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FOR IMMEDIATE RELEASE: Tuesday, March 3, 2015                    

CONTACT: Leah Mohr, deputy executive director, South Dakota Public Utilities Commission, (605) 773-3201 or (605) 280-4327


PUC accepts settlement agreement; Black Hills Power allowed to increase rates


PIERRE, S.D. – This week, the South Dakota Public Utilities Commission reduced by more than half the electric rate increase sought by Black Hills Power. The commission voted on March 2 to accept a settlement agreement negotiated by the PUC staff and Black Hills Power that allows the company to increase rates by 4.35 percent. The company had requested an increase of 9.27 percent.


The increase is expected to generate an additional $6.89 million in annual revenues for the company. According to Black Hills Power, as a result of the new rate, a typical residential customer using an average of 650 kilowatt-hours of power each month will see an increase of $4.61 per month beginning April 1.


Black Hills Power implemented interim rates for its customers on Oct. 1, 2014, based on its initial request of 9.27 percent. Because the PUC-approved rate is lower than the interim rate, the company will refund the difference, plus interest, to its customers. Implementing an interim rate is allowed by state law. The company will begin issuing refunds in May.


The closure of three of the company’s coal-fired power plants and the resulting construction of the Cheyenne Prairie Generating Station as well as the repair and replacement of infrastructure damaged by winter storm Atlas were primary drivers of the rate increase request.


“Rate cases are never easy,” stated PUC Chairman Chris Nelson. “The company’s request is complicated, the commission’s decision is difficult, and the result can be troubling for rate payers. Having said that, I believe the rate increase we’ve approved considers the facts as a whole and arrives at a just and reasonable result,” he concluded.


“We commissioners take very seriously the ratemaking authority we have over investor-owned utilities,” said PUC Vice Chairman Kristie Fiegen. “We abide by what is allowed by state law and administrative rule. It’s important, I think, to understand that Black Hills Power’s request was thoroughly scrutinized, questioned and analyzed by the PUC staff and commissioners. In the end, the commission allowed an increase that is much less than what the company wanted,” she stated.


“I commend all the parties for the tremendous effort that has been focused on this proceeding,” said Commissioner Gary Hanson. “This docket included thousands of pages of facts, figures, testimony, argument and comments submitted and reviewed over a span of 11 months. Processing a rate increase request truly is an arduous effort and I am happy we were able to keep the rate increase so low,” he said.


Black Hills Power filed the rate increase request with the PUC on March 31, 2014. A PUC staff team of one attorney and three analysts, supported by consultants, examined the case. Intervenors in the case included GCC Dakotah, Pete Lien & Sons, Rushmore Forest Products, Spearfish Forest Products, Rapid City Regional Hospital and Wharf Resources, collectively known as the Black Hills Industrial Intervenors, and Dakota Rural Action. A hearing was held in Pierre on Jan. 27-28. The complete docket of the proceeding is available on the PUC website at, Commission Actions, Commission Dockets, Electric Dockets, 2014 Electric Dockets. The case is EL14-026 - In the Matter of the Application of Black Hills Power, Inc. for Authority to Increase its Electric Rates.