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What changed in BLACK HILLS CORP /SD/'s 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of BLACK HILLS CORP /SD/'s 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+272 added−293 removedSource: 10-K (2025-02-12) vs 10-K (2024-02-14)

Top changes in BLACK HILLS CORP /SD/'s 2024 10-K

272 paragraphs added · 293 removed · 216 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

43 edited+6 added−12 removed44 unchanged
Biggest changeSee recent peak discussion in the Recent Developments section of Management’s Discussion and Analysis of Financial Condition and Results of Operations in Item 7 in this Annual Report on Form 10-K for additional information. 12 Table of Contents As of December 31, 2023, our Electric Utilities’ ownership interests in electric generating plants were as follows: Unit Fuel Type Location Ownership Interest % (d) Owned Nameplate Capacity (MW) In Service Date Colorado Electric: Busch Ranch I (a) Wind Pueblo, Colorado 50% 14.5 2012 Peak View (b) (c) Wind Pueblo, Colorado 100% 60.8 2016 Pueblo Airport Generation #1-2 Natural Gas Pueblo, Colorado 100% 200.0 2011 Pueblo Airport Generation CT #6 Natural Gas Pueblo, Colorado 100% 40.0 2016 AIP Diesel Diesel Oil Pueblo, Colorado 100% 10.0 2001 Diesel #1 and #3-5 Diesel Oil Pueblo, Colorado 100% 8.0 1964 Diesel #1-5 Diesel Oil Rocky Ford, Colorado 100% 10.0 1964 South Dakota Electric: Cheyenne Prairie Natural Gas Cheyenne, Wyoming 58% 58.0 2014 Corriedale (c) Wind Cheyenne, Wyoming 62% 32.5 2020 Wygen III Coal Gillette, Wyoming 52% 60.3 2010 Neil Simpson II Coal Gillette, Wyoming 100% 90.0 1995 Wyodak Plant Coal Gillette, Wyoming 20% 80.5 1978 Neil Simpson CT Natural Gas Gillette, Wyoming 100% 40.0 2000 Lange CT Natural Gas Rapid City, South Dakota 100% 40.0 2002 Ben French Diesel #1-5 Diesel Oil Rapid City, South Dakota 100% 10.0 1965 Ben French CTs #1-4 Natural Gas/Diesel Oil Rapid City, South Dakota 100% 100.0 1977-1979 Wyoming Electric: Cheyenne Prairie Natural Gas Cheyenne, Wyoming 42% 42.0 2014 Cheyenne Prairie CT Natural Gas Cheyenne, Wyoming 100% 40.0 2014 Corriedale (c) Wind Cheyenne, Wyoming 38% 20.0 2020 Wygen II Coal Gillette, Wyoming 100% 95.0 2008 Integrated Generation: Wygen I Coal Gillette, Wyoming 76.5% 68.9 2003 Pueblo Airport Generation #4-5 Natural Gas Pueblo, Colorado 50.1% (e) 200.0 2012 Busch Ranch I (a) Wind Pueblo, Colorado 50% 14.5 2012 Busch Ranch II (c) Wind Pueblo, Colorado 100% 59.4 2019 Total MW Capacity 1,394.4 ____________________ (a) In 2013, Busch Ranch I was awarded a one-time cash grant in lieu of ITCs under the Section 1603 program created under the American Recovery and Reinvestment Act.
Biggest changeSystem Peak Demand for the Electric Utilities’ retail customers for each of the last three years are listed below: System Peak Demand (in MWs) 2024 2023 2022 Summer Winter Summer Winter Summer Winter Colorado Electric 394 311 411 297 410 334 South Dakota Electric 388 346 378 289 403 355 Wyoming Electric (a) 309 314 312 301 294 281 ____________________ (a) See Recent Developments section of Management’s Discussion and Analysis of Financial Condition and Results of Operations in Item 7 in this Annual Report on Form 10-K for discussion on recent Wyoming Electric peaks. 12 Table of Contents As of December 31, 2024, our Electric Utilities’ ownership interests in electric generating plants were as follows: Unit Fuel Type Location Ownership Interest % (c) Owned Nameplate Capacity (MWs) In Service Date Colorado Electric: Busch Ranch I Wind Pueblo, Colorado 50% 14.5 2012 Peak View (a) (b) Wind Pueblo, Colorado 100% 60.8 2016 Pueblo Airport Generation #1-2 Natural Gas Pueblo, Colorado 100% 200.0 2011 Pueblo Airport Generation CT #6 Natural Gas Pueblo, Colorado 100% 40.0 2016 AIP Diesel Diesel Oil Pueblo, Colorado 100% 10.0 2001 Diesel #1 and #3-5 Diesel Oil Pueblo, Colorado 100% 8.0 1964 Diesel #1-5 Diesel Oil Rocky Ford, Colorado 100% 10.0 1964 South Dakota Electric: Cheyenne Prairie Natural Gas Cheyenne, Wyoming 58% 58.0 2014 Corriedale (b) Wind Cheyenne, Wyoming 62% 32.5 2020 Wygen III Coal Gillette, Wyoming 52% 60.3 2010 Neil Simpson II Coal Gillette, Wyoming 100% 90.0 1995 Wyodak Plant Coal Gillette, Wyoming 20% 80.5 1978 Neil Simpson CT Natural Gas Gillette, Wyoming 100% 40.0 2000 Lange CT Natural Gas Rapid City, South Dakota 100% 40.0 2002 Ben French Diesel #1-5 Diesel Oil Rapid City, South Dakota 100% 10.0 1965 Ben French CTs #1-4 Natural Gas/Diesel Oil Rapid City, South Dakota 100% 100.0 1977-1979 Wyoming Electric: Cheyenne Prairie Natural Gas Cheyenne, Wyoming 42% 42.0 2014 Cheyenne Prairie CT Natural Gas Cheyenne, Wyoming 100% 40.0 2014 Corriedale (b) Wind Cheyenne, Wyoming 38% 20.0 2020 Wygen II Coal Gillette, Wyoming 100% 95.0 2008 Integrated Generation: Wygen I Coal Gillette, Wyoming 76.5% 68.9 2003 Pueblo Airport Generation #4-5 Natural Gas Pueblo, Colorado 50.1% (d) 200.0 2012 Busch Ranch I Wind Pueblo, Colorado 50% 14.5 2012 Busch Ranch II (b) Wind Pueblo, Colorado 100% 59.4 2019 Total MW Capacity 1,394.4 ____________________ (a) The PTCs for Peak View flow back to customers through the RESA and ECA mechanisms as a reduction to Colorado Electric’s margins.
Transmission investments are recovered from wholesale transmission customers under the FERC Formula Transmission rate. The rate base associated with FERC assets is not displayed separate from that collected through the state recovery mechanisms, to avoid double counting. The rate base amounts for Colorado Electric and Wyoming Electric include rate base recovered through base rates and the authorized regulatory mechanisms.
Transmission investments are recovered from wholesale transmission customers under the FERC Formula Transmission rate. The rate base associated with FERC assets is not displayed separate from that collected through the state recovery mechanisms, to avoid double counting. Authorized totals for Colorado Electric and Wyoming Electric include amounts recovered through base rates and the authorized regulatory mechanisms.
The following table summarizes the mechanisms we have in place for each of our Electric Utilities: Cost Recovery Mechanisms Electric Utility Jurisdiction Environmental Cost EECR/DSM Transmission Expense Fuel Cost Transmission Capital Purchased Power RESA Colorado Electric (a) ☑ ☑ ☑ ☑ ☑ ☑ Colorado Electric (FERC) (a) ☑ South Dakota Electric (SD) (b) ☑ ☑ ☑ South Dakota Electric (WY) (c) ☑ ☑ ☑ ☑ South Dakota Electric (FERC) ☑ Wyoming Electric (a) ☑ ☑ ☑ ☑ ☑ Wyoming Electric (FERC) (a) ☑ ____________________ (a) For both Wyoming Electric and Colorado Electric retail customers, transmission investments are recovered through retail rates rather than FERC Transmission Tariffs.
The following table summarizes the mechanisms we have in place for each of our Electric Utilities: Cost Recovery Mechanisms Electric Utility Jurisdiction EECR/DSM Transmission Expense Fuel Cost Transmission Capital Purchased Power RESA/CEPR Colorado Electric (a) ☑ ☑ ☑ ☑ ☑ ☑ Colorado Electric (FERC) (a) ☑ South Dakota Electric (SD) (b) ☑ ☑ ☑ South Dakota Electric (WY) (c) ☑ ☑ ☑ ☑ South Dakota Electric (FERC) ☑ Wyoming Electric (a) ☑ ☑ ☑ ☑ ☑ Wyoming Electric (FERC) (a) ☑ ____________________ (a) For both Wyoming Electric and Colorado Electric retail customers, transmission investments are recovered through retail rates rather than FERC Transmission Tariffs.
We operate our business in the United States, reporting our operating results through our Electric Utilities and Gas Utilities segments. Certain unallocated corporate expenses that support our operating segments are presented as Corporate and Other. Our Electric Utilities segment generates, transmits and distributes electricity to approximately 222,000 electric utility customers in Colorado, Montana, South Dakota and Wyoming.
We operate our business in the United States, reporting our operating results through our Electric Utilities and Gas Utilities segments. Certain unallocated corporate expenses that support our operating segments are presented as Corporate and Other. Our Electric Utilities segment generates, transmits and distributes electricity to approximately 225,000 electric utility customers in Colorado, Montana, South Dakota, and Wyoming.
These tariffs allow the utility a return on the investment. 17 Table of Contents Electric Utilities The following table provides regulatory information for each of our Electric Utilities: Subsidiary Jurisdiction Authorized Rate of Return on Equity Authorized Return on Rate Base Authorized Capital Structure Debt/Equity Authorized Rate Base (in millions) Effective Date Additional Regulatory Mechanisms Percentage of Power Marketing Profit Shared with Customers Colorado Electric CO 9.37% 7.43% 48%/52% $653.7 (a) 1/2017 ECA, TCA, PCCA, EECR/DSM, RESA, TEPR, Energy Assistance Benefit Charge 90% CO 9.37% 6.02% 67%/33% $57.9 1/2017 CACJA Adjustment Rider N/A FERC 9.80% 6.45% 53%/47% (a) 9/2022 FERC Transmission Tariff N/A South Dakota Electric WY 9.90% 8.13% 47%/53% $46.8 10/2014 ECA 65% SD Global Settlement 7.76% Global Settlement $543.9 10/2014 ECA, TFA, EIA 70% FERC 10.80% 8.76% 43%/57% $197.7 (b) 2/2009 FERC Transmission Tariff N/A Wyoming Electric (c) WY 9.75% 7.48% 48%/52% $551.2 (a) 3/2023 PCA, EECR/DSM, Rate Base Recovery on Acquisition Adjustment, TCAM N/A FERC 9.90% 8.77% 44%/56% (a) 1/2019 FERC Transmission Tariff N/A ____________________ (a) For both Wyoming Electric and Colorado Electric retail customers, transmission investments are recovered through retail rates rather than FERC Transmission Tariffs.
