2026 Colorado electric regulatory rate review
Delivering safe, reliable electric service for Southern Colorado
At Black Hills Energy, our most important responsibility is providing safe, reliable electric service to our customers and communities. This takes everyday investments in the electric system infrastructure that serves over 102,000 customers in Southern Colorado.
Since the company's last rate review in 2024, Black Hills Energy has invested approximately $184 million to improve reliability, strengthen the electric grid, and extend the life of key generation infrastructure. Key outcomes of the 2024 filing include:
- Achieving nearly first quartile reliability performance nationally.
- Improving 195 miles of distribution line by adding, upgrading, or replacing over 1,000 transformers and conductors, and upgrading more than 2,500 poles.
- Strengthening the transmission backbone near Cañon City with two new 69 kV transmission lines so that power can be rerouted quickly during an outage. These upgrades make the system more resilient against high winds, heavy snow, and other severe weather events.
- Upgrading the Erie Avenue substation and distribution lines to improve customer reliability on Pueblo’s east side.
- Expanding the distribution system infrastructure serving the Pueblo Industrial Park to increase reliability for customers.
- Extending the life of key generation infrastructure by completing extensive maintenance at the Pueblo Airport Generating Station (PAGS).
Proposed increase in electric base rates
We submitted a rate review proposal to the Colorado Public Utilities Commission (PUC) on June 12, 2026, requesting a rate update to recover these investments and adjust for the rising cost of operating and maintaining our Colorado electric system. Subject to approval by the PUC, the rate proposal would result in an average monthly bill increase for Colorado residential customers of $10.90 per month, or 8.8%. As proposed, new rates would take effect in March 2027.
One core component of this rate proposal is a $38 million customer refund, which would help reduce the customer bill impact. The refund is the result of dollars previously collected to fund new renewable energy projects required under the company's Renewable Energy Standard Plan and Clean Energy Plan.
Greater transparency
When Black Hills Energy submitted its last rate review in 2024, it had been eight years since the company had requested an update in base electric rates. With this filing, we are seeking to update rates on a more regular cadence, so bill impacts are more modest each time and customers can plan for them, just like they plan for other rising household expenses. This adds more transparency to the rate-making process.
How your electric rates are set
Our electric rates are established through a highly regulated process guided and approved by the PUC, allowing utility companies to recover the prudent costs of providing service to customers. The PUC will evaluate Black Hills Energy’s rate review proposal while also hearing from intervening parties and considering public comment before it makes its decision about customer rates and the way rates are structured.
Proposed changes to customer bills
Learn more about the proposed rates, and the total monthly bill impacts on each customer rate class.
Support for customers
We recognize the impact of rising energy bills on our customers. That’s why we continually look for ways to control costs and increase efficiency. In this rate proposal, we are seeking to:
- Reduce the customer bill impact of this rate review by proposing a $38 million customer refund. The refund is the result of dollars previously collected to fund new renewable energy projects required under the company's Renewable Energy Standard Plan and Clean Energy Plan. The refund would be implemented over two years as a credit on customer bills under the General Rate Schedule Adjustment rider (GRSA).
- Develop a pilot program with a portion of the refund to provide a monthly discount to income-qualified customers participating in the Black Hills Energy Affordability Program (BHEAP).
- Establish a flat rate for residential energy usage to lower energy costs for income-qualified customers. As proposed, the flat rate would eliminate the current inclining block rate which charges a higher rate per kilowatt-hour for usage over 500 kWh per month. In general, income-qualified customers have higher average energy usage than other residential customers, so they are more likely to be impacted by the inclining block rate structure.
We are continuing to support customers through:
- Energy Assistance Programs: Black Hills Energy supports energy assistance programs through financial contributions and by connecting income-qualified customers to resources and energy assistance options. Learn more at energy-ready.com.
- Bill Payment Assistance: Customers who experience challenges paying their bills are encouraged to contact us at 888-890-5554 or submit an online form on our customer service page as soon as they think they may be experiencing financial difficulties to discuss payment arrangements. Learn more at blackhillsenergy.com/customer-service.
- Energy Efficiency Programs: We are committed to helping customers save energy and money through energy efficiency programs and tips. No matter what approach is right for you, our resources and support can help. Find ways to save at energy-ready.com.
Frequently Asked Questions
What is a rate review?
In order to change electric rates, we must go through a comprehensive and transparent process called a rate review. The rate review process is guided and approved by state regulatory commissions with input from the public so that customers and other stakeholders have a voice in the proceeding.
Why are you requesting another rate update so soon after your last rate review?
