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Black Hills Joins Gas Rate Reduction Stampede

South Dakota-based Black Hills Corp.'s Colorado utility has proposed reducing its retail natural gas rates in the area around Colorado Springs, CO, by nearly $20/month for some residential customers. Black Hills Energy has asked state regulators to make the reduction effective June 1.

This would be the second retail gas rate reduction this year. Black Hills reduced charges in February resulting in an average decline in residential bills of about $27/month and $109 for commercial customers. Subsequently, though, the utility raised gas rates in April to cover operating cost increases other than the cost of wholesale gas supplies. The increase ranged from $1.76 to $2.83 monthly for residential and commercial customers, respectively.

The Colorado Public Utilities Commission (PUC) authorized the higher rates and the first change in the customer service charge for years on April 1. Later that month, Black Hills Energy reported that its cost of wholesale gas supplies hit a seven-year low, and it announced future gas rate decreases this year.

Black Hills said in April that it was taking advantage of the early spring gas prices -- the lowest natural gas prices in seven years -- by purchasing early some of the supplies its customers will need next winter. "Under typical circumstances, [we] begin buying natural gas needed to serve customers for the next winter during May, but this year, however, as market conditions began to change dramatically in January, the company began locking in prices at the lower levels," a utility spokesperson said.

Natural gas prices have continued to fall during the last couple of months, Black Hills said. The utility requested permission from the Colorado PUC earlier in May to pass along another reduction in monthly charges.

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