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

Rhea-AI Summary

Black Hills Corp. (NYSE: BKH) has received approval from the Colorado Public Utilities Commission for new electric utility rates in Colorado. The approved rates will enable recovery of approximately $370 million in system investments made since 2016 and cover inflationary impacts on customer service costs.

The new rates, effective March 22, 2025, will generate approximately $17.0 million in new annual revenues. The approval is based on a weighted average cost of capital of 6.90%, with a capital structure ranging from 47-49% equity and 51-53% debt, and a return on equity between 9.3-9.5%. The company has until April 7, 2025, to file for rehearing, reargument, or reconsideration with the commission.

Positive

• Secured approval for $17.0 million in new annual revenues
• Recovery of $370 million in system investments
• Approved return on equity range of 9.3-9.5%
• Immediate rate implementation effective March 22, 2025

Negative

• Lower weighted average cost of capital at 6.90%
• Higher debt ratio (51-53%) compared to equity (47-49%) in capital structure

News Market Reaction

-1.08%

1 alert

-1.08% News Effect

On the day this news was published, BKH declined 1.08%, reflecting a mild negative market reaction.

Data tracked by StockTitan Argus on the day of publication.

RAPID CITY, S.D., March 24, 2025 (GLOBE NEWSWIRE) -- Black Hills Corp. (NYSE: BKH) today announced that its electric utility subsidiary in Colorado received approval from the Colorado Public Utilities Commission for new rates. The approved new rates will provide recovery of approximately $370 million of system investments since the utility’s last general rate filing in 2016 and inflationary impacts on costs to serve customers.

The approved new rates provide approximately $17.0 million of new annual revenues based on a weighted average cost of capital of 6.90% with a capital structure in a range of 47% to 49% equity and 51% to 53% debt, and a return on equity in a range of 9.3% to 9.5%. The new rates were effective on March 22, 2025.

As part of the regulatory process, the company has the opportunity to file a request for rehearing, reargument or reconsideration with the commission by April 7, 2025.

Black Hills Corp.
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 1.35 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
Sal Diaz
investorrelations@blackhillscorp.com

24-Hour Media Relations Line
888-242-3969

Caution Regarding Forward-Looking Statements
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 2024 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

How much additional revenue will BKH generate from the new Colorado rate approval?

The new rates will generate approximately $17.0 million in new annual revenues for Black Hills Corp.

What is the approved return on equity range for BKH's Colorado electric utility?

The approved return on equity range is between 9.3% to 9.5%.

When did BKH's Colorado electric utility last file for a general rate increase?

The utility's last general rate filing was in 2016.

How much system investment will BKH recover through the new Colorado rates?

The new rates will allow recovery of approximately $370 million in system investments made since 2016.

When do the new electric utility rates take effect for BKH in Colorado?

The new rates became effective on March 22, 2025.