Black Hills Energy Heat Pump Rates
Synapse provided expert witness support for Sierra Club and Western Resource Advocates in Black Hills Energy's 2024 rate case. Specifically, we proposed two cost-reflective and revenue neutral rate designs, including a seasonal flat rate and a seasonal time of use rate, for residential customers with heat pumps as their primary heating source. The rates are designed to reflect the seasonality of demand-related costs on Black Hills Energy's system by allocating more costs to the summer when the highest system peaks have occurred in the last decade, resulting in higher rates in the summer and lower rates in the winter. Because heat pump load is concentrated in the winter, Synapse's proposed rates would help heat pump customers save approximately $500 per year relative to Black Hills Energy's proposed rates, thereby encouraging heat pump adoption and helping Colorado make progress towards its climate goals. Additionally, new heat pump load can put downward pressure on rates for all residential customers by helping to spread the fixed costs of the grid across more electricity sales.