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

1. Black Hills Corp. approved new rates by Colorado regulators. 2. The rate increase will recover $370 million from investments since 2016. 3. New rates are expected to generate $17 million in annual revenue. 4. The measured cost of capital is set at 6.90%. 5. Rehearing requests with the commission can be filed until April 7.

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Why Bullish?

The new rate approval positively affects revenues, setting a supportive backdrop for BKH growth, similar to past rate adjustments that created stable revenue channels and reflected positively on stock performance.

How important is it?

The approval of new rates directly impacts BKH’s revenue and overall financial health, making the information highly important for stakeholders and investors.

Why Short Term?

The immediate increase in revenues will likely enhance BKH's financials significantly in the upcoming quarters, reminiscent of previous rate approvals that prompted short-term stock rallies.

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CMSNFGED
March 24, 2025 16:35 ET  | Source: Black Hills Service Company, LLC 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 RelationsSal Diazinvestorrelations@blackhillscorp.com 24-Hour Media Relations Line888-242-3969 Caution Regarding Forward-Looking StatementsThis 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.

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