These tariffs allow the utility a return on the investment. 17 Table of Contents Electric Utilities The following table provides regulatory information for each of our Electric Utilities: Subsidiary Jurisdiction Authorized Rate of Return on Equity Authorized Return on Rate Base Authorized Capital Structure Debt/Equity Authorized Rate Base (in millions) Effective Date Additional Regulatory Mechanisms Percentage of Power Marketing Profit Shared with Customers Colorado Electric (c) CO 9.37% 7.43% 48%/52% $653.7 (a) 1/2017 ECA, TCA, PCCA, EECR/DSM, RESA, TEPR, Energy Assistance Benefit Charge, CEPR 90% CO 9.37% 6.02% 67%/33% $57.9 1/2017 CACJA Adjustment Rider N/A FERC 9.80% 6.45% 53%/47% (a) 9/2022 FERC Transmission Tariff N/A South Dakota Electric WY 9.90% 8.13% 47%/53% $46.8 10/2014 ECA 65% SD Black-box Settlement 7.76% Black-box Settlement $543.9 10/2014 ECA, TFA, EIA 70% FERC 10.80% 8.76% 43%/57% $200.4 (b) 2/2009 FERC Transmission Tariff N/A Wyoming Electric WY 9.75% 7.48% 48%/52% $551.2 (a) 3/2023 PCA, EECR/DSM, Rate Base Recovery on Acquisition Adjustment, TCAM N/A FERC 9.90% 8.77% 44%/56% (a) 1/2019 FERC Transmission Tariff N/A ____________________ (a) For both Wyoming Electric and Colorado Electric retail customers, transmission investments are recovered through retail rates rather than FERC Transmission Tariffs.
The recoverable reserve life is equal to approximately 48 years at the current production levels. Transmission and Distribution. Through our Electric Utilities, we own electric transmission and distribution systems composed of high voltage lines (greater than 69 kV) and low voltage lines (69 kV or less).
The recoverable reserve life is equal to approximately 47 years at the current production levels. Transmission and Distribution. Through our Electric Utilities, we own electric transmission and distribution systems composed of high voltage lines (greater than 69 kV) and low voltage lines (69 kV or less).
Recent Tariff Filings See Note 2 of the Notes to Consolidated Financial Statements in this Annual Report on Form 10-K for information regarding current regulatory activity. FERC The Federal Power Act gives FERC exclusive rate-making jurisdiction over wholesale sales of electricity and the transmission of electricity in interstate commerce.
Recent Tariff Filings See Note 2 of the Notes to Consolidated Financial Statements in this Annual Report on Form 10-K for information regarding current regulatory activity. 19 Table of Contents FERC The Federal Power Act gives FERC exclusive rate-making jurisdiction over wholesale sales of electricity and the transmission of electricity in interstate commerce.
We produced approximately 3.7 million tons of coal in 2023. The mine provides low-sulfur coal directly to these five power plants via a conveyor belt system, minimizing transportation costs. The fuel can be delivered to our adjacent power plants at very cost competitive prices (i.e., $1.14 per MMBtu for year ended December 31, 2023) when compared to alternatives.
We produced approximately 3.7 million tons of coal in 2024. The mine provides low-sulfur coal directly to these five power plants via a conveyor belt system, minimizing transportation costs. The fuel can be delivered to our adjacent power plants at very cost competitive prices (i.e., $1.19 per MMBtu for year ended December 31, 2024) when compared to alternatives.
Nearly all of the mine’s production is sold to our on-site generation facilities under long-term supply contracts. As of December 31, 2023, we estimated our recoverable reserves to be approximately 179 million tons, based on a life-of-mine engineering study utilizing currently available drilling data and geological information prepared by internal engineering analyses.
Nearly all of the mine’s production is sold to our on-site generation facilities under long-term supply contracts. As of December 31, 2024, we estimated our recoverable reserves to be approximately 175 million tons, based on a life-of-mine engineering study utilizing currently available drilling data and geological information prepared by internal engineering analyses.
Black Hills Energy Services provides natural gas supply to approximately 53,000 retail distribution customers under the Choice Gas Program in Nebraska and Wyoming. Additionally, we provide services under the Service Guard Comfort Plan, Tech Services and HomeServe.
Black Hills Energy Services provides natural gas supply to approximately 51,000 retail distribution customers under the Choice Gas Program in Nebraska and Wyoming. Additionally, we provide non-regulated services under the Service Guard Comfort Plan, Tech Services, and HomeServe.
Our Electric Utilities’ power supply by resource as a percent of the total power supply for our energy needs for the years ended December 31 was as follows: Power Supply 2023 2022 2021 Coal 35.0 % 35.1 % 34.2 % Natural Gas 26.4 % 18.8 % 24.4 % Wind (a) 8.9 % 11.4 % 11.3 % Total Generated (b) 70.3 % 65.3 % 69.9 % Coal, Natural Gas, Diesel Oil and Other Market Purchases 24.1 % 29.6 % 25.1 % Wind and Solar Purchases 5.6 % 5.1 % 5.0 % Total Purchased 29.7 % 34.7 % 30.1 % Total 100.0 % 100.0 % 100.0 % ____________________ (a) Wind generation decreased due to the sale of Northern Iowa Windpower assets in March 2023.
Our Electric Utilities’ power supply by resource as a percent of the total power supply for our energy needs for the years ended December 31 was as follows: Power Supply 2024 2023 2022 Coal 32.5 % 35.0 % 35.1 % Natural Gas 29.4 % 26.4 % 18.8 % Wind (a) 8.6 % 8.9 % 11.4 % Total Generated (b) 70.5 % 70.3 % 65.3 % Coal, Natural Gas, Diesel Oil and Other Market Purchases 14.7 % 24.1 % 29.6 % Wind and Solar Purchases (c) 14.8 % 5.6 % 5.1 % Total Purchased 29.5 % 29.7 % 34.7 % Total 100.0 % 100.0 % 100.0 % ____________________ (a) Wind generation decreased due to the sale of Northern Iowa Windpower assets in March 2023.
Our Electric Utilities own 1,394 MW of generation and 9,106 miles of electric transmission and distribution lines. Our Gas Utilities segment serves approximately 1,116,000 natural gas utility customers in Arkansas, Colorado, Iowa, Kansas, Nebraska, and Wyoming.
Our Electric Utilities own 1,394 MW of generation and 9,196 miles of electric transmission and distribution lines. Our Gas Utilities segment serves approximately 1,128,000 natural gas utility customers in Arkansas, Colorado, Iowa, Kansas, Nebraska, and Wyoming.
In Colorado, our electric utility is subject to rules which may require competitive bidding for generation supply. Because of these rules, we face competition from other utilities and non-affiliated IPPs for the right to supply electric energy and capacity for Colorado Electric when resource plans require additional resources.
In Colorado and Wyoming, our electric utilities are subject to rules which may require competitive bidding for generation supply. Because of these rules, our Electric Utilities face competition from other utilities and non-affiliated IPPs for the right to supply electric energy and capacity when resource plans require additional resources.
Our Gas Utilities own and operate 4,663 miles of intrastate gas transmission pipelines and 42,514 miles of gas distribution mains and service lines, seven natural gas storage sites, more than 50,000 horsepower of compression and 516 miles of gathering lines. Electric Utilities We conduct electric utility operations through our Colorado, South Dakota and Wyoming subsidiaries.
Our Gas Utilities own and operate 4,648 miles of intrastate gas transmission pipelines and 44,524 miles of gas distribution mains and service lines, seven natural gas storage sites, more than 50,000 horsepower of compression, and 516 miles of gathering lines. Electric Utilities We conduct electric utility operations through our Colorado, South Dakota, and Wyoming subsidiaries.
(e) Excludes amounts to serve non-jurisdictional and agriculture customers. 19 Table of Contents The following table summarizes the mechanisms we have in place for each of our Gas Utilities: Gas Utility Jurisdiction Cost Recovery Mechanisms EECR/DSM Integrity Additions Bad Debt Weather Normal Pension Recovery Gas Cost (a) Revenue Decoupling Arkansas Gas ☑ ☑ ☑ ☑ ☑ Colorado Gas ☑ ☑ ☑ RMNG Iowa Gas ☑ ☑ ☑ Kansas Gas ☑ ☑ ☑ ☑ ☑ Nebraska Gas ☑ ☑ ☑ Wyoming Gas ☑ ☑ ☑ ____________________ (a) All of our Gas Utilities, except where the Choice Gas Program is the only option, have GCAs that allow us to pass the prudently-incurred cost of gas and certain services through to the customer between rate reviews.
The following table summarizes the mechanisms we have in place for each of our Gas Utilities: Gas Utility Jurisdiction Cost Recovery Mechanisms EECR/DSM Integrity Additions Bad Debt Weather Normal Gas Cost (a) Revenue Decoupling Arkansas Gas ☑ ☑ ☑ ☑ ☑ Colorado Gas (b) ☑ ☑ RMNG (c) Iowa Gas ☑ ☑ ☑ Kansas Gas ☑ ☑ ☑ ☑ Nebraska Gas ☑ ☑ ☑ Wyoming Gas ☑ ☑ ☑ ____________________ (a) All of our Gas Utilities, except where the Choice Gas Program is the only option, have GCAs that allow us to pass the prudently-incurred cost of gas and certain services through to the customer between rate reviews.
(b) Includes $180.6 million in 2023 rate base for the 2023 Projected Common Use System formula rate that is updated annually and $17.1 million in rate base for the Transmission Tie that is based on the approved stated rate from 2005.
(b) Includes $183.3 million in 2024 rate base for the 2024 Projected Common Use System formula rate that is updated annually and $17.1 million in rate base for the Transmission Tie that is based on the approved stated rate from 2005.
Our Team As of December 31, 2023 As of December 31, 2022 Total employees 2,874 2,982 Women in executive leadership positions (a) 29% 33% Gender diversity (women as a % of total employees) 24% 25% Represented by a union 25% 25% Military veterans 10% 11% Ethnic diversity (non-white employees as a % of total) 15% 14% For the year ended December 31, 2023 For the year ended December 31, 2022 Number of external hires 293 487 External hires gender diversity (as a % of total external hires) 27% 30% External hires ethnic diversity (as a % of total external hires) 24% 23% Turnover rate (b) 12% 13% Retirement rate 3% 3% ____________________ (a) Executive leadership positions are defined as positions with Vice President, Senior Vice President or Chief in their title.
