photo by: Brian Grimmett/Kansas News Service

A natural gas furnace

Natural gas customers of Black Hills Energy — including large numbers of homes and businesses in Lawrence — now have official word that they will be paying for last February’s arctic blast until 2027.

Kansas regulators on Thursday approved a plan that is expected to add $11.47 per month to the bills of average residential customers through January of 2027. The surcharge is designed to recoup the costs Black Hills Energy incurred during the February arctic blast, which resulted in historically high natural gas prices.

In some cases, natural gas prices were so high that gas utilities were paying in one month what they normally would spend on gas for four years. Utility companies like Black Hills did not immediately pass those costs along to customers. Instead, they absorbed the costs — often taking out debt to finance the payments — with the belief that Kansas regulators would allow the companies to pass the costs along to customers over a period of many months.

On Thursday, the Kansas Corporation Commission — the chief regulators for utilities in the state — gave that approval. The $11.47 per month average increase is in line with what Black Hills officials had previously announced. In total, Black Hills is collecting $87.9 million, which includes the cost of the gas purchased by the utility during the two-week arctic blast period as well as certain financing costs the company incurred.

If customers would have been required to pay the outstanding gas fees over a one-year period, bills would have increased by $53.51, on average, for a total of about $642 in additional payments. Under the five-year repayment plan, customers will pay, on average, $688 in special payments.

In making its decision, the KCC said the longer payment was justified because it wouldn’t create as large of a spike in utility bills for the average customer.

“Today’s order acknowledges that while no customer welcomes bill increases, the five-year repayment period provides some relief to ratepayers,” the KCC said in a statement.

Customers should look for the charge on their bills under the heading of “Storm Uri Gas Charge.”

The amount of the surcharge could decline, if federal and state investigations into the arctic blast find that natural gas suppliers — entities the utilities buy the gas from — engaged in illegal price fixing.

“Any recovery of costs through federal or state investigations into price gouging, market manipulation or civil suit resulting from the weather event will be passed on to customers,” the KCC said in its statement.