- Oops!Something went wrong.Please try again later.
Settlement agreement allows statewide customer rates and $11.1 million revenue increase
LINCOLN, Neb., Jan. 26, 2021 (GLOBE NEWSWIRE) -- Black Hills Corp. (NYSE: BKH) today announced that its Nebraska natural gas utility, Black Hills Nebraska Gas, LLC, doing business as Black Hills Energy, received approval from the Nebraska Public Service Commission of a settlement agreement providing the company a general rate increase and allowing consolidation of its base rates and tariffs.
The commission’s approval is the final step in Black Hills’ utility jurisdiction consolidation process in Nebraska. Previously, Black Hills received approval and legally consolidated its two natural gas utilities in the state. This settlement agreement allows Black Hills Energy to establish statewide uniform customer rates and consolidate general tariffs.
“This approval is an important step toward simplifying how we operate our natural gas utilities in Nebraska,” said Linn Evans, president and CEO of Black Hills Corp. “Our consolidation effort will improve customer service and reduce the complexity and number of rate reviews and other regulatory filings.”
Black Hills Energy has invested more than $450 million in its 13,000-mile natural gas pipeline system in Nebraska since its last general rate filing 12 years ago in 2009. These investments include replacing, upgrading and maintaining more than 500 miles of natural gas transmission and distribution pipeline to serve approximately 300,000 customers in over 300 communities throughout the state. Not only have these investments in modern pipeline material improved safety and reliability for customers, they have contributed to more than a one-third reduction in greenhouse gas emissions intensity for the company’s pipeline system since 2005.
The approved settlement will shift approximately $4.6 million of rider revenue to base rates and will generate an estimated $6.5 million in new annual base rate revenues starting March 1, 2021, to recover Black Hills Energy’s investments in utility infrastructure and increased operating expenses. The new revenue is based on a return on equity of 9.5% and a capital structure of 50% equity and 50% debt.
The approved settlement agreement also allows Black Hills Energy to renew and expand its System Safety and Integrity Rider across all its Nebraska service area to recover the costs of safety infrastructure projects during the next five years.
Black Hills Corporation
Black Hills Corp. (NYSE: BKH) is a customer focused, growth-oriented utility company with a tradition of improving life with energy and a vision to be the energy partner of choice. Based in Rapid City, South Dakota, the company serves 1.28 million natural gas and electric utility customers in eight states: Arkansas, Colorado, Iowa, Kansas, Montana, Nebraska, South Dakota and Wyoming. More information is available at www.blackhillscorp.com.
Jerome E. Nichols
24-Hour Media Relations Line
Caution Regarding Forward Looking Statement
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 anticipated revenues from the new rate increase and our ability to realize efficiencies in regulatory processes and deliver an appropriate return to investors. 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, the risk factors described in Item 1A of Part I of our 2019 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.