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Kansas Regulators Approve $11.47 Bill Hike For Black Hills Customers

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The hike will allow the gas utility to recoup costs from last February’s deep freeze

KANSAS CITY, Mo. — Natural gas bills will go up next month for 117,000 Kansans, including in the Wichita metro area, following last winter’s deep freeze. 

Customers of Black Hills Energy will see, on average, another $11.47 on their monthly bills attributed to Winter Storm Uri under a settlement agreement with regulators and consumer advocates. The hike lasts five years.

“Today’s order acknowledges that while no customer welcomes bill increases, the five-year repayment period provides some relief to ratepayers,” the Kansas Corporation Commission said in a news release after approving the settlement Thursday. 

The news release says customers’ bills would have risen by an average $53.51 per month had they been required to pay the costs of the storm over one year. 

Last February, temperatures across the Midwest plunged below freezing for days on end, causing fear the grid would be unstable. During that time, natural gas was difficult to come by and prices shot up by 200 times in a matter of days. According to the National Oceanic and Atmospheric Administration, it was the coldest February in more than 40 years.

All told, utilities in Kansas incurred about $1 billion in excess gas costs from the storm. Gas and electric utilities have been filing plans with the KCC to pass those costs onto customers over time rather than all at once.

Black Hills incurred $87.9 million tied to the February freeze — about a year’s worth of gas charges in a month. It initially proposed raising bills, on average, by $12.23, but trimmed the carrying costs under the settlement agreement. 

The state’s largest gas utility, Kansas Gas Service, has proposed recouping $390 million costs over five, seven or 10 years. KCC regulators are still reviewing those plans. 

James Williams, a spokesman for Black Hills, noted the company offers budget billing and energy assistance programs and encouraged customers struggling to pay bills. 

“The cost of natural gas is often the largest portion of our customers’ bills during the winter heating season and it’s a pass-through cost – meaning we do not make money on natural gas, even when prices increase,” Williams said. 

The Kansas Attorney General’s Office has been investigating potential price-gouging, and in a statement, the Natural Gas Transportation Customer Coalition said the settlement includes clawbacks should government or private investigations or litigation lower the prices.

“No reasonable view of the natural gas market can support natural gas price increases that escalated from $2.54 per unit on February 1 to $622.78 on February 17, 2021,” the coalition’s attorney, Jim Zakoura said in an email. 

The prices posted to the index used to set natural gas prices by many utilities, he said, “either do not accurately reflect prevailing market prices for natural gas or reflect a market that was subject to manipulation — or both.”

Kansas Reflector is part of States Newsroom, a network of news bureaus supported by grants and a coalition of donors as a 501c(3) public charity. Kansas Reflector maintains editorial independence. Contact Editor Sherman Smith for questions: info@kansasreflector.com. Follow Kansas Reflector on Facebook and Twitter.

Derek Nester
Derek Nesterhttps://sunflowerstateradio.com
Derek Nester was born and raised in Blue Rapids and graduated from Valley Heights High School in 2000. He attended Cowley College in Arkansas City and Johnson County Community College in Overland Park studying Journalism & Media Communications. In 2002 Derek joined Taylor Communications, Inc. in Salina, Kansas working in digital media for 550 AM KFRM and 100.9 FM KCLY. Following that stop, he joined Dierking Communications, Inc. stations KNDY AM & FM as a board operator and fill-in sports play-by-play announcer. Starting in 2005 Derek joined the Kansas City Chiefs Radio Network as a Studio Coordinator at 101 The Fox in Kansas City, a role he would serve for 15 years culminating in the Super Bowl LIV Championship game broadcast. In 2021 he moved to Audacy, formerly known as Entercom Communications, Inc. and 106.5 The Wolf and 610 Sports Radio, the new flagship stations of the Kansas City Chiefs Radio Network, the largest radio network in the NFL. Through all of this, Derek continues to serve as the Digital Media Director for Sunflower State Radio, the digital and social media operations of Dierking Communications, Inc. and the 6 radio stations it owns and operates across Kansas.

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