A South Dakota household that uses 650 kilowatt-hours of electricity a month will see its Black Hills Energy bill climb by about $16.34 once new rates take effect in December. The South Dakota Public Utilities Commission approved the increase on Wednesday, Nov. 4, at its meeting in Pierre, after reviewing a joint settlement negotiated among the parties and the company.
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The approved package lets the utility collect more than $27.3 million a year in added revenue. That is a little over half of the $50.6 million the company asked for when it filed in February, and a second, separate decision about a power-plant surcharge is still pending behind it.
A settlement worth $27.3 million a year
KOTA reporter Kennedy Leara, writing for Dakota News Now on Nov. 7, reported that commissioners weighed the settlement and the negotiations behind it before voting. The story gives no vote count and no docket number. The company’s own rate review page fills part of that gap: it identifies the general case as docket EL26-003, filed Feb. 19 by Black Hills Power, Inc., and says the filing sought recovery of about $523 million in investments made over 12 years, with no change to base rates since 2014.
The original ask for a typical 650-kilowatt-hour home came to roughly $25 a month, the Custer County Chronicle reported, so the settlement trims the monthly hit by about a third.
As filed, the request was uneven across customer types. The review page lists a $35.55 monthly rise for the total-electric residential class, $51.66 for residential demand service, $11.65 for small general service and $409.75 for general service accounts. Which of those classes absorb the smaller settlement amounts is not spelled out in the sources reviewed, and the commission’s order itself had not been located when this article was prepared.
The decision follows months of public comment on the Black Hills proposals. The company’s case for the increase rested on three points, as the Chronicle summarized them: the planned retirement of the Ben French plant, heavy infrastructure investment, and inflation, set against base rates that had not moved since 2014. The review page had told customers to expect final rates in the first quarter of 2027, which means the Nov. 4 vote arrived ahead of the company’s own published schedule. Black Hills Energy’s parent, Black Hills Corp., is also pursuing a merger with NorthWestern Energy, and the Chronicle noted that Montana is the one affected state that has not yet approved it.
Interim rates since Aug. 18 and the refund owed
Black Hills Energy did not wait for the commission. Because the PUC had not ruled within its 180-day review period, the utility began collecting the higher rates on an interim basis on Aug. 18, the Chronicle reported. Dakota News Now says customers who paid those interim rates will get refunds with interest, and the company’s review page says the same about any gap between interim and final rates.
The published averages show how large that gap is. The review page puts the average residential bill at $98.96 before any increase and at $124.08 under interim rates. Adding the approved $16.34 to $98.96 gives about $115.30, which is roughly $8.78 a month below what the interim rate has been charging. A household billed at the interim average for three months would be owed on the order of $26 before interest. That figure is arithmetic on published averages, not a number the company has stated.
The refund promise matters because the interim period was long. The 180-day window ran out in August, and under the process the Chronicle described, the company was allowed to bill the higher amount while the commission kept reviewing. Dakota News Now adds that the refund comes with interest, which gives the utility a reason to settle near the final number and gives customers a reason to check the first bills that carry the new rates in December.
The Lange II surcharge still waiting for a ruling
Separate from the settlement, the company wants a monthly charge of $19.70 for the average residential customer to pay for the $320 million Lange II natural gas plant in Rapid City. Dakota News Now reports that the charge could take effect on an interim basis, that it is still under review, and that it could be reduced or rejected. Stacked on the approved increase, the total would be about $36 a month, or more than $430 a year.
The surcharge sits in its own case, docket EL26-024. The commission’s filing-fee order records that the application arrived Aug. 5 and that the company proposed a Dec. 1 start date. The company’s South Dakota rates page lists the proposed charge by customer class, from $19.70 for regular residential service to $291.89 for general service accounts.
Wes Ashton, a Black Hills Energy vice president, said any customer struggling to make ends meet should reach out to the company, which he said has payment options and other support available. Whether commissioners trim or approve the surcharge before Lange II enters service in December is the question the commission has yet to answer.
This article was produced with the assistance of AI and reviewed by Morning Overview editors prior to publication.
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