Here's what Black Hills Energy's recovery efforts from February's cold snap could mean for Pueblo
Jun. 25—Black Hills Energy is seeking to recover losses the company says it experienced as a result of the extreme cold weather in February which led to an extraordinary spike in natural gas prices.
The utility company has applied with the Colorado Public Utilities Commission for the OK to recoup funds. Although the cost will be passed on to both electric and gas customers, if approved, a local energy attorney said she thinks the request is fair.
"Because the company operates separate electric and natural gas utilities in Colorado, two applications were filed with proposed methods for recovery," said Julie Rodriguez, Black Hills Energy community affairs program manager.
"There were a confluence of factors in February, including extreme cold temperatures and record-high customer demand, plus the freeze off of natural gas production and processing facilities in other areas of the country that resulted in an unprecedented spike in natural gas prices across much of the U.S.," said Vance Crocker, Black Hills Energy vice president of Colorado operations.
In the applications, Black Hills Energy outlined several recovery scenarios and made a recommendation to the commission. The commission ultimately will make the decision on the recovery method and timeline.
Electric customers in Southern Colorado may think it unfair they are being asked to help foot the bill, but the natural-gas powered Pueblo Airport Generation Station saw increased demands in February, causing Black Hills unforeseeable expenses in providing electricity.
The company recommends a $3.83 per month charge for the average residential electric customer during a two-year period. The average small commercial customer would see an increase of $14.67 per month during the same two-year period.
The utility's Colorado natural gas customers also will experience an increase in monthly bills.
Black Hills is requesting to recover those costs via a temporary billing line item beginning in November.
"Our most important obligation is to deliver reliable service to our customers," Crocker said. "We're extremely proud of how our system and team performed during the record-breaking cold temperatures across Colorado and much of the country.
"We recognize that there will be financial impacts and we will continue to work with the commission to identify the recovery scenario that balances customer considerations with our ability to keep our system running," he said.
Pueblo energy attorney Frances Koncilja, who works as a consultant for Pueblo County and formerly served on the Colorado Utilities Commission board, said she doesn't think it is, "fair to blame Black Hills for these charges for gas. You can blame the Texas market 'ERCOT,'" which is the Electric Reliability Council of Texas, Inc., an organization that operates Texas's electrical grid, "as well as the utilities commission in Texas," she said.
"There was not enough power to meet demand. Gas producing lines froze and the price of gas went sky high," she said.
"To the best of my knowledge, neither Black Hills nor Public Service Company profited from this mess," she said.
Five members of the ERCOT board resigned and all three members of the Texas Public Utilities Commission resigned following the February cold snap, Koncilja explained.
"I am sure that folks are unhappy with these charges. However, Black Hills and PSCO kept the lights and heat on. In Texas, there were deaths and billions of dollars of property damage," Koncilja said.
Chieftain reporter Tracy Harmon covers business news. She can be reached by email at tharmon@chieftain.com or via Twitter at twitter.com/tracywumps.
