Gas rate case settled; consumer board calls it a win for customers

State officials and Black Hills Energy reached a settlement late Friday that will slightly raise consumers’ natural gas bills, but by much less than the company had requested.

The state’s chief consumer counsel called it a win for more than 30,000 Wichita gas customers.

The settlement will raise overall rates by about $735,000 from the current level, which pencils out to about $3 a year for the average customer, said David Springe, consumer counsel for the Citizens’ Utility Ratepayer Board.

That’s less than 15 percent of the $5.1 million net increase the company applied for in April, which would have raised the average bill by $4.17 a month – or about $50 a year.

“From our perspective, that’s a very, very good settlement,” Springe said. “The rate impact to consumers is very minimal.”

Black Hills officials could not be reached for comment late Friday.

The case is not yet final and the settlement must be approved by the three appointed members of the commission to take effect.

However, a rejection by the commissioners is unlikely because all the parties to the case have signed off on the agreement, including the company, the commission’s staff and CURB, the state agency that represents residential and small-business consumer interests.

“The ‘total effect’ of the terms of the Agreement results in just and reasonable rates and represents an equitable balancing of the interest of all the parties,” the settlement said. “Thus, the agreement is in the public interest and should be approved by the commission in its entirety.”

Black Hills, which is based in South Dakota, provides natural gas service to 110,000 customers in Kansas, about a third of those in the Wichita area.

Most local Black Hills customers are in northwest Wichita and the Riverside area of the city.

The rate increase in the settlement applies only to the portion of the bill that customers pay for delivery of gas. The other major part of the bill, the cost of gas, is based on what the company pays to buy it and is passed almost directly through to customers.

Technically, the settlement gives Black Hills an overall increase of $5.23 million. But customers were already paying about $4.5 million of that through special riders on their bills, which the settlement will roll into the base rates.

This story was originally published October 24, 2014 at 7:05 PM with the headline "Gas rate case settled; consumer board calls it a win for customers."