Nebraska Natural Gas Rate Application

Important rate refund information

On Nov. 30, 2010, the Nebraska Public Service Commission approved Black Hills Energy’s rate refund plan. As a result, Black Hills will begin refunding an interim rate over collection that was part of the company’s 2009 rate application.

State law allows utilities to begin charging interim rates that are in line with a rate request filing 90 days after the utility makes a rate application to the NPSC.

Black Hills Energy filed for a $12.1 million increase Dec. 1, 2009, and implemented interim rates at that level March 1, 2010. The Commission issued a final rate order Aug. 17, 2010, for an $8.6 million increase which it reduced to $8.3 million Sept. 14, 2010.

Black Hills implemented final rates Sept. 1, 2010, and adjusted rates Oct. 1, 2010. Now Black Hills is refunding to residential and commercial customers the difference between interim and final rates, plus interest. The total amount being refunded is $2.6 million, which includes interest.

Most residential or commercial customers of Black Hills Energy in Nebraska who received natural gas service from the company between March 1, 2010, the date Black Hills Energy implemented interim rates, and Aug. 31, 2010, when interim rates ended, are entitled to a refund with interest.

This refund will appear as a one-time credit on monthly Black Hills Energy gas bills dated Jan. 1-31, 2011. The credit will be identified on the bill as “Rate Refund.”

The average residential refund is approximately $13; the average commercial refund is approximately $18. Actual refunds will vary because they are based on how much natural gas a customer used during the interim rate period, plus interest.

The interest rate used in the interest calculation ranged from 2.183 percent to 2.244 percent during the interim period. The interest calculation used by Black Hills for the interim rate refund is based on state law as required under the state Natural Gas Regulation Act. The rate is fixed at a rate equal to 1 percentage point above the bond equivalent yield, as published by the United States treasury secretary.

For those who were customers of Black Hills during the interim rate period but who are no longer customers of Black Hills Energy in Nebraska, a check will be issued if the refund is $3 or more. Checks will automatically be mailed to final bill addresses or forwarding addresses if customers provided one to Black Hills. For refunds less than $3 or for former customers the company does not have a forwarding address for, refund amounts will be rolled into a Black Hills gas supply account to reduce the cost of gas for all customers.

An appeal of the Commission’s Aug. 17 rate order by the State of Nebraska Public Advocate is currently in Lancaster County District Court.

If you have questions about the rate refund, please contact Black Hills Energy at 888-890-5554. Click on the links below for more information about Black Hills Energy’s rate application.