Black Hills Corp. Seeks Rate Adjustment for Gas Services

Rate Review Application by Black Hills Corp.

Black Hills Corp. recently took a significant step by submitting a rate review application in Kansas. This move aims to recuperate essential capital infrastructure and operational expenses to maintain the safe and dependable delivery of natural gas to approximately 120,000 customers in the state.

Investment in Infrastructure

Since their last general rate proposal in 2021, Black Hills Energy has made major investments exceeding $118 million. These funds have gone towards enhancing safety, reliability, and overall system integrity across more than 4,765 miles of natural gas pipelines in Kansas. Such investments are not just operational; they are crucial for accommodating system growth and adhering to stringent state and federal safety regulations.

Commitment to Customer Safety

Linn Evans, the president and CEO of Black Hills Corp., emphasized the importance of these upgrades, stating, "Our customers deserve safe and reliable natural gas, and these investments adjust for the rising cost of operating, maintaining and upgrading our Kansas natural gas system." This underscores the company's commitment to providing top-notch service, especially in a climate marked by inflation affecting various sectors.

Details of the Rate Proposal

The application foresees a necessity for additional revenue of approximately $17.2 million per year, alongside consolidating around $4.4 million of rider revenue into the standard rates. This results in a total annual increase of $21.6 million in base rate revenue. The current proposal operates on a capital framework consisting of 50.44% equity alongside 49.56% debt. To ensure profitability, the company is seeking a return on equity of 10.50% and aims to implement new rates in the latter part of 2025.

Gas System Reliability Surcharge

This current rate application also facilitates the usage of the Gas System Reliability Surcharge (GSRS), aimed at expediting safety-related pipeline replacements statewide. By fulfilling this application, Black Hills Corp. ensures compliance with requirements for a general rate case by the close of 2026, thus maintaining eligibility for future GSRS applications.

About Black Hills Corp.

Black Hills Corp. (NYSE: BKH) continues to be a leader in the utility sector, focusing on growth and customer satisfaction. Based in Rapid City, the company serves an impressive customer base of 1.34 million across eight states, providing both natural gas and electric utility services. The firm prides itself on being a supportive energy partner for consumers, striving to enhance their quality of life through reliable energy services.

Investor Relations Contact

For further inquiries, investors can reach out to Sal Diaz at 605-399-5079 or via email. The company remains transparent and accessible for stakeholder communication.

Frequently Asked Questions

What prompted Black Hills Corp. to submit a rate review application?

The rate review application aims to recover vital infrastructure and operational costs to ensure safe and reliable natural gas service for its Kansas customers.

How much has Black Hills Corp. invested in infrastructure since 2021?

Black Hills Corp. has invested around $118 million in infrastructure enhancements to strengthen safety and reliability.

What is the total annual base rate revenue increase requested?

The company is seeking a total annual base rate revenue increase of $21.6 million.

When does Black Hills Corp. plan to implement the new rates?

The implementation of the new rates is expected in the second half of 2025.

How does the Gas System Reliability Surcharge (GSRS) factor into the application?

The GSRS allows for accelerated pipeline replacements and is necessary for compliance with future rate cases. This application supports ongoing safety improvements.

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