Black Hills Natural Gas Utilities Request Rate Reviews in Colorado and Iowa

Source: www.gulfoilandgas.com 6/1/2021, Location: North America

Black Hills Corp. announced that its natural gas utility subsidiaries in Colorado and Iowa separately filed rate review applications to recover investments made in natural gas infrastructure systems in their respective states. 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 Black Hills’ pipeline systems to serve extraordinary demand during the extreme cold conditions of the polar vortex and Winter Storm Uri in February. These investments in replacing and upgrading pipeline materials have also contributed to more than a one-third reduction in greenhouse gas emissions intensity for the company’s pipeline systems since 2005.

Black Hills Colorado Gas Rate Review Request
Black Hills Colorado Gas, Inc., doing business as Black Hills Energy, filed a rate review application with the Colorado Public Utilities Commission requesting $14.6 million in new annual revenue. From July 2018 through year-end 2020, the company has invested $144 million in replacing, upgrading and expanding its natural gas system in the state. The more than 7,000 miles of natural gas transmission and distribution pipeline provide the critical infrastructure required to meet the growing needs of its 194,000 Colorado customers.

As filed, the rate review is requesting a capital structure of 50.26% equity and 49.74% debt and a return on equity of 9.95%. The company is seeking to implement new rates in the first quarter of 2022.

Black Hills Iowa Gas Rate Review Request
Black Hills / Iowa Gas Utility Company, LLC, doing business as Black Hills Energy, filed a rate review application with the Iowa Utilities Board requesting $8.3 million in new annual revenue. The company has invested over $250 million in safety, reliability and system integrity in its more than 5,000-mile natural gas pipeline system in Iowa since its last rate review filing more than 10 years ago.

Black Hills Energy is also seeking to implement a five-year System Safety and Integrity Rider to prioritize safety-focused investments using a consistent, long-term approach to benefit customers and allow the company to recover its capital investments in these infrastructure upgrades. The rider will also support the company’s clean energy goals for reducing greenhouse gas emissions.

If approved as filed, the request will shift approximately $2.2 million of rider revenue to base rates and generate approximately $8.3 million per year in additional revenue. The request is based on a capital structure of 50% equity and 50% debt and a return on equity of 10.15%. Black Hills Energy will implement interim rates beginning June 11, subject to adjustment or refund. The company is seeking to implement final rates in the first quarter of 2022.

“These rate review requests reflect our commitment to our customers for safe and reliable service and to support economic growth in Colorado and Iowa,” said Linn Evans, president and CEO of Black Hills Corp. “These investments are also critical in helping meet our clean energy goals while ensuring that our customers continue to have natural gas as an energy choice.”


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