Request includes federal and state tax reform credit for customers
WICHITA, Kan. – May 7, 2021 – Black Hills Energy today submitted a rate review application to the Kansas Corporation Commission (KCC) requesting an increase in rates and renewal of its Gas System Reliability Surcharge (GSRS) to continue to fund accelerated, safety-focused pipeline replacement across the state. As part of the request, Black Hills Energy also seeks to provide the benefit of recent state and federal tax reform to its 117,000 customers in 65 Kansas communities.
“Kansans deserve safe and reliable natural gas. That’s why we’ve been updating natural gas lines throughout the state to deliver resilient service to our customers,” said Black Hills Energy Kansas General Manager Jerry Watkins. “As a result, we’ve made significant improvements to our system since our last rate review almost seven years ago.”
Black Hills Energy has invested approximately $130 million in Kansas since 2014 for safety, reliability, system integrity and customer additions. In accordance with state law, the company is required to periodically file a rate review application with the KCC to continue to recover safety and reliability investments through the GSRS, which is set to expire. In addition to Black Hills Energy’s request to continue its GSRS, the company is requesting $5.3 million in new annual revenue.
As part of this rate review application, Black Hills Energy is proposing to provide customers additional benefits from recent federal and state tax reform. The company previously passed along tax benefits on two separate occasions, one beginning in 2018 and one earlier in 2021 to reflect lower federal and state corporate tax rates, which benefitted customers and resulted in over $8 million for customers.
“Our efficient management and GSRS recovery have allowed us to delay a rate review for many years. This rate review is necessary to continue prioritizing customer needs by completing pipeline safety and reliability system needs under the GSRS that is set to expire,” Watkins said. “This timing also works well for customers to receive tax reform benefits to help offset costs being requested for recovery.”
The investments that Black Hills Energy has made in modern pipeline materials for Kansas customers have also contributed to more than a one-third reduction in greenhouse gas emissions intensity for the company’s pipeline system since 2005. Renewal of the rider will not only support the company’s efforts for safety and reliability but also its clean energy goals for reducing greenhouse gas emissions.
As proposed, the average residential customer bill would increase by $2.27 per month, or approximately 4.5%. The figures are based on an average monthly use of 56 therms and will vary, based on rate class, load factors and total usage. The rate review does not affect the cost of the natural gas delivered by Black Hills Energy or natural gas costs related to Winter Storm Uri.
Customers who would like information about saving energy or bill payment assistance should call Black Hills Energy at 888-890-5554 or visit www.blackhillsenergy.com/assistance. For more information about this rate review, please visit www.blackhillsenergy.com/Kansas.