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BKH - Black Hills News Story

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Black Hills Corp. Utility Subsidiary Receives Revenue Increase Approval

Thu 21st August, 2014 2:15pm
Black Hills Corp. Utility Subsidiary Receives Revenue Increase Approval

RAPID CITY, S.D. Aug. 21, 2014 - Black Hills Corp. (NYSE: BKH) utility subsidiary Black Hills Power yesterday received approval from the Wyoming Public Service Commission of a settlement agreement allowing the company to increase electric revenues in Wyoming.

The settlement agreement between the utility and the Wyoming Office of Consumer Advocate allows Black Hills Power to implement new rates for its Wyoming electric customers on Oct. 1, the scheduled in-service date for the new Cheyenne Prairie Generating Station.

The new rates will generate an estimated $2.2 million per year in additional revenue, based on a return on equity of 9.90 percent, and a capital structure of approximately 53.3 percent equity and 46.7 percent debt.

The new rates will apply to electric service for the utility's 2,700 customers in Wyoming; Black Hills Power also serves approximately 65,500 customers in South Dakota.

"Our goal is to provide safe, reliable, cost-effective energy for our customers, while delivering an appropriate return for our investors," said Linn Evans, Black Hills Corp.'s president and chief operating officer of utilities.

The Wyoming PSC's decision allows Black Hills Power a return on the portion of its investment in the 132-megawatt Cheyenne Prairie station and associated infrastructure committed to serve the utility's Wyoming customers, and provides for recovery of the utility's Wyoming-based share of operating expenses for the natural gas-fired facility. The increased revenues also will be used to recover other infrastructure investments and operating cost increases in Wyoming.

The new facility will replace Black Hills Power's Osage and Neil Simpson I plants in Wyoming, and the Ben French plant in South Dakota. Those three coal-fired plants were retired in March 2014 to comply with new Environmental Protection Agency air emissions regulations.

"The Cheyenne Prairie station will produce immediate and long-term benefits and help us meet the increasingly strict EPA air emissions regulations," Evans said. "We are committed to producing electricity at a good value by controlling costs and making responsible investments."

The Cheyenne Prairie station is the first energy-efficient, natural gas-fired, combined-cycle power plant in Wyoming. It features relatively low air emissions and can quickly be called upon to supplement the availability of wind power, making it an effective solution to the increasingly strict EPA air emission standards.

The Cheyenne Prairie station is co-owned by Black Hills Power (approximately 40 percent) and another Black Hills Corp. subsidiary, Cheyenne Light, Fuel & Power (approximately 60 percent).

Black Hills Power will use its share of the Cheyenne Prairie station's electricity to serve its customers in South Dakota, Montana and Wyoming. Earlier this year, Black Hills Power filed for a revenue increase with the South Dakota Public Utilities Commission to recover a return on the utility's investment in the station related to serving South Dakota customers. This filing is still under review.

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Black Hills Power, Inc.
Black Hills Power is the legacy utility business of Black Hills Corp. and has been delivering energy for more than 131 years. The electric utility serves 69,000 customers in 31 communities in western South Dakota, northeastern Wyoming and southeastern Montana.

Black Hills Corporation
Black Hills Corp. (NYSE: BKH) is a growth-oriented, vertically-integrated energy company with a tradition of exemplary service and a vision to be the energy partner of choice. Black Hills Corp. is based in Rapid City, S.D., and serves 777,000 natural gas and electric utility customers in Colorado, Iowa, Kansas, Montana, Nebraska, South Dakota and Wyoming. The company generates wholesale electricity and produces natural gas, oil and coal. Black Hills Corp.'s 1,948 employees partner to produce results that are improving life with energy. More information is available at

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 rate increase and our ability and the timing of receiving regulatory approval to recover Black Hills Power's share of the operating costs and a return on its investment related to serving its South Dakota customers. 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, including the factors discussed above, our ability to obtain adequate cost recovery for our utility operations through regulatory proceedings and the timing in which new rates would go into effect, the risk factors described in Item 1A of Part I of our 2013 Annual Report on Form 10-K filed with the SEC, and other reports that we file with the SEC from time to time.

This announcement is distributed by NASDAQ OMX Corporate Solutions on behalf of NASDAQ OMX Corporate Solutions clients.
The issuer of this announcement warrants that they are solely responsible for the content, accuracy and originality of the information contained therein.
Source: Black Hills Corporation via Globenewswire

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