PIERRE, S.D. (KELO) — There’s a possible compromise coming between a Rapid City-based utility company and its South Dakota customers who also produce some of their own electricity.
The sides have agreed to hold off changes that Black Hills Power requested.
Instead, they’re asking the South Dakota Public Utilities Commission on Tuesday to approve a delay until at least January 1, 2024.
The three commissioners are scheduled to decide Tuesday whether to approve the deal.
The sides submitted a signed plan where they agree to “work collaboratively on the best strategy to collect, share, and analyze data for the examination of alternative potential revisions to Black Hills Power’s tariffs.”
One of the conditions calls for Black Hills Power, at its expense, to install production meters on a select number of behind-the-meter generation facilities.
The goal is to collect data to better understand the generation profile of each facility and the impact on the Black Hills Power system.
Another condition calls for the sides to meet at least twice in 2022 and at least twice in 2023 to exchange data and discuss potential changes to Black Hills Power’s tariffs to address fixed-rate recovery.
Black Hills Power currently has 62 residential customers and 11 commercial customers in South Dakota that can generate some or their own electricity. They include 30 residential and three commercial who converted in 2019 and 2020.
Intervenors who signed the agreement include residential customers of R. ‘Sonny’ Rivers, Richard Bell, and Steve and Lynn Hammond, and commercial customers Xanterra Parks and Resorts, Cobblestone, Pangea Design Group, Black Hills Homestead, and GenPro Energy Solutions.
The utility company has argued that self-producers don’t fully pay the fixed costs of their electricity service.
Jason Keil is director of regulatory and finance for Black Hills Power. In written testimony, Keil stated, “In order to make electric service more widely available, monthly customer charges, which are paid by customers regardless of electricity usage during the billing period, have been kept low. The result is that utilities like Black Hills Power recover most of its fixed costs, which can be as much than 75% of its costs, through volumetric charges. So when a customer installs behind-the-meter generation to reduce their metered electricity consumption, under current rate design practices that customer no longer pays the actual cost related to their receiving reliable utility provided electric service.”
Black Hills Power originally requested the commission’s approval to change the system for new self-producers with less than 1 megawatt of generation. Currently the utility bills for net usage. The utility wanted to convert them to a buy-all / sell-all approach. The proposal also called for these customers to pay a $10 monthly metering charge.
The existing self-producing customers would have been grandfathered –meaning the changes would be delayed — until May 31, 2041.