Kansas regulatory rate review
Providing you with the energy you depend on
At Black Hills Energy, our most important responsibility is providing safe, reliable natural gas service to our Kansas customers and communities – approximately 120,000 customers in 68 communities across 50 counties. This requires our continuous investment in the 4,765 miles of natural gas pipeline infrastructure that serves homes and businesses across the state.
We've made significant improvements to our system since our last rate review in 2021. Since that time, we will have invested approximately $118 million on behalf of our Kansas customers for safety, reliability, system integrity and customer additions.
Update to natural gas rates
We submitted a rate review to the Kansas Corporation Commission (KCC) on Feb. 3, 2025, requesting an increase in rates to recover critical system costs already incurred by Black Hills Energy to support the safe and reliable delivery of natural gas for our customers. This allows us to continue using the Gas System Reliability Surcharge (GSRS) to fund accelerated, safety-focused pipeline replacement across the state. This application satisfies the requirement to file a general rate case in Kansas by the end of 2026 to remain eligible for commission approval of future GSRS filings.
We are requesting this update to rates because inflationary cost pressures have led to substantial increases in all aspects of providing safe, reliable natural gas service to customers. In addition to inflation, the Federal Reserve has increased interest rates from near zero, peaking in 2023 at 5.5%, to now at 4.5%.
The rate review does not affect the cost of natural gas, which is adjusted monthly in Kansas. Natural gas prices are a pass-through cost without any markup from Black Hills Energy.
Public hearing
The public hearing is scheduled for:
Tuesday, April 29, 2025 – Beginning at 6:00 p.m., CDT
This meeting will be held at:
Wichita State University Hughes Metroplex
5015 E. 29th St. N
Wichita, KS 67220
Attendees may participate in person or virtually via Zoom. Those who wish to participate by Zoom, with the ability to make a comment or ask a question, must register at kcc.ks.gov/your-opinion-matters by noon on April 28.
To view the hearing without participating, tune in to the KCC YouTube channel. A link will appear on the KCC’s website homepage at kcc.ks.gov on the day of the hearing.
The public hearing will begin with brief presentations followed by a question and answer period to allow the public to ask questions about the proposal. At the conclusion of the Q&A, members of the public will have the opportunity to make formal comments to KCC Commissioners.
How your energy rates are set
Each day, our Black Hills Energy team works to maintain, replace and update critical equipment to provide you with the safe, reliable natural gas service you depend on. It's our responsibility to make investments consistently and prudently in the safety and resilience of our system. The Kansas Corporation Commission (KCC) regulates public utilities, including Black Hills Energy. Preparing to file a rate review for the KCC takes over a year of prep work and is the standard process for a public utility to set new rates and tariffs that allow the company to recover allowable costs and system investments necessary to meet our responsibility to provide safe, reliable natural gas service for our customers. Prior to deciding on proposed changes, the KCC carefully reviews the request and considers public comment along with testimony from the KCC Commission Staff, Citizens’ Utility Ratepayer Board, Black Hills Energy and other intervening parties.
Subject to KCC approval, we are requesting an update in base rates which would result in an average monthly bill increase for residential customers of about $11 per month. This equates to a 5.8% annual increase over three years, or a 17.6% increase since Black Hills Energy last changed its rates in 2022. If approved by the KCC, new rates would go into effect in the second half of 2025.
| Customer class | Current rate bill amount | Updated rate bill amount | Monthly change |
|---|---|---|---|
| Residential service | |||
| 50 therms | $62.86 | $73.93 | $11.07 |
| Small commercial sales | |||
| 107 therms | $122.49 | $141.04 | $18.55 |
| Small volume firm sales | |||
| 843 therms | $763.39 | $788.65 | $25.26 |
| Large volume firm sales | |||
| 13,316 therms | $6,165.55 | $6,044.34 | ($121.21) |
| Irrigation sales | |||
| 1,770 therms | $835.48 | $866.27 | $30.79 |
Other changes include:
With this 2025 rate review, we are seeking to continue to fund accelerated, safety-focused pipeline replacement projects across the state through the renewal of the Gas System Reliability Surcharge (GSRS).
This is allowed by the Gas Safety and Reliability Policy Act, passed by the Kansas Legislature in 2006, to create a funding mechanism which allows natural gas utilities to recover its capital investments on certain types of infrastructure replacements that address safety and reliability.
GSRS investments benefit customers and are critical to the ongoing safety and reliability of the system but do not cover all of the investment needs.
How we’re supporting our customers
We recognize the impact of rising energy bills for our customers. That’s why we have worked hard to control our own costs and why we have avoided updating our base rates for three years. We have worked diligently over the past three years to manage cost increases with the goal of maintaining stable bills for customers.
Our work to help customers includes:
- We’ve increased our efforts to provide support for customers, including launching a new Energy Assistance team to help our most vulnerable customers access programs and resources to help make their bills more affordable.
- Customers who experience challenges paying their bills are encouraged to contact us at 888-890-5554 or submit an online form on our customer service page as soon as they think they may be experiencing financial difficulties to discuss payment arrangements.
- Enrolling in Budget Billing, a free payment plan that averages the amount owed each month, is a great way to avoid seasonal spikes in bills.
Frequently asked questions
What is a rate review?
Utilities periodically review customer rates to align with the actual cost of delivering natural gas service – this includes operating costs, capital investments and other system expenses. As a regulated public utility, Black Hills Energy must work with the KCC to request review and approval for any change to tariffs or rates.
Black Hills Energy will follow the KCC’s formal process to recover allowable costs and system investments necessary to meet our responsibility to provide safe, reliable natural gas service for our customers. The KCC will review our request and consider public comment and perspective from stakeholders.
Why are you requesting a rate update?
Our most important responsibility is providing safe, reliable natural gas service to our Kansas customers and communities. Black Hills Energy serves approximately 120,000 natural gas customers in Kansas. It’s our responsibility to make investments consistently and prudently in the safety and resilience of our system.
Why now?
We are requesting this update to rates because inflationary cost pressures have led to substantial increases in all aspects of providing safe, reliable natural gas service to customers. This includes natural gas pipeline construction and higher costs for steel pipes, valves, flanges and fittings, and increased costs for vehicle expense, and compensation for our hardworking Kansas employees and contractors. Since our last rate filing in 2021, Black Hills Energy will have invested approximately $118 million on behalf of customers to support the safety, reliability and integrity of the natural gas system.
How will this rate update impact customer bills?
As proposed, the average residential customer would see a monthly bill increase of about $11. This equates to a 5.8% annual increase over three years, or 17.6% increase since Black Hills Energy last changed its rates in 2022.
When will new rates take effect?
If approved by the KCC, new rates would take effect in the second half of 2025.