Our Team As of December 31, 2024 As of December 31, 2023 Total employees 2,841 2,874 Women in executive leadership positions (a) 32% 29% Gender diversity (women as a % of total employees) 24% 24% Represented by a union 25% 25% Military veterans 9% 10% Ethnic diversity (non-white employees as a % of total) 15% 15% For the year ended December 31, 2024 For the year ended December 31, 2023 Number of external hires 303 293 External hires gender diversity (as a % of total external hires) 29% 27% External hires ethnic diversity (as a % of total external hires) 25% 24% Turnover rate (b) 11% 12% Retirement rate 3% 3% ____________________ (a) Executive leadership positions are defined as positions with Vice President, Senior Vice President, or Chief in their title.
(c) Arkansas Gas rate base is adjusted to include certain liabilities for comparison with other subsidiaries. (d) The Choice Gas Program mechanisms are applicable to only a portion of Nebraska Gas and Wyoming Gas customers.
(b) Arkansas Gas return on rate base is adjusted to remove certain liabilities from rate review capital structure for comparison with other subsidiaries. (c) Arkansas Gas rate base is adjusted to include certain liabilities for comparison with other subsidiaries. (d) The Choice Gas Program mechanisms are applicable to only a portion of Nebraska Gas and Wyoming Gas customers.
We continue to evaluate the potential effect of these directives on our operations and facilities and will continue to monitor for any clarifications or amendments to these directives. 20 Table of Contents Gas Pipeline and Storage Integrity and Safety We are subject to regulation by PHMSA, which requires the following for certain gas distribution and transmission pipelines and underground storage facilities: inspection and maintenance plans; integrity management programs, including the determination of pipeline integrity risks and periodic assessments on certain pipeline segments; an operator qualification program, which includes certain trainings; a public awareness program that provides certain information; and a control room management plan.
Gas Pipeline and Storage Integrity and Safety We are subject to regulation by PHMSA, which requires the following for certain gas distribution and transmission pipelines and underground storage facilities: inspection and maintenance plans; integrity management programs, including the determination of pipeline integrity risks and periodic assessments on certain pipeline segments; an operator qualification program, which includes certain trainings; a public awareness program that provides certain information; and a control room management plan.
We have undertaken initiatives to meet current requirements and to prepare for anticipated future regulations, reduce GHG emissions, and respond to state renewable and energy efficiency goals. Compliance with future environmental regulations could result in substantial cost.
We have undertaken initiatives to meet current requirements and to prepare for anticipated future regulations, reduce GHG emissions, and respond to state renewable and energy efficiency goals.
(c) South Dakota Electric has WPSC authorization to accumulate certain energy efficiency costs in a regulatory asset with determination of recovery to be made in the next rate review. 18 Table of Contents Gas Utilities The following table provides regulatory information for each of our Gas Utilities: Subsidiary Jurisdiction Authorized Rate of Return on Equity Authorized Return on Rate Base Authorized Capital Structure Debt/Equity Authorized Rate Base (in millions) Effective Date Additional Regulatory Mechanisms Arkansas Gas (a) AR 9.60% 6.20% (b) 55%/45% $674.6 (c) 10/2022 GCA, Safety and Integrity Rider, EECR, Weather Normalization Adjustment, Billing Determinant Adjustment Colorado Gas (a) CO 9.20% 6.56% 50%/50% $303.2 1/2022 GCA, SSIR, DSM, Gas Price Risk Management Rider, Energy Assistance Benefit Charge RMNG (a) CO 9.50%-9.70% 6.93% 48%-50%/ 50%-52% $209.3 7/2023 Liquids/Off-system/Market Center Services Revenue Sharing Iowa Gas IA 9.60% 6.75% 50%/50% $300.9 1/2022 GCA, EECR, System Safety and Maintenance Adjustment Rider, Gas Supply Optimization revenue sharing Kansas Gas KS Global Settlement Global Settlement Global Settlement Global Settlement 1/2022 GCA, Weather Normalization Tariff, Gas System Reliability Surcharge, Ad Valorem Tax Surcharge, Cost of Bad Debt Collected through GCA, Pension Levelized Adjustment, Tax Adjustment Rider, Gas Supply Optimization revenue sharing Nebraska Gas (d) NE 9.50% 6.71% 50%/50% $504.2 (e) 3/2021 GCA, Cost of Bad Debt Collected through GCA, Infrastructure System Replacement Cost Recovery Surcharge, Choice Gas Program, SSIR, Bad Debt expense recovered through Choice Supplier Fee, Line Locate Surcharge, HEAT Program Wyoming Gas (a)(d) WY 9.85% 7.33% 49%/51% $450.8 1/2024 GCA, EECR, Rate Base Recovery on Acquisition Adjustment, Wyoming Integrity Rider, Choice Gas Program ____________________ (a) Colorado Gas regulatory information presented above does not reflect the recent settlement agreement which is subject to CPUC approval.
(c) South Dakota Electric has WPSC authorization to accumulate certain energy efficiency costs in a regulatory asset with determination of recovery to be made in the next rate review. 18 Table of Contents Gas Utilities The following table provides regulatory information for each of our Gas Utilities: Subsidiary Jurisdiction Authorized Rate of Return on Equity Authorized Return on Rate Base Authorized Capital Structure Debt/Equity Authorized Rate Base (in millions) Effective Date Additional Regulatory Mechanisms Arkansas Gas (a) AR 9.85% 7.07% (b) 54%/46% $823.4 (c) 10/2024 GCA, Safety and Integrity Rider, EECR, Weather Normalization Adjustment, Billing Determinant Adjustment, Tax Adjustment Rider Colorado Gas (a) CO 9.30% 6.90% 49%/51% $378.4 5/2024 GCA, DSM, Gas Price Risk Management Rider, Energy Assistance Benefit Charge RMNG CO 9.50%-9.70% 6.93% 48%-50%/ 50%-52% $209.3 7/2023 Liquids/Off-system/Market Center Services Revenue Sharing Iowa Gas IA Black-box Settlement 7.21% Black-box Settlement $393.8 1/2025 GCA, EECR, System Safety and Maintenance Adjustment Rider, Gas Supply Optimization revenue sharing Kansas Gas KS Black-box Settlemen t Black-box Settlement Black-box Settlemen t Black-box Settlemen t 1/2022 GCA, Weather Normalization Tariff, Gas System Reliability Surcharge, Ad Valorem Tax Surcharge, Cost of Bad Debt Collected through GCA, Gas Supply Optimization revenue sharing Nebraska Gas (d) NE 9.50% 6.71% 50%/50% $504.2 (e) 3/2021 GCA, Cost of Bad Debt Collected through GCA, Choice Gas Program, SSIR, Bad Debt expense recovered through Choice Supplier Fee, Line Locates Surcharge, HEAT Program Wyoming Gas (a)(d) WY 9.85% 7.33% 49%/51% $450.8 2/2024 GCA, EECR, Rate Base Recovery on Acquisition Adjustment, Wyoming Integrity Rider, Choice Gas Program ____________________ (a) For additional information regarding recent rate review updates, see Note 2 of the Notes to Consolidated Financial Statements in this Annual Report on Form 10-K.
Our recruiting strategies support our efforts to attract qualified individuals with targeted efforts to reach underrepresented talent. Our internship program and our partnerships and participation in outreach programs with local schools and colleges attract students to careers in the energy industry.
Our recruiting strategies support our efforts to attract qualified individuals with targeted efforts to reach underrepresented talent. Our internship program, together with our partnerships and participation in outreach programs with local schools and colleges, attract students to careers in the energy industry. We seek to attract, retain, and cultivate an engaged and thriving team driven to improve life with energy.
In addition to company-owned regulated underground natural gas storage assets in Arkansas, Colorado and Wyoming, we also contract with third-party transportation providers for natural gas storage service to provide gas supply during the winter heating season and to meet peak day customer demand for natural gas. 15 Table of Contents The following table summarizes certain information regarding our company-owned regulated underground gas storage facilities as of December 31, 2023: Working Capacity (Mcf) Cushion Gas (Mcf) Total Capacity (Mcf) Maximum Daily Withdrawal Capability (Mcfd) Arkansas Gas 8,442,700 13,149,040 21,591,740 196,000 Colorado Gas 2,360,895 6,165,315 8,526,210 30,000 Wyoming Gas 5,733,900 17,545,600 23,279,500 36,000 Total 16,537,495 36,859,955 53,397,450 262,000 The following table summarizes certain information regarding our system infrastructure as of December 31, 2023: Intrastate Gas Transmission Pipelines (in line miles) Gas Distribution Mains (in line miles) Gas Distribution Service Lines (in line miles) Arkansas Gas 875 5,197 1,380 Colorado Gas 694 7,188 1,861 Iowa Gas 173 2,890 2,765 Kansas Gas 339 3,026 1,400 Nebraska Gas 1,315 8,611 2,845 Wyoming Gas 1,267 3,625 1,726 Total 4,663 30,537 11,977 Seasonal Variations of Business.
In addition to company-owned regulated underground natural gas storage assets in Arkansas, Colorado, and Wyoming, we also contract with third-party transportation providers for natural gas storage service to provide gas supply during the winter heating season and to meet peak day customer demand for natural gas. 15 Table of Contents The following table summarizes certain information regarding our company-owned regulated underground gas storage facilities as of December 31, 2024: Working Capacity (Mcf) Cushion Gas (Mcf) Total Capacity (Mcf) Maximum Daily Withdrawal Capability (Mcfd) Arkansas Gas 8,442,700 13,149,040 21,591,740 196,000 Colorado Gas 2,361,495 6,164,715 8,526,210 30,000 Wyoming Gas 5,733,900 17,545,600 23,279,500 36,000 Total 16,538,095 36,859,355 53,397,450 262,000 The following table summarizes certain information regarding our system infrastructure as of December 31, 2024: Intrastate Gas Transmission Pipelines Gas Distribution Mains Gas Distribution Service Lines (in Line Miles) Arkansas Gas 875 5,317 1,411 Colorado Gas 682 7,290 2,245 Iowa Gas 173 2,938 3,729 Kansas Gas 339 3,096 1,510 Nebraska Gas 1,313 8,658 2,967 Wyoming Gas 1,266 3,618 1,745 Total 4,648 30,917 13,607 Seasonal Variations of Business.
