PUC dismisses Black Hills gas reserve plan

DENVER (April 27, 2016) — The Colorado Public Utilities Commission (PUC), part of the Department of Regulatory Agencies (DORA), today granted a motion to dismiss an application by Black Hills Colorado/Gas Utility Company to acquire natural gas reserves, stating the plan posed “serious risks to ratepayers.”

The PUC voted 3-0 in favor of a motion to dismiss filed by DORA’s Office of Consumer Counsel (OCC), which argued that Black Hills had failed to provide sufficient evidence on immediate and future costs of the proposal.

Black Hills in October filed an application seeking approval of proposed investments in natural gas reserves for a period of 20 years. Black Hills sought to enter into a “gas hedging” agreement with an affiliate to acquire 50 percent of the company’s forecasted annual firm gas demand. Production operating expenses, plus a return on expenses for capital used to acquire the reserves, drill the wells and construct required infrastructure, would be recovered from ratepayers.

The PUC in December directed Black Hills to provide additional information about the cost impacts of the program, and issued specific questions to be addressed. The PUC said the company in its supplemental testimony failed to provide the majority of information requested by the Commission.

The PUC said granting this particular gas hedging program without adequate information to determine sufficient ratepayer protections was not in the public interest.

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About PUC

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. Visit www.colorado.gov/dora/puc.

About DORA

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.colorado.gov/dora for more information or call 303-894-7855/toll free 1-800-886-7675.