2025 Arkansas regulatory rate review
Providing you with the energy you depend on
At Black Hills Energy, our most important responsibility is providing safe, reliable natural gas service to our Arkansas customers and communities – over 189,000 customers in more than 100 communities across our service territory. This requires continuous investment in the 8,000 miles of natural gas pipeline infrastructure that serves homes and businesses across the state. These investments support system safety, reliability, integrity and customer additions and include ongoing inspections and maintenance costs and pipeline replacement projects to meet state and federal safety regulations.
Update to natural gas rates
We submitted a rate review to the Arkansas Public Service Commission (PSC) on Dec. 5, 2025, requesting an increase in base rates to adjust for the rising cost of operating, maintaining and upgrading our Arkansas natural gas system. This includes recovery of approximately $147 million in natural gas system safety, reliability and integrity investments since our last rate filing in 2023.
Subject to Arkansas PSC approval, this rate proposal would result in an average monthly bill increase for residential customers of about $11 per month, or approximately 12%, based on monthly usage of 51 Ccf (hundred cubic feet). The increase for commercial customers will vary, based on rate class, load factors and usage. If approved by the PSC, new rates would go into effect in the second half of 2026.
This 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.
How your energy rates are set
The Arkansas PSC regulates public utilities, including Black Hills Energy. Preparing to file a rate review takes over a year of prep work and is the standard process for a public utility to set new rates and tariffs that allow the company to recover allowable costs and system investments necessary to meet our responsibility to provide safe, reliable natural gas service for our customers.
Prior to deciding on proposed changes, the Arkansas PSC carefully reviews the request and considers testimony from the Commission Staff, Black Hills Energy and other interested parties. The final Black Hills Energy service rates approved by the Commission may include rates that are higher or lower than the rates proposed by the company or currently in effect.
Proposed changes to customer bills
| Customer class | Average monthly bill - current rates | Average monthly bill - proposed rates | Avg monthly $/ change | Avg monthly %/ change |
|---|---|---|---|---|
| Residential | ||||
| 51 Ccf | $94.44 | $105.56 | $11.12 | 11.8% |
| Small business service | ||||
| 263 Ccf | $346.60 | $381.30 | $34.70 | 10.0% |
| Medium business service | ||||
| 8,324 Ccf | $7,797.78 | $8,037.22 | $239.44 | 3.1% |
| Large business service: non-demand - low load factor | ||||
| 44,892 Ccf | $34,234.54 | $34,556.60 | $322.06 | 0.9% |
| Large business service: non-demand - mid load factor | ||||
| 37,892 Ccf | $29,143.53 | $30,497.87 | $1,354.34 | 4.6% |
| Large business service: non-demand - high load factor | ||||
| 38,747 Ccf | $29,765.57 | $29,766.40 | $0.83 | 0.0% |
| Large business service: demand - low load factor | ||||
| 86,005 Ccf | $64,278.30 | $64,681.70 | $403.40 | 0.6% |
| Large business service: demand - mid load factor | ||||
| No current customers meet criteria | ||||
| Large business service: demand - high load factor | ||||
| 85,201 Ccf | $62,237.40 | $61,890.18 | $(347.22) | -0.6% |
In this rate review, Black Hills Energy is proposing rate design changes to help stabilize energy costs from season to season and encourage customer cost savings through tiered pricing levels. Proposed changes include:
- Changes to the Weather Normalization Adjustment Rider (WNA) to improve bill stability and predictability, especially throughout the heating season, by spreading costs more evenly over the year versus the winter months when customers see their highest monthly bills
- A declining block rate design that will allow customers to pay less for their heating load.
- A change to the customer charge, which is incorporated within the total bill increase of $11 per month.
- As proposed, the residential customer charge would increase to $28 per month, from its current $15.51 per month.
- The customer charge, which is separate from energy usage, recovers a portion of fixed operating costs, such as customer accounting and services, as well as costs associated with meters and service lines.
How we’re supporting our customers
We recognize the impact of rising energy bills for our customers. That’s why we continually look for ways to control costs and increase efficiency.
Our work to help customers includes:
- Increasing our efforts to provide support for customers, including launching a new Energy Assistance team to help our most vulnerable customers access programs and resources to help make their bills more affordable
- Supporting energy assistance programs in Arkansas through financial contributions and by educating customers on assistance options. For more information visit blackhillsenergy.com/assistance.
- Providing Budget Billing, a free payment plan that averages the amount owed each month, which is a great way to avoid seasonal spikes in bills
- Helping customers save money and energy through energy efficiency programs, energy-saving tips and rebates. Learn more at blackhillsenergy.com/ready.
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.
Frequently asked questions
What is a rate review?
Utilities periodically review customer rates to align with the actual cost of delivering natural gas service – this includes operating costs, capital investments and other system expenses. As a regulated public utility, Black Hills Energy must work with the Arkansas PSC to request review and approval for any change to tariffs or rates.
Black Hills Energy will follow the Commission’s formal process to recover allowable costs and system investments necessary to meet our responsibility to provide safe, reliable natural gas service for our customers. The Commission will review our request and consider perspectives from stakeholders.
Why are you requesting a rate update?
Our most important responsibility is providing safe, reliable natural gas service to our Arkansas customers and communities. Black Hills Energy serves over 189,000 natural gas customers in Arkansas. It's our responsibility to consistently and prudently invest in the safety and resilience of our system.
Why now?
We’ve made significant investments in our system since our last rate review in 2023. We are seeking recovery of approximately $147 million invested on behalf of our Arkansas customers for safety, reliability, system integrity and customer additions.
How will this rate update impact customer bills?
As proposed, the average residential customer would see a monthly bill increase of about $11.
When will new rates take effect?
The rate review process is complex, and it will be many months before Black Hills Energy’s rate application is finalized as it must be reviewed and approved by the Arkansas PSC. If approved, new rates would take effect in the second half of 2026.
What is Black Hills Energy doing to control costs?
We are committed to managing our costs and making prudent investments on behalf of customers to deliver safe, reliable natural gas at a good value. We continually look for ways to control costs and increase efficiency. Some of the steps taken include improvements in customer service, automating and standardizing processes and using work management and dispatching software for more efficient routing and dispatching of technicians.