Black Hills Corp. Requests Rate Review in Arkansas

Rhea-AI Summary

Black Hills Corp (NYSE: BKH) said its Arkansas natural gas utility filed a rate review with the Arkansas Public Service Commission on Dec. 8, 2025 requesting $29.4 million in new annual revenue to recover capital and operational costs for more than 189,000 Arkansas customers across 100+ communities.

The filing seeks recovery of about $147 million in safety, reliability and system integrity investments since the last general rate filing in 2023, uses a capital structure of 50.2% equity / 49.8% debt and requests a 10.5% return on equity, with new rates proposed in the second half of 2026.

Positive

• $29.4M requested in new annual revenue
• Recovery sought for $147M in pipeline investments since 2023
• Filed ROE of 10.5% based on 50.2% equity capital structure
• Targets rate implementation in H2 2026

Negative

• Requesting $29.4M implies higher customer rates if approved
• Significant $147M capital recovery depends on regulator approval

Key Figures

Requested new annual revenue $29.4 million Arkansas natural gas rate review application

Infrastructure investments sought for recovery $147 million Safety, reliability and system integrity since 2023 filing

Arkansas gas customers over 189,000 customers Served across more than 100 communities in Arkansas

Capital structure basis 50.2% equity / 49.8% debt Assumed in Arkansas rate review request

Requested return on equity 10.5% Proposed ROE in Arkansas rate case

Planned timing for new rates second half of 2026 Target implementation for Arkansas rate changes

Total utility customers 1.35 million Natural gas and electric customers across eight states

States served 8 states Arkansas, Colorado, Iowa, Kansas, Montana, Nebraska, SD, Wyoming

Market Reality Check

$69.94 Last Close

Volume Volume 824,701 is at 0.59x the 20-day average, indicating subdued trading ahead of this filing. low

Technical Shares trade above the 200-day MA, at 69.94 versus a 200-day MA of 60.71.

Peers on Argus

Peers in regulated gas (e.g., SR, OGS, NJR, SWX) showed modest mixed moves between -0.72% and +0.32%, suggesting this Arkansas rate case is more company‑specific than broad sector momentum.

Historical Context

Date	Event	Sentiment	Move	Catalyst
Nov 05	Q3 2025 earnings	Positive	+0.2%	Stronger Q3 EPS, reaffirmed 2025 guidance, merger and project updates.
Oct 28	Dividend declaration	Positive	-2.4%	Announced quarterly dividend and upcoming Q3 earnings release details.
Oct 08	Earnings call schedule	Neutral	-1.2%	Set dates and access details for Q3 2025 earnings release and call.
Sep 26	Equity issuance	Negative	+1.5%	Completed ATM equity program raising funds for 2025 capex and growth.
Sep 25	Debt offering	Positive	+1.5%	Priced $450M senior notes mainly to refinance 2026 maturity and fund needs.

Pattern Detected

Recent news shows a mix of aligned and divergent reactions: capital raising and dividends sometimes prompted moves counter to their generally positive or neutral tone.

Recent Company History

Over the past few months, Black Hills Corp. has focused on funding and executing its utility growth strategy. In September 2025 it priced a $450 million senior note offering and completed $219.6 million of equity issuances to support a $1.0 billion 2025 capex program. Subsequent earnings in Q3 2025 showed higher adjusted EPS and reaffirmed 2025 guidance. Alongside regular dividends and routine earnings call scheduling, the company has advanced large projects like Ready Wyoming and Lange II, consistent with today’s Arkansas rate review focused on recovering infrastructure investments.

Market Pulse Summary

This announcement highlights Black Hills’ effort to recover $147 million of Arkansas gas infrastructure investments by requesting $29.4 million in new annual revenue, based on a 50.2% equity / 49.8% debt capital structure and a 10.5% ROE. It fits a broader pattern of funding growth through capital programs and then seeking regulated recovery. Investors may monitor the Arkansas Public Service Commission process, any adjustments to requested returns, and the targeted second‑half 2026 rate implementation.

Key Terms

rate review regulatory

"has filed a rate review application with the Arkansas Public Service Commission"

Rate review is a regulatory check where an insurer, utility, or other regulated service provider submits proposed price or premium increases to a government agency for examination and possible approval or modification. It matters to investors because the outcome determines how much revenue the company can charge customers, affecting earnings, profit margins and demand; think of it like a landlord asking the city for permission to raise rents, with regulators able to limit or reshape the increase.

capital structure financial

"The request is based on a capital structure of 50.2% equity and 49.8% debt"

Capital structure is the way a company finances its operations and growth by using different sources of money, such as borrowed funds (loans or bonds) and owner’s equity (investments from owners or shareholders). It’s like a recipe for baking a cake, where the balance of ingredients affects the final product's strength and taste; similarly, the mix of debt and equity influences a company's stability and risk. For investors, understanding a company's capital structure helps gauge how risky it might be to invest or lend money.

return on equity financial

"and a return on equity of 10.5%."

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.

natural gas pipeline infrastructure technical

"system integrity investments for its natural gas pipeline infrastructure since its last"

A network of pipes, compressor stations, storage sites and control equipment that moves natural gas from production areas to power plants, factories, homes and export terminals — like a highway system for gas. Investors care because these physical assets generate steady fee-based income, determine how much gas can reach customers (which affects prices), and require large, long-term investments and regulatory approvals that shape returns and risks.

AI-generated analysis. Not financial advice.

RAPID CITY, S.D., Dec. 08, 2025 (GLOBE NEWSWIRE) -- Black Hills Corp. (NYSE: BKH) today announced that its Arkansas natural gas utility has filed a rate review application with the Arkansas Public Service Commission requesting $29.4 million in new annual revenue to recover the necessary capital infrastructure and operational costs required to deliver safe, reliable natural gas service for over 189,000 Arkansas customers in more than 100 communities in Arkansas.

The company is seeking recovery of approximately $147 million in safety, reliability and system integrity investments for its natural gas pipeline infrastructure since its last general rate filing in 2023. These critical investments are required to meet system growth, ensure the safe and reliable delivery of natural gas to customers’ homes and businesses, and meet compliance requirements of state and federal regulations.

“We are committed to serving our customers with the safe and reliable natural gas service they depend on,” said Linn Evans, president and CEO of Black Hills Corp. “Our critical infrastructure investments and prudent cost management enable us to operate, maintain, and upgrade our Arkansas natural gas system while supporting growth.”

The request is based on a capital structure of 50.2% equity and 49.8% debt and a return on equity of 10.5%. The company is seeking to implement new rates in the second half of 2026.

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 1.35 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
605-399-5079
Investorrelations@blackhillscorp.com

24-Hour Media Relations Line
888-242-3969

FAQ

What did Black Hills Corp (BKH) file with the Arkansas Public Service Commission on Dec. 8, 2025?

Black Hills filed a rate review requesting $29.4 million in new annual revenue for its Arkansas natural gas utility.

How much investment recovery is Black Hills Corp (BKH) seeking for Arkansas since 2023?

The company seeks recovery of approximately $147 million in safety, reliability and system integrity investments since 2023.

What return on equity and capital structure did Black Hills Corp (BKH) propose in the Arkansas filing?

The filing is based on a capital structure of 50.2% equity / 49.8% debt and requests a 10.5% return on equity.

When does Black Hills Corp (BKH) aim to implement new Arkansas rates?

The company is seeking to implement new rates in the second half of 2026.

How many Arkansas customers would be affected by Black Hills Corp (BKH)'s rate request?

The request covers service for over 189,000 Arkansas customers in more than 100 communities.