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BHE Suspends Rate Hike for Homeowners Making Renewable Energy Until 2024, Pending Data and Discussion

An eager reader asks for an update on Black Hills Energy’s plan to raise rates on folks who produce their own electricity at home. Some wind and solar producers opposed BHE’s tariff amendment, saying that it would wipe out the economic incentive for homeowners to invest in small-scale renewable energy. Black Hills Energy contended that letting homeowners negate their electric bill by using home-generated power unfairly shifts the fixed costs of operating the grid and generating steady power onto other BHE customers. BHE’s regulatory and finance manager Jason S. Keil testified to the PUC that BHE’s current rebates to home renewable-energy makers is too high and analogized to pedal power: I may ride my bicycle a lot and save on gasoline and car maintenance, but I still have to pay for car insurance, oil changes, and my garage.

BHE and the intervening renewable energy producers talked it out, and BHE was persuaded to put its tariff amendment on hold. On September 27, BHE and the intervenors agreed to collect more data and meet to discuss the issue further at least four times (twice in 2022, twice in 2023) to discuss how Black Hills Energy may strike a balance between charging all customers fair rates to cover fixed costs and encouraging homeowners to invest in small-scale home energy production. BHE will return to the PUC to ask to revise its Cogeneration and Small Power Production Service tariff, but it won’t ask for a new rate to kick in until January 1, 2024. The PUC approved that agreement and closed the current docket on October 14.

And hey, maybe Black Hills Energy will get so much support from the Biden infrastructure plan that it will be able to put off rate hikes for home renewable energy producers for a few more years after 2023!

10 Comments

  1. larry kurtz 2021-11-30

    Don’t tie your system to the grid but if you use it as a backup keep your electricity completely invisible to the utility that reads your meter. Microgrid technologies are destined to encourage self-reliance, enhance tribal sovereignty, free communities from electric monopolies and net-metering only gives control back to utilities enabled by moral hazard.

  2. larry kurtz 2021-11-30

    Frances Koncilja was a member of the Colorado Public Utilities Commission for four years.

    First, save millions of dollars in interest payments. Black Hills charges you $18.5 million of interest every year on $350 million of debt at 5.29 percent. Interest rates have been at historical lows for almost 10 years, but Pueblo does not benefit. Black Hills assigns to Pueblo the higher, in some cases, the highest interest rate. Other Black Hills entities get the benefit of lower rates. Second, eliminate almost $1 million of holding company costs that Black Hills collects from Pueblo every year. Third, eliminate the costs of natural gas purchases. Black Hills has passed onto ratepayers its hedging losses on gas purchases of $31,547,135.

    Black Hill’s business model is predatory: Buy utilities in small communities, usually poorer with less money to spend fighting at the PUC; acquire more customers; pay 30 percent premium to book value for these utilities; cut back on maintenance and then ask the PUC to order huge rate increases to pay for the deferred maintenance. The residents of Pueblo have been at the mercy of Black Hills and these draconian policies and prices for more than 12 years. A prudently run electric utility is your only hope to reduce rates and you will not get it from Black Hills.

    https://www.chieftain.com/news/20200410/end-black-hills-predatory-business-practices

  3. Cory Allen Heidelberger Post author | 2021-11-30

    How many homeowners will dive into complete energy self-sufficiency and cut their connection to the grid?

  4. larry kurtz 2021-11-30

    Our entire Santa Fe County community of about two hundred property owners makes our own electricity. We operate three of our properties with photovoltaics and heat with propane and/or firewood and I have actually become quite proficient at building systems.

    The average cost of a household photovoltaic system has dropped below $3/watt or less than $12,810 before tax credits are factored in and leaving the grid has never been easier so anyone who can afford to it should do it now.

  5. Porter Lansing 2021-11-30

    #InvalidLogic = I may ride my bicycle a lot and save on gasoline and car maintenance, but I still have to pay for car insurance, oil changes, and my garage.

    *Not as much car insurance since rates go down the less you drive.
    Not as many oil changes.
    Garages make great mother-in-law or teen bedrooms if you park a rarely used vehicle outside with a car cover.

    #What the energy producer really means:
    People who only use a minimum of our product are an unfair competitive element to our community subsidized paradigm. We make our own product. Why should we be forced to buy theirs?

  6. Bill McClellan 2021-11-30

    When utilities charge a monthly connection or service fee they always tell us that those fees are necessary for maintaining their infrastructure. Methinks BHP’s Mr. Keil is attempting to hoodwink us customers.

  7. John 2021-12-01

    BHE and corporate utilities business models are broken and their assets are stranded. Their hostages (customers) will pay and pay again for the executives and boards incompetence and inability to adapt. The cheapest energy is solar. Wind is the next less expensive. Solar, wind, and battery storage systems are less expensive to build than it costs to maintain fossil-fuel utility systems. Dispersed energy systems are more resilient than are monopolistic utility systems.

    Yes, people will make new construction with self-generating systems, as have many corporations, government buildings. Some of us retrofit our furnace to geothermal. Every roof is a potential power plant. The sooner the industry markets a residential fuel cell, the sooner we will kick the electric utility out of our lives, forever.

  8. jerry 2021-12-01

    The entire state will have to foot the bill for a 2 Billion dollar Missouri River siphon to Rapid City and beyond while leaving Rapid Creek for mining exploitations. We loves us some socialism in this state while we punish those who strive for their own freedoms.

    “The foundation needs to be set for future water needs in Black Hills communities, area mayors said Wednesday morning.

    Mayors Steve Allender of Rapid City, Larry Larson of Box Elder, and Teresa Hall of New Underwood talked about the need for working together as a region to bring Missouri River water to western South Dakota during the “Water is Our Future” summit.

    Panel participants throughout the event discussed funding, what already exists to get the project moving, and the necessity to build a 171-mile system to bring water to the area. The project has an estimated cost of $1.87 billion.” Rapid City Journal 12.1.21
    Blue states will have to pony up at least double that for this to happen. We got no money here while kicking the will of the voters on a pot economy in the teeth.

    Hide and watch as Texas and the rest of the dry states get the siphon going for “as long as the rivers flow”. Maybe a moratorium on building would be the best way to conserve. Try living off the grid with an electric vehicle as your backup, it’s possible.

  9. jerry 2021-12-01

    Black Hills Energy lost a billion bucks in the Texas storm last winter so it figures on doing what it can to screw over those who would want to produce their own energy. Capitalism really means no competition. We prove it each day when we look at the choices or lack of choices we have at the gas pumps and the grocery stores.

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