As of December 31, Retail Customers 2023 2022 2021 Residential 871,930 864,038 853,908 Commercial 84,917 85,203 84,234 Industrial 2,179 2,189 2,158 Transportation 157,367 155,685 153,929 Total Natural Gas Retail Customers at End of Year 1,116,393 1,107,115 1,094,229 As of December 31, Retail Customers 2023 2022 2021 Arkansas Gas 186,216 183,270 180,216 Colorado Gas 211,155 208,060 202,747 Iowa Gas 163,281 162,801 161,905 Kansas Gas 119,407 118,599 117,862 Nebraska Gas 302,167 301,007 298,832 Wyoming Gas 134,167 133,378 132,667 Total Natural Gas Retail Customers at End of Year 1,116,393 1,107,115 1,094,229 We procure natural gas for our distribution customers from a diverse mix of producers, processors and marketers and generally use hedging, physical fixed-price purchases and market-based price purchases to achieve dollar-cost averaging within our natural gas portfolio.
As of December 31, Retail Customers by Customer Class 2024 2023 2022 Residential 882,232 871,930 864,038 Commercial 85,594 84,917 85,203 Industrial 2,174 2,179 2,189 Transportation 158,355 157,367 155,685 Total Natural Gas Retail Customers at End of Year 1,128,355 1,116,393 1,107,115 As of December 31, Retail Customers by Business Unit 2024 2023 2022 Arkansas Gas 189,240 186,216 183,270 Colorado Gas 215,190 211,155 208,060 Iowa Gas 164,134 163,281 162,801 Kansas Gas 120,225 119,407 118,599 Nebraska Gas 304,429 302,167 301,007 Wyoming Gas 135,137 134,167 133,378 Total Natural Gas Retail Customers at End of Year 1,128,355 1,116,393 1,107,115 We procure natural gas for our distribution customers from a diverse mix of producers, processors, and marketers and generally use financial hedges, physical fixed-price purchases, and market-based price purchases to achieve dollar-cost averaging within our natural gas portfolio.
Power generated from these units, as a percentage of total power supply, was 0.0% for each of the years presented. 13 Table of Contents Our Electric Utilities’ weighted average cost of fuel utilized to generate electricity and the average price paid for purchased power (excluding contracted capacity) per MWh for the years ended December 31 were as follows: Fuel and Purchased Power (dollars per MWh) 2023 2022 2021 Coal $ 13.40 $ 12.76 $ 11.55 Natural Gas 20.20 37.09 33.65 Total Generated Weighted Average Fuel Cost 14.27 17.57 17.40 Coal, Natural Gas, Diesel Oil and Other Market Purchases 55.61 66.35 64.85 Wind and Solar Purchases 34.99 33.78 34.69 Total Purchased Power Weighted Average Cost 51.68 61.56 59.84 Total Weighted Average Fuel and Purchased Power Cost $ 25.39 $ 32.82 $ 30.17 Purchased Power.
The renewable energy from these PPAs is used to serve our expanding partnerships with LPCS customers. 13 Table of Contents Our Electric Utilities’ weighted average cost of fuel utilized to generate electricity and the average price paid for purchased power (excluding contracted capacity) per MWh for the years ended December 31 were as follows: Fuel and Purchased Power (dollars per MWh) 2024 2023 2022 Coal $ 13.87 $ 13.40 $ 12.76 Natural Gas 15.64 20.20 37.09 Wind — — — Total Generated Weighted Average Fuel Cost 12.90 14.27 17.57 Coal, Natural Gas, Diesel Oil and Other Market Purchases 67.04 55.61 66.35 Wind and Solar Purchases 38.70 34.99 33.78 Total Purchased Power Weighted Average Cost 52.79 51.68 61.56 Total Weighted Average Fuel and Purchased Power Cost $ 24.66 $ 25.39 $ 32.82 Purchased Power.
At December 31, 2023, our Electric Utilities owned the electric transmission and distribution lines shown below: Utility State Transmission (a) (in Line Miles) Distribution (in Line Miles) Colorado Electric Colorado 599 3,213 South Dakota Electric (b) South Dakota, Wyoming 1,232 2,616 Wyoming Electric Wyoming 86 1,360 1,917 7,189 ____________________ (a) Electric transmission line miles include voltages of 69 kV and above.
At December 31, 2024, our Electric Utilities owned the electric transmission and distribution lines shown below: Utility State Transmission (a) Distribution (in Line Miles) Colorado Electric Colorado 655 3,222 South Dakota Electric (b) South Dakota, Wyoming 1,234 2,627 Wyoming Electric Wyoming 88 1,370 1,977 7,219 ____________________ (a) Electric transmission line miles include voltages of 69 kV and above.
In July of 2019, the EPA adopted the Affordable Clean Energy rule, which requires states to develop plans by 2022 for GHG reductions from coal-fired power plants.
Compliance with future environmental regulations could result in substantial cost. 20 Table of Contents In July of 2019, the EPA adopted the Affordable Clean Energy rule, which required states to develop plans by 2022 for GHG reductions from coal-fired power plants.
See Note 12 of the Notes to Consolidated Financial Statements in this Annual Report on Form 10-K for additional information.
(d) Non-controlling interest is discussed in Note 12 of the Notes to Consolidated Financial Statements in this Annual Report on Form 10-K.
As of December 31, Retail Customers 2023 2022 2021 Residential 190,776 188,921 186,852 Commercial 30,491 30,404 30,326 Industrial 84 82 81 Other 989 1,024 1,010 Total Electric Retail Customers at End of Year 222,340 220,431 218,269 As of December 31, Retail Customers 2023 2022 2021 Colorado Electric 100,907 100,573 99,709 South Dakota Electric 76,479 75,169 74,509 Wyoming Electric 44,954 44,689 44,051 Total Electric Retail Customers at End of Year 222,340 220,431 218,269 Capacity and Demand.
As of December 31, Retail Customers by Customer Class 2024 2023 2022 Residential 192,716 190,776 188,921 Commercial 31,210 30,491 30,404 Industrial 83 84 82 Municipal 1,079 989 1,024 Total Electric Retail Customers at End of Year 225,088 222,340 220,431 As of December 31, Retail Customers by Business Unit 2024 2023 2022 Colorado Electric 101,455 100,907 100,573 South Dakota Electric 77,941 76,479 75,169 Wyoming Electric 45,692 44,954 44,689 Total Electric Retail Customers at End of Year 225,088 222,340 220,431 Capacity and Demand.
Total Employees Number of Employees As of December 31, 2023 Electric Utilities 425 Gas Utilities 1,198 Corporate and Other 1,251 Total 2,874 At December 31, 2023, approximately 18% of our total employees and 20% of our Electric and Gas Utilities employees were eligible for retirement (age 55 with at least 5 years of service).
Total Employees Number of Employees As of December 31, 2024 Electric Utilities 423 Gas Utilities 1,175 Corporate and Other 1,243 Total 2,841 At December 31, 2024, approximately 18% of our total employees and 20% of our Electric and Gas Utilities employees were eligible for retirement (age 55 with at least 5 years of service). 21 Table of Contents Collective Bargaining Agreements At December 31, 2024, certain employees of our Electric Utilities and Gas Utilities were covered by the collective bargaining agreements as shown in the table below.
In May and July 2021 the TSA issued security directives that included several new cybersecurity requirements for critical pipeline owners and operators; and • the PHMSA, which is responsible for administering the federal regulatory program to help ensure the safe transportation of natural gas, petroleum and other hazardous materials by pipelines, including pipelines associated with natural gas storage, and develops regulations and other approaches to risk management to help ensure safety in design, construction, testing, operation, maintenance and emergency response of pipeline facilities.
The EPA also works with industries and all levels of government, including federal and state governments, in a wide variety of voluntary pollution prevention programs and energy conservation efforts; • the PHMSA, which is responsible for administering the federal regulatory program to help ensure the safe transportation of natural gas, petroleum, and other hazardous materials by pipelines, including pipelines associated with natural gas storage, and develops regulations and other approaches to risk management to help ensure safety in design, construction, testing, operation, maintenance, and emergency response of pipeline facilities.
Utility Number of Employees Union Affiliation Expiration Date of Collective Bargaining Agreement Colorado Electric 108 IBEW Local 667 April 15, 2027 South Dakota Electric 122 IBEW Local 1250 March 31, 2027 Wyoming Electric 29 IBEW Local 111 June 30, 2024 Total Electric Utilities 259 Iowa Gas 129 IBEW Local 204 January 31, 2026 Kansas Gas 15 Communications Workers of America, AFL-CIO Local 6407 December 31, 2024 Nebraska Gas 92 IBEW Local 244 March 13, 2025 Nebraska Gas 134 CWA Local 7476 October 30, 2026 Wyoming Gas 16 IBEW Local 111 June 30, 2024 Wyoming Gas 80 CWA Local 7476 October 30, 2026 Total Gas Utilities 466 Total 725 22 Table of Contents Diversity, Equity & Inclusion We believe the benefits of diversity, equity and inclusion can be powerful, and we are committed to building a workforce whose diversity is representative of the communities we serve.
Utility Number of Employees Union Affiliation Expiration Date of Collective Bargaining Agreement Colorado Electric 109 IBEW Local 667 April 15, 2027 South Dakota Electric 118 IBEW Local 1250 March 31, 2027 South Dakota Electric 6 IBEW Local 1250 September 29, 2028 Wyoming Electric 28 IBEW Local 111 June 30, 2029 Total Electric Utilities 261 Iowa Gas 127 IBEW Local 204 January 31, 2026 Kansas Gas 15 Communications Workers of America, AFL-CIO Local 6407 December 31, 2029 Nebraska Gas 92 IBEW Local 244 March 13, 2025 Nebraska Gas 127 CWA Local 7476 October 30, 2026 Wyoming Gas 13 IBEW Local 111 June 30, 2029 Wyoming Gas 81 CWA Local 7476 October 30, 2026 Total Gas Utilities 455 Total 716 Development and Retention Developing and retaining talent is critical to our continued success.
By making our people and culture a strategic priority, our employees are engaged and empowered to contribute to the success of our business.
Human Capital Resources Overview We are committed to retaining, attracting and cultivating a talented, engaged, and thriving team. By making our people and culture a strategic priority, our employees are engaged and empowered to contribute to the success of our business. We are committed to building a workforce that is representative of the communities we serve.
For additional information on environmental matters, see Item 1A and Note 3 of the Notes to Consolidated Financial Statements in this Annual Report on Form 10-K. 21 Table of Contents Human Capital Resources Overview We are committed to retaining, attracting and cultivating a talented, engaged and thriving team.
