Black Hills Power received the rate increase last week that we all knew was coming. The pending agreement with the South Dakota Public Utilities Commission is for an overall 6.4 percent increase beginning Oct. 1.
The rate increase won’t be felt because the utility already had permission to raise rates on an interim basis effective June 16. Because the agreed rate increase is less than what BHP had been charging as interim rates, the company will issue refunds that the company said would be an average $10.50 to residential customers.
The pending agreement was negotiated with PUC staff and amounts to an additional $8.8 million in revenues for BHP. The company had sought an increase of $13.7 million.
BHP officials have told the Journal that the rate increase was requested as compensation for retiring older coal-fired power plants and building a newer plant near Cheyenne, Wyo., that will generate electricity using natural gas as fuel.
While natural gas is a cleaner fuel source, company officials have said the cheapest energy source available to them is coal, but federal regulations are making it all but impossible to build more coal power plants, and its existing coal plants are facing stricter emissions requirements that will increase the cost of electricity generation.
What this means to consumers is that the cost of electricity will continue to increase in the future to achieve public policy goals on plant emissions.
Whether you agree with the policy goals or not, the result will be rising electricity rates down the road for everyone.
Let’s face it, life as we currently know it is impossible without electricity. Our lights, appliances, electronics, even that electric car that some politicians envision in every garage, depend on electric power to run. We have difficulty imagining that wind and solar energy alone could meet future demands for power.
What to do? Electricity isn’t going to get cheaper and could become more scarce. It would be in anyone’s best interests – in homes and at businesses – to look at energy efficiency to offset rising energy costs.
Black Hills Power, in fact, offers energy efficiency programs, appliance rebates, and energy savings tips on its website. There are many other sources of information about energy efficient appliances, insulating homes and offices, and cutting back on energy use. You can even get tax credits for buying energy efficient products on your federal income taxes.
If we’re not going to pursue the cheapest and most abundant energy available – and we’re not – then finding ways to save energy – and holding down monthly utility bills -- is the next best alternative.
We need electricity, and it’s not going to get cheaper anytime soon.