Black Hills Energy Arkansas Inc. filed a request with state regulators Dec. 15 for approval of a gas base rate increase.
If approved, the rate increase would generate additional revenues of approximately $29.9 million annually, according to a news release. The revenues will be based on a capital structure of approximately 54.7% equity and 45.3% debt and premised on a return on equity of 10.2%. The company is requesting the increase to recover $160 million of investments in upgrading its gas infrastructure.
Since 2016, Black Hills Energy Arkansas said it has invested more than $160 million in replacing, upgrading and maintaining more than 5,500 miles of transmission and distribution pipelines.
"The system investments and staff additions we've made, and will continue to make, are critical to ensuring safe, reliable service as we strive to meet customer needs driven by robust economic growth in Northwest Arkansas," Black Hills Corp. Chairman and CEO David Emery said. "As with our entire natural gas service footprint, we take a deliberate approach to assessing and prioritizing staffing levels, infrastructure upgrades and additions. This rate review filing reflects our need to provide the infrastructure and support services required to serve the increasing demands of our customers."
Subject to the Arkansas Public Service Commission's approval, Black Hills Energy Arkansas will implement the new rates in the fourth quarter of 2018. (Docket: 17-071-U)