Black Hills Corp. Gas Utility Receives Approval for New Rates in Nebraska

Rhea-AI Summary

Black Hills Corp. (NYSE: BKH) announced that its Nebraska natural gas utility received Nebraska Public Service Commission approval of a unanimous settlement for new rates effective Jan. 1, 2026.

The settlement permits recovery of over $453 million of system investments since the last general rate filing in 2020 and supports service for more than 304,000 Nebraska customers. It will generate approximately $23.9 million of new annual revenues and migrate about $18.5 million of annual rider revenue into base rates for a total base rate revenue increase of $42.4 million. Rates are based on a 9.85% return on equity and a capitalization of 50.5% equity / 49.5% debt.

The settlement also renews a five-year System Safety and Integrity Rider and establishes a new insurance tracker, a manufactured gas plant tracker, and a weather normalization pilot.

Positive

• Recovery of over $453 million in system investments
• Total annual base rate revenue increase of $42.4 million
• New rates effective Jan. 1, 2026 provide regulatory certainty

Negative

• Higher customer charges implied by a $42.4 million base rate increase effective Jan. 1, 2026

Key Figures

Recoverable system investments $453 million Investments since last Nebraska general rate filing in 2020

Nebraska customers 304,000 customers Natural gas customers served in Nebraska

New annual revenues $23.9 million New annual revenues from approved Nebraska rates

Rider revenue to base rates $18.5 million Annual rider revenue migrated into base rates

Total base rate increase $42.4 million Total annual base rate revenue increase in Nebraska

Return on equity 9.85% ROE underpinning the new Nebraska rates

Capital structure 50.5% equity / 49.5% debt Regulatory capitalization for Nebraska rate case

New rates effective date Jan. 1, 2026 Effective date for approved Nebraska base rates

Market Reality Check

$70.52 Last Close

Volume Volume 863,359 vs 20-day average 1,349,290 (relative activity 0.64x pre-news). low

Technical Shares at $70.12, trading above 200-day MA of $60.76 and about 5.27% below the $74.02 52-week high.

Peers on Argus

BKH was up 0.26% pre-news, while key gas-utility peers were mostly down: SR -0.21%, OGS -0.88%, NJR -1.00%, MDU -0.31%, with only SWX up 1.20%. This suggests a more company-specific setup ahead of the Nebraska rate approval.

Historical Context

Date	Event	Sentiment	Move	Catalyst
Nov 05	Q3 earnings & guidance	Positive	+0.2%	Q3 2025 EPS growth and reaffirmed full-year adjusted earnings guidance.
Oct 28	Dividend declaration	Positive	-2.4%	Announced quarterly dividend of $0.676 per share with set pay date.
Oct 08	Earnings call scheduling	Neutral	-1.2%	Scheduled timing and access details for Q3 2025 earnings call.
Sep 26	ATM equity completion	Neutral	+1.5%	Completed 2025 ATM program raising $219.6M via 3.7M new shares.
Sep 25	Debt offering pricing	Neutral	+1.5%	Priced $450M senior notes at 4.550% to refinance 2026 maturity.

Pattern Detected

Recent news reactions mostly aligned with event tone, with one notable divergence on a positive dividend announcement.

Recent Company History

This announcement builds on a series of regulatory, financing and earnings milestones. In Q3 2025, Black Hills reported higher adjusted EPS and reaffirmed $4.00–$4.20 guidance while advancing large projects like the $350M Ready Wyoming line and $280M Lange II plant. The company priced a $450M senior note offering and completed an ATM equity program raising about $219.6M for a $1.0B 2025 capex plan. Earlier SEC filings highlighted that the Nebraska gas settlement was expected to add $23.9M annually, which this rate approval now confirms.

Market Pulse Summary

This announcement confirms Nebraska regulators’ approval of new gas utility rates that recover over $453 million of investments and add about $42.4 million in annual base rate revenue, including $23.9 million of new revenues. The decision is based on a 9.85% return on equity and a roughly balanced capital structure. It also renews the safety-focused rider and introduces new trackers and a weather normalization pilot, extending Black Hills’ multi-state track record of supportive rate outcomes.

Key Terms

return on equity financial

"The new rates are based on a return on equity of 9.85% and capitalization..."

Return on equity shows how effectively a company uses its shareholders' money to generate profit. It is calculated by dividing the company's net profit by its shareholders' equity, indicating how much profit is earned for each dollar invested by owners. Higher return on equity suggests the company is good at turning investments into earnings, which can be an important factor for investors assessing its profitability and efficiency.

forward-looking statements regulatory

"This news release includes “forward-looking statements” as defined by the..."

Forward-looking statements are predictions or plans that companies share about what they expect to happen in the future, like estimating sales or profits. They matter because they help investors understand a company's outlook, but since they are based on guesses and assumptions, they can sometimes be wrong.

AI-generated analysis. Not financial advice.

RAPID CITY, S.D., Dec. 09, 2025 (GLOBE NEWSWIRE) -- Black Hills Corp. (NYSE: BKH) today announced that its natural gas utility subsidiary in Nebraska received approval from the Nebraska Public Service Commission of a unanimous settlement agreement for new rates. The new rates will provide recovery of over $453 million of system investments since the utility’s last general rate filing in 2020 and operational costs required to deliver safe, reliable natural gas service for over 304,000 Nebraska customers.

“These new rates will support our ability to safely and reliably serve our customers and communities in Nebraska,” said Linn Evans, president and CEO of Black Hills Corp. “We are proud of our solid track record of delivering for the needs of our customers, and we remain diligently focused on maintaining dependable natural gas service in Nebraska.”

The approved settlement agreement will generate approximately $23.9 million of new annual revenues and migrate approximately $18.5 million in annual rider revenue to base rates for a total annual base rate revenue increase of $42.4 million. The new rates are based on a return on equity of 9.85% and capitalization of 50.5% equity and 49.5% debt. New rates will be effective on Jan. 1, 2026, replacing interim rates in place since Aug. 1, 2025.

The approved settlement also allows for renewal of a five-year System Safety and Integrity Rider to fund accelerated, safety-focused pipeline replacement across the state, a new insurance tracker, a new manufactured gas plant tracker, and a new weather normalization pilot program.

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

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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

What did Black Hills Corp (BKH) announce about Nebraska gas rates on Dec. 9, 2025?

The company said its Nebraska gas utility won unanimous approval for new rates effective Jan. 1, 2026, recovering over $453 million of investments.

How much annual revenue will BKH’s Nebraska rate change add for shareholders?

The settlement will generate approximately $23.9 million of new annual revenues and migrate $18.5 million of rider revenue into base rates, totaling $42.4 million.

What return on equity and capital structure were approved for BKH Nebraska rates?

The new rates are based on a 9.85% return on equity and a capitalization of 50.5% equity / 49.5% debt.

When did interim Nebraska rates begin before the Jan. 1, 2026 effective date for BKH?

Interim rates had been in place since Aug. 1, 2025 and will be replaced on Jan. 1, 2026.

What regulatory mechanisms were included in the BKH Nebraska settlement?

The settlement renews a five-year System Safety and Integrity Rider and adds an insurance tracker, a manufactured gas plant tracker, and a weather normalization pilot.