• Black Hills Energy
LAWRENCE – Black Hills Energy’s Kansas natural gas utility today filed a request with the Kansas Corporation Commission to recover increased operating expenses and infrastructure investments through a rate increase amounting to about 13 cents a day for the typical residential customer, beginning in February 2015.
It has been eight years since Black Hills Energy requested a rate increase, an achievement the company attributes to effective cost management and process improvement practices. Natural gas service for the typical Black Hills Energy residential customer costs less per day than a loaf of bread, and the percentage increase proposed for the typical residential bill is substantially lower than the annual rate of inflation since the previous increase.
“Natural gas remains a good value,” said Lon Meyer, director of business operations for Black Hills Energy’s Kansas natural gas utility. “We’re committed to controlling costs and making responsible investments so that our customers can count on us for safe, reliable natural gas service at a reasonable price.”
Black Hills Energy has invested $50.8 million in its natural gas system since late 2006. The utility’s 111,000 customers in 64 Kansas communities already receive the benefits of those investments.
Consistent with the standard rate-making process, the KCC and its staff will thoroughly review the utility’s request and carefully consider public comments and testimony from the Citizens’ Utility Ratepayers Board, Black Hills representatives and other interested parties.
The rate request pertains only to delivery costs – less than half the typical bill. Most of a customer’s bill reflects the cost of natural gas, especially in winter, when usage levels are higher. Gas costs are passed through to customers without markup.
Meyer said Black Hills Energy seeks to limit those costs for its customers, buying natural gas for storage when demand is low, locking in lower rates through advantageous purchasing contracts and in other ways. While usage levels and the cost of natural gas can fluctuate considerably from month to month, service and operating costs are relatively constant throughout the year and far less influenced by how much natural gas is used.
Black Hills proposes to take some of the sting out of higher winter bills by reducing the volume-based delivery charge and distributing service costs out more evenly throughout the year by increasing the fixed monthly service charges. The overall result would be an increase to the typical residential bill of about $4.17 a month. Rates for commercial and industrial customers vary, based on rate class and annual consumption.
“We maintain top-tier service levels,” Meyer said. “The demand for energy is rising, and we want to help our customers save money by providing the tools they need to reduce consumption without sacrificing comfort.”
Black Hills Energy offers programs, services and information to help customers manage their account and use energy wisely. Options available at no additional charge include a level payment plan for a more consistent bill, email alerts and online bill presentment. The company recently added a bank transfer option for making a one-time payment, setting up recurring payments and viewing or canceling a pending payment – all without a service fee.
“We use the latest technologies to work more efficiently and contain costs,” Meyer said. “Our wireless meter reading system reduced operating costs by making meter-reading vehicles obsolete, and we just added a QR code to our bills to include a smartphone payment option that reduces manual and mechanical processes.”
Meyer suggests visiting www.blackhillsenergy.com and www.blackhillscorp.com for company information and enrollment options, rate request updates and tips to save money by saving energy.
Black Hills Energy’s residential customers can enter how much energy they use into a calculator at www.blackhillsenergy.com/reliableks to see the results of the proposed rate increase. Information also can be found on Black Hills Energy’s Facebook page and Twitter feed, or by calling a customer service representative at 888-890-5554.