The budget for Colorado Springs Utilities is expected to drop slightly for 2027, landing at just above $2 billion.

The proposed budget was outlined at the Utilities Board working committee meeting on Monday morning. The $2.06 billion budget for 2027 would be a notable decline from this year’s $2.24 billion budget.

Utilities financial planning manager John Hunter said that next year will see $117 million less spent on capital projects than in 2026, as some major projects conclude and others are set for 2028. The wastewater system expansion in eastern Colorado Springs and the Williams Creek natural gas power station are two of the upcoming projects on the longer timeframe.

An additional budget decrease of around $76 million comes from the declining costs to purchase natural gas and other fuels.

Some of the decline in the budget was expected as Utilities enters the third year of a five-year rate plan that will be in place through the end of 2029. The rate plan, which was approved by the Colorado Springs City Council in 2024, sets a rate increase for each year to cover hundreds of millions of dollars in new projects. As a public utility, Colorado Springs Utilities is primarily funded by its rates.

The rate increases set for 2027 include a 4% jump in residential gas rates, a 6.5% increase in electric and water rates, and a 9% increase in wastewater rates.

The presentation to the Utilities Board Monday said the rate increases would make up around $61 million, or 3%, of the total utility budget for 2027.

Hunter said that the budget is expected to surge back up again in 2028 to roughly $2.4 billion to accommodate the next slate of major developments.

A more detailed version of the 2027 budget will be presented during the working committee meeting in August. The first vote on the budget is not scheduled until October, when it goes to the Utilities Board and eventually the Colorado Springs City Council, whose members make up the Utilities Board.