Black Hills Energy Reports Third Quarter 2020 Bad Debt Expense

Strategic Insights -

Black Hills Energy, a prominent energy provider in the western United States, has released its Third Quarter 2020 report on bad debt expenses, which has been affected by the COVID-19 pandemic. The report, submitted to the Colorado Public Utility Commission, details the company's efforts to mitigate bad debt expenses and provides an update on the incremental bad debt expense for the quarter. The report highlights the company's continued commitment to assisting its customers during this challenging time, including providing extended payment arrangements, levelized billing programs, energy efficiency tips, and referrals to bill assistance funding.

Key Takeaways:

  • Black Hills Colorado Gas, Inc. has not recorded any expenses to its regulatory asset account, as actual bad debt expense is below the baseline established in the Settlement.
  • Black Hills Colorado Electric, LLC has recorded an incremental bad debt expense of $202,010 into the regulatory asset account, but has not yet reported the actual incremental bad debt expense for the Third Quarter.
  • The company approximated the customer class distribution of the Third Quarter incremental bad debt expense using a proxy, with 84% attributed to residential customers, 16% to commercial customers, and 0.1% to industrial customers.
  • The company has late fees in its respective tariffs for gas and electric, but did not bill any late fees to customers during the Third Quarter due to a waiver established in response to Governor Executive Orders.
  • The company has implemented measures to mitigate bad debt expenses, including providing extended payment arrangements, levelized billing programs, energy efficiency tips, and referrals to bill assistance funding through The CARES Act and low-income agencies and organizations.
  • The company believes that the bad debt expense accrual in FERC Account 904 is likely to increase with increases in revenues for November and December heating loads.

Statistics:

  • Incremental bad debt expense for Black Hills Colorado Electric, LLC: $202,010
  • Year-to-Date Bad Debt Expense Baseline: $143,948 (Black Hills Colorado Gas, Inc.) and $1,250,384 (Black Hills Colorado Electric, LLC)
  • Actual 90-day arrearage data for gas and electric customers as of June 30, 2020: $883,599 (residential), $168,184 (commercial), and $652 (industrial)
  • Incremental bad debt expense as a percentage of total bad debt expense: 23.4% (Black Hills Colorado Gas, Inc.) and 16.5% (Black Hills Colorado Electric, LLC)

Sources:

  • Black Hills Energy Report for Third Quarter, 2020, filed on November 16, 2020, in Proceeding No. 20V-0159EG with the Colorado Public Utility Commission.
  • Unanimous and Comprehensive Stipulation and Settlement Agreement, filed on July 16, 2020, in Proceeding No. 20V-0159EG with the Colorado Public Utility Commission.
  • Decision R20-0597, granted on July 16, 2020, in Proceeding No. 20V-0159EG with the Colorado Public Utility Commission.
  • Public Attachment 1 in Proceeding No. 20M-0267EG, filed on October 15, 2020.
  • Governor Executive Orders Nos. D 2020 098, D 2020 132, D 2020 157, and D 2020 181.