We continually assess risk and develop mitigation strategies to manage and ensure compliance across the enterprise successfully and responsibly. For additional information on environmental matters, see Item 1A and Note 3 of the Notes to Consolidated Financial Statements in this Annual Report on Form 10-K.
(b) The diesel oil-fueled generating units are generally used as supplemental peaking units.
(b) The diesel oil-fueled generating units are generally used as supplemental peaking units. Power generated from these units, as a percentage of total power supply, was 0.0% for each of the years presented.
For the year ended December 31, 2023 Total Case Incident Rate (incidents per 200,000 hours worked) 1.51 Preventable Motor Vehicle Incident Rate (vehicle accidents per 1 million miles driven) 1.65 Proactive Safety Activities per Employee 4 % of injuries reported within 1 day 93.3% 23 Table of Contents
For the year ended December 31, 2024 Days Away, Restricted, or Transferred (incidents per 200,000 hours worked) 1.0 Proactive Safety Activities per Employee 6 % of injuries reported within 1 day 91.5% 22 Table of Contents
(b) The PTCs for Peak View flow back to customers through a rider mechanism as a reduction to Colorado Electric’s margins. (c) This facility qualifies for PTCs at $28/MWh under IRC 45 during the 10-year period beginning on the date the facility was originally placed in service.
(b) This facility qualifies for PTCs at $29/MWh under IRC 45 during the 10-year period beginning on the date the facility was originally placed in service. (c) Jointly owned facilities are discussed in Note 6 of the Notes to Consolidated Financial Statements in this Annual Report on Form 10-K.
Our compensation programs are designed to be strategically aligned, externally competitive, internally equitable, personally motivating, cost effective and legally compliant. We monitor employee engagement through bi-annual engagement surveys and quarterly pulse surveys. Every leader is responsible for creating and implementing an action plan based on their team’s engagement survey results.
Our development and retention efforts include internal and external skills training, career development programs, and competitive compensation. Our compensation programs are designed to be strategically aligned, externally competitive, internally equitable, personally motivating, cost effective, and legally compliant. We monitor employee engagement through regular engagement surveys to gather valuable insights and feedback.
Employee Safety and Wellness Safety is one of our company values, a top priority in all we do and deeply embedded in our culture. Meetings of three or more employees begin with a safety share, a practice which contributes to keeping safety top of mind.
Meetings of three or more employees begin with a safety share, a practice which contributes to keeping safety top of mind. We focus our safety efforts on fostering a learning culture with proactive safety engagement with the goal of building capacity and reducing the potential for serious injuries and fatalities.
Environmental risk changes constantly with the implementation of new or modified regulations, changing stakeholder interests and needs, and through the introduction of innovative work practices and technologies. We continually assess risk and develop mitigation strategies to manage and ensure compliance across the enterprise successfully and responsibly.
We are currently evaluating the impact of these rules through our integrated resource plans and believe that costs incurred as a result of the new rules will be recoverable through our regulatory mechanisms. Environmental risk changes constantly with the implementation of new or modified regulations, changing stakeholder interests and needs, and through the introduction of innovative work practices and technologies.
Workforce diversity trends, which include new hires, promotions and turnover, are monitored at regular intervals throughout the year. Development and Retention Developing and retaining talent is critical to our continued success. Our development and retention efforts include internal and external skills training, career development programs, and competitive compensation.
We continuously evaluate our recruitment strategies to determine their effectiveness to attract and build a talented, diverse workforce with a sense of belonging. Workforce diversity trends, which include new hires, promotions, and turnover, are monitored at regular intervals throughout the year.
Our career development programs include management onboarding, leadership development programs, mentoring programs, individual development assessments, stretch opportunities, talent sharing and more. Internal training opportunities include corporate-wide and specialized training opportunities for different job functions. Our Field Career Path Program (FCPP) promotes career growth for our frontline customer-facing employees through established standards of knowledge, skills, abilities and performance.
Our Field Career Path Program (FCPP) promotes career growth for our frontline customer-facing employees through established standards of knowledge, skills, abilities, and performance. Employee Safety and Wellness Safety is one of our company values, a top priority in all we do and deeply embedded in our culture.
The proposed emissions limitations are based upon the application of carbon capture controls or the use of hydrogen fuel beginning in 2030. The EPA is expected to issue a final rule in the first half of 2024. We will continue to monitor any related guidelines and rulemakings issued by the EPA or state regulatory authorities.
The proposed emissions limitations are based upon the application of carbon capture controls or the use of hydrogen fuel beginning in 2030. In April 2024, the EPA published final rules addressing control of CO 2 emissions from the power sector. The rules regulate new natural gas generating units and provide emission guidelines for existing coal and certain natural gas generation.
Removed
System Peak Demand for the Electric Utilities’ retail customers for each of the last three years are listed below: System Peak Demand (in MW) 2023 (a) 2022 2021 Summer Winter Summer Winter Summer Winter Colorado Electric 411 297 410 334 407 279 South Dakota Electric 378 289 403 355 397 299 Wyoming Electric 312 301 294 281 274 246 ____________________ (a) In 2023, Wyoming Electric set new summer and winter peak loads.
Added
(c) Renewable energy purchases increased in 2024 primarily due to Wyoming Electric entering into a new wind PPA effective December 2023 and a new solar energy PPA effective March 2024.
Removed
(d) Jointly owned facilities are discussed in Note 6 of the Notes to Consolidated Financial Statements in this Annual Report on Form 10-K. (e) In 2016, Black Hills Electric Generation sold a 49.9% non-controlling interest in Black Hills Colorado IPP to a third party.
Added
(e) Excludes amounts to serve non-jurisdictional and agriculture customers.
Removed
The EPA also works with industries and all levels of government, including federal and state governments, in a wide variety of voluntary pollution prevention programs and energy conservation efforts; • the TSA, which regulates certain activities related to the safety and security of natural gas pipelines.
Added
(b) Colorado Gas's SSIR was approved by the CPUC for a three-year term, effective January 1, 2022 to December 31, 2024. The SSIR was not extended during the most recent rate review. (c) RMNG does not have retail customers and therefore, does not have typical cost recovery mechanisms.
Removed
For additional information regarding recent rate review updates, see Note 2 of the Notes to Consolidated Financial Statements in this Annual Report on Form 10-K. (b) Arkansas Gas return on rate base is adjusted to remove certain liabilities from rate review capital structure for comparison with other subsidiaries.
Added
The rules create subcategories of coal units based on planned retirement date and subcategories of natural gas combustion turbines and combined cycle units based on utilization. The CO 2 control requirements vary by subcategory.
Removed
Pipeline Security In May and July 2021, the TSA issued security directives in response to a ransomware attack on the Colonial Pipeline that occurred earlier in 2021 that included several new cybersecurity requirements for critical pipeline owners and operators.
Added
We have not experienced any labor stoppages in decades.
Removed
Among these requirements is the implementation of specific mitigation measures to protect against ransomware attacks and other known threats to information and operational technology systems; development and implementation of a cybersecurity contingency and recovery plan; and performance of a cybersecurity architecture design review. Compliance with these measures has not had a material impact on our operations.
Added
Every leader is responsible for creating and implementing an action plan based on their team’s engagement survey results, while the company develops broader action plans to address organization-wide opportunities. Our career development programs include management onboarding, leadership development programs, mentoring programs, stretch opportunities, and more. Internal training opportunities include corporate-wide and specialized training opportunities for different job functions.
Removed
In February 2022, the EPA proposed the Good Neighbor Rule Provisions, which are part of the CSAPR framework and is intended to address ozone transport for the 2015 ozone NAAQS. The proposed rule included the state of Wyoming and imposed a NOx emissions trading program on fossil fueled electricity generating plants within the state.
Removed
The EPA’s consideration of revised NOx emissions inventories and revised ozone modeling resulted in Wyoming’s exclusion from the final Good Neighbor Rule published on June 5, 2023.
Removed
In a subsequent action published on August 14, 2023, the EPA approved Wyoming’s State Implementation Plan submission addressing interstate transport for the 2015 8-hour ozone NAAQS, and Wyoming sources will not be subject to the CSAPR.
Removed
Collective Bargaining Agreements At December 31, 2023, certain employees of our Electric Utilities and Gas Utilities were covered by the collective bargaining agreements as shown in the table below. We have not experienced any labor stoppages in decades.
Removed
Our commitment to equitable and inclusive hiring practices, including diverse candidate slates and interview panels and pay equity reviews, further supports our vision of retaining, attracting and cultivating an engaged and thriving team driven by improving life with energy. We continuously evaluate our recruitment strategies to determine their effectiveness to attract and build a talented, diverse workforce.
Removed
Since 2009, we have reduced workplace injuries by more than 64% and continue to see long-term, sustained improvements in our safety practices and performance.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

48 edited+15 added−12 removed58 unchanged
Biggest changeOur ability to access capital markets and the costs and terms of available financing depend on many factors, including changes in our credit ratings, general macroeconomic conditions which may drive changes in interest rates and cause volatility in our stock price, changes in the federal or state regulatory environment affecting energy companies and volatility in commodity prices.
Biggest changeOur ability to access capital markets and the costs and terms of available financing depend on many factors, including changes in our credit ratings, general macroeconomic conditions which may drive changes in interest rates and cause volatility in our stock price, changes in the federal or state regulatory environment affecting energy companies, and volatility in commodity prices. 28 Table of Contents In addition, because we are a holding company and our utility assets are owned by our subsidiaries, if we are unable to adequately access the credit markets, we could be required to take additional measures designed to ensure that our utility subsidiaries are adequately capitalized to provide safe and reliable service.
The successful execution of our capital investment program depends on, or could be affected by, a variety of factors that include, but are not limited to: access to capital to fund projects, weather conditions, effective management of projects, availability of qualified construction personnel including contractors, changes in commodity and other prices, impacts of supply chain disruptions on availability and cost of materials, governmental approvals and permitting, regulatory cost recovery and return on investment.
The successful execution of our capital investment program depends on, or could be affected by, a variety of factors that include, but are not limited to: access to capital to fund projects, weather conditions, effective management of projects, availability of qualified construction personnel including contractors, changes in commodity prices, impacts of supply chain disruptions on availability and cost of materials, governmental approvals and permitting, regulatory cost recovery, and return on investment.
Sweeping legislation or regulation could be enacted by any of these governmental authorities which may affect our tax burden. Changes may include numerous provisions that affect businesses, including changes to corporate tax rates, business-related exclusions, and deductions and credits.
