BLACK HILLS ENERGY RECEIVES RATE CASE DECISION
FROM COLORADO PUBLIC UTILITIES COMMISSION
Increase in Customer Charge will be first since
Black Hills Contact Information:
Curt Floerchinger (785) 764-6492
24-Hour Media Line (866) 243-9002
FOUNTAIN, Colo., April 1, 2009 – Black Hills Energy has received a decision from the Colorado Public Utilities Commission allowing the company to increase rates for the typical residential customer bill by 2.04 percent, or $1.76 per month. Black Hills Energy requested an increase in response to growing costs of operation and system investments required to maintain safe, reliable service and support growth. The changes will be implemented April 1, 2009.
Service rates for Black Hills Energy’s Colorado natural gas customers have not changed since 1993. Since then, the company has invested $66 million in the integrity and growth of its Colorado natural gas system. The number of customers has risen from 28,281 in 1991, to nearly 68,000 today. Due primarily to increased customer base, total volume of natural gas provided to residential customers has more than doubled, and commercial delivery has risen 50 percent.
“These major investments are necessary to continue providing our customers with safe, reliable natural gas service,” said Ivan Vancas, vice president of operations for Black Hills Energy’s Colorado and Kansas natural gas operations. “We manage our business to run efficiently and effectively, but costs continue to rise for system maintenance, improvements and expansion of service.”
Under the agreement, the bill for a typical residential customer using 181 therms of gas during peak usage periods (usually the winter) will actually decrease slightly, from $159 to $158 a month. The average monthly increase will be $1.92. For commercial customers using 251 therms during peak usage, the bill will decrease from $222 to $220. The increase for a typical commercial customer will average $2.83 per month.
The rate revisions apply to all customer classes in proportion to the cost of service. The rates considered in this case were the customer charge and transportation fee, which account for approximately 15 percent of a residential bill and encompass the delivery of gas from the supplier to customers, customer service, system integrity and service extension to new customers. The remaining 85 percent of the bill covers the gas cost portion, which is recovered without markup and was not part of this filing.
The settlement includes three primary changes to the bill. First, usage now is measured on a per therm basis instead of per ccf (hundred cubic feet). Most utilities bill on a per therm basis and Black Hills Energy will now follow that convention.
Second, the transportation fee for residential and small-commercial customers has been reduced, from $0.17203/ccf to $0.14109/therm. Third, the customer charge for residential customers moves from $5.50 per month to $10; for commercial customers, it goes from $8.50 per month to $15.
“You pay a flat rate for cable or satellite TV regardless how much you watch,” Vancas said. “Our billing changes reflect the fact that, like your cable company or phone bill, many of our costs are fixed and are not related to the amount of commodity used. While some of our costs are impacted by the amount of gas flowing through the lines, many aren’t. Maintaining system integrity, managing accounts and customer service generate costs that don’t waver with usage.”
ABOUT BLACK HILLS CORPORATION
Black Hills Corp., a diversified energy company with a tradition of exemplary service and a vision to be the energy partner of choice, is based in Rapid City, S.D., with corporate offices in Golden, Colo., and Omaha, Neb. The company serves 750,000 utility customers in Colorado, Iowa, Kansas, Montana, Nebraska, South Dakota and Wyoming. The company’s non-regulated businesses generate wholesale electricity, produce natural gas, oil and coal, and market energy. We partner to produce results that improve life with energy. More information is available at www.blackhillscorp.com.
ABOUT BLACK HILLS ENERGY
Black Hills Energy, a subsidiary of Black Hills Corp., serves approximately 68,000 natural gas customers in 28 Colorado communities. More information is available at www.blackhillsenergy.com.
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