Colorado Springs Utilities gives company confidential deal to cut rates

The Gazette (Colorado Springs): Colorado Springs Utilities is giving a secret deal to Microchip Technology Inc. to reduce its payments of higher commercial rates that kicked in Jan. 1.

The Utilities board doesn’t vote on these “economic development special contracts,” which are deemed confidential by the publicly owned Utilities and by city economic development officials.

Instead, Utilities staff follows a policy set by the board that allows for the contracts, which must be reviewed and approved by the City Auditor’s Office.

A city document on the Microchip deal says the company will get three years to phase in the higher rates for electric, water and wastewater services because otherwise it “could elect to move plant operations” out of the city.

Similar special contracts have been issued for the University of Colorado at Colorado Springs and other customers, and a few of the city’s biggest electric customers pay a reduced rate, said City Councilman Don Knight, chairman of the Utilities Finance Committee.

Microchip had objected to Utilities’ base rate increases during an Oct. 25 City Council meeting.

The company was paying $11.1 million a year for utilities and would have to ante up $1.4 million more under the new base rates, testified Dan Malinaric, vice president of operations for Microchip.

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