The Colorado Public Utilities Commission has approved Black Hills Energy’s request to increase rates to pay for its new gas-fired generating plant near Pueblo Memorial Airport.
The increase will allow the utility to raise an additional $10.1 million a year to pay for the new plant, which was necessitated by a decision by Xcel Energy to end its agreement to supply Black Hills with electricity from its Comanche Generating Station.
The PUC’s approval this week will mean an increase of 9 to 10 percent in customers’ bills, substantially less than Black Hills originally sought. The precise amount of the increase must be figured during a technical conference next week.
Meanwhile, two more rate hikes may be forthcoming, and they would be a result of “green” mandates by the state Legislature.
Black Hills’ coal-fired Clark Station in Canon City will cease operation at the end of 2013 to comply with legislatively mandated clean-air standards. Then, to meet the state’s increased renewable energy standard, Black Hills intends to invest in power generated at a Huerfano County wind farm.
So while Huerfano County’s tax base will be bolstered by the wind farm, the tab will be paid by electric users in Pueblo, Rocky Ford, Canon City and Victor. There is no free lunch, and there is no free energy.
Indeed, Black Hills’ decision to build its gas-fired plant near Pueblo’s airport was driven by the same demands of the greens, who would like to see the end to coal-fired generation, even though the United States has huge reserves of coal, particularly the cleaner-burning type from Wyoming that is used in this part of the nation.
Customers of Black Hills should keep all this in mind when their higher electricity bills start showing up after the first of the year.