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Reliable Colorado

Colorado gas regulatory rate review

On June 1, 2021, Black Hills Colorado Gas (BHCG) submitted a proposal to the Colorado Public Utilities Commission (CPUC) asking to recover enhancements made in safety, reliability and system integrity for natural gas service to our 194,000 Colorado customers. The outcome of these procedures can result in rates changes.

Below are a few details around those changes and how you may be impacted.

 

Why is Black Hills Energy seeking a rate increase?

Year after year, Black Hills Energy consistently invests in replacing, upgrading and maintaining our more than 7,000 miles of natural gas transmission and distribution pipelines in Colorado — critical infrastructure required to provide necessary safe and reliable delivery of natural gas to customers’ homes and businesses while meeting the needs of our growing communities. From July 2018 through the end of 2020, Black Hills Energy will have invested $144 million to continue providing customers safe, efficient and reliable energy.   

 

What changes Black Hills Energy proposing?

The Company proposes changes in the base rates for gas sales and transportation services affecting all customers. All rate schedules for gas sales and transportation service are revised for this purpose. 

Settlement with Parties

On Oct. 5, Black Hills Energy reached an agreement with all parties to the rate review. The settlement agreement is contingent upon final review and approval by the administrative law judge and the Colorado Public Utilities Commission.  If approved, the average residential and small commercial customer monthly bill impacts shown below are anticipated to go into effect on January 1, 2022.

Average Residential Customer Monthly Bill Impact

Base Rate
Area
GCA Region Current
Average
Monthly
Bill
Direct
Average
Monthly
Bill
Settlement
Average
Monthly Bill
Direct
Monthly
Change
Direct
Percentage
Change
Settlement
Monthly
Change
Settlement
Percentage
Change
1 North/Southwest $75.84 $81.27 $78.73 $5.43 7.2% $2.89 3.8%
1 Western Slope - Without Storage $81.51 $86.94 $84.40 $5.43 6.7% $2.89 3.5%
1 Western Slope - With Storage $85.84 $91.28 $88.73 $5.44 6.3% $2.89 3.4%
2 Central $52.92 $66.24 $59.14 $13.32 25.5% $6.22 11.8%
2 North/Southwest $63.39 $76.71 $69.61 $13.32 21.0% $6.22 9.8%
3 Central $55.77 $60.38 $57.45 $4.61 8.3% $1.68 3.0%

Average Small Commercial Customer Monthly Bill Impact

Base Rate
Area
GCA Region Current
Average
Monthly
Bill
Direct
Average
Monthly
Bill
Settlement
Average
Monthly Bill
Direct
Monthly
Change
Direct
Percentage
Change
Settlement
Monthly
Change
Settlement
Percentage
Change
1 North/Southwest $148.85 $152.88 $148.85 $4.03 2.7% $0.00 0.0%
1 Western Slope - Without Storage $160.73 $164.76 $160.73 $4.03 2.5% $0.00 0.0%
1 Western Slope - With Storage 169.80 $173.82 $169.80 $4.02 2.4% $0.00 0.0%
2 Central $106.24 $127.66 $116.88 $21.42 20.2% $10.64 10.0%
2 North/Southwest $130.73 $152.15 $141.37 $21.42 16.4% $10.64 8.1%
3 Central $81.38 $86.02 $82.70 $4.64 5.7% $1.32 1.6%

The Company is also proposing to:

  1. reclassify the Small Volume and Large Volume rate schedules into Large Commercial;
  2. discontinue interruptible sales services;
  3. discontinue residential transportation service;
  4. add Small Commercial Transportation Service to base rate area 3 for conformity;
  5. add the Monthly Administrative Charge for transportation customers in base rate area 3; and
  6. provide additional textual changes of a clarifying or housekeeping nature.  

The Customers are notified via either email or paper copy in accordance with the Public Utilities Law. The copy of the Customer Notice can be found here.

 

What is a rate review?

The CPUC regulates all public utilities, including Black Hills Energy. In order to change rates for service, we must request approval from the CPUC. Filing for a rate review with the CPUC is the standard process for a public utility to recover costs and investments and make changes to its tariffs or governing documents.

We’ve followed the CPUC’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.

 

When will new policies and rates take effect?

We anticipate new rates will go into effect March 2022.

 

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.

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.

 

How will the CPUC decision impact my rates?

New rates will vary by customer class and location. Changes for commercial customers will vary, based on rate class and total usage. The projected impacts on typical monthly bills are shown in the tables below.


