Black Hills Power has announced that the Federal Energy Regulatory Commission has approved a formulaic approach for setting transmission rates. This change will result in an increase to Black Hills Power’s transmission revenue requirement from $5.6 million to $9.4 million.
Under the formula approved by the Federal Energy Regulatory Commission (FERC), transmission rates will be set utilizing a return on equity of 10.8% and a capital structure consisting of 57% equity and 43% debt.
Chuck Loomis, vice president of operations for Black Hills Power, said: “The FERC decision is notable that it approves a formula-based rate process. This allows us to utilize an annual true-up calculation rather than having to file separate rate cases each time we make transmission investments.”
Earlier in the first week of February 2009, Black Hills Energy filed a request with the Colorado Public Utilities Commission to reduce the cost per unit of natural gas for its residential, commercial and industrial customers by 28 percent. The request was based on lower natural gas prices. The company proposed to apply the new lower rate to usage beginning in the last week of February.
Based in Rapid City, S.D., with corporate offices in Golden, Colo., and Omaha, Neb., Black Hills Corporation is engaged in energy services. Its non-regulated businesses generate wholesale electricity, produce natural gas, oil and coal, and market energy.
