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Black Hills customers face massive rate increases to cover $80 million in cold snap costs
  • Updated

Black Hills Energy customers in Nebraska are facing some significant rate increases to pay for costs the company incurred to keep furnaces and fireplaces running during the extreme cold in February.

Black Hills officials told the Nebraska Public Service Commission during a workshop Tuesday that the utility spent $80 million in Nebraska to purchase natural gas Feb. 12-18 —  more than it spends in a typical year. Over the past five years, the company never spent more than $13 million on gas for the entire month of February.

By law, Black Hills, which has more than 300,000 customers in Nebraska, the bulk of which are in Lincoln, is allowed to recoup the cost of the natural gas it provides to customers, and in the case of the February cold snap, the costs are astronomical.

Douglas Law, Black Hills' associate general counsel in Nebraska, said it paid prices on the spot market as high as $381 per dekatherm of natural gas during the cold snap. That's compared with prices of about $3 per dekatherm earlier in February. A dekatherm is 1 million British thermal units.

Robert Amdor, manager of regulatory services for Black Hills, said the company experiences a significant winter cold snap about once every five years, but he said that in his 30 years he has never seen one as significant as the one in February.

He said it was "unique" because of how cold it got, how wide of an area experienced the cold and how much it drove up demand for natural gas.

In Lincoln, overnight temperatures dipped below zero on 11 consecutive days, capped by a minus 31 reading Feb. 16 that is the coldest temperature ever recorded in Lincoln in February.

The freezing temperatures extended to the Gulf Coast and demand caused unprecedented disruptions to the power grid, as well as rocking the natural gas market.

"This event was far beyond any we've experienced in the past," Amdor said.

Overall, across its six-state territory, Black Hills had more than $600 million in additional energy costs during the cold snap.

Now the company is working with regulators in those states to lessen the burden on customers by spreading out the bills to cover those additional costs over years.

In Nebraska, the additional costs work out to an average of $332 per residential customer and $1,277 per commercial customer.

Normally, Black Hills customers would have just received a larger bill in March reflecting the increases, but Nebraska's Public Service Commission directed the company to delay passing on the costs to customers and to come up with a plan to mitigate the increases and prevent customers from experiencing sticker shock.

Black Hills is proposing to spread the costs out over three years by adding a surcharge to customer bills. Under that plan, the average residential customer would pay an extra $9.21 a month and the average commercial customer would pay $35.47 more.

The amounts would work out to about $110 more a year for the average residential user, a nearly 17% annual increase, and $422 a year, or about 21% more, for the average commercial user.

The surcharges are structured based on usage, so the increases would be higher for households and businesses that use more natural gas, and higher in the winter months.

About half of all Black Hills residential customers use between 80 and 140 therms of natural gas per month during the winter, and they would see monthly bill increases in those months ranging from 19-22%. Households using 40 therms would see an average monthly increase of about 14%, while those using 200 would see an average increase of 23.5%.

The approximately 7,000 customers who participated in Black Hills' annual price option last fall, which allows them to lock in a price for the winter, will not face any increases.

The surcharges will not apply to customers in central and western Nebraska who participate in the Choice Gas program, because they purchase their gas from other suppliers and Black Hills transports it. The surcharges also won't apply to industrial users and large commercial users, who also buy their own gas from other suppliers.

Black Hills presented the commission with plans to have customers pay back the costs over anywhere from one to five years, but Amdor said it settled on three years because it was a "sweet spot" that kept the average increase less than $10 a month.

Tuesday's workshop was for informational purposes only, and it's not clear when the PSC will vote on Black Hills' proposal. Commissioners asked for some additional information, and the company has a week to provide it, although it could ask for additional time.

Commissioner Tim Schram said it is important for the PSC to move "thoroughly but expeditiously."

In a statement, Black Hills said it will "continue to work closely with the Nebraska Public Service Commission to manage the long-term impact of increased natural gas pricing for our customers.

"As the PSC determines the best path forward, we will keep our customers informed when a determination has been made."

The Public Service Commission is holding another workshop Wednesday for the other natural gas company it regulates, NorthWestern Energy, which serves about 43,000 Nebraska customers, mostly in Grand Island, Kearney and North Platte.