Table 1 - Average residential customer monthly bill impact

Base rate area GCA region and communities serviced current average monthly bill proposed average monthly bill monthly change percent change
1 Western Slope Without Storage GCA Region
Communities located in Delta, Eagle, Garfield, Montrose, Ouray, Pitkin, and San Miguel counties, including the towns of Delta, Glenwood Springs, Hotchkiss, Montrose, Olathe, Paonia, and Telluride
$81.51 $86.94 $5.43 6.7%
1 Western Slope With Storage GCA Region
Communities located in Eagle, Garfield, and Pitkin counties, including the towns of Aspen, Carbondale, and Eagle
$85.85 $91.28 $5.43 6.3%
1 North/Southwest GCA Region
Communities in Larimer and Weld counties, including the towns of Dacono, Erie, Firestone, Frederick, and Wellington
$75.84 $81.27 $5.43 7.2%
2 Central GCA Region
Communities in Bent, Crowley, and Otero counties, including the towns of Fowler, La Junta, Las Animas, Rocky Ford, and Swink
$52.93 $66.24 $13.31 25.1%
2 North/Southwest GCA Region
Communities in Cheyenne, Logan, Morgan, Phillips, Sedgwick, Washington, Weld, Archuleta, La Plata, Minteral and Yuma counties, including the towns of Akron, Wray Pagosa Springs, Bayfield, and Yuma
$63.40 $76.71 $13.31 21.0%
3 Central GCA Region
Castle Rock south to Monument, Fountain, Woodland Park, east to Kiowa, Limon and burlington, and the surrounding areas to these communities
$55.78 $60.38 $4.60 8.2%

 

 

Table 2 - Average small commercial customer monthly bill impact

Base rate area GCA region and communities serviced current average monthly bill proposed average monthly bill monthly change percent change
1 Western Slope Without Storage GCA Region
Communities located in Delta, Eagle, Garfield, Montrose, Ouray, Pitkin, and San Miguel counties, including the towns of Delta, Glenwood Springs, Hotchkiss, Montrose, Olathe, Paonia, and Telluride
$160.73 $164.76 $4.03 2.5%
1 Western Slope With Storage GCA Region
Communities located in Eagle, Garfield, and Pitkin counties, including the towns of Aspen, Carbondale, and Eagle
$169.79 $173.82 $4.03 2.4%
1 North/Southwest GCA Region
Communities in Larimer and Weld counties, including the towns of Dacono, Erie, Firestone, Frederick, and Wellington
$148.85 $152.88 $4.03 2.7%
2 Central GCA Region
Communities in Bent, Crowley, and Otero counties, including the towns of Fowler, La Junta, Las Animas, Rocky Ford, and Swink
$106.24 $127.66 $21.42 20.2%
2 North/Southwest GCA Region
Communities in Cheyenne, Logan, Morgan, Phillips, Sedgwick, Washington, Weld, Archuleta, La Plata, Minteral and Yuma counties, including the towns of Akron, Wray Pagosa Springs, Bayfield, and Yuma
$130.73 $152.15 $21.42 16.4%
3 Central GCA Region
Castle Rock south to Monument, Fountain, Woodland Park, east to Kiowa, Limon and burlington, and the surrounding areas to these communities
$81.38 $86.02 $4.64 5.7%

 

 

 

Table 3 – Average monthly bill impacts - small commercial transportation customers

Base rate area GCA region and communities serviced current average monthly bill proposed average monthly bill monthly change percent change
1 Western Slope Without Storage GCA Region
Communities located in Delta, Eagle, Garfield, Montrose, Ouray, Pitkin, and San Miguel counties, including the towns of Delta, Glenwood Springs, Hotchkiss, Montrose, Olathe, Paonia, and Telluride
$225.01 $231.07 $6.06 2.7%
1 Western Slope With Storage GCA Region
Communities located in Eagle, Garfield, and Pitkin counties, including the towns of Aspen, Carbondale, and Eagle
$225.01 $231.07 $6.06 2.7%
1 North/Southwest GCA Region
Communities in Larimer and Weld counties, including the towns of Dacono, Erie, Firestone, Frederick, and Wellington
$230.52 $236.58 $6.06 2.6%
2* Central GCA Region
Communities in Bent, Crowley, and Otero counties, including the towns of Fowler, La Junta, Las Animas, Rocky Ford, and Swink
$88.40 $92.00 $3.60 4.1%
2* North/Southwest GCA Region
Communities in Cheyenne, Logan, Morgan, Phillips, Sedgwick, Washington, Weld, Archuleta, La Plata, Minteral and Yuma counties, including the towns of Akron, Wray Pagosa Springs, Bayfield, and Yuma
$88.40 $92.00 $3.60 4.1%
3* Central GCA Region
Castle Rock south to Monument, Fountain, Woodland Park, east to Kiowa, Limon and burlington, and the surrounding areas to these communities
N/A $83.00 N/A N/A

*There are currently no Small Commercial Transportation customers in these rate areas.

