Black Hills Energy Rate Increase: SD Approves $16.34 a Month

South Dakota regulators approved a smaller Black Hills Energy rate increase on Nov. 4, 2026: about $16.34 a month for a typical residential customer using 650 kWh, starting Dec. 1. The South Dakota Public Utilities Commission (PUC) accepted a settlement that raises the company’s South Dakota electric revenue by $27.354 million a year. Black Hills had asked for about $50.6 million, or $25.13 a month for a typical home.

The case covers Black Hills Power, Inc., which does business as Black Hills Energy and serves about 75,000 customers in its South Dakota territory, including Rapid City. A second, separate charge for a new power plant is still pending and could start on an interim basis the same day. For Xcel Energy’s 2026 decision and how solar is paid in the state, see our South Dakota electricity rates and solar guide.

What the PUC Approved

According to the PUC’s Nov. 5 news release, the settlement allows Black Hills to “increase electric rates for South Dakota customers by $27.354 million annually.” The PUC says that is “a 21.28% increase in base rate revenue” and “a 13.62% increase in total bills.”

Sources: PUC release of Nov. 5, 2026; the PUC’s Nov. 4 meeting agenda; Black Hills’ updated customer notice. The 21.28% applies to base rate revenue only; the 13.62% applies to total bills, which also include other charges.

The settlement was filed Oct. 26 by Black Hills, PUC staff and the South Dakota Large Customer Group, a group of eight large energy users that intervened in the case, according to the agenda. The PUC says the company’s last rate increase was approved “in March of 2015.” Commission Chairman Chris Nelson said that, counting rate changes since what he called the company’s last base rate increase in 2014, the typical residential customer’s increase “averages approximately 3.0% per year,” below average annual inflation of about 3.5%.

The case is Docket EL26-003.

Interim Rates and Your Refund

Black Hills began charging interim rates on Aug. 18, 2026, while the case was pending, at the level of its full request. The company’s interim bill-impact sheet shows the average residential regular-service bill rising from $98.96 to $124.08 under interim rates, the same $25.13 as the full request.

“The approved settlement is less than interim rates,” the PUC says, so the company “agreed to refund customers the difference between interim rates and new rates collected, plus interest.”

Our estimate of the size of that gap, for a typical customer:

• Interim increase: $25.13 a month
• Approved increase: $16.34 a month
• Difference: $25.13 − $16.34 = $8.79 a month over-collected, plus interest

Assumptions: the company’s typical residential customer at 650 kWh a month, regular service. Interim rates ran from Aug. 18 through Nov. 30, about three and a half billing months. The PUC release does not give a refund amount per customer or say on which bill the credit will appear, so treat this as an estimate, not your refund. Customers on total-electric or demand service had different interim increases.

The Separate Lange II Surcharge

The base rate case is not the only change scheduled for Dec. 1. In August, Black Hills filed a second request, Docket EL26-024, to amend its Phase-In Plan Rate (PIPR), a surcharge tied to its new Lange II generating plant in Rapid City.

The company’s application describes Lange II as “a generating plant that will produce a total of 97.4 MW net capacity,” which the application describes as six dual-fuel reciprocating engines. It proposed to increase PIPR revenue “by approximately $39.5 million.” South Dakota Public Broadcasting reported the plant’s cost at $320 million.

On Oct. 30, Black Hills filed a notice of intent to put interim PIPR rates in place “effective December 1, 2026,” designed to recover “approximately $37.5 million in additional annual revenue.” The notice says: “A typical residential customer using approximately 600 kWh per month is expected to experience an increase of approximately $17.26 per month.” The company’s customer notice puts that at $0.02876 per kWh. Black Hills “acknowledges that the interim rates … are subject to refund.”

The PUC has not issued a final decision on the surcharge. The docket page listed it as pending on Nov. 6, 2026, with no hearing or decision date shown.

What a December Bill Could Look Like

If the interim surcharge starts Dec. 1 as Black Hills has noticed, a typical home would see both changes at once. Our rough estimate at 650 kWh a month, regular residential service:

This is our estimate, not a company or PUC figure. It combines figures computed at two usage levels (650 kWh for the rate case, 600 kWh for the surcharge, which we scaled by its per-kWh rate), it assumes the $98.96 average bill matches the typical 650 kWh customer, and it leaves out the interim refund credit. The surcharge is interim and could change when the PUC rules. Black Hills’ application also says its new PIPR allocation method “ties to Docket No. EL26-003,” so the final surcharge may reflect the settlement.

Compared with the interim bill customers have paid since August ($124.08), the estimate is about $9.91 higher. For how interim rates, settlements and riders fit together, see how electric rate cases work.

What It Means if You Have or Want Solar

South Dakota does not have net metering. The PUC’s solar FAQ states that “South Dakota does not compensate solar generation at a net metered rate.” It says “the minimum rate paid” for power you send to the grid “is referred to as the avoided cost,” meaning what the utility would otherwise spend to generate or buy that energy. Solar you use at home as it is produced offsets the full retail rate; exported power may be credited at as little as avoided cost.

Two things follow for Black Hills customers:

• Per-kWh charges are what solar can offset. The interim Lange II surcharge is billed per kWh ($0.02876 in the company’s notice), so each kWh your panels supply directly to your home avoids it. Exported kWh do not.
• We do not yet know how the base increase is split. The PUC release does not say how much of the $16.34 is in the fixed customer charge versus per-kWh energy charges. Fixed charges cannot be offset by solar. Our guide to fixed charges and solar savings explains why that split matters.

Without net metering, sizing a system to your daytime use generally gets the most value from each kWh. If an installer’s quote assumes every kWh is worth the full retail rate, ask how it values exports. Our payback guide walks through the math.

What to Check on Your Bill

1. December bill: new base rates for service from Dec. 1.
2. Refund credit: the interim refund, with interest. Ask Black Hills when it will appear if you do not see it.
3. PIPR or Phase-In Plan Rate line: whether the Lange II interim surcharge has started.

For help reading those lines, see how to read your electric bill.

Sources and verification

Checked Nov. 6, 2026. The base rate figures are approved. The Lange II surcharge is a pending request with interim rates noticed by the company, not a PUC decision.