How much will SDS cost?

Our proposed option for the Southern Delivery System is based on more than 10 years of planning and review. It uses water we own and is the most economical, most reliable and an environmentally responsible option for meeting our future water needs. We studied hundreds of possible combinations before choosing the one we’re proposing.

The proposed action (Alternative 2) costs less to build and operate than all the other alternatives. As reported in socioeconomic reports prepared for U.S. Bureau of Reclamation’s draft Environmental Impact Statement, it is estimated that the total cost to construct the project is approximately $1.1 billion for the proposed action (in 2007 dollars). The project will be built in multiple phases.

Are there better and less expensive alternatives?

The proposed action originating from Pueblo Dam is the most direct and most economical of the seven listed in the draft Environmental Impact Statement. Before narrowing down to the seven alternatives, hundreds of other options were examined by Colorado Springs Utilities after extensive public input.

How will the project be paid for?

Water users in Colorado Springs, Security, Fountain and Pueblo West who benefit from SDS will pay for it.

What percentage of the project will be paid by residential, development fees, business customers?

The project cost will be included in future cost of service studies to ensure that all users are treated as fairly as possible and no single group or groups are called on to bear an unreasonable portion of the cost. We estimate the cost distribution to be similar to what it is today. Residential customers currently pay 35 percent; nonresidential 39 percent; development fees (tap charges) 26 percent of total water costs. There have been increases to development fees since 2003 associated with SDS.

How will SDS affect residential water bills?

Providing water to our community through SDS is an investment in our future and will require increases in water rates. Data prepared for the Draft Environmental Impact Statement shows the average single-family residence paid approximately $25.58 per month for water in 2007, based on an average use of 8,500 gallons per month per household. Without SDS or no major investments in a water delivery system, it is anticipated rates would increase to $35.08 in 2015 and about $46.25 in 2025. With the added costs of implementing SDS, households would pay $57.78 per month in 2015 and $77.71 per month in 2025.

How do Colorado Springs water rates compare to other Front Range cities?

Colorado Springs’ water rates compare quite favorably to other cities along the Front Range. Here are some comparisons, based on 8,500 gallons of water used:

Rates in effect April 1, 2008

Colorado Springs tap water is a tremendous value for our customers. Our great-tasting tap water costs a tiny fraction of what bottled water costs. Colorado Springs’ residents pay less than 1/3 of a penny per gallon of water. With SDS, they will still pay less than a penny per gallon of water in 2015.

Water is just one of four utility services included on our customers’ bill. Our overall utility rates are lower than most cities our size in the country.

Will development fees increase?

Similar to residential rates, development fees, or tap fees as they are referred to in the draft EIS, will increase with or without SDS. To help pay for future water projects, development charges have already increased from $4,695 in 2003 to $7,849 in 2007. For the proposed alternative the estimated fees in 2015 and 2025 would be $11,990 and $17,697 respectively.

How will SDS impact nonresidential/business water rates?

The draft Environmental Impact Statement did not examine rate impacts on nonresidential customers. However, based on our current and forecast data, the average nonresidential customer paid $202 per month for water in 2007 based on an average use of 71,700 gallons per month. For the proposed alternative for SDS, the average nonresidential customer would pay an estimated $489 per month by 2015 and $657 per month by 2025.