Colorado Springs Utilities customers could see a new fee on their bills later this year as Utilities embarks on a massive replacement project for natural gas lines.

The Utilities Board advanced a proposal at its Wednesday meeting to add a temporary charge to all customer bills — around $8 per month to residential bills and $18 per month for industrial and commercial bills. The charge could begin as soon as July and would help fund a federally mandated gas line replacement program.

The gas line work was required by a federal consent agreement Utilities signed last fall with the Pipeline and Hazardous Materials Safety Administration, part of the U.S. Department of Transportation. The agreement resolves a 2024 federal ruling that Colorado Springs had not done enough to mitigate the risks of decades-old, unprotected steel gas lines since the Gas Distribution Integrity Management Program was implemented in 2011.

Colorado Springs was on pace for an 80-year replacement cycle for the lines. Under the new agreement, Utilities would pay for any steel gas mains that need replacement by the end of 2029 and all gas service lines by 2034.

“We were aware of all our work. It wasn’t budgeted, we had just strung it out over a longer period of time to keep rates down and that was not acceptable to the PHMSA,” Utilities CEO Travas Deal told the Utilities Board during a Tuesday morning working committee meeting.

The consent agreement estimated that Utilities has 1.24 miles of gas mains and around 5,100 individual service lines to replace. The agreement requires Utilities to replace at least the 30 most dangerous sections each year, as determined by a risk assessment formula.

“We’re taking responsibility for the past. We want to move forward and make our system as safe as possible,” Utilities Operational Manager Jennifer Alecci told the Utilities Board on Wednesday.

Reaching that pace will mean more than doubling the $15 million budget for managing the gas lines, which is where the new fee comes in. Utilities Pricing Manager Scott Shirola said the federal order was not issued in time to be incorporated in the five-year rate plan, so it will be added as a rider.

Bill riders are temporary, meaning the charge would expire after the five-year rate plan ends in 2029. Utilities would then decide whether to continue with a different standalone rider or add the cost of the natural gas program to its budget.

“We were trying to find the right time to accelerate this and get the most out of our assets that are already in the ground,” Shirola said.

Shirola said keeping the cost as a separate line item will also let customers know where the extra charge on their bills is going and make it easier for the Utilities Board — composed of City Council members — to oversee the program.

The cost of the proposed rider is 28 cents per day for residential customers. In comparison, a separate rider that is a requirement of the Colorado Clean Heat Plan laws adds an average of 74 cents per month for residents.

Utilities plans to make a gas cost adjustment later this spring, which will temporarily reduce the natural gas prices. Councilmember and Utilities Board President Dave Donelson suggested scheduling the decrease to take place before the rider begins hitting bills.

“It would be nice for ratepayers to see the two happening at once, so they go, ‘Damn it, they’re adding this $7 or $8 fee now,’ but the other fee is going down,” Donelson said at Tuesday’s meeting.

Shirola said the goal was to file the rate case change with the city in March, hold a public hearing and final City Council vote by the end of April and have it take effect July 1.