns, for example, Deal said.

“That’s phenomenal. Every bit of that actually helps us maintain our current growth and hopefully future growth,” he said.

Among other efforts to increase efficiency, Colorado Springs Utilities too is upgrading its Phillip H. Tollefson Water Treatment Plant on Mesa Road that produces about 20% to 25% of Colorado Springs’ drinking water, blending water from Pikes Peak with supplies transported from the Continental Divide. The upgrades improve the plant’s performance so Colorado Springs Utilities can use more local water supply, which provides flexibility and manages risks to water supply in the Colorado River, officials said in a news release this week.