Black Hills Corp. Colorado Gas Subsidiary Requests Rate Review and System Safety and Integrity Rider

Rhea-AI Summary

Black Hills Corp. (NYSE: BKH) submitted a rate review application to the Colorado Public Utilities Commission on September 11, 2020, seeking $13.5 million in annual revenue to recover investments in natural gas infrastructure. The proposal includes a five-year safety and integrity rider. Since July 2018, Colorado Gas has invested over $105 million in system upgrades, serving 192,000 customers with a 7,000-mile pipeline network. The company aims to implement new rates by Q2 2021, proposing a capital structure of 50% equity and 50% debt with a return on equity of 9.95%.

Positive

• Investment of over $105 million in natural gas infrastructure since July 2018.
• Proposed new rates aimed for Q2 2021 to support ongoing capital investments.
• Requesting a reasonable return on equity of 9.95% for infrastructure investments.

Negative

• Dependency on regulatory approval from the Colorado Public Utilities Commission for the proposed rate increase.
• Potential risks and uncertainties in achieving expected outcomes as highlighted in the cautionary statement.

DENVER, Sept. 14, 2020 (GLOBE NEWSWIRE) -- Black Hills Corp.’s (NYSE: BKH) Colorado natural gas utility, Black Hills Colorado Gas, Inc., doing business as Black Hills Energy, on Friday, Sept. 11, filed a rate review application with the Colorado Public Utilities Commission requesting $13.5 million in new annual revenue to recover the investments made in its natural-gas infrastructure to serve customers. In a separate filing, as required by the Colorado commission, the company is also proposing a five-year system safety and integrity rider to recover the investment cost of maintaining the safety and integrity of the natural gas system.

From July 2018 through year-end 2020, Colorado Gas will have invested over $105 million in replacing, upgrading and expanding its natural gas system in the state. The 7,000 miles of natural gas transmission and distribution pipeline in Colorado provide the critical infrastructure required to meet the growing needs of its 192,000 Colorado customers. These investments have maintained safety and reliability by replacing aging infrastructure while meeting compliance requirements of state and federal regulations.

“We take a deliberate approach to assessing infrastructure upgrades and additions to our system, and this rate review reflects our ongoing need to maintain safe and reliable service while meeting growing customer demand driven by Colorado’s robust economy,” said Vance Crocker, vice president of Colorado Operations. “We look forward to working with the Colorado commission and staff to ensure that Colorado Gas can continue to fulfill the growing and essential requirements of its customers.”

As proposed, the rate review is requesting a capital structure of 50% percent equity and 50% percent debt and a return on equity of 9.95% for investments Colorado Gas made in its natural gas system. The company is seeking to implement new rates in the second quarter of 2021.

Black Hills Corporation
Black Hills Corp. (NYSE: BKH) is a customer focused, growth-oriented utility company with a tradition of improving life with energy and a vision to be the energy partner of choice. Based in Rapid City, South Dakota, the company serves 1.28 million natural gas and electric utility customers in eight states: Arkansas, Colorado, Iowa, Kansas, Montana, Nebraska, South Dakota and Wyoming. More information is available at www.blackhillscorp.com.

Investor Relations
Jerome E. Nichols
605-721-1171
jerome.nichols@blackhillscorp.com

24-Hour Media Relations Line
888-242-3969

Caution Regarding Forward Looking Statement
This news release includes “forward-looking statements” as defined by the Securities and Exchange Commission, or SEC. We make these forward-looking statements in reliance on the safe harbor protections provided under the Private Securities Litigation Reform Act of 1995. All statements, other than statements of historical facts, included in this news release that address activities, events or developments that we expect, believe or anticipate will or may occur in the future are forward looking statements. This includes our ability to gain approval from the CPUC for the requests in our rate review to recover the investments, along with a return, we have made in our natural gas infrastructure in Colorado. These forward-looking statements are based on assumptions which we believe are reasonable based on current expectations and projections about future events and industry conditions and trends affecting our business. However, whether actual results and developments will conform to our expectations and predictions is subject to a number of risks and uncertainties that, among other things, could cause actual results to differ materially from those contained in the forward-looking statements, the risk factors described in Item 1A of Part I of our 2019 Annual Report on Form 10-K filed with the SEC, and other reports that we file with the SEC from time to time.

New factors that could cause actual results to differ materially from those described in forward looking statements emerge from time-to-time, and it is not possible for us to predict all such factors, or the extent to which any such factor or combination of factors may cause actual results to differ from those contained in any forward-looking statement. We assume no obligation to update publicly any such forward-looking statements, whether as a result of new information, future events or otherwise.

 

FAQ

What is Black Hills Corp's rate review request about?

Black Hills Corp. is seeking a $13.5 million annual revenue increase through a rate review application filed with the Colorado Public Utilities Commission.

When is Black Hills Corp. planning to implement new rates?

The company aims to implement new rates by the second quarter of 2021.

How much has Black Hills Corp. invested in its natural gas infrastructure?

Since July 2018, Black Hills Corp. has invested over $105 million in upgrading and expanding its natural gas system.

What is the proposed return on equity for Black Hills Corp's investments?

The company is proposing a return on equity of 9.95% for its infrastructure investments.

How many customers does Black Hills Corp. serve in Colorado?

The company serves approximately 192,000 customers in Colorado.