CHEYENNE, Wyo., Dec. 2, 2013 - Black Hills Corp. (BKH) subsidiary Cheyenne Light, Fuel and Power today filed rate requests with the Wyoming Public Service Commission to increase the utility`s electric and natural gas system revenues to recover investments in electric and natural gas infrastructure, including the Cheyenne Prairie Generating Station.
If approved as filed, the new electric and natural gas rates will generate an estimated $14 million per year in additional revenue, based on an aggregate capital structure of 54 percent equity and 46 percent debt. The filing seeks a return on equity of 10.25 percent for investments the company has made in its electric and natural gas systems. The primary component of the electric filing is Cheyenne Light`s portion of construction and operating costs for a new generating station.
The $222 million Cheyenne Prairie Generating Station is under construction in Cheyenne and will be co-owned by Cheyenne Light and another Black Hills Corp. utility, Black Hills Power.
"Our goal is to provide cost-effective energy for our customers while delivering an appropriate return for our investors," said Linn Evans, Black Hills Corp.`s president and chief operating officer of utilities. "These investments ensure our customers can continue to depend on us for safe, reliable electric and natural gas service that supports continued community growth and the increasing demand for energy."
Cheyenne Light seeks to recover a return on its $127 million share of the new plant and associated infrastructure and recover its share of operating expenses. Black Hills Power, an electric service provider to the Black Hills region of South Dakota and Wyoming, will file a request within the next several months to recover a return on its approximately $95 million share of the plant.
"The Cheyenne Light/Black Hills Power partnership benefits customers of both utilities, in part by creating economies of scale that share construction and operating costs for the 132-megawatt Cheyenne Prairie Generating Station," Evans said. "Natural gas fired generation has relatively low air emissions and is an effective solution to meeting increasingly strict U.S. Environmental Protection Agency air emission standards."
The Cheyenne Light rate requests seeks to implement the natural gas and electric rate increases when the plant is placed into service, scheduled for Oct. 1, 2014. The Wyoming PSC and its staff will conduct an extensive review of the rate plans, a process that considers public comments and includes testimony from utility representatives, the Wyoming Office of Consumer Advocate and other interested parties.
Cheyenne Light will provide periodic rate case updates at www.reliableclfp.com, and company information is always available at www.cheyennelight.com and www.blackhillscorp.com. You can also find helpful information at Cheyenne Light`s Facebook page and Twitter feed.
Cheyenne Light, Fuel & Power Company
Cheyenne Light, Fuel & Power Company, a subsidiary of Black Hills Corp., serves 40,000 electric customers and 35,000 natural gas customers in the greater Cheyenne, Wyo., area.
Black Hills Corporation
Black Hills Corp. (BKH), a growth-oriented, vertically-integrated energy company with a tradition of exemplary service and a vision to be the energy partner of choice, is based in Rapid City, S.D. The company serves 769,000 natural gas and electric utility customers in Colorado, Iowa, Kansas, Montana, Nebraska, South Dakota and Wyoming. The company generates wholesale electricity and produces natural gas, oil and coal. Black Hills` 1,925 employees partner to produce results that are improving life with energy. More information is available at www.blackhillscorp.com.
Caution Regarding Forward Looking Statements
This news release includes "forward-looking statements" as defined by the Securities and Exchange Commission, or SEC. We make these forward-looking statements in reliance on the safe harbor protections provided under the Private Securities Litigation Reform Act of 1995. All statements, other than statements of historical facts, included in this news release that address activities, events or developments that we expect, believe or anticipate will or may occur in the future are forward looking statements, including our ability and the timing of receiving regulatory approval to recover our operating costs and a return on our investments. These forward-looking statements are based on assumptions which we believe are reasonable based on current expectations and projections about future events and industry conditions and trends affecting our business. However, whether actual results and developments will conform to our expectations and predictions is subject to a number of risks and uncertainties that, among other things, could cause actual results to differ materially from those contained in the forward-looking statements, including the factors discussed above, our ability to obtain adequate cost recovery for our utility operations through regulatory proceedings and the timing in which new rates would go into effect, the risk factors described in Item 1A of Part I of our 2011 Annual Report on Form 10-K filed with the SEC, and other reports that we file with the SEC from time to time.
New factors that could cause actual results to differ materially from those described in forward looking statements emerge from time-to-time, and it is not possible for us to predict all such factors, or the extent to which any such factor or combination of factors may cause actual results to differ from those contained in any forward-looking statement. We assume no obligation to update publicly any such forward-looking statements, whether as a result of new information, future events or otherwise.
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Source: Black Hills Corporation via GlobeNewswire