In materials it submitted to the PSC in advance of its hearing, NorthWestern said it spent nearly $26 million on natural gas purchases for its Nebraska customers from Feb. 13-18, the bulk of it — about $22.5 million — from Feb. 13-16.

It is proposing having customers repay that amount over anywhere from one to three years.

There also are dozens of municipal utilities in Nebraska that provide natural gas, ranging in size from Omaha's Metropolitan Utilities District, which has about 230,000 customers, to small-town utilities that serve only a few hundred customers.

Many of those utilities, which are not regulated by the PSC, also are struggling with how to deal with huge increases in natural gas costs.

Some examples include Pender, which paid $370,000 extra for natural gas during the cold snap, and Wahoo, which spent $511,000 more than usual.

The Nebraska Legislature is considering a bill that would provide $10 million in emergency aid to municipal utilities that got hit with large increases in natural gas costs.

PSC member Mary Ridder also suggested Nebraska should consider joining other states in an investigation into potential natural gas "price gouging."

"I think we should reach out to our attorney general ... and ask him to join that investigation," she said.

Suzanne Gage, a spokeswoman for Attorney General Doug Peterson, said it was "premature" to comment on the issue at this time.

PHOTOS: RECORD COLD IN LINCOLN

Photos: Record cold in Lincoln

Elections
editor's pick alert top story
Three Democrats, three Republicans advance in City Council race
  • Updated

The three incumbents on the Lincoln City Council, two Republicans new to politics and a Democrat on the city-county planning commission advanced to the general election Tuesday night, narrowing a crowded race.

Twelve candidates vied for three at-large City Council seats — the largest field of candidates in 16 years, which included a host of newcomers to politics. 

COURTESY PHOTO 

Tom Beckius

Courtesy photo 

Eric Burling

Courtesy photo 

Mary Hilton 

Three of those newcomers will advance: Tom Beckius, a Democrat who works in real estate and construction and serves on the Lincoln-Lancaster County Planning Commission; Mary Hilton, a Republican and issues advocate; and Eric Burling, a Republican and software engineer running a study-abroad company.

COURTESY PHOTO  

Lincoln City Councilman Roy Christensen

Courtesy photo 

Bennie Shobe 

COURTESY PHOTO 

Sändra Washington 

The three incumbents who advanced: Roy Christensen, a Republican and audiologist seeking his third term; Bennie Shobe, a Democrat and program analyst at the Nebraska Department of Labor seeking his second term; and Sändra Washington, a Democrat and retired National Parks Service employee who was appointed after Leirion Gaylor Baird became mayor in 2019.

The top three vote-getters were the incumbents, with Democrats Washington (20,644 votes) and Shobe (19,602) taking the top spots.

Washington said she’s very pleased, especially since this is her first campaign.

“It was very gratifying to see the team’s hard work has generated a lot of early votes for me,” she said. “I’m really pleased to see Bennie Shobe and Tom Beckius are right there at the top.”

She said she thinks her positive focus, as well as her work on the council accounts for much of the support with voters.

“When you look at size of the challenges, they might seem large, but I don’t think our challenges are so large we can’t fix them."

Shobe said he thinks his ability to build bridges across the political aisle, listen to everyone and be fair and inclusive resonated with voters. 

Christensen, who garnered 19,365 votes, said he thinks voters focus on prioritizing public safety. 

“There’s several things we need to be working on with public safety, both police and fire,” he said. “There’s issues in both that need more funding and to be prioritized at a higher level.”

Hilton, a political newcomer with the backing of a host of Republican leaders including Christensen, Lt. Gov. Mike Foley, former Gov. Kay Orr, and Gov. Pete Ricketts, said her support of limited government resonated with voters she spoke with on the campaign trail.

“They want good local government providing those essential services and doing it well,” she said, without the sort of overreach and mandates that happened during the pandemic. 

“I’m hoping we can have an honest debate about what we did well and what we can do better,” she said

Beckius said he was thrilled to have such a strong turnout.

“I think voters are looking for a new voice to bring new ideas to the council. I think we have an opportunity to draw a new contingent and I think people might be interested in changing things up a little bit.”

Burling, also a newcomer to politics, ended the night with 11,774 votes. He promotes more fiscally conservative city policies as a way to help the city attract and retain entrepreneurial young adults. He said his experience in starting his own business will help him lead the city.

