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February cold snap to likely cost Black Hills customers at least $300

Black Hills said it spent $80 million providing gas to various communities during bitterly cold...
Black Hills said it spent $80 million providing gas to various communities during bitterly cold temperatures over a week-long stretch in February 2021.(KOLN)
Published: Apr. 7, 2021 at 9:19 PM CDT
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LINCOLN, Neb. (KOLN) - Not a single customer lost gas service because of the February 2021 cold weather, according to Black Hills Energy, but the cold stretch cost the company about $80 million.

In a letter from Black Hills attorneys filed to the Nebraska Public Service Commission, they said:

“That record cold weather over a large geographic area, particularly in the State of Texas, drove an unprecedented increased demand for electric and natural gas energy, which contributed to unforeseeable dramatic increases in natural gas supply prices well beyond the control of Black Hills Energy.”

In the document, Black Hills is advocating for a cold-weather event time period and looking to recoup energy costs from February 12 to February 18. In its submission to the Public Service Commission, it’s seeking to recover that $80 million over a three-year period, dividing it between residential and commercial customers.

That week-long stretch would cost, on average, each residential customer $322 and each commercial customer $1,277, according to Black Hills.

It would cost the average residential customer $110 per year or a 16.7% increase, and the average commercial customer $422 a year or a 20.9% increase. Broken down by month, that’s about $9.21 per month for residential customers and $35.47 per month for commercial customers.

Black Hills serves more than 300,000 customers across 319 Nebraska communities, with its biggest being the Lincoln metro area. At one point, Black Hills said every single one of its customers, from Wyoming to Arkansas, was experiencing negative air temperatures.

During the cold snap, which saw several days reach negative temperatures, Lincoln set a record for coldest recorded February temperature. That was -31 degrees on February 16. The all-time record low temperature in Lincoln is -33 in January 1974.

As an example of the extreme cost, Black Hills said over the last five years, it spent between $8 million and $13 million for energy costs for the entire month of February. The week-long stretch was roughly 700% what it spends in a normal February.

Black Hills Energy presented its findings to the Public Service Commission on Tuesday, and will need to submit an updated, written plan and answers to commissioner questions next week.

The Public Service Commission will then deliberate and, if approved, sign off on an order later this spring. It’s still unclear when the extra cost would be reflected on customers’ bills.

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