Black Hills Power gets bonding OK, makes rate changes
PIERRE -- Black Hills Power received authority from South Dakota regulators Tuesday to issue up to $110 million in bonds that will help pay for the next round of improvements to its electricity system.
The Rapid City-based utility company plans to use part of the financing for its share of a new power plant called Cheyenne Prairie, to be built in Wyoming.
Black Hills Power would own 55 megawatts and Cheyenne Light, Fuel and Power would have the other 45 megawatts.
The state Public Utilities Commission gave its approval 3-0 for the bonds. The commission also approved a rate increase for Black Hills Power that will be about 20 cents per month for the average residential customer.
The money will help pay for rebuilding two existing transmission lines between Hot Springs and Custer and between Spearfish and Belle Fourche. Those lines are approximately 60 years old, according to company officials.
Customers of Black Hills Power also will see small refunds from the environmental improvement adjustment they've been paying the past two years. The company is shifting that adjustment to zero for 2014 and will reimburse customers with the money left in that fund. The refund amount for the average residential customer will be about 33 cents per month.
The commission approved those changes.
Company officials said they wanted to deal with the transmission rebuild and the environmental adjustment refunds now as issues separate from the company's upcoming rate-increase case.
Black Hills Power is seeking a round of rate increases that would cost the average residential customer approximately $10.91 per month, according to the company.
The company wants to put those increases into effect no earlier than Oct. 1 of this year.