WICHITA, Kan. – May 7, 2021 – Black Hills Corp. (NYSE: BKH) today announced that its Kansas natural gas utility, Black Hills / Kansas Gas Utility Company, LLC, doing business as Black Hills Energy, filed a rate review application with the Kansas Corporation Commission requesting $5.3 million in new annual revenue.
Black Hills Energy has invested approximately $130 million in safety, reliability and system integrity for more than 4,600 miles of natural gas pipeline infrastructure in Kansas since its last general rate filing seven years ago. These critical investments were required to meet system growth, ensure the safe and reliable delivery of natural gas to customers’ homes and businesses, and meet compliance requirements of state and federal regulations. The importance of these investments was recently demonstrated by the excellent performance of our pipeline system to serve extraordinary demand during the extreme cold conditions of Winter Storm Uri.
Black Hills Energy is also seeking renewal of its safety and reliability rider, the Gas System Reliability Surcharge. This legislatively approved rider allows gas utilities to recover capital investments for infrastructure upgrades. According to state law, a gas utility is required to periodically file a rate review application to continue recovering these investments through the GSRS.
“This request is a win-win for our customers and Black Hills,” said Linn Evans, president and CEO of Black Hills Corp. “Our customer-focused strategy and rider mechanism has delivered safe and reliable service to our Kansas customers for seven years since our last rate review in the state. Renewal of the rider will continue our ability to prioritize our investments to benefit customers while providing a fair return on investments for shareholders.”
The investments that Black Hills Energy has made in modern pipeline materials for Kansas customers has also contributed to more than a one-third reduction in greenhouse gas emissions intensity for the company’s pipeline system since 2005. Renewal of the rider will not only support the company’s efforts for safety and reliability but also its clean energy goals for reducing greenhouse gas emissions. If approved as filed, the request will shift approximately $4.9 million of rider revenue to base rates and will generate an estimated $5.3 million per year in additional revenue. The request is based on a capital structure of 50.34% equity and 49.66% debt and a return on equity of 10.15%. Black Hills Energy is seeking new rates in the first quarter of 2022.
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