Black Hills Energy Seeking Rate Increase from Arkansas PSC

A rate increase request from Black Hills Energy is pending.

Black Hills Energy releases a statement saying the company filed a rate review application with the Arkansas Public Service Commission to request a base rate increase to recover the necessary capital infrastructure and operational costs required to deliver safe and reliable natural gas service for over 184,000 Arkansas customers. 

Marc Eyre, vice president of operations at Black Hills Energy in Arkansas states, “These investments not only fulfill our obligation to meet our customers’ growing energy needs but also allow us to meet regulations governing safety and reliability. In order to maintain the high level of safety and service our customers rely on, the company must ask the Arkansas Public Service Commission to allow the company to recover costs involved with operating a robust natural gas system.”

Black Hills Energy, which has 7,200 miles of transmission and distribution pipelines in Arkansas, states it has invested approximately $130 million in critical infrastructure in the state since 2021. The investments are said to have supported a substantial increase in the number of customers served over the past two years to include rapidly developing Northwest Arkansas and industrial growth in Northeast Arkansas. Reliability projects have included pipeline replacement with lower emitting materials, exchanging meters with advanced technology and increasing natural gas capacity in growing communities. Additionally, safe digging education, outreach and enforcement support remain priorities to meet safety goals.

If the total $44 million request is approved as filed, the typical residential customer would see an average increase in their monthly bill of approximately $15, based on an average monthly usage of 53 Ccf (hundred cubic feet). The increase for commercial customers will vary, based on rate class, load factors and usage. The rate review does not affect the cost of natural gas, which is adjusted twice a year in Arkansas. Natural gas prices are a pass-through cost without any markup from Black Hills Energy.

Eyre states, “We strive to keep bills as low as possible, and we also take very seriously our responsibility to keep our customers safe and warm by providing reliable energy. The proposed change in our service rates will enable us to continue investing in critical infrastructure and meet the needs of our growing communities, while continuing to prudently manage increased costs to operate a safe and sustainable system and serve customers.”

Pending approval from the Arkansas Public Service Commission, the new rates are expected to take effect in the fourth quarter of 2024. Black Hills Energy also plans to refund customers for excess deferred income taxes in winter 2025. For more information about the rate review, visit blackhillsenergy.com/reliableAR.

Eyre added, “Black Hills Energy is committed to being the energy partner of choice for our customers — a commitment we’ve demonstrated through infrastructure investments and in our communities.” The company estimates its economic impact in 2022 was over $120 million across its 106 Arkansas communities. This includes $532,000 in charitable contributions and sponsorships. Arkansas employees also volunteered more than 4,400 hours last year.

With continued recognition for its long-term energy efficiency efforts, Black Hills Energy obtained its fifth ENERGY STAR® Partner of the Year Award from the U.S. Environmental Protection Agency and Department of Energy for its Arkansas service territory, and 2023 is its third year to receive the Sustained Excellence designation.

(Full release from Black Hills Engergy posted by KTLO)