On June 14, Black Hills Colorado Electric submitted advice letter number 871, initiating a significant phase 1 and phase 2 rate case—the first since its previous filings in 2016 and 2017. The utility is seeking an annual revenue increase of approximately $37 million, raising its total base rate revenue request to $216 million. This request comes amid stagnant economic growth in its service area, despite an increase in residential customers, who are using less electricity due to net metering practices.

Black Hills has reported a total investment of $371 million in its electric system since the last rate case and plans to invest an additional $99 million in 2024, with nearly half allocated for distribution improvements. The company is proposing a weighted average cost of capital (WACC) of 7.7%, with a return on equity set at 10.5%.

In a notable shift, Black Hills plans to incorporate its current transmission cost adjustment and clean air adjustment into base rates. A class cost of service study indicates that residential customers could see a 26% increase in costs due to a significant load shift from commercial to residential classes. To mitigate this impact, the company proposes a uniform rate increase of 20.5% across all classes, which would relieve residential customers of about $5 million in costs.

The proposed changes also include a transition from an inclining block rate structure to a flat energy rate of 15 cents per kilowatt-hour, alongside a fixed monthly charge of $9.16. This would result in an average increase of $20 per month for residential customers, equating to an 18% rise in their bills. Additionally, Black Hills aims to modify billing structures for large service customers and introduce time-of-use (TOU) tariffs.

However, the utility consumer advocate (UCA) has filed a protest against the proposal, raising concerns about bill impacts, the use of a current test year, and the proposed WACC. The UCA has requested a hearing to address these issues, emphasizing the need for a thorough examination of the filing's completeness and the historical data it presents.

The commission is now tasked with determining whether Black Hills' filing meets the necessary standards for completeness, which includes a comprehensive analysis of costs and revenue requirements based on auditable historical data.