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 a  increase to Black Hills Power’s transmission revenue requirement from $5.6 million to $9.4 million.

Transmission rates will be set utilizing a return on equity of 10.8% and a capital structure consisting of 57% equity and 43% debt, under the formula approved by the Federal Eenergy Regulatory Commission (FERC).

“The FERC decision is notable that it approves a formula-based rate process, said Chuck Loomis, vice president of operations for Black Hills Power. “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.