PUC upholds decision on Black Hills resource plan

  • Joshua B. Epel, Chairman
  • Pamela J. Patton, Commissioner
  • Glenn A. Vaad, Commissioner

DENVER - (April 16, 2015) - The Colorado Public Utilities Commission (PUC) today upheld its decision on Black Hills Energy’s electric resource plan, reaffirming that the company’s proposal to acquire additional renewable energy resources was not cost effective and would be an additional burden to ratepayers.
The PUC unanimously denied requests for reconsideration of its February decision in which it determined that none of the three alternatives proposed in the company’s resource portfolio was cost effective. The PUC ruled in February that the Black Hills’ proposal to acquire a 60-megawatt wind farm could cost as much as $246 million with resulting increases to ratepayers. That’s on top of expected increases in 2015, 2016 and 2017 for a third gas-fired generation unit at the Pueblo Airport Generating Station, which the PUC reluctantly approved because it had no choice under the Clean Air Clean Jobs Act.
The company’s proposal also would exceed 2016 Renewable Energy Standard Adjustment (RESA) collections set at the 2 percent retail rate cap, requiring the company to advance funds for the project that would add further costs to ratepayers. The Commission strongly refuted arguments that the proposed wind project would provide cost savings to ratepayers over both the short term and the long term. The PUC said Black Hills’ estimates were based on unrealistic natural gas price forecasts over the 25 years of the proposed wind facility.
“The record clearly shows that the original proposal by Black Hills is predicated on unrealistic assumptions, and will result in a net negative impact to their ratepayers,” PUC Chairman Joshua Epel said during deliberations on Thursday. The PUC reiterated that it encourages the development of cost-effective renewable energy. “This Commission consistently has and will approve cost-effective renewable energy projects that are predicated on accurate gas forecasts and are designed as a hedge against gas volatility,” Epel said.
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The Colorado Public Utilities Commission (PUC) serves the public interest by effectively regulating utilities and facilities so that the people of Colorado receive safe, reliable, and reasonably-priced services consistent with the economic, environmental and social values of our state.
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The Department of Regulatory Agencies (DORA) is dedicated to preserving the integrity of the marketplace and is committed to promoting a fair and competitive business environment in Colorado. Consumer protection is our mission. Visit www.dora.colorado.gov for more information or call 303-894-7855 / toll free 1-800-886-7675

Media Contact:
Terry Bote
Colorado Public Utilities Commission
p: 303-894-2827