2013-09-19 00:46:02 -
RAPID CITY, S.D., Sept. 18, 2013 - Black Hills Corp. (NYSE:BKH) subsidiary Black
Hills Power today announced that the South Dakota Public Utilities Commission
has approved a settlement between the company, Commission Staff, and intervening
parties that will increase electric rates by 6.4 percent, or a revenue increase
of $8.8 million per year, on Oct. 1, 2013.
Black Hills Power filed a request in December 2012 to increase rates by 9.94
percent, and was allowed to implement that adjustment on an interim basis
beginning June 16 of this year. Since the PUC approved increase is less than the
interim increase, actual billed rates to customers will be reduced effective
October 1, 2013. The company will recalculate charges for service between June
16 and Sept. 30 at the approved rate, and
refund the difference, with interest,
by crediting customer bills beginning in November.
"Our customers depend on safe and reliable electric service," said Vance
Crocker, vice president of operations for Black Hills Power. "Since our last
rate filing in 2009, we have invested more than $50 million to extend service to
new customers, replace and upgrade our distribution and transmission systems,
install advanced metering systems, and ensure environmental compliance."
The approved settlement also includes a mechanism for recovering financing costs
for Black Hills Power's share of the new Cheyenne Prairie Generating Station, a
132-megawatt, natural-gas-fired power plant located in Cheyenne, Wyo., expected
to go online in the fourth quarter of 2014.
"Our customers shared their preference for smaller, incremental rate adjustments
rather than infrequent and larger increases," Crocker said. "Customers will save
money because the more gradual, quarterly rate adjustments will enable the
company to recover financing costs during construction, reducing the total
capital cost of the plant."
The utility received interim approval from the PUC in April to begin recovering
the finance costs for the plant by increasing rates approximately one percent
per quarter until the plant is completed in late 2014. The quarterly adjustments
for Black Hills Power customers began in April 2013. Black Hills Power will
seek, through a separate future rate filing, a return on the actual capital
investment and recovery of plant operating costs.
The new power plant will be jointly owned by Black Hills Power and its
affiliate, Cheyenne Light, Fuel and Power. Black Hills Power's 55-megawatt share
of the Cheyenne plant will replace the company's Osage plant in Wyo., the Ben
French plant in Rapid City, and the Neil Simpson I plant near Gillette, Wyo.
All of these coal-fired plants will be retired in 2014 to comply with new
Environmental Protection Agency emissions regulations. It is more cost-effective
to replace the company's three oldest power plants rather than retrofit them to
comply with the new regulations. Joint ownership and operation of the Cheyenne
Prairie Generating Station will reduce capital cost and expenses, thereby
keeping customer bills lower.
Rate requests are extensively reviewed by the South Dakota PUC and its staff, a
process that considers public comments and includes testimony from utility
representatives and intervenors in the case. Under terms of the settlement,
return on equity and capital structure details will remain confidential.
Additional information and the latest news on Black Hills Power's new rates are
available at www.reliablebhp.com. The site also offers ways to save energy to
better control utility bills.
Jerome E. Nichols 605-721-1171
Marsha Nichols P: 605-721-1844
24-hour Media Assistance 866-243-9002
Caution Regarding Forward Looking Statements
This news release includes "forward-looking statements" as defined by the
Securities and Exchange Commission, or SEC. We make these forward-looking
statements in reliance on the safe harbor protections provided under the Private
Securities Litigation Reform Act of 1995. All statements, other than statements
of historical facts, included in this news release that address activities,
events or developments that we expect, believe or anticipate will or may occur
in the future are forward looking statements. These forward-looking statements
are based on assumptions which we believe are reasonable based on current
expectations and projections about future events and industry conditions and
trends affecting our business. However, whether actual results and developments
will conform to our expectations and predictions is subject to a number of risks
and uncertainties that, among other things, could cause actual results to differ
materially from those contained in the forward-looking statements, including the
factors discussed above, our ability to obtain adequate cost recovery for the
actual capital and operating costs of the plant through future regulatory
proceedings and the timing in which new rates would go into effect, the risk
factors described in Item 1A of Part I of our 2012 Annual Report on Form 10-K
filed with the SEC, and other reports that we file with the SEC from time to
New factors that could cause actual results to differ materially from those
described in forward looking statements emerge from time-to-time, and it is not
possible for us to predict all such factors, or the extent to which any such
factor or combination of factors may cause actual results to differ from those
contained in any forward-looking statement. We assume no obligation to update
publicly any such forward-looking statements, whether as a result of new
information, future events or otherwise.
Black Hills Power, Inc.
Black Hills Power is the legacy utility business of Black Hills Corp. and has
been delivering energy for more than 130 years. The electric utility serves
68,000 customers in 34 communities in western South Dakota, northeastern
Wyoming, and southeastern Montana.
Black Hills Corporation
Black Hills Corp. (NYSE: BKH), a growth oriented, vertically integrated energy
company with a tradition of exemplary service and a vision to be the energy
partner of choice, is based in Rapid City, S.D. The company serves 769,000
natural gas and electric utility customers in Colorado, Iowa, Kansas, Montana,
Nebraska, South Dakota and Wyoming. The company's non-regulated businesses
generate wholesale electricity and produce natural gas, oil and coal. Black
Hills' 1,925 employees partner to produce results that are improving life with
energy. More information is available at www.blackhillscorp.com.
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Source: Black Hills Corporation via Thomson Reuters ONE