The Drake Power Plant has been inoperable since May 5 after a fire broke out, forcing Colorado Springs Utilities to use their other power plants and replacement power from different utilities.
The overall cost to cover that replacement power is estimated at $3 million a month. The number could change depending on natural gas prices and electricity demand during the summer.
Springs Utilities Rate Manager Sonya Thieme tells 11 News that they did take into account the increased usage they usually see during the summer when deciding on the $3 million estimate.
The average family can expect to see a 7.4 percent increase in their monthly bill to help pay for that. That averages out as an extra $5.34 a month.
Businesses will be an increase between 10.5- 11.2 percent depending on their power usage.
The current insurance plan for Drake Power Plant only covers the physical damage to the plant. The increase in rates will not go to pay for those damages, but only to pay for replacement power needed because of the fire.
Springs Utilities officials tell 11 News that in the past they considered an insurance option that would cover those costs, but eventually decided against it.
They told 11 News that an insurance plan like that would have been very expensive and rates would have been raised to pay for it.
They also said that type of coverage would only kick in after the plant had been shut down for 60-90 days.
So far there is no word on how long these rates will last.
"Until Springs Utilities concludes the assessment of the Drake Power Plant and the damage incurred there, there's really no definitive time frame at this point to tell you how long that plant will be unavailable to generate coal fired power," Thieme said.
The Springs City Council still needs to approve this rate adjustment. They will make that decision on May 27.
If approved, the new rates will go into affect on June 1.