By Campbell Hawkins,
Vice President, Colorado Utilities for Black Hills Energy
Black Hills Energy customers in Cañon City may have heard about our rate update request, filed with the Colorado Public Utilities Commission (PUC) in June. As vice president of Colorado utilities for Black Hills Energy, I want to explain what this means for our customers, how rates are decided and why we’re asking for an update for the first time since 2016.
If our request is approved, the average residential customer would see a monthly bill increase of about $20 per month, starting in or before March 2025. This equates to a 2.25% annual increase over the eight years since our last rate request.
We have avoided asking for a rate update since 2016 because we recognize the impact that higher energy bills will have for our customers. As we’ve told the PUC, a change is needed now because the cost of providing safe, reliable electric service for our more than 100,000 customers has gone up substantially over the past eight years.
We’ve worked hard to manage our budget, but we’re not immune to inflationary pressures. For example, the cost of critical components for our system – poles, wire and cable, transformers and so on – has gone up 74.2% since 2016.
We’ve also made improvements, including a new transmission line, two new substations in Fremont County and a third new substation in Pueblo West. These expenditures are necessary in order for us to continue providing safe, reliable electric power.
Higher costs matter because the cost of providing service is the key factor considered by the PUC in deciding on rates. We’ve provided hundreds of pages of testimony detailing our costs, and we’re answering questions from PUC staff and intervenors – third parties who can ask questions and offer testimony of their own.
The PUC also will hear from the public. Comments can be filed on the PUC’s website and the commission is planning a public meeting in Cañon City from 4 to 7 p.m. Nov. 19 at City Hall. We encourage all interested customers to attend.
The commissioners’ job is balancing the needs of customers and utilities. Although we believe our request is justified, what utilities request is not always what the PUC decides.
The energy landscape is changing, impacting costs for all utilities and their customers. Demand on the grid is growing fast, thanks to data centers, building electrification and EVs, driving further investments by utilities across the nation. This is not just a Black Hills Energy issue.
Here in Colorado, this shift includes aggressive greenhouse gas reduction goals, which means eliminating the use of lower-cost (but less clean) coal for power generation. We retired our last Colorado coal plant, W.N. Clark in Cañon City, in 2012, replacing it with our Pueblo Airport Generating Station (PAGS), which uses cleaner-burning natural gas.
Other utilities also are investing in cleaner generation sources and moving away from coal as part of the state’s clean energy mandates. The good news is that everyone breathes cleaner air and that we built PAGS more than a decade ago, saving customers millions compared with the cost of building it today.
As we add more wind and solar to our generation mix, PAGS will run less often, meaning customers will pay for less natural gas to fuel it. But PAGS is still essential for reliability when the wind isn’t blowing and the sun isn’t shining.
Knowing the impact of higher energy costs, we’re taking action to help. Since the amount of energy used drives 90% of the monthly residential electric bill, we’re working to help customers use less. This means increasing energy efficiency education, offering free virtual home energy assessments, distributing weatherization kits and offering rebates when customers purchase energy-efficient appliances or smart thermostats.
We’re also helping customers who struggle to pay their utility bills. Sometimes the solution is budget billing, so customers pay the same amount every month, avoiding spikes when energy usage is higher. In other cases, getting customers on a payment plan can help them catch up if they’ve fallen behind.
We’ve also launched a new Energy Assistance Team to connect customers with programs like Black Hills Energy Assistance (BHEAP) and Blacks Hills Cares, and with state and local programs like Energy Outreach Colorado. It can be hard to navigate different sources of support and our Energy Assistance Team is tackling that mission.
Nobody likes to pay more for groceries, gasoline or electricity – we get that. We’re committed to being transparent with our customers, to helping them reduce energy use and to connecting them with sources of support. We want to continue serving customers here in Cañon City and throughout Southern Colorado for many years to come. Please visit us at www.blackhillsenergy.com to learn more.
Campbell Hawkins is the vice president of Colorado Utilities for Black Hills Energy.
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