Utility proposes raising gas rates

Home heating bills in areas outside Colorado Springs would rise about $26 a month during the coldest times of the year, under a proposal by a South Dakota-based private utility.

Black Hills Corp., which earlier this year acquired Kansas City, Mo.-based Aquila, filed paperwork Monday with the Colorado Public Utilities Commission, seeking to pass on its higher costs of buying natural gas to its residential and commercial customers.
The higher bills would take effect Oct. 1. Black Hills Corp. serves about 36,000 customers in Black Forest, Monument, Palmer Lake, Woodmoor, Fountain and Woodland Park.

Under state law, Black Hills and other private utilities regulated by the commission can pass along gas purchase costs if they document those expenses. In some cases, gas costs and heating bills have risen; other times, gas costs and customer bills have fallen.

In the case of Black Hills' filing Monday, the company said it expects its wholesale gas purchase costs will be 10 percent to 25 percent higher than last winter; a Black Hills Corp. official blamed increased demand, weather-related disruptions of gas production in the Gulf of Mexico and higher crude oil prices worldwide.

This will be the third increase this year for Black Hills customers.

According to the company, monthly bills for typical residential customers will rise an average $11.84 a month when those higher costs are spread out over a year; the increase will be $26 a month when temperatures are coldest and gas usage is at its peak.

For commercial customers, bills will increase an average $48.31 a month, and $101 a month during peak usage periods.

In July, Aquila asked the Public Utilities Commission for a permanent increase in its natural gas rates, which is a separate request from the Oct. 1 change in heating bills.

But the commission has delayed the permanent rate hike so that it can consider the request. Those hearings were scheduled for November, but probably will be delayed until early 2009 because of Aquila's takeover by Black Hills Corp., according to a commission spokeswoman.

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Contact the writer: 636-0228 or rich.laden@gazette.com