The Colorado Public Utilities Commission (PUC) slashed 85 percent from Black Hills Energy’s request to increase electric rates at a meeting last week (Docket No.16AL-0326E), according to a December 2 report in The Denver Post.
The utility – which serves 94,000 customers in Pueblo, Cañon City, and other parts of southern Colorado – had sought an $8.5 million annual increase in its filing of May 3, but the hike will likely be less than $2 million. Final rates won’t be determined until a technical conference tomorrow, the local news outlet said.
Rapid City, South Dakota-based Black Hills said it asked for the rate increase to help recover the cost of a new gas-fired generation unit at the Pueblo Airport Generating Station that replaced a coal-fired plant in Cañon City. The Cañon City unit was closed to comply with Colorado’s Clean Air-Clean Jobs Act; the new unit is expected to begin commercial operation before December 31.
If the commission had approved Black Hills’ proposal, a residential customer’s monthly bill would have increased by $4.99. Since 2008, the utility has increased average residential customers’ bills by 58 percent.
The commission said the utility company was within its rights to build the replacement plant. But the commission said it was disappointed that Black Hills did not pursue a cheaper option.
The commission made multiple decisions that cut the company’s proposed revenue increases in areas including employee pension expenses, executive incentives, and property tax allowances.