Sweeping legislation or regulation could be enacted by any of these governmental authorities which may affect our tax burden. Changes may include numerous provisions that affect businesses, including changes to corporate tax rates, business-related exclusions, transferability of tax credits, and deductions and credits.
New or more stringent regulations or other energy efficiency requirements could require us to incur significant additional costs relating to, among other things, the installation of additional emission control equipment, the acceleration of capital expenditures, the purchase of additional emissions allowances or offsets, the acquisition or development of additional energy supply from renewable resources, the closure or capacity reductions of coal-fired power generation facilities or conversion to alternative fuels, and potential increased production from our combined cycle natural gas-fired generating units.
New or more stringent regulations or other energy efficiency requirements could require us to incur significant additional costs relating to, among other things, the installation of additional emission control equipment, the acceleration of capital expenditures, the purchase of additional emissions allowances or offsets, the acquisition or development of additional energy supply from renewable resources, the closure or capacity reductions of coal-fired power generation facilities or conversion to alternative fuels, and potential decreased production from our combined cycle natural gas-fired generating units.
We had approximately $1.3 billion of goodwill on our consolidated balance sheets as of December 31, 2023. If we make changes in our strategic business plan and growth strategy, or if macroeconomic or other conditions adversely affect operations in any of our businesses, we may be required to record a non-cash impairment charge.
We had approximately $1.3 billion of goodwill on our consolidated balance sheets as of December 31, 2024. If we make changes in our strategic business plan and growth strategy, or if macroeconomic or other conditions adversely affect operations in any of our businesses, we may be required to record a non-cash impairment charge.
Failures of or contact with power lines, natural gas pipelines or service facilities and equipment may result in fires, explosions, property damage and personal injuries, including death. While we maintain liability and property insurance coverage, such policies are subject to certain limits and deductibles.
Failures of or contact with power lines, natural gas pipelines, or service facilities and equipment may result in fires (discussed above), explosions, property damage, and personal injuries, including death. While we maintain liability and property insurance coverage, such policies are subject to certain limits and deductibles.
Such developments could affect the price and/or delivery of energy, require further improvements to our distribution systems to address changing load demands and could make portions of our electric system power supply and transmission and/or distribution facilities obsolete prior to the end of their useful lives.
Such developments could affect the price and/or delivery of energy, require further improvements to our distribution systems to address changing load demands and could make portions of our electric system's power supply and transmission and/or distribution facilities obsolete prior to the end of their useful lives.
Our senior unsecured debt rating is Baa2 (Stable outlook) by Moody’s; BBB+ (Stable outlook) by S&P; and BBB+ (Negative outlook) by Fitch. Reduction of our investment grade credit ratings could impair our ability to refinance or repay our existing debt and complete new financings on reasonable terms.
Our senior unsecured debt rating is Baa2 (Stable outlook) by Moody’s and BBB+ (Stable outlook) by S&P. Reduction of our investment grade credit ratings could impair our ability to refinance or repay our existing debt and complete new financings on reasonable terms.
See additional information in “ Critical Accounting Estimates ” under Item 7 , Management’s Discussion and Analysis of Financial Condition and Results of Operations and Note 1 of the Notes to Consolidated Financial Statements in this Annual Report on Form 10-K. 28 Table of Contents FINANCIAL RISKS A sub-investment grade credit rating could impact our ability to access capital markets.
See additional information in “ Critical Accounting Estimates ” under Item 7 , Management’s Discussion and Analysis of Financial Condition and Results of Operations and Note 1 of the Notes to Consolidated Financial Statements in this Annual Report on Form 10-K. FINANCIAL RISKS A sub-investment grade credit rating could impact our ability to access capital markets.
Severe weather events, such as snow and ice storms (e.g., Winter Storm Uri), fire, and strong winds could negatively impact our operations, including our ability to provide energy safely, reliably and profitably and our ability to complete construction, expansion or refurbishment of facilities as planned. Climate change may intensify these events or increase the frequency of their occurrence.
Severe weather events, such as snow and ice storms (e.g., Winter Storm Uri), wildfires, and strong winds could impact our operations, including our ability to provide energy safely, reliably, and profitably and our ability to complete construction, expansion, or refurbishment of facilities as planned. Climate change may intensify these events or increase the frequency of their occurrence.
Assumptions related to interest rates, expected return on investments, mortality and other key actuarial assumptions have a significant impact on our funding requirements and the expense recognized related to our pension and other postretirement benefit plans.
Assumptions related to interest rates, expected return on investments, mortality, and other key actuarial assumptions have a significant impact on our funding requirements and the expense recognized related to our pension and other retiree benefit plans.
These risks could directly influence the demand for electricity and natural gas as well as the need for additional power generation and generating facilities. We could also be exposed to greater risks of accounts receivable write-offs if customers are unable to pay their bills. • Weather conditions.
These risks could directly influence the demand for electricity and natural gas as well as the need for additional power generation and generating facilities. We could also be exposed to greater risks of accounts receivable write-offs if customers are unable to pay their bills. 27 Table of Contents • Weather conditions.
See Note 13 of the Notes to Consolidated Financial Statements of this Annual Report on Form 10-K for further information Our use of derivative financial instruments as hedges against commodity prices and financial market risks could result in material financial losses.
See Note 13 of the Notes to Consolidated Financial Statements of this Annual Report on Form 10-K for further information 29 Table of Contents Our use of derivative financial instruments as hedges against commodity prices and financial market risks could result in material financial losses.
Market performance or changes in key valuation assumptions could require us to make significant unplanned contributions to our pension plan and other postretirement benefit plans.
Market performance or changes in key valuation assumptions could require us to make significant unplanned contributions to our pension plan and other retiree benefit plans.
Our results of operations could be negatively impacted by the lack of availability and cost of natural gas, and disruptions in the delivery of natural gas due to various factors, including but not limited to, transportation delays, labor relations, weather, sabotage, cyber-attacks and environmental regulations; • Replacement power.
Our operations could be negatively impacted by the lack of availability and cost of natural gas, and disruptions in the delivery of natural gas due to various factors, including but not limited to, transportation delays, labor relations, weather, sabotage, cyber-attacks, and environmental regulations. 26 Table of Contents • Replacement power.
Climate change may lead to increased intensity and frequency of storms, resulting in increased likelihood of fire, wind and extreme temperature events.
Climate change may lead to increased intensity and frequency of storms, resulting in increased likelihood of wildfires, wind, and extreme temperature events.
Our supply chain, material costs, and capital investment program may be negatively impacted by: • Unanticipated price increases due to recent macroeconomic factors, such as inflation, including wage inflation, or rising demand for raw materials associated with the Energy Transition; and • Supply restrictions beyond our control or the control of our suppliers such as disruption of the freight system (e.g. labor union strikes), increased environmental threats from weather-related disasters, rising demand for raw materials associated with the Energy Transition and/or geopolitical unrest (e.g.
Our supply chain, material costs, and capital investment program may be negatively impacted by: • Unanticipated price increases due to recent macroeconomic factors, such as inflation, including wage inflation, imposition of new tariffs, or rising demand for raw materials associated with the Energy Transition; and • Supply restrictions beyond our control or the control of our suppliers such as disruption of the freight system (e.g. labor union strikes, disruptions of trade routes), new or increased tariffs or quotas, increased environmental threats from weather-related disasters, rising demand for raw materials associated with the Energy Transition, and/or geopolitical unrest.
If we are unable to successfully attract and retain an appropriately qualified workforce and maintain satisfactory collective bargaining agreements, safety, service reliability, customer satisfaction and our results of operations could be adversely affected .
If we are unable to successfully attract and retain an appropriately qualified workforce and maintain high levels of employee engagement, and maintain satisfactory collective bargaining agreements, safety, service reliability, customer satisfaction, and our results of operations could be adversely affected.
The coverage we currently have in place may not apply to a particular loss, or it may not be sufficient to cover all liabilities to which we may be subject, including liability and losses associated with wildfires, natural gas and storage field explosions, cyber-security breaches, environmental hazards and natural disasters. We have a holding company corporate structure with multiple subsidiaries.
The coverage we currently have in place may not apply to a particular loss, or it may not be sufficient to cover all liabilities to which we may be subject, including liability and losses associated with wildfires, natural gas and storage field explosions, cyber-security breaches, environmental hazards, and natural disasters.
We rely on various suppliers in our supply chain for the materials necessary to execute on our capital investment program that is key to our strategic business plans and to respond to a significant unplanned event such as a natural disaster.
Supply chain challenges could negatively impact our operations. We rely on various suppliers in our supply chain for the materials necessary to execute on our capital investment program that is key to our strategic business plans and to respond to a significant unplanned event such as a natural disaster.
More stringent environmental laws or regulations could result in additional costs of operation for existing facilities or impede the development of new facilities. 24 Table of Contents There is significant uncertainty regarding if and when new climate legislation, regulations or administrative policies will be adopted to reduce or limit GHG and the impact any such regulations would have on us.
More stringent environmental laws or regulations could result in additional capital investments and costs of operation for existing facilities or impede the development of new facilities. There is uncertainty regarding if and when new climate legislation, regulations or policies will be adopted to reduce or limit GHG and the impact any such regulations would have on us.
An inability to successfully and timely adapt to changing conditions and execute our strategic plans could materially affect our financial operating results including earnings, cash flow and liquidity. REGULATORY, LEGISLATIVE AND LEGAL RISKS We may be subject to unfavorable or untimely federal and state regulatory outcomes.
An inability to successfully adapt to changing conditions and execute our strategic plan, including our capital investment program, could materially affect our financial operating results including earnings, cash flow, and liquidity. REGULATORY, LEGISLATIVE, AND LEGAL RISKS We may be subject to unfavorable or untimely federal and state regulatory outcomes.
The FERC, NERC, PHMSA, CFTC, EPA, OSHA, SEC, TSA and MSHA may impose significant civil and criminal penalties to enforce compliance requirements relative to our business, which could have a material adverse effect on our financial operating results including earnings, cash flow and liquidity. Municipal governments may seek to limit or deny our franchise privileges.
The FERC, NERC, PHMSA, CFTC, EPA, OSHA, SEC, TSA, and MSHA may impose significant civil and criminal penalties to enforce compliance requirements relative to our business, which could have a material adverse effect on our financial operating results including earnings, cash flow, and liquidity.
Operational limitations imposed by environmental and other regulatory requirements and contractual agreements, including those that restrict the timing of generation plant scheduled outages, could negatively impact our results of operations; • Increased costs.
Operational limitations imposed by environmental and other regulatory requirements and contractual agreements, including those that restrict the timing of generation plant scheduled outages. • Increased costs.
