BLACK HILLS ENERGY COLO. NATURAL GAS RATES APPROVED; LESS THAN 1 PERCENT INCREASE EFFECTIVE DEC. 10
FOUNTAIN, Colo., Dec. 10, 2012 - Black Hills/Colorado Gas Utility Company, d/b/a Black Hills Energy, a subsidiary of Black Hills Corp. (NYSE: BKH), on Dec. 5 received a recommended decision from a Colorado Public Utilities administrative law judge approving a settlement that will implement a less than 1 percent increase in rates
at its Colorado natural gas utility. Rates are effective Dec. 10 as ordered by the administrative law judge.
The administrative law judge approved a $174,000, or approximately 0.83 percent increase in annual natural gas revenues. The judge also approved a 9.6 percent return on equity and a capital structure of 50 percent equity and 50 percent debt. The last base rate increase for Black Hills/Colorado Gas Utility Company customers was effective April 1, 2009.
"Since 2008, we have invested nearly $30 million in Colorado for service extensions to meet customer needs and to replace pipe and other equipment that has reached the end of its useful life so that our natural gas distribution systems remain safe, reliable and efficient," said Susan Bailey, Black Hills Energy Colorado Gas general manager. "The approved rates allow for recovery of operating costs and a return on these infrastructure investments to ensure our natural gas customers continue to receive dependable service."
The increase is the result of an administrative law judge's recommended decision that approved a settlement agreement. Black Hills asked the Colorado Public Utilities Commission in June to approve its rate increase request, which was mandated by a regulatory requirement arising from a settlement in a previous case. The unanimous agreement, filed in October, is between Black Hills Energy, Colorado Public Utilities Commission staff, the Colorado Office of Consumer Counsel and Colorado Natural Gas.
The 0.83 percent rate increase will result in an average bill increase of 17 cents a month for the typical residential customer, 27 cents in the month of peak winter usage. The typical bill for a small-business customer will increase 26 cents a month, 35 cents for the month of peak usage. Actual bills will vary with the amount of natural gas used and its price.
The increase applies to costs of service, not to the 65 percent to 75 percent of the bill that covers the actual cost of natural gas. The higher cost-of-service rate is offset by recent gas cost adjustments that have reduced a typical residential customer's bill by $15 a month due to low natural gas prices. Black Hills passes the cost of natural gas through to customers without markup.
Black Hills Energy offers programs and services to help customers control energy use and encourages customers to visit www.blackhillsenergy.com to learn about ways to manage their natural gas bills and for energy saving tips, energy efficiency programs and incentives available to the utility's Colorado customers.
"Our company's primary areas of focus are the safety of our customers and employees, reliable service, and developing business and community partnerships that benefit everyone we serve," said Bailey. "It's what we mean by 'improving life with energy'."
ABOUT BLACK HILLS ENERGY
Black Hills/Colorado Gas Utility Company, LP d/b/a Black Hills Energy serves 72,000 natural gas customers in 31
Colorado communities. Black Hills Energy is a subsidiary of Black Hills Corp.
ABOUT BLACK HILLS CORP.
Black Hills Corp. (NYSE: BKH), a diversified 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., and has corporate offices in Denver and Papillion, Neb. The company serves 765,000 natural gas and electric utility customers in Colorado, Iowa, Kansas, Montana, Nebraska, South Dakota and Wyoming. The company's non-regulated businesses generate wholesale electricity and produce natural gas, oil and coal. Black Hills' 2,000 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, including the statement that the rate increase allows cost recovery for investments in utility infrastructure and statements regarding the projected monthly rate increases for residential and small-business customers, are forward looking statements. 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, 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.