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Black Hills Energy Seeks $44M in Base Rate Increase

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Black Hills Energy, which provides natural gas to more than 184,000 Arkansas customers, is seeking a base rate increase with the Arkansas Public Service Commission, seeking to recover $44 million in “necessary capital infrastructure and operational costs required to deliver safe, reliable natural gas service.”

Mark Eyre, vice president of operations for Black Hills Energy in Arkansas, said the investments “not only fulfill our obligation to meet our customers’ growing energy needs but also allow us to meet regulations governing safety and reliability,” according to a Dec. 4 news release.

“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,” Eyre said.

Black Hills has 7,200 miles of transmission and distribution pipelines in the state, and has invested about $130 million in “critical infrastructure” here since 2021, the release said.

The investments support a notable increase in customers served over the last two years in northwest Arkansas, which has experienced significant development, and in northeast Arkansas, where industry has burgeoned.

“Reliability projects have included pipeline replacement with lower emitting materials, exchanging meters with advanced technology and increasing natural gas capacity in growing communities,” Black Hills said. The news release also cited safe digging education, outreach and enforcement support to meet the company’s safety goals.

If the full $44 million request is approved, typical residential customers would see an average monthly increase of about $15 in their gas bills, based on an average monthly use of 5,300 cubic feet of gas. “The increase for commercial customers will vary, based on rate class, load factors and usage,” Black Hills said.

The rate review does not affect the cost of natural gas, which is adjusted twice a year in Arkansas in coordination with the PSC. Natural gas prices are a pass-through cost without any markup from Black Hills Energy.

“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,” Eyre said. “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.”

If the PSC approves, the new rates would likely take effect in the fourth quarter of next year. Black Hills also plans to refund ratepayers for excess deferred income taxes in the winter of 2025, it said.

“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,” Eyre stated. 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.

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