Rate hike proposed — Black Hills Energy seeks 1st base rate increase in a decade

Black Hills Energy filed a request March 18 with the Wyoming Public Service Commission to update its electric base rates for customers in northeast Wyoming, beginning a formal review process in which the commission will evaluate whether the proposed rates are justified.

If the commission approves the increase, new rates may go into effect in early 2027, David Bush, governmental affairs manager for Wyoming, said in a March 19 email.

He said the request is intended “to recover critical system costs needed to support the safe and reliable delivery of electricity to our customers in northeast Wyoming served by our Black Hills Power electric system.”

Bush said the company’s electric base rates have not changed in more than a decade and that rate stability is a priority.

He said the request reflects the approximately $60.5 million Black Hills Energy has invested since its last rate filing, which was in 2014, “to ensure Wyoming customers have the safe and reliable energy they need to power their lives.”

“We are requesting this rate review because it’s necessary for us to update rates to account for the critical investments made to our system over the past 12 years to strengthen the electric grid, maintain reliability, and reduce wildfire risk,” Bush said. “This also accounts for increased operating costs to serve our customers.”

If approved, the proposal would raise residential customers’ monthly bills by an average of about $33, or approximately 32%, based on usage of 650 kilowatt-hours. Bush said that equates to about a 3% annual increase over the 12 years since rates were last adjusted.

The effect on commercial customers would vary depending on usage, rate class and load factors.

Local officials said the proposal could affect public budgets.

“It could certainly have negative effects on budgets, more money paid out for services the county will receive,” Weston County Commission Chairman Nathan Todd said.

He said higher utility costs could increase expenses for residents and businesses, and some businesses may pass those costs on to customers. 

The increase could also lead to a modest rise in local tax revenue through sales taxes on utilities, though the exact amount is unclear, he said. A portion of those tax revenues is distributed back to counties and municipalities. 

Todd said that, at the same time, higher utility rates would affect local government budgets, as heating and cooling public buildings are already significant annual expenses.

Brad LaCroix, superintendent of Weston County School District No. 1, said any increase would add pressure to school finances.

“Any increase is not a good increase for public education or anyone that turns on a switch,” LaCroix said.

State Rep. Chip Neiman, a rancher and the Speaker of the Wyoming House, said the size of the proposed increase raises questions.

“At first blush, it’s a huge jump and not something that most folks can simply absorb,” Neiman said. “I want to know what the reason is. I know that if I want to add a service to a new stock well or otherwise, I have to pay for it, so not sure how Black Hills Energy does their infrastructure costs.”

Wes Ashton, vice president of South Dakota and Wyoming Utilities for Black Hills Energy, said in a Black Hills Energy press release that investments have focused on maintaining safe and reliable service.

“Our investments in distribution system hardening and generation have increased reliability, which means that customers experience shorter outages, fewer interruptions and less disruption to homes and businesses,” Ashton said.

According to the release, the proposal also includes costs associated with the Lange II Power Plant under construction in Rapid City, which is intended to replace the 60-year-old Ben French generating units scheduled for retirement in 2027.

“Lange II will serve as a critical generation resource to support Wyoming customers’ energy needs during normal operation and extreme weather events,” the release said.

Customers who are experiencing financial difficulties can contact the company at 888-890-5554 or submit an online form at blackhillsenergy.com/customer-service. Energy efficiency programs and tips are available at blackhillsenergy.com/efficiency-and-savings.