The six candidates who won’t advance to the general election are: Aurang Zeb, a Democrat and Pakistani immigrant who runs a painting company and flips houses; Elina Newman, an independent and Azerbaijani refugee and Southeast Community College professor and pharmacy technician; Trevor Reilly, a Libertarian and Marine Corps veteran who is a hemp consultant; Maggie Mae Squires, an independent working as a yoga instructor and in parking management; Joe Swanson, a socialist and retired union activist; and Peter Kolozky, an independent and former Army Ranger medic who works as a security guard.

At-large City Council members represent the entire city and join four council members who represent equally populated districts. Members serve four-year terms and are paid $24,000 a year.

Lincoln Airport Authority

Also on Tuesday's ballot were two six-year terms on the Lincoln Airport Authority. All four candidates will appear on the general election ballot, but John S. Olsson and Nicki Behmer scooped up the most votes Tuesday. Jason B. Krueger and Tracy L. Refior are the other candidates.

VOTER'S GUIDE FOR LINCOLN CITY COUNCIL CANDIDATES:

Voter's Guide: Lincoln City Council candidates

National
AP
Vaccine passports latest split over COVID-19
  • Updated

HARRISBURG, Pa. — Vaccine passports being developed to verify COVID-19 immunization status and allow inoculated people to more freely travel, shop and dine have become the latest flash point in America's perpetual political wars, with Republicans portraying them as a heavy-handed intrusion into personal freedom and private health choices.

They currently exist in only one state — a limited government partnership in New York with a private company — but that hasn't stopped GOP lawmakers in a handful of states from rushing out legislative proposals to ban their use.

The argument over whether passports are a sensible response to the pandemic or governmental overreach echoes the bitter disputes over the past year about masks, shutdown orders and even the vaccines themselves.

Nebraska Gov. Pete Ricketts said last week that the state will not participate in any “vaccine passport program.”

“This concept violates two central tenets of the American system: freedom of movement and health care privacy,” the governor said. “Nebraska will take any necessary action to protect the private health information of our citizens and the freedoms we cherish.”

Vaccine passports are typically an app with a code that verifies whether someone has been vaccinated or recently tested negative for COVID-19. They are in use in Israel and under development in parts of Europe, seen as a way to safely help rebuild the pandemic-devastated travel industry.

They are intended to allow businesses to more safely open up as the vaccine drive gains momentum, and they mirror measures already in place for schools and overseas travel that require proof of immunization against various diseases.

But lawmakers around the country are already taking a stand against the idea. GOP senators in Pennsylvania are drawing up legislation that would prohibit vaccine passports, also known as health certificates or travel passes, from being used to bar people from routine activities.

"We have constitutional rights and health privacy laws for a reason," said Pennsylvania House Majority Leader Kerry Benninghoff, a Republican. "They should not cease to exist in a time of crisis. These passports may start with COVID-19, but where will they end?"

Benninghoff said this week his concern was "using taxpayer money to generate a system that will now be, possibly, in the hands of mega-tech organizations who've already had problems with getting hacked and security issues."

A Democratic colleague, Rep. Chris Rabb of Philadelphia, sees value in vaccine passports if they are implemented carefully.

"There's a role for using technology and other means to confirm people's statuses," Rabb said. "But we do have concerns around privacy, surveillance and inequitable access."

Republican legislators in other states have also been drafting proposals to ban or limit them. A bill introduced in the Arkansas Legislature last week would prevent government officials from requiring vaccine passports for any reason, and would ban their use as a condition of "entry, travel, education, employment or services."

The sponsor, Republican state Sen. Trent Garner, called vaccine passports "just another example of the Biden administration using COVID-19 to put regulations or restrictions on everyday Americans."

President Joe Biden's administration has largely taken a hands-off approach on vaccine passports.

At a recent news conference, Andy Slavitt, acting administrator of the Centers for Medicare and Medicaid Services, said he considered them a project for the private sector, not the government.

He said the government is considering federal guidelines to steer the process surrounding vaccine passports. Among its concerns: Not everyone who would need a passport has a smartphone; passports should be free and in multiple languages; and private health information must be protected.

"There will be organizations that want to use these. There will be organizations that don't want to use these," said Dr. Brian Anderson of Mitre, which operates federally funded research centers and is part of a coalition working to develop standards for vaccine certifications to make their use easier across vendors.

