RAPID CITY, S.D., Feb. 11 /PRNewswire-FirstCall/ -- Black Hills Corp. utility subsidiary Black Hills Power announced today that the Federal Energy Regulatory Commission has approved a formulaic approach for setting transmission rates. This change will result in an increase to Black Hills Power's transmission revenue requirement from $5.6 million to $9.4 million, effective Jan. 1, 2009. Under the formula approved by FERC, transmission rates will be set utilizing a return on equity of 10.8 percent and a capital structure consisting of 57 percent equity and 43 percent debt.
"The Federal Energy Regulatory Commission decision is notable in that it approves a formula-based rate process. This allows us to utilize an annual true-up calculation rather than having to file separate rate cases each time we make transmission investments," said Chuck Loomis, vice president of operations for Black Hills Power. "We continue to add transmission infrastructure to serve the growing needs of Black Hills Power transmission customers. This decision improves the efficiency of recovering those transmission system investments."
ABOUT BLACK HILLS CORPORATION
Black Hills Corp. -- a diversified energy company with a tradition of exemplary service and a vision to be the energy partner of choice -- is based in Rapid City, S.D., with corporate offices in Golden, Colo., and Omaha, Neb. The company serves 750,000 utility customers in Colorado, Iowa, Kansas, Montana, Nebraska, South Dakota and Wyoming. The company's non-regulated businesses generate wholesale electricity, produce natural gas, oil and coal, and market energy. We partner to produce results that improve life with energy. More information is available at http://www.blackhillscorp.com/.
ABOUT BLACK HILLS POWER
Black Hills Power is the legacy business of Black Hills Corp. and has been delivering energy for more than 125 years. The electric utility serves 65,400 customers in 20 communities in western South Dakota, northeastern Wyoming and southeastern Montana. More information is available at http://www.blackhillspower.com/.
