Rapid City, SD-based Black Hills Corp.’s Colorado natural gas utility operations, Black Hills Energy, were granted a $1.379 million, or 1.7%, rate increase by state regulators last Wednesday. It includes a slightly larger increase for residential customers of 2.04%, or about $1.76/month. The rate hike was effective last Wednesday.

Black Hills said this was the first change in its Colorado natural gas rates since 1993, during which time it has invested $66 million in its gas infrastructure, and the number of customers have more than doubled from 28,000 in 1991 to about 68,000 currently.

The utility holding company said it needed the increase to respond to what it called “growing costs of operation and system investments required to maintain safety, reliable service and support growth.”

Ivan Vancas, vice president for Black Hills’ operations in Colorado and Kansas, said the utility manages its business “to run efficiently and effectively, but costs continue to rise for system maintenance, improvements and expansion of service.”

The increase was part of a settlement among the utility, Colorado Public Utilities Commission staff and other stakeholders. It included three primary changes to customer bills — usage is now measured in therms; transportation fees for residential and small commercial customers were reduced; and monthly customer charges are increased for residential and commercial customers to $10 and $15, respectively.

The transportation and customer charges account for about 15% of a customer’s monthly bill. The rate revisions apply to all customer classes in proportion to their respective cost of service, Black Hills said.

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