Five of the region's biggest industrial power users say the proposed Black Hills Power rate increase would harm them by increasing their cost of business at a time they are already under economic stress.

The group filed a petition Thursday with the state Public Utilities Commission, asking to intervene in the issue. Intervenors become part of the case and are allowed to call witnesses at hearings on the proposed 26.6 percent rate increase, commission Vice Chairman Steve Kolbeck said.

Dakota Panel particleboard plant in Rapid City, the GCC Dacotah cement plant in Rapid City, the Sanford Underground Laboratory at Homestake in Lead, and Neiman Enterprises' two South Dakota sawmills -- Rushmore Forest Products in Hill City and Spearfish Forest Products -- have asked to intervene.

GCC Dacotah is the power company's single biggest user of electricity, plant manager Stephen Post told the Journal in an e-mail, and the increase would cost it nearly $1 million more per year.

The Sanford lab would pay about $500,000 more per year, spokesman Bill Harlan said.

"It's a huge amount of money, and in an economy that's stressed -- and we have a very tight budget -- this is potentially devastating," he said.

The lab's biggest uses of electricity are running hoists up and down two 5,000-foot mine shafts and pumping water and running exhaust fans 24 hours a day, he said.

Beyond the five intervenors, 23 residential customers and two other businesses, Coca-Cola Bottling Company High Country and Fischer Furniture, have filed comments with the Public Utility Commission opposing the rate increase.

"I believe the rate increase would place a significant hardship, not only on my business and other businesses in my area, but on my employees and their households," Fischer Furniture vice president Sam Fischer wrote in his letter to the commission. "In the current economy, when businesses are fighting to spend every penny wisely and employees are living on flat or reduced incomes, this proposed rate increase is out of line."

The PUC's Kolbeck said it is common to have intervenors in rate increase cases and that although intervenors are usually companies or citizen organizations, anyone -- including an individual citizen -- can become one. He encouraged people to file public comments with the commission or to come to a public hearing on Tuesday, Nov. 24, in Rapid City to voice their opinions.

"We'll take anybody's comments, no matter what," he said. "We always make sure that one of us responds."

Black Hills Power has applied for approval to increase rates by $32 million annually, which would mean an increase of $18 a month for the typical residential customer using 600 kWh per month, according to the commission.

The increase would affect about 64,100 customers.

The heavy industrial users have more money at stake, but the Public Utilities Commission treats all comments equally, Kolbeck said, and looks at what is fair for both consumers and the utility.

"That's why the commission is involved, to make sure everyone gets a fair shake," he said.

For example, one BHP customer who wrote to the commission, Steven Mitchell of Sturgis, complained the utility is using too much of the consumer's dollars to donate to philanthropic causes.

Kolbeck said the commission considers how much charitable giving is appropriate, and any giving beyond that would need to come from stockholders as opposed to ratepayers.

"We look at everything," Kolbeck said. "It's definitely an extremely in-depth process."

The process is expected to take four to six months, BHP vice president for operations Chuck Loomis said.

"Ultimately, the costs that are included in customer rates are approved by the commission," Loomis said, including ratepayers' portion of charitable contributions and advertising expenses. "We're an important partner in the community, and we believe it's important to demonstrate our partnership through both community involvement, volunteer efforts and also financial contributions."

Loomis said he understands consumers' concerns about the rate increase.

"It's important for the commission to take those comments into consideration as it makes its decision in the case," he said.

Have a comment?

Send comments on the Black Hills Power rate increase proposal to puc@state.sd.us or 500 E. Capitol Ave., Pierre, SD 57501. Submissions should include the commenter's full name, mailing address and telephone number.

A public meeting to hear comments is scheduled for 7 p.m. Tuesday, Nov. 24, at The Journey Museum, 222 New York St., Rapid City. The meeting will begin with a presentation from Black Hills Power followed by a public comment session. It will last until the commission has heard from everyone who arrives before 9 p.m.

For more information

Complete information about the proposed rate increase is at puc.sd.gov. Select "Commission Actions," "Electric Dockets" and "2009 Electric Dockets." Click on the docket titled EL09-018.