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Black Hills gas utility in Wyoming gets approval to consolidate, increase rates

The Wyoming Public Service Commission approved the settlement agreement for Black Hills Corp.'s natural gas utility Black Hills Wyoming Gas LLC to consolidate its base rates and tariffs and for a general rate increase.

The approved rates are expected to generate an estimated increase in annual revenue of $13.3 million, beginning March 1, 2020, according to a Dec. 11 news release. The new revenue will be used to recover amounts spent on utility infrastructure and increased operating expenses. It is based on a 9.4% return on equity and a capital structure of 50.23% equity and 49.77% debt.

The agreement also permits Black Hills Wyoming to establish a Wyoming Integrity Rider, which would allow the utility to recover costs spent on integrity management programs, according to the release. Black Hills Wyoming has spent roughly $150 million on these programs addressing safety and system reliability for almost 6,000 miles of transmission and distribution pipeline in the state.

Black Hills, which filed an application with the commission in June, previously received approval to consolidate its four natural gas utilities in Wyoming. The corporation serves 1.27 million natural gas and electricity customers in eight states.