Black Hills Corp. secures approval for new natural gas rates in Iowa

In a recent development on December 2, 2024, Black Hills Corporation announced that its Iowa natural gas utility, operating as Black Hills Energy, has gained approval from the Iowa Utilities Commission. This approval is regarding a settlement agreement that establishes new rates for the utility. These new rates are set to help recover approximately $100 million in investments made on the pipeline system since its last general rate filing in 2021. Linn Evans, the president and CEO of Black Hills Corp, expressed satisfaction over this settlement, emphasizing the company's commitment to providing safe and dependable natural gas service to its customers and communities in Iowa. The revised rates will generate around $15 million in new annual revenues and will come into effect in January 2025, replacing the interim rates that have been applied since May 11, 2024. This strategic move not only demonstrates the company's dedication to enhancing service but also facilitates continued resilience within the Iowa natural gas system. With a focus on these investments, Black Hills Corp aims to maintain its growth trajectory and continue to be a reliable energy partner for its customers across several states, including Iowa, where it serves a diverse customer base. The new rates are calculated based on a weighted average cost of capital of 7.21%, representing a significant adjustment for the utility as it transitions to the newly approved rates, thus impacting the pricing structure for natural gas consumption moving forward. This development may encourage similar rate adjustments and investment strategies among utility companies across the country as they aim to modernize their infrastructures in response to evolving customer needs and regulatory environments.