Black Hills Power customers at a public hearing Tuesday said they can't afford a big electric rate increase and demanded the utility research and invest in renewable power.

But with wind energy not yet a reliable resource, the utility must raise rates now to support expanded coal-fired power plant capacity to meet growing demand from residents, business and industry in western South Dakota, company vice president Kyle White told an audience at The Journey Museum.

"It's necessary so that we can provide safe and reliable service and that these communities we live in will have the opportunity to grow and prosper," White said.

The state Public Utilities Commission hosted the hearing to gather public comment on Black Hills Power's 26.6 percent rate increase request.

The commission staff and officials will use the input to help inform their research and debate over whether the rate request is "fair and reasonable." A February hearing will help commissioners make a decision on what rate to allow, and a decision is required by March, commission chairman Dusty Johnson told the audience of a few dozen.

The proposed rate increase is not fair or reasonable, said customer Carla Kock, a Rapid City attorney and a member of a group of "residential interveners" who will be part of the case's legal proceedings.

She told the commission: "Make them prove that they made a good decision, and if they didn't make a good decision, don't make us pay for it."

She was referring to a decision by the utility to build the WyGen III power plant in Gillette, Wyo., near the company's coal mines. White said the plant is needed to serve a customer base that has grown by 8,400 to 69,000 since 1995, with the average residential consumer using 19 percent more electricity over that time frame to power homes, laptops, cell phones and iPods.

While some customers argued an economic downturn is not the time to raise rates, White said power consumption hasn't tapered off much in the last year.

Rapid City resident Stephen Skromeda said the rate hike would be a hardship for residents, and would raise his bill to power and heat his home from $216 a month to $290 in the wintertime.

"It's a large burden for residential and business consumers that have no option," he said. "I'm at their whim."

Adam Sanders, a South Dakota School of Mines & Technology student, asked the utility to "look into the future" by implementing rate increases gradually and investing in wind energy.

"The future is renewable energy," Sanders said.

White responded that state law doesn't allow utilities to charge in advance for future services. He also pointed out the utility's financial support of a new wind turbine research facility at the School of Mines but said the challenge is, "the wind doesn't blow all the time, but consumers need power all the time."

Rapid City businessman Mike Derby spoke in support of the utility, saying it's been a good civic neighbor and that its services are needed for the city to grow and develop. He told the commission: "I'm confident you're going to look at this as a fact-based, law-based decision."

Reach Barbara Soderlin at 394-8417 or at barbara.soderlin@rapidcityjournal.com.