Anderson noted the Vaccination Credential Initiative is not making recommendations on how — or even if — organizations choose to use the certifications.

In Montana, GOP lawmakers voted along party lines to advance a pair of bills that would ban discrimination based on vaccine status or possession of an immunity passport, and to prohibit using vaccine status or passports to obtain certain benefits and services.

And a freshman Republican state lawmaker in Ohio spoke out about the concept, saying more restrictions or mandates are not the answer to every COVID-19 problem.

"Ohioans are encouraged to take the COVID-19 vaccine for the health and well-being of themselves and others," Rep. Al Cutrona said. "However, a vaccine should not be mandated or required by our government for our people to integrate back to a sense of normalcy."

Republican Florida Gov. Ron DeSantis on Friday issued an executive order that said no governmental entity can issue a vaccine passport, and businesses in that state can't require them. He said he expected the Legislature to pass a similar law.

A GOP lawmaker in Louisiana has teed up a bill to keep the state from including any vaccination information on the Louisiana driver's license or to make issuance of a driver's license subject to vaccine status.

In New York, a government-sponsored vaccine passport called the Excelsior Pass is being introduced. A smartphone app, it shows whether someone has been vaccinated or recently tested negative for COVID-19.


Nebraska
editor's pick topical alert
NU, Creighton researchers preparing for 'unprecedented' study of contamination from AltEn
  • Updated

Researchers from the University of Nebraska and Creighton University will study the long-term effects pesticides have had on the environment, agriculture and humans living near the AltEn ethanol plant south of Mead.

Experts across several disciplines — including public health, entomology, environmental engineering, chemistry, natural resources and geography — will sample for lingering neonicotinoids, a class of pesticides commonly used in seed coatings.

Unlike most ethanol plants, which use harvested grain to produce ethanol, AltEn solicited and used discard treated seed to manufacture the fuel.

The solid and liquid byproducts of that process were discovered to be heavily contaminated with pesticides believed to be responsible for the collapse of dozens of bee colonies, the death of wildlife, and for making pets and humans sick.

A burst pipe on a tank at AltEn in February released 4 million gallons of pesticide-laden wastewater and manure into nearby waterways and streams, further contributing to the environmental contamination.

The 10-year study, which is expected to cost $1 million annually, will begin ramping up in the coming weeks, said Dr. Eleanor Rogan, chair of Department of Environmental, Agricultural and Occupational Health at the University of Nebraska Medical Center.

"We aggressively reached out across the state for the best scientific minds," Rogan said.

In a virtual town hall Tuesday, researchers explained the various facets of the study, and outlined a timeline for when they expect to be able to provide community members detailed information about the pervasiveness of the pesticides.

Rogan said researchers will sample the air, surface water, groundwater and soil to study how neonicotinoids may have spread from the ethanol plant, the wet distiller's grains spread on nearby fields, or from the February spill.

Other research will study how the pesticides, which are water-soluble and systemic, may continue to exist in both food crops and other plants, as well as how they are affecting wildlife such as bees and butterflies, amphibians, or even larger animals such as deer.

Researchers will also search for neonicotinoids in companion and agricultural production animals.

The team also plans to survey community members and review medical records to look for recurring health issues that may have begun after the plant started operations, and ask for adult volunteers to submit blood and urine samples to understand how the contaminants may persist in humans.

Dan Snow, a research professor at Nebraska Water Center at the University of Nebraska-Lincoln, called the scope and scale of the study "unprecedented."

Dr. Ali Khan, the dean of UNMC's College of Public Health, said AltEn has agreed to participate in the study, as has a toxicologist from Bayer, one of the companies whose product ended up at the ethanol plant.

Researchers also plan to reach out to other seed manufacturers, Khan said, to engage those companies that sent discard treated seed to AltEn.

To pay for the study, Rogan said researchers are seeking funds from the Legislature, the National Institutes of Health, the Nebraska Environmental Trust and other philanthropic groups.

A $200,000 grant from the Claire M. Hubbard Foundation provided seed money for a crowdfunding campaign seeking to raise $25,000. Those wishing to donate can do so online at the University of Nebraska Foundation website.

Preliminary results are expected to be shared in August.

Photos: Mead ethanol plant

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