Black Hills Energy asks for $44 million rate increase

Rapid City, S.D.-based utility Black Hills Energy is seeking a $44 million rate increase that will add about $15 to average monthly bills for its Arkansas residential customers, according to a Monday (Dec. 4) news release. If approved, the rates are expected to go into effect in the fourth quarter of 2024.

The utility is seeking an increase to recover operational and infrastructure costs. A rate review application has been filed with the Arkansas Public Service Commission, which determines whether the increase will go into effect. The expected increase for residential customers is based on average monthly usage of 53 Ccf (hundred cubic feet). The rate increase for commercial customers will vary based on rate class, load factors and usage.

“We strive to keep bills as low as possible, and we also take very seriously our responsibility to keep our customers safe and warm by providing reliable energy,” said Marc Eyre, vice president of operations at Black Hills Energy in Arkansas. “The proposed change in our service rates will enable use to continue investing in critical infrastructure and meet the needs of our growing communities, while continuing to prudently manage increased costs to operate a safe and sustainable system and serve customers.”

Since 2021, Black Hills Energy has invested about $130 million in infrastructure in Arkansas, the release shows. The utility has more than 184,000 customers and 7,200 miles of transmission and distribution pipelines in the state.

The investments have supported an increase in customers amid rapid development in Northwest Arkansas and industrial growth in northeast Arkansas. Investments included pipeline replacement with lower emitting materials, replacing meters with advanced technology and increasing natural gas capacity in growing areas. Safety projects comprised safe digging education, outreach and enforcement support.

“These investments not only fulfill our obligation to meet our customers’ growing energy needs but also allow us to meet regulations governing safety and reliability,” Eyre said. “In order to maintain the high level of safety and service our customers rely on, the company must ask the Arkansas Public Service Commission to allow the company to recover costs involved with operating a robust natural gas system.”

In winter 2025, Black Hills Energy plans to refund customers for excess deferred income taxes. This winter, customers can expect lower natural gas costs because of stability in the natural gas market as a result of high production and storage levels. According to the news release, the proposed rate increase won’t affect the natural gas cost, which is adjusted twice annually in Arkansas. Natural gas prices are a pass-through cost without any markup from Black Hills Energy.

Black Hills Energy serves more than 1.3 million natural gas and electric utility customers in eight states, including 100 communities in Arkansas.