Black Hills Power’s Electricity Prices Stable for Over a Decade
by Barbara Zar
With the price volatility Americans are experiencing with nearly all forms of energy, some Black Hills Power customers may assume that their electricity rates have been going up as well. However, BHP has not increased rates since 1995, when the company’s Neil Simpson II power plant came on line.
“We’re hearing through our industry associations that more than 100 state regulatory actions are planned or in progress to address rising electricity costs,” said Linn Evans, President and Chief Operating Officer for Black Hills Power. “We’re glad we’ve been able to use our stable resources to keep our rates below the national average.”
Black Hills Power manages its costs by being “vertically-integrated”—that is, by owning its own generation, transmission, and distribution resources. Black Hills also owns its own fuel resources, Wyodak Mine, a Powder River Basin coal mine near Gillette, Wyoming. The coal is fed directly into mine-mouth power plants by conveyor, thus avoiding costly transportation. “Instead, we ship coal-by-wire, and it’s very efficient,” said Evans.
Some of the reasons for rising electricity costs nationwide besides rising fuel costs are the need for new generation and new transmission; costs associated with developing renewable resources such as wind or energy efficiency programs; and the lifting of rate freezes or price caps that were imposed as part of electricity deregulation in a number of states. “We’re appreciative that our regulators in South Dakota and Wyoming didn’t take us down that precipitous path,” said Evans. “Some states are now trying to ‘underegulate’ or ‘re-regulate’ to undo the damaging effects of deregulation, especially on price stability.”
Demand for electricity continues to grow. According to U.S. Energy Information Agency information on the Department of Energy website, U.S. electricity consumption will increase by about 50% by 2030. World consumption is predicted to nearly double during the same period, driven by the need for electricity in developing nations including China and India.
“We can’t export electrons, so Black Hills Power’s energy supply will continue to be dedicated directly to our 64,000 customers,” said Evans.
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