Summaries of the current and proposed rates are provided in Tables 4 and 5.

Table 4 - Base Rate Changes for Sales Customers

Base Rate Area Rate Schedule Current Monthly Customer Charge Proposed Monthly Customer Charge Current Volumetric Charge ($/therm) Proposed Volumetric Charge ($/therm)
1 R-1 $10.28 $17.00 $0.21334 $0.19841
SC-1 $20.57 $24.00 $0.17473 $0.17803
LC-1 $93.49 $98.00 $0.14435 $0.14932
I/S-1 $168.28  $147.00 $0.08629  $0.06391
2 R-2 $11.70  $16.00  $0.24224  $0.38093 
SC-2 $23.40  $27.00  $0.16664  $0.28382 
LC-2 $117.02  $114.00  $0.13633  $0.20189 
I/S-2 $46.81  $50.00  $0.08215  $0.22117 
3 R-3 $9.44 $13.00 $0.13316 $0.14478
SC-3 $14.16 $18.00 $0.13316 $0.13920
SVF-3, SVI-3 $70.78 Reclassed to LC-3 $0.10421 Relcassed to LC-3
LVF-3, LVI-3 $235.95 Reclassed to LC-3 $0.08682 Relcassed to LC-3
LC-3 N/A $74.00 N/A $0.08933
I/S-3 $28.31 $45.00 $0.10184 $0.07559

Table 5 –Base Rate Changes for Transportation Customers

Base Rate Area Rate Schedule Current Administrative Charge Proposed Administrative Charge  Current Volumetric Charge ($/therm) Proposed Volumetric Charge ($/therm) Current Monthly Customer Charge Proposed Monthly Customer Charge
1 RTS-1 $50.00 Moved to SCTS-1 $0.21334 Moved to SCTS-1 $10.28 Moved to SCTS-1
SCTS-1 $50.00 $50.00 $0.17473 $0.17803 $20.57 $24.00
LCTS-1 $50.00 $50.00 $0.14435  $0.14932  $93.49  $98.00 
I/STS-1 $50.00 $50.00 $0.08629  $0.06391  $168.28  $147.00 
2 RTS-2 $50.00 Moved to SCTS-2 $0.24224  Moved to SCTS-2 $11.70  Moved to SCTS-2
SCTS-2 $50.00 $50.00 $0.16664  $0.28382  $23.40  $27.00 
LCTS-2 $50.00 $50.00 $0.13633  $0.20189  $117.02  $114.00 
I/STS-2 $50.00 $50.00 $0.08215  $0.22117  $46.81  $50.00 
3 SCTS-3 N/A $50.00  N/A $0.13920  N/A $18.00 
LCTS-3 $0.00  $50.00  $0.08682  $0.08933  $235.95  $74.00 
I/STS-3 $0.00  $50.00  $0.10184  $0.07559  $28.31  $45.00 

 

What is Black Hills Energy doing to control costs?

We’re committed to controlling costs and making responsible investments to deliver safe, reliable natural gas at a good value.   We use technology and embrace process improvements to hold down costs and work more efficiently, while retaining our commitment to safety and reliability.

 

Is there anything I can do to reduce my natural gas bill?

There are many things you can do to save money and energy in your home.  And you won’t have to sacrifice comfort.  For example:

  • Replace old, inefficient appliances, furnaces and water heaters with energy-efficient natural gas appliances with the Energy Star designation. 
  • Add insulation and seal out drafts around doors and windows. 
  • Learn more at https://www.blackhillsenergy.com/efficiency-and-savings

 

Does Black Hills Energy have energy assistance programs? 

Yes, Black Hills Energy offers many programs to help customers manage their bills. 

  • Our budget billing level payment plan is a payment option that takes seasonal peaks out of the customer’s bill for a more even monthly payment. This is a free service for residential customers. The customer monthly balance is calculated based on the average of the previous 12 months’ actual bills. 
  • Customers who experience trouble paying their bills are encouraged to contact us at our 24/7 customer service number as soon as they think they may be experiencing financial difficulties to discuss payment arrangements. 
  • Customers can consider joining Black Hills Energy in providing energy assistance through the company’s Black Hills Cares program. Black Hills Energy matches donations from customers and employees to Black Hills Cares, and forwards the funds to Energy Outreach Colorado for distribution throughout the state. Customers can designate one-time or monthly donation(s) to Black Hills Cares on their bill stub, or by going to www.blackhillsenergy.com. 

Learn more about Colorado Public Utilities