As benefit costs continue to rise, however, there is no assurance that the utility commissions will allow recovery of these increased costs. The rising employee benefit costs, or inadequate recovery of such costs, may adversely affect our financial operating results including earnings, cash flow, and liquidity.
As employee benefit costs continue to rise, however, there is no assurance that the utility commissions will allow recovery of these increased costs. Rising employee benefit costs, or inadequate recovery of such costs, may adversely affect our financial operating results including earnings, cash flow, and liquidity. We have a holding company corporate structure with multiple subsidiaries.
These risks could also cause us to incur significant costs or be unable to deliver energy and/or operate below expected capacity levels, which in turn could reduce revenues or cause us to incur higher operating and maintenance costs and penalties.
Any of these risks described above could damage our reputation and public confidence. These risks could also cause us to be unable to deliver energy and/or operate below expected capacity levels, which in turn could reduce revenues or cause us to incur higher operating and maintenance costs and penalties.
As discussed in Item 1C in this Annual Report on Form 10-K, we have instituted security measures and safeguards to protect our operational systems and information technology assets against cybersecurity threats, including certain safeguards required by NERC.
As discussed in Item 1C in this Annual Report on Form 10-K, we have instituted security measures and safeguards to protect our operational systems and information technology assets against cybersecurity threats, including certain safeguards required by NERC. Despite our implementation of security measures and safeguards, all of our technology systems may still be vulnerable to disability, failures, or unauthorized access.
Increased capital and operating costs to comply with increasingly stringent laws and regulations, unexpected engineering, environmental and geological problems, and unanticipated cost overruns could negatively impact our results of operations; • Supply chain challenges (discussed above); • Workforce capabilities and labor relations (discussed above); and 26 Table of Contents • Public opposition.
Increased capital and operating costs to comply with increasingly stringent laws and regulations, unexpected engineering, environmental and geological problems, and unanticipated cost overruns. • Supply chain challenges (discussed above). • Workforce capabilities and labor relations (discussed above). • Public opposition. Opposition by members of public or special-interest groups could negatively impact our ability to operate our businesses.
Demand for natural gas is also impacted by summer weather patterns that are cooler than normal and provide higher than normal precipitation; both of which can reduce natural gas demand for irrigation.
Demand for natural gas is also impacted by summer weather patterns that are cooler than normal and provide higher than normal precipitation; both of which can reduce natural gas demand for irrigation. • Our customers' focus on energy conservation which may be assisted by emerging technologies.
Such directives or other requirements may require expenditure of significant additional resources to respond to cybersecurity incidents, to continue to modify or enhance protective measures, or to assess, investigate and remediate any critical infrastructure security vulnerabilities.
In recent years, the TSA issued security directives that included several new cybersecurity requirements for critical pipeline owners and operators. Such directives or other requirements may require expenditure of significant additional resources to respond to cybersecurity incidents, to continue to modify or enhance protective measures, or to assess, investigate and remediate any critical infrastructure security vulnerabilities.
The inability to obtain required governmental permits and approvals along with the cost of complying with or satisfying conditions imposed upon such approvals could negatively impact our ability to operate and our results of operations; • Operational limitations.
We may incur increased cost of supplying or securing replacement power during scheduled and unscheduled outages of generation facilities. • Governmental permits. The inability to obtain required governmental permits and approvals along with the cost of complying with or satisfying conditions imposed upon such approvals could negatively impact our ability to operate. • Operational limitations.
Our financial performance depends on the successful operation of electric generating facilities, electric and natural gas transmission and distribution systems, natural gas storage facilities and a coal mine. The risks associated with managing these operations include: • Operating hazards.
In addition, there is no certainty that costs incurred related to securing against threats will be recovered through rates. Our financial performance depends on the successful operation of electric generating facilities, electric and natural gas transmission and distribution systems, natural gas storage facilities and a coal mine. The risks associated with managing these operations include: • Operating hazards.
We depend on transmission and distribution facilities, including those operated by unaffiliated parties, to deliver the electricity and natural gas that we sell to our retail and wholesale customers.
Breakdown or failure of equipment or processes, unavailability, or increased cost of equipment, and performance below expected levels of output or efficiency. • Disrupted transmission and distribution. We depend on transmission and distribution facilities, including those operated by unaffiliated parties, to deliver the electricity and natural gas that we sell to our retail and wholesale customers.
Our current plans and strategy may be negatively impacted by disruptive forces and innovations in the marketplace, workforce capabilities, changing political, business or regulatory conditions and technology advancements. In addition, we have significant capital investment programs planned for the next five years that are key to our strategic business plans.
Our current plans and strategy may be negatively impacted by disruptive forces and innovations in the marketplace, workforce capabilities, changing political, business or regulatory conditions, and technology advancements.
As part of our strategic business plans, we will need to attract and retain personnel who are qualified to implement our strategy and may need to retrain or re-skill certain employees to support our long-term objectives. 25 Table of Contents Supply chain challenges could negatively impact our operations.
As part of our strategic business plans, we will need to attract and retain personnel who are qualified and engaged to implement our strategy and may need to retrain or re-skill certain employees to support our long-term objectives. Our businesses have collective bargaining agreements with labor unions and approximately 25% of our employees are represented by unions.
In addition, each subsidiary’s ability to pay dividends to us depends on any applicable contractual or regulatory restrictions that may include requirements to maintain minimum levels of cash, working capital, equity or debt service funds. 29 Table of Contents There is no assurance as to the amount, if any, of future dividends to the holding company because these subsidiaries depend on future earnings, capital requirements and financial conditions to fund such dividends.
In addition, each subsidiary’s ability to pay dividends to us depends on any applicable contractual or regulatory restrictions that may include requirements to maintain minimum levels of cash, working capital, equity, or debt service funds.
Although condemnation is a process that is subject to constitutional protections requiring just and fair compensation, as with any judicial procedure, the outcome is uncertain. If a municipality sought to pursue this course of action, we cannot assure that we would secure adequate recovery of our investment in assets subject to condemnation.
If a municipality sought to pursue this course of action, we cannot assure that we would secure adequate recovery of any litigation costs or our investment in assets subject to condemnation.
OPERATING RISKS Failure to attract and retain an appropriately qualified workforce could have a negative impact on our operations and long-term business strategy. Recent trends, such as a competitive and tight labor market and an aging workforce may lead to higher costs and increased risk of negative outcomes for safety, compliance, customer service, and operations.
Recent trends, such as a competitive and tight labor market and declines in employee engagement may lead to higher costs and increased risk of negative outcomes for safety, compliance, customer service, and operations.
Our results of operations and cash flows are affected by the demand for electricity and natural gas, which can vary greatly based upon: • Fluctuations in customer growth and general economic conditions in our service territories.
Our operations are subject to various conditions that can result in fluctuations in customer usage, including customer growth and general economic conditions in our service territories, weather conditions, and responses to price increases and technological improvements. Demand for electricity and natural gas can vary greatly based upon: • Fluctuations in customer growth and general economic conditions in our service territories.
The utility industry has been the target of several cyberattacks on operational systems and has seen an increased volume and sophistication of cybersecurity incidents from international activist organizations, other nation state actors and individuals. To date, we have not experienced a cybersecurity incident that has had a material impact on our business or results of operations.
The utility industry has been the target of several cyberattacks on operational systems and has seen an increased volume and sophistication of cybersecurity incidents from international activist organizations, other nation state actors and individuals. In addition, the advancement of AI has given rise to additional vulnerabilities and potential entry points for cyberattacks.
Possible additional measures would be evaluated in the context of then-prevailing market conditions, prudent financial management and any applicable regulatory requirements. Costs associated with our healthcare plans and other benefits could increase significantly. The costs of providing healthcare benefits to our employees and retirees have increased substantially in recent years.
Further, the proceeds of any such insurance may not be received in a timely manner. Costs associated with our healthcare plans and other benefits could increase significantly. The costs of providing healthcare benefits to our employees and retirees have increased significantly in recent years.
Russia-Ukraine and Middle East conflicts). An inability to successfully manage challenges in our supply chain network could materially affect our ability to execute our business plan and growth strategy and our financial operating results including earnings, cash flow and liquidity.
An inability to successfully manage challenges in our supply chain network could materially affect our ability to execute our business plan and growth strategy and our financial operating results including earnings, cash flow, and liquidity. 25 Table of Contents Cybersecurity incidents, terrorism, or other malicious acts targeting our key technology systems could disrupt our operations, lead to a loss or misuse of confidential and proprietary information, or cause reputational or other harm.
Any failure to comply with such government regulations or failure in our cybersecurity protective measures may result in enforcement actions that may have a material adverse effect on our business, results of operations and financial condition. In addition, there is no certainty that costs incurred related to securing against threats will be recovered through rates.
Increased costs and the operational impacts of compliance and changes in cybersecurity requirements, including any failure to comply with government regulations or any failure in our cybersecurity protective measures may result in enforcement actions, all of which may have a material adverse effect on our business and our financial operating results including earnings, cash flow, and liquidity.
We regularly engage in negotiations on renewals of franchise agreements with our municipal governments. We have from time to time faced challenges or ballot initiatives on franchise renewals. To date, we have been successful in resolving or defending most of these challenges.
We regularly engage in negotiations on renewals of franchise agreements with our municipal governments. We have from time to time faced challenges or ballot initiatives on franchise renewals. Although condemnation is a process that is subject to constitutional protections requiring just and fair compensation, as with any judicial procedure, the outcome is uncertain.
We may be unable to obtain insurance coverage, and the coverage we currently have may not apply or may be insufficient to cover a significant loss. Our ability to obtain insurance, as well as the cost of such insurance, could be impacted by developments affecting the insurance industry and the financial condition of insurers.
In recent years, securing adequate insurance coverage has become more difficult and the cost of insurance has increased substantially. We believe that these trends are likely to continue. Our ability to obtain insurance, as well as the cost of such insurance, could be impacted by developments affecting the insurance industry and the financial condition of insurers.
We also cannot quantify the impact that such action would have on the remainder of our business operations. Changes in Federal tax law may significantly impact our business. We are subject to taxation by the various taxing authorities at the federal, state and local levels where we operate.
Changes in Federal income tax policy or our inability to use or generate tax credits may adversely affect our financial condition, results of operations, and cash flows, as well as our credit ratings. We are subject to taxation by the various taxing authorities at the federal, state and local levels where we operate.
If regulators decide to discontinue these tariff-based recovery mechanisms, it could negatively impact earnings, cash flow and liquidity. Costs could significantly increase to achieve or maintain compliance with existing or future environmental laws, regulations or requirements including those associated with climate change.
