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City Council ponders gas rate hike

by Larry Patrick

WALSENBURG- Mike McFadden of McFadden Consulting Group gave a report Monday night outlining the reasons for a need to increase in gas rates for heating.  McFadden said the customer and delivery charge portions of gas is not going up but the gas supply charge is going up.  That is the cost to the City of Walsenburg to get gas to their pipelines for distribution to customers.  The bottom line is the cost to get the gas to Walsenburg is going up and McFadden recommends hiking gas rates by 27.5% after Jan. 20th to handle the additional expense to the City of Walsenburg.

    McFadden says the City simply wants to cover their costs for getting the gas.  A member of the finance committee asked what would happen if they raised rates only 20%.  A perplexed McFadden responded that the City would not cover their costs of purchasing gas and put Walsenburg in a financial hole.  McFadden says gas commodities are very volatile from month to month and that is why municipalities buy gas during the year to store for use in winter time.

    On average monthly bills, Walsenburg residents would see an increase of $11.77 while commercial rates would see an increase of $66.67.  During January, one of the coldest months, residents would see their bill increase by an average of  $23.45 while commercial costs would show an increase of $114.91.  McFadden emphasized that the City is passing on to its customers only the cost of getting natural gas to Walsenburg.  The rate set for customer charges and delivery charges to the consumer are not changing.

    The Walsenburg City Council, which is made up of the same people on the finance committee, voted Tuesday night 5-3 to set a hearing date in January to raise the gas rates so that Walsenburg doesn’t fall into further financial shortfalls with their budget. The 5 who voted in favor of the  meeting to discuss the hike understands that without the increase, Walsenburg may not have the money to purchase enough gas in the future to provide heat for their citizens when they need it. The City doesn’t have enough cash reserves to absorb increased costs without passing it on to residents and businesses.