When Black Hills Energy submitted its last rate review in 2024, it had been eight years since the company had requested an update in base electric rates. With this filing, we are seeking to update rates on a more regular cadence, so bill impacts are more modest each time and customers can plan for them, just like they plan for other rising household expenses. This adds transparency to the rate-making process.
How will this new rate update impact customer bills?
Subject to approval by the Colorado PUC, the rate proposal would result in an average monthly bill increase for residential customers of $10.90 per month, or 8.8%. Bill impacts will vary across customer classes based on how much energy each customer uses.
When would new rates take effect?
We are requesting that new rates take effect in March 2027.
Why is Black Hills Energy continuing to spend so much money on its system?
Our customers depend on Black Hills Energy to provide the energy they can count on. This requires continuous investment in the electric system infrastructure that safely and reliably delivers the power our customers need and expect. Nearly half of our Colorado electric distribution system equipment is over 50 years old. Replacing and upgrading this equipment helps reduce the risk of outages and keeps power flowing safely and reliably to the homes, businesses and communities we serve.
How does Black Hills Energy prioritize equipment replacements?
We are responsible for continuously identifying, monitoring, and systematically mitigating risks related to the safe and reliable operation of the electric system. We proactively replace equipment based upon safety and reliability standards.
How has Black Hills Energy improved its transmission system?
We recently strengthened the transmission backbone near Cañon City with two new 69 kilovolt (kV) transmission lines so that power can be rerouted quickly during an outage. That helps shorten outages and makes the system more resilient during high winds, heavy snow, and other severe weather events.
How many transformers have you replaced?
Across the region, in 2024 and 2025, we added, replaced, or upgraded over 1,000 transformers and conductors, improved 195 miles of distribution line, upgraded more than 2,500 poles and continued to install smart meters, which provide better data and support faster, more efficient service.
How has this investment improved reliability?
During 2025, our customers, on average, experienced under 95 minutes of outages. This placed our reliability performance to nearly the first quartile of reliability performance as measured by the Edison Electric Institute (SAIDI).
How is reliability measured?
An industry standard measurement of reliability is the System Average Interruption Duration Index (SAIDI). This reflects the average outage duration for each customer in a given time period, most commonly during a calendar year. SAIDI is calculated by summing all of the outage minutes in a year, times the number of customers experiencing an outage, divided by the number of customers on the system. SAIDI is then expressed in minutes or hours that the average customer is without power in a given period.
What is Black Hills Energy doing to control costs?
Our customers count on us to deliver the energy they need while keeping bills as low as possible; that’s why we take steps inside our organization to find efficiency and reduce costs. This includes improvements in customer service, automating and standardizing processes, and using work management and dispatching software for more efficient routing and dispatching of technicians.
Why is the company proposing a $38 million refund for customers?
To help fund the renewable energy projects needed for the State of Colorado’s required Clean Energy Plan, customers have paid monthly surcharges on their bills through the Clean Energy Plan Rider and the Renewable Energy Standard Adjustment Rider. With the commission’s recent approval of our Clean Energy Plan, there remains a balance in these accounts of approximately $38 million. We are proposing to refund this amount to customers to help lower the bill impact of this rate review.
How do you plan to refund $38 million to customers?
We are proposing to refund this amount over a two-year period. If approved, the refund would show up as a credit on a line item on the bill, the General Rate Schedule Adjustment rider.
How much do customers pay each month for the Renewable Energy Standard Adjustment Rider (RESA)?
The RESA rider is a surcharge of 1.5% of the customers’ monthly bill. Funds collected through this rider are used to support renewable energy projects required by the PUC.
Are you proposing any changes to the RESA?
No. We will address any potential changes to RESA in a separate proceeding this fall when we file our next Electric Resource Plan and Renewable Energy Plan.
How much do customers pay for the Clean Energy Plan Rider?
The Clean Energy Plan Rider (CEPR) is a surcharge of 1.5% of the customers’ monthly bill. The rider became effective on Jan. 1, 2025.
Is the company proposing to eliminate the Clean Energy Plan Rider?
Yes. The rider is no longer needed as a result of the PUC’s approval of the company’s Clean Energy Plan. The PUC approved a 50-megawatt (MW) battery storage facility and 200 MW of solar generation. These projects will be recovered through the monthly Energy Cost Adjustment (ECA) rider.
How will this rate review be impacted by Black Hills Energy’s plans to merge with NorthWestern Energy?
There is no connection with this rate review and our company’s intention to merge with NorthWestern Energy. By joining forces, we will have the added scale to make us a financially stronger, more resilient utility better equipped to meet the challenges of a rapidly changing energy landscape.
