Regulators Approve Black Hills Energy Rate Increase

The South Dakota Public Utilities Commission unanimously approved a settlement allowing a $27.4 million annual increase for western South Dakota customers.

Updated on Nov. 6, 2026 in Utilities

Bold flat-color vector editorial illustration of a lone wooden utility pole with power lines stretching across open prairie under a wide sky. — The South Dakota Public Utilities Commission unanimously approved a $27.4 million annual rate increase for Black Hills Energy customers in western South Dakota, effective December. AI Illustration. Upload story photo >

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The South Dakota Public Utilities Commission unanimously approved a settlement on Wednesday allowing Black Hills Energy to collect $27.4 million annually from about 75,000 customers in western South Dakota. The approved increase adds about $16 to the typical residential monthly electric bill and takes effect in December.

Why it matters

The company said the increase is needed to cover infrastructure improvements, inflation, and rising operating costs, and its rates had not increased since 2014. The settlement also prevents another rate increase from taking effect before August 2030.

The approved $27.4 million is roughly 54 percent of the $50.6 million Black Hills Energy originally sought, which would have added $25 to the average monthly bill. A pending surcharge tied to the $320 million Lange II plant could add an estimated $19.70 per month, and its final status is not yet determined.

The players

Black Hills Energy

Black Hills Energy is an investor-owned utility company that provides electric and natural gas service to customers across several states, including western South Dakota.

South Dakota Public Utilities Commission

The South Dakota Public Utilities Commission is the state regulatory body that oversees rates and services for investor-owned utilities operating in South Dakota.

The details

The commission approved a settlement negotiated by its staff with the company and a group representing large electric customers, with lesser increases for some commercial and industrial customer types. Customers will receive refunds for overages paid since the higher interim rate took effect in August.

August: Higher monthly increase took effect on an interim basis.
December: Approved rate increase and the pending surcharge are scheduled to take effect.
August 2030: Settlement prevents another rate increase before this date.

Utility Rate Framework

Under South Dakota's public utility law, the commission must allow reasonable cost recovery and a return on investment, which shapes this approval of a settlement below Black Hills Energy's original $50.6 million request. The pending Lange II surcharge reflects the same framework, as the plant's $320 million cost is passed to ratepayers through a separate charge.

A typical residential customer will see roughly $16 added to the monthly electric bill starting in December, plus a possible $19.70 surcharge if it is approved. Customers who overpaid since August will receive refunds for those overages.

The takeaway

Households in western South Dakota should budget for a higher electric bill beginning in December and watch for the commission's decision on the Lange II surcharge, which could change the total monthly cost.

What happens next

The approved rate increase takes effect in December, and the pending Lange II surcharge is scheduled to take effect on an interim basis at the same time, with refunds available if the commission later reduces it.