Black Hills Energy settles on plan to recover $87.9M in costs from Winter Storm Uri in Kansas

Black Hills Energy reached a settlement agreement with the Kansas Corporation Commission staff and Citizens’ Utility Ratepayer Board this week that will allow $87.9 million in incremental fuel costs to be recovered over five years.

This plan was linked to costs incurred due to Winter Storm Uri’s push through Kansas in February 2021. Black Hills Energy noted that it had served extraordinary demand and bore excessive carrying costs to reduce the impact on customers’ bills during the storm, specifically through procurement of critical natural gas. These costs were beyond the commission-approved procurement and commodity hedging program meant to reduce commodity cost volatility for customers.

“We are pleased to reach a constructive agreement for recovery of costs we incurred to keep our customers warm and safe when they needed us the most,” Jerry Watkins, Kansas general manager for Black Hills Energy, said. “Our team is proud of our reliable service through the dangerously cold conditions of Winter Storm Uri and other winter events. Recovery of these costs are essential to continue delivering safe and reliable service for our 117,000 customers across 66 communities in Kansas.”

Typically, recovery of natural gas costs transpires over a single year. Instead, Black Hills proposed recovery of these associated costs over five years to reduce the impact on its customers, meaning that a typical residential customer would see an increase of $11.47 per month as a result.

Despite the agreement, this will not go into effect unless approved by the Kansas Corporation Commission.