Black Hills Corp. Electric Utility Receives Approval for New Rates in Wyoming

Rhea-AI Summary

Black Hills Corp. (NYSE: BKH) announced that its Wyoming electric utility, Cheyenne Light, Fuel and Power Company, received approval from the Wyoming Public Service Commission for a settlement agreement. This allows the company to recover approximately $250 million in investments since the last rate review in 2014. The new rates, effective March 1, 2023, will generate around $8.7 million in annual revenue based on a capital structure of 52% equity and 48% debt, with a return on equity of 9.75%. The settlement also includes a new transmission rider for recovering transmission expenses.

Positive

• Approval of a $250 million rate recovery investment.
• New annual revenues of $8.7 million expected.
• Support for economic stability and growth in the Cheyenne region.
• New rates effective March 1, 2023 enhance financial position.

Negative

• None.

RAPID CITY, S.D., Jan. 27, 2023 (GLOBE NEWSWIRE) -- Black Hills Corp. (NYSE: BKH) today announced that its Wyoming electric utility, Cheyenne Light, Fuel and Power Company, doing business as Black Hills Energy, received approval from the Wyoming Public Service Commission of a settlement agreement for new rates to recover approximately $250 million of investments since its last rate review in 2014.

“We are pleased to receive approval of a settlement that supports our long-term commitment to serving customers and the greater Cheyenne community with safe and reliable service,” said Linn Evans, president and CEO of Black Hills Corp. “Maintaining top-quartile electric reliability is pivotal to cultivating economic stability and helping support growth in the Cheyenne region. Our ongoing Ready Wyoming transmission expansion project will also enhance resiliency and reliability efforts while delivering ongoing benefits to our customers.”

The approved settlement agreement will generate approximately $8.7 million of new annual revenues based on a capital structure of 52% equity, 48% debt and a return on equity of 9.75%. New rates will be effective March 1, 2023, and the approved settlement also includes a new transmission rider that will be filed annually to recover transmission investment and expenses.

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 1.3 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 and www.blackhillsenergy.com.

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

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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, including anticipated revenues from the new rate increase. 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 2021 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 the significance of the new rates approved for BKH?

The new rates will allow Black Hills Corp. to recover approximately $250 million in investments, generating about $8.7 million annually.

When do the new rates for Black Hills Corp. take effect?

The new rates will be effective from March 1, 2023.

What is the projected return on equity for the new rates of BKH?

The projected return on equity for the new rates is 9.75%.

What is Black Hills Corp.'s commitment to the Cheyenne community?

Black Hills Corp. aims to provide safe and reliable service, fostering economic stability and growth in the Cheyenne region.