Fort Collins budget proposes higher utility bills, $600,000 annual energy-incentive cut

Fort Collins’ recommended budget would raise the average residential Utilities bill by $18.86 a month in 2027, to $222.75, a 9.3% increase from 2026.

The recommended rates would increase 7.0% for Light & Power, 15.0% for water, 10.0% for wastewater and 5.0% for stormwater in both 2027 and 2028. In the comparison, monthly electricity use of 620 kilowatt-hours would cost $96.54 in 2027, up $6.32, or 7.0%, from $90.22 in 2026; water use of 7,000 gallons would cost $56.88, up $7.42, or 15.0%, from $49.46. For 3,300 gallons of wastewater, the 2027 comparison is $42.06, up $3.82, or 10.0%, from $38.24; stormwater for an 8,000-square-foot lot with light runoff would cost $27.27, up $1.30, or 5.0%, from $25.97.

Staff said the utility would bring rates forward for adoption with the budget in November and adopt only the 2027 rates at that time. Staff said it planned to return the following year with the 2028 rates after more time to evaluate them, including potential upside on water rates as the city evaluates the water-storage project. Staff said the recommended water-rate scenario was the medium scenario, which would fund major capital projects but would not immediately increase investment in water-main replacement. Staff said the rates could increase water-main replacement investment over about 15 years.

The city identified a gap between projected ongoing revenues and the ongoing expenditures needed to maintain current service levels. The budget agenda describes an exercise for service areas to examine ongoing expenditures and identify opportunities to reduce projected ongoing costs by 8%. The recommended budget adjusts close to $10 million annually across governmental funds to better align ongoing expenditures with ongoing revenues.

Staff said water-main breaks set a record at 118 last year and the city was on pace for potentially 130 this year. Staff said material costs and the frequency of water-main breaks had increased, while water-treatment facilities faced chemical-cost increases beyond typical inflation. Staff said the recommended budget includes a 7.5% increase in PRPA’s wholesale purchased-power rate for 2027 and 2028 and estimated debt service for capital projects over the next two years, including work at Drake Water Reclamation Facility and a water-storage project. Staff said the utility budget sought cost savings and reductions to help alleviate rates rather than relying only on additional rate increases.

The utility alignment table lists a $600,000 annual reduction to Energy Services Incentive Programs in both 2027 and 2028. Councilmember Anne Nelsen asked whether income-qualified efficiency and weatherization programs were protected from the reduction, which she described as about $600,000 a year. Staff said the primary reductions were in commercial incentive programs and anticipated that income-qualified programs would either be maintained or enhanced over the next two years. Nelsen said, “something that would lower people's bills permanently and cut emissions is the sort of spending that I think we want to protect.”

Councilmember Anne Nelsen said many households could struggle with higher bills and asked whether the new customer information system could simplify Income Qualified Assistance Program enrollment, including by accepting another program’s eligibility verification or a single application for multiple city programs. Nelsen also asked about options for households with high electricity use because of medical conditions such as home dialysis or oxygen concentrators. Staff said the city did not have a medical-device rate program; staff could review the earlier program, which ended after low enrollment and was considered redundant with other assistance, along with records from when it ended five or six years ago, to consider bringing it back. Melanie Potyondy said clear communication would help ratepayers understand why rates were rising, the long-term consequences of not raising them and the pace of the increases.

The first budget public hearing is scheduled for Oct. 6, 2026, with a second on Oct. 20. Staff said the hearings generally provide a dedicated public-comment period for feedback on the recommended budget, without necessarily including a separate presentation, and include translation opportunities. The budget schedule sets an Oct. 13, 2026, work session for follow-up on earlier budget questions and an Oct. 27 session for final Council direction.