Winter storm FAQs on supply and pricing
Did the extreme cold impact Black Hills Energy and its customers?
Black Hills Energy stood ready to respond to dramatic increases in customer energy demand on our electric and natural gas infrastructure. Our team members continually monitored energy supply and adjusted as needed to support system integrity and meet extraordinary customer demand.
While widespread customer demand for energy increased, our teams continued to deliver the most cost-effectively priced energy available. Our safe and reliable gas and electric infrastructure across our eight-state footprint performed well during this historic event.
What was the initial response?
Black Hills Energy’s planning began far ahead of the event with careful consideration that sufficient energy supply would be available during extreme cold and dangerous temperatures. As the cold set in and customer demands for energy increased, our teams continued to deliver the most cost-effectively priced energy available. As the event progressed, we requested that our large volume natural gas customers begin curtailing load to ensure overall system reliability. We communicated with all customers via email and direct outreach on limiting their energy use, as well as providing that information over web and social media postings for the following week.
Was Black Hills Energy prepared for such an event?
Black Hills Energy prepares for all emergency situations, including extreme weather. We have a plan in place and will execute that plan in partnership with local officials, state agencies, local employees, and employees from other states to provide customers the safe, reliable energy they’ve come to expect. We continually invest in safe and reliable infrastructure to prepare for periods of peak usage and we do request certain large volume and ‘interruptible use’ customers, during these types of events, to decrease usage as needed to allow our residential customers to continue receiving service.
How is Black Hills Energy preventing this from happening again in the future?
Our teams will continue to assess and learn from this event and will continue to be proactive in our communications as new information develops.
What was different about this storm?
This record-breaking winter event contributed to dramatic increases in natural gas prices, the largest price increases in more than twenty years. Extraordinary utility costs can occur when the demand for energy increases beyond reasonable available supplies. Therefore, we have experienced significant commodity cost increases from suppliers due to extremely high demand and natural gas production interruptions.
What was done to respond and minimalize impacts?
We responded to this event with initial calls for large volume customer usage curtailments that began on February 12, 2021 and extended throughout the duration of this record-breaking weather event to maintain the overall and ongoing reliability of our system.
Will there be a massive increase in rates?
As we look to the recovery phase of this weather incident, we remain committed to reasonable energy increases. The impact to our customers is under review, as actual usage and billing timing must be confirmed and measured to provide an accurate impact to customer bills. This information is expected to be available in the weeks ahead.
How long will this impact my bill?
Customers can expect to see an increase in March bills directly related to their increased consumption of energy in February. This increase would be attributed to the additional usage as a result of extreme temperatures, and not related to the increased natural gas prices during the winter event. We will work closely with the Public Service Commission to determine the best path forward to manage the long-term impact of increased natural gas pricing for our customers, which will take more time.
My thermostat was at the same temperature it always is, why was my bill so much higher?
Due to the extreme temperatures, your furnace and other appliances had to run more frequently and for longer periods of time to keep the temperature in your home at your thermostat setting, therefore using more energy than it would in milder weather conditions. Generally, the smaller the difference between the indoor and outdoor temperatures, the lower your overall heating or cooling cost.
What assistance options are available to help pay my bill?
Customers worried about affording their bill are encouraged to enroll in Budget Billing, a free payment plan that averages the amount you pay each month. This budget option supports customers looking to avoid the seasonal increases in bills that result during extreme weather by averaging out usage during the past year. Customers can also seek out other assistance options such as United Way’s 211 to get access to emergency utility assistance services like Black Hills Cares, by visiting the Assistance Programs page on our website.
Natural Gas FAQ
How will the extreme cold affect my natural gas bill?
Extraordinary costs occurred when demand increases went beyond reasonable supplies. Our natural gas system held up well, but we have experienced significant commodity cost increases from our suppliers due to extremely high demand and natural gas production interruptions.
Are the high prices being seen across the country?
Our team of gas supply experts are working diligently to limit the impacts to our customers, but all states and the utilities impacted by the winter storms will witness increases in bills related to the significant increase in usage and gas prices. In addition, market prices in Feb. 2021 are seeing unprecedented increases that will impact our customers as we meet our ongoing obligations to provide critical service in extreme weather.
Does Black Hills Energy make a profit on the gas going to customers?
No. The cost of a customer’s natural gas is passed on to our customers with no mark-ups. Our Gas Supply team continuously plans to prepare for abnormal demand and price changes to help minimize the financial impact to our customers by implementing a portfolio of gas purchase options. The current arctic event has caused the largest natural gas price increases in the last twenty years.
(NE & WY) Choice Gas Customers will need to contact their suppliers to understand any impact to their natural gas commodity pricing.
How will the extreme cold affect my electric bill?
Usage is the largest portion of our energy bills and weather is the biggest factor in increased usage. When temperatures are exceptionally low and usage increases dramatically across the country, the law of supply and demand can create a temporary increase in commodity prices. Our system held up well with limited issues, but also saw pricing increases in order to meet the increased demand of our customers and subsequent energy usage. Some areas witnessed two-to-three times the price of electricity than other areas of the country.
The Southwest Power Pool seemed to have some of the biggest issues and were implementing controlled interruptions across their service territory. Is Black Hills Energy associated with the SPP?
Black Hills Energy is not a member of SPP, and, our electric customers did not experience the rolling blackouts that were implemented in many other states.
What will Black Hills Energy do to support those in need of help paying their bills?
The easiest way for families to access emergency assistance funds is to call their state 211, and a representative will connect them with a utility assistance case worker in their area.
Customers in the Black Hills Energy service territory are eligible for Black Hills Cares funds, a utility assistance program made possible by donations from fellow customers and employees. The Black Hills Energy Foundation matches those donations at 100%.
Budget Billing is a free, stable payment option offered by Black Hills Energy that makes bills more predictable by averaging the amount you pay each month so you can avoid spikes in a bill caused by seasonal anomalies.