Nov. 16, 2015 – Black Hills Corp. (NYSE: BKH) today announced its subsidiary Black Hills Utility Holdings (the “Company”), the Staff of the Colorado Public Utilities Commission and the Office of Consumer Counsel entered into a settlement agreement resolving the issues relating to the Company’s joint application seeking approval of the purchase of SourceGas Holdings LLC. Black Hills and SourceGas filed the joint application on Aug. 10, 2015, with the Colorado commission.
“This settlement is an important step in our regulatory approval process to acquire SourceGas,” said Linn Evans, President and COO Utilities for Black Hills Corp. “The settlement represents the agreement of the parties that the acquisition will be beneficial to customers.”
The agreement prohibits any change in customer base rates for at least three years for SourceGas Distribution customers in Colorado and two years for Rocky Mountain Natural Gas LLC, an intrastate pipeline. The settling parties to the agreement are conditionally prohibited from challenging the rates and revenue requirements of SourceGas in Colorado for five years after the closing of the transaction. The Company will not seek recovery of any acquisition premium from the acquired Colorado customers and will reduce annual SourceGas distribution customer charges by $200,000 per year for up to five years.
The settlement agreement is subject to approval by the Colorado commission before its terms become effective. As part of the settlement, the parties will request that the commission issue a final decision by Dec. 31, 2015.
SourceGas is a natural gas utility company serving approximately 425,000 customers in Arkansas, Colorado, Nebraska and Wyoming. Black Hills expects to complete the acquisition in the first half of 2016.