This week, the Colorado Public Utilities Commission (PUC) granted a motion to dismiss an application by Black Hills/Colorado Electric Utility Company to acquire natural gas reserves as a hedge against future gas prices. The application, which was filed in late 2015, sought approval of long-term investments in natural gas reserves that would be recoverable though rates charged to utility customers. The program, Black Hills argued, was designed to reduce its customers exposure to volatile natural gas prices though a long-term physical hedge. The utility has filed similar plans in other states where it provides electricity or gas service.
In dismissing the application 3-0, the PUC expressed concerns about ratepayer protection, and stated that the plan posed "serious risks to ratepayers." In a statement, the PUC further explained that "granting this particular gas hedging program without adequate information to determine sufficient ratepayer protections was not in the public interest." Even though the application was dismissed, the utility will nevertheless have a chance to reapply with a different and more detailed plan.(April 27) PUC dismisses Black Hills gas reserve plan
Even if Black Hills does not file a new application, similar issues will remain before the PUC during 2016. Public Service Company of Colorado (Xcel Energy) currently has an application for a similar plan pending before the PUC. That plan, which has not been subject to a similar motion to dismiss, is set for hearing later in 2016.
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