photo by: Journal-World File Photo

This file photo from July 2015 shows a westward look across Lawrence; at right, Ninth Street stretches toward downtown.

TOPEKA — Black Hills Energy residential customers will see natural gas bills increase nearly $6 per month after state regulators approved a unanimous settlement agreement Thursday.

The increase is based on a residential average use of about 50 therms per month.

The Kansas Corporation Commission approved the settlement agreement that will increase base rates by $10.8 million, less than the $17.2 million the company initially requested.

Black Hills Energy provides natural gas services primarily to southwest and south-central Kansas customers, but also is the largest natural gas provider in Lawrence. The new rates will go into effect August 1, a KCC press release said.

The settlement agreement included approval of Black Hills’ request to refund nearly $3 million in excess deferred income tax to customers and allows the company to file an abbreviated rate case later this year to recover capital investments, the press release said.

In testimony filed in the rate case, Black Hills Energy officials said the company has experienced declining natural gas usage per customer since its last rate case filed in 2021.

Robert Daniel, Black Hills director of regulatory affairs for Kansas and Arkansas, testified the company had one new revenue increase in the past decade. He said a 2014 rate case resulted in about $800,000 in new revenue and a 2021 rate case brought no new revenue.

The settlement is a “black box” settlement, which means some items, such as capital structure, return on equity or overall rate of return, are not defined in the agreement, said Audrey Benham, regulatory accountant for the Citizen’s Utility Ratepayer Board. She filed documents for CURB in support of the agreement.

Other parties to the settlement agreement are KCC staff, Black Hills Energy, WoodRiver Energy, Kansas Municipal Energy Agency, Symmetry Energy, Freedom Pipeline and Seaboard Energy Kansas.

• Morgan Chilson is a journalist with the Topeka-based news service Kansas Reflector.