Black Hills proposes ambitious clean energy plan amid rate concerns

In a recent government meeting, officials discussed the Phase 2 Electric Resource Plan (ERP) for Black Hills Colorado Electric LLC, which aims to significantly reduce carbon emissions. The plan, filed on May 27, 2022, includes a Clean Energy Plan (CEP) targeting an 80% reduction in carbon dioxide emissions by 2030 compared to 2005 levels.

The meeting highlighted the unanimous settlement agreement reached in Phase 1, which set the groundwork for the current deliberations. Black Hills has proposed a preferred portfolio consisting of a 150 Megawatt wind project, a 200 Megawatt solar project, and a 50 Megawatt battery storage project. The total estimated cost for this preferred portfolio is approximately $1.5 billion, factoring in social costs related to carbon emissions.

However, the discussion revealed significant concerns among commissioners regarding the financial implications for customers. Black Hills currently has some of the highest electric rates in Colorado, and the utility is seeking a 20% revenue requirement increase. Commissioners expressed frustration over the potential rate impacts on a community with low median income and stagnant demand growth. They criticized the utility for not exploring more cost-effective options and for the high costs associated with the proposed projects.

The independent evaluator confirmed that the solicitation process for bids was fair, but commissioners noted the limited pool of bidders and the high costs compared to other utilities. The meeting concluded with a call for further analysis and a multi-step deliberation to address the pressing concerns about customer rate impacts and the overall viability of the proposed energy resources.