Colorado gas regulatory rate review
We’ve filed a rate review application with the Colorado Public Utilities Commission (CPUC) requesting an increase of $26.7 million in base rates to recover the necessary capital infrastructure and operational costs required to enable safe, reliable natural gas service for customers in Colorado. We’re also seeking to help protect customers from regional price spikes by introducing a Colorado state-wide natural gas cost adjustment to be implemented over a two-year period.
Why is Black Hills energy seeking a rate increase?
We invest millions of dollars each year to safely operate, maintain and update more than 10,000 miles of gas system infrastructure, which provides critical and reliable energy to more than 208,000 Colorado households and businesses in 105 communities from Delta to Dacono.
These investments not only fulfill our obligation to meet our customers’ growing energy needs, but also allow us to do our part to meet the state of Colorado’s climate goals and comply with state and federal regulations governing safety and reliability.
In order to maintain that high level of both safety and service along with financial health, the company must occasionally ask the Colorado Public Utilities Commission to allow the company to recover costs involved with operating a robust natural gas system.
If approved as filed, residential customers would see an average increase in their monthly bill of about 6% or $6, while small commercial customers would see a monthly increase of about 10% or $21.
All customers have been notified by email or mailed letter of the proposed changes.
Will rate changes impact how much we pay for the natural gas itself?
No. Usage is a primary factor in energy bills, and outdoor temperature is a key driver in determining how much natural gas customers use to heat their homes and businesses. The cost of natural gas comprises a significant portion of the bill. That cost is a direct pass-through to customers, without markup. The gas cost adjustment items on the bill are adjusted up or down each November to ensure charges cover the cost of gas delivered to customers. The cost of natural gas is passed along to all customers on a dollar for dollar basis.
To help hold down costs, we buy a portion of physical gas supply on a set price basis for the November to March heating season. We also purchase gas through short-term contracts and, when necessary, on the open market.