The City Council on Tuesday confirmed its vote to approve Colorado Springs Utilities’ $1.8 billion budget for 2025, including base rate increases for the next five years and a new time-of-day rate.

The council at its regular meeting cast its second votes and unanimously approved next year’s budget and rate case for the municipally owned agency, with Councilman Mike O’Malley absent.

The council first approved the budget through the consent calendar, without discussion. Items on the consent calendar are considered as a whole and passed through with one vote. Later in the afternoon, the council unanimously voted on five separate items that approved the new base and time-of-day rates.

Residential customers can expect to pay on average $14 more each month next year for water, wastewater, natural gas and electric services, according to a Utilities presentation in October. A sample service bill provided by Utilities shows the average residential customer can expect their bills to increase from about $255 a month currently to about $269 a month beginning Jan. 1, or an increase of 5.5%.

Monthly costs increase every year, up to an average of about $334 a month by 2029 for residential customers, the sample bill showed.

The 2025 budget is 21% more than the approved 2024 spending plan. Regulatory requirements, system reliability needs and community growth are driving the increased costs from 2025 through 2029, Utilities officials have said.

The agency plans to add about $3.9 billion in additional infrastructure over the next five years and capital projects make up almost 34% of Colorado Springs Utilities’ 2025 budget.

The agency typically updates its base rates annually; they pay for the pipes, wires and plants that provide utility services and are based on the cost of serving customers.

For 2025, Utilities officials requested approval to set base rates for five years to help pay for current and planned capital projects.

Councilwoman Nancy Henjum said the council, which also serves as the Colorado Springs Utilities Board of Directors, understands the financial impact the rate increases could have on ratepayers.

“I recognize this is going to be a burden to everybody in Colorado Springs, to every business (and) ratepayer, whatever you make. … It’s going to be hard, and we have to do this for the sake of our city,” she said.

The council voted to implement recommended base rate increases by about 6.6% for all four utility services each year from 2025 through 2029. Utilities will increase base rates by 6.5% for electric and water services, 4% for natural gas and 9% for wastewater each year during the next five years.

The council also voted to approve a new “energy-wise” rate to allow customers to pay different rates for electricity based on the time of day they are using it. Utilities officials have said this gives customers more control over their bills, and some customers could save money on utilities.

It is most expensive for Utilities to deliver energy between the hours of 5 and 9 p.m. Mondays through Fridays, when most customers are using it.

The new energy-wise rate will make electricity costs cheaper on weekdays before 5 p.m. and after 9 p.m., and on weekends and holidays. Rates will be higher in the summer, when demand is highest, and lowest in the winter.

The base rate changes will go into effect Jan. 1, and the energy-wise rates on Oct. 1, 2025.