If regulators decide to discontinue these tariff-based recovery mechanisms, it could negatively impact earnings, cash flow and liquidity. Municipal governments may seek to limit or deny our franchise privileges.
Our strategy is centered on four critical priorities: Growth— to grow strategically and achieve strong financial performance, Operational Excellence— delivering safe, reliable and cost-effective energy to meet our customers’ needs, Transformation —be a simple and connected company positioned for growth, and People & Culture —retain and attract a talented, engaged and thriving team.
Our strategy is centered on four priorities: People & Culture —build a team that wins together , Operational Excellence— relentlessly deliver on our commitment to serve our customers, Transformation —be a simple and connected company and Growth— grow to be a dominant long-term energy provider.
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Our continued success depends, in significant part, on our ability to execute our strategic business plans.
Added
In addition, we have significant capital investment programs planned for the next five years that are key to our strategic business plan, such as: our Ready Wyoming transmission project; the acquisition of a renewable generating facility and energy storage facility as part of our Colorado Clean Energy Plan; the addition of 99 MWs of natural gas-fired generation in South Dakota; large-scale investments to upgrade existing utility infrastructure; support of customer and community growth needs; and compliance with safety requirements.
Removed
Our ability to transition and replace our retirement-eligible utility employees is a risk; at December 31, 2023, approximately 18% of our employees were eligible for retirement. Our ability to avoid or minimize work stoppages and labor disputes is also a risk with approximately 25% of our employees represented by unions.
Added
Our capacity requirements and applicable reserve margins are a critical component to serving our customers. Delays in construction, increasing reserve margins, and growing demand put additional pressures on meeting resource adequacy requirements.
Removed
Failure to hire and retain qualified employees, including the ability to transfer significant internal historical knowledge and expertise to new employees, may adversely affect our ability to manage and operate our business.
Added
We also cannot quantify the impact that such action would have on the remainder of our business operations. 23 Table of Contents Costs could significantly increase to achieve or maintain compliance with existing or future environmental laws, regulations or requirements including those associated with climate change.
Removed
Breakdown or failure of equipment or processes, unavailability or increased cost of equipment, and performance below expected levels of output or efficiency could negatively impact our results of operations; • Disrupted transmission and distribution.
Added
We have reduced our consolidated federal and state income tax liabilities in prior years through tax credits, net operating losses, and charitable contribution deductions. A reduction in or disallowance of these tax benefits could adversely affect our earnings and cash flows.
Removed
The cost of supplying or securing replacement power during scheduled and unscheduled outages of generation facilities could negatively impact our results of operations; • Governmental permits.
Added
We have not fully used these allowed tax benefits in our previous tax filings and have carried them forward to use against future taxable income.
Removed
Opposition by members of public or special-interest groups could negatively impact our ability to operate our businesses. Any of these risks described above could damage our reputation and public confidence.
Added
Our inability to generate sufficient taxable income in the future to fully use these tax carryforwards before they expire, or to transfer future tax credits as discussed below, could significantly affect our tax obligations and financial results. 24 Table of Contents Our Electric Utilities and non-regulated power generation entities own and operate renewable energy generating facilities.
Removed
Cybersecurity incidents, terrorism, or other malicious acts targeting our key technology systems could disrupt our operations or lead to a loss or misuse of confidential and proprietary information.
Added
These facilities produce PTCs and ITCs used to reduce our federal tax obligations.
Removed
As discussed in Utility Regulation Characteristics above, in 2021 the TSA issued security directives that included several new cybersecurity requirements for critical pipeline owners and operators.
Added
The amount of tax credits we earn depends on the date the qualifying generating facilities are placed in service and various operating and economic factors, including facility generation, transmission constraints, unfavorable trends in pricing for wind or solar energy, adverse weather conditions, the breakdown or failure of equipment, and the applicable tax credit rate.
Removed
Despite our implementation of security measures and safeguards, all of our technology systems may still be vulnerable to disability, failures or unauthorized access. 27 Table of Contents Our operations are subject to various conditions that can result in fluctuations in customer usage, including customer growth and general economic conditions in our service territories, weather conditions, and responses to price increases and technological improvements.
Added
These factors could significantly reduce the PTCs and ITCs produced by our wind farms, resulting in increased federal income tax expense. The IRA of 2022 allows for the sale or transfer of renewable tax credits to other taxpayers. We have sold and plan to continue to sell tax credits if market conditions are favorable.
Removed
Our Utilities are impacted by economic cycles and the competitiveness of the commercial and industrial customers we serve. Any economic downturn, inflation, disruption of financial markets, or reduced incentives by state government for economic development could adversely affect the financial condition of our customers and demand for their products or services.
Added
Our inability to generate, transfer, or sell these credits could have a material impact on our financial condition, results of operations and cash flows. OPERATING RISKS Failure to attract and retain an appropriately qualified and engaged workforce could have a negative impact on our operations and long-term business strategy.
Removed
Unusually mild summers and winters, therefore, could have an adverse effect on our financial operating results, including earnings, cash flow and liquidity. • Our customers' focus on energy conservation.
Added
Failure to renew or renegotiate these contracts could lead to labor disruptions, including strikes or boycotts. Liability from fires could have a negative impact on our operations or financial performance, and our protocols may not prevent such liability. Environmental factors including precipitation, temperature, humidity and wind speeds have the potential to increase the likelihood and impact of a wildfire event.
Removed
In addition, because we are a holding company and our utility assets are owned by our subsidiaries, if we are unable to adequately access the credit markets, we could be required to take additional measures designed to ensure that our utility subsidiaries are adequately capitalized to provide safe and reliable service.
Added
We invest resources on initiatives designed to mitigate wildfire risks and also intend to implement a PSPS framework in 2025. The potential for a wildfire event exists even when effective mitigation procedures are followed. Despite our wildfire mitigation initiatives, a wildfire could be ignited, spread and cause damages, which would subject us to significant liability.
Added
Other potential risks associated with wildfires include the inability to secure sufficient insurance coverage, uninsured losses or losses in excess of current insurance coverage, increased costs of insurance, damage to our reputation, regulatory recovery risk, litigation risk, the potential for a credit downgrade or the inability to access capital markets on reasonable terms.
Added
Possible additional measures would be evaluated in the context of then-prevailing market conditions, prudent financial management, and any applicable regulatory requirements. We may be unable to obtain insurance coverage, and the coverage we currently have may not apply or may be insufficient to cover a significant loss.
Added
There is no assurance as to the amount, if any, of future dividends to the holding company because these subsidiaries depend on future earnings, capital requirements, and financial conditions to fund such dividends.

Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeThese reports address a variety of topics including updates on strategic cyber initiatives, industry trends, threat vulnerability assessments, and efforts to prevent, detect and respond to internal and external critical threats. From time to time, our Board of Directors also engages third-party consultants to provide further education about cybersecurity risks.
Biggest changeOur Chief Information Officer provides our Board of Directors quarterly reports that summarize material cybersecurity threats and the countermeasures taken to mitigate the associated risks. These reports address a variety of topics including updates on strategic cyber initiatives, industry trends, threat vulnerability assessments, and efforts to prevent, detect, and respond to internal and external critical threats.
Our cybersecurity risk management program, which is discussed above, is led by our CSO, who has 28 years of prior work experience in various roles involving managing information security of large-scale global security operations, including developing cybersecurity strategy and implementing effective information and cybersecurity programs. Our CSO maintains industry certifications, including an ISC2 Certified Information Systems Security Professional certification.
Our cybersecurity risk management program, which is discussed above, is led by our CSO, who has 34 years of experience in various roles involving managing information security of large-scale global security operations, including developing cybersecurity strategy and implementing effective information and cybersecurity programs. Our CSO maintains industry certifications, including an ISC2 Certified Information Systems Security Professional certification.
Our enterprise risk management team works closely with our Chief Security Officer ("CSO") and IT risk management team to evaluate and address material cybersecurity risks in alignment with our business strategy and operational needs. 30 Table of Contents We have a cybersecurity risk management program that is managed by a team of full-time cybersecurity professionals that utilizes a variety of tools and techniques to identify and assess material cybersecurity threats, their potential impact and opportunities for mitigation.
We have a cybersecurity risk management program that is managed by a team of full-time cybersecurity professionals that utilizes a variety of tools and techniques to identify and assess material cybersecurity threats, their potential impact and opportunities for mitigation.
These procedures include steps to identify, classify, communicate, contain, eradicate, and recover from a cybersecurity incident. These procedures also include notification to a cross-functional management team to assess incident materiality and an escalation process to members of our senior management team and our Board of Directors.
These procedures also include notification to a cross-functional management team to assess incident materiality and an escalation process to members of our senior management team and our Board of Directors. 30 Table of Contents Governance Our Board of Directors is responsible for the oversight of risks from cybersecurity threats.
ITEM 1C. CYBERSECURITY The utility industry has been the target of several cyberattacks on operational systems and has seen an increased volume and sophistication of cybersecurity incidents from international activist organizations, other nation state actors and individuals. We expect to continue to experience attempts to compromise our information technology and control systems, network infrastructure and other assets.
ITEM 1C. CYBERSECURITY The utility industry has been the target of several cyberattacks on operational systems and has seen an increased volume and sophistication of cybersecurity incidents from international activist organizations, other nation state actors, and individuals. In addition, the advancement of AI has given rise to additional vulnerabilities and potential entry points for cyberattacks.
To date, we have not experienced a cybersecurity incident that has had a material impact on our business or results of operations. Risk Management and Strategy Our enterprise risk management program, which includes cybersecurity risks that are identified through our cybersecurity risk management program, is designed to identify, report, and manage relevant material risks and opportunities.
Risk Management and Strategy Our enterprise risk management program, which includes cybersecurity risks that are identified through our cybersecurity risk management program, is designed to identify, report, and manage relevant material risks and opportunities. Management of the identified risks is embedded into business processes and key decision making at every level of the Company.
Removed
Management of the identified risks is embedded into business processes and key decision making at every level of the Company.
Added
We expect to continue to experience attempts to compromise our information technology and control systems, network infrastructure, and other assets. To date, we have not experienced a cybersecurity incident that has had a material impact on our business or results of operations.
Removed
Governance Our Board of Directors is responsible for the oversight of risks from cybersecurity threats. Our Chief Information Officer provides our Board of Directors quarterly reports that summarize material cybersecurity threats and the countermeasures taken to mitigate the associated risks.
Added
Our enterprise risk management team works closely with our CSO and IT risk management team to evaluate and address material cybersecurity risks in alignment with our business strategy and operational needs.
Added
These procedures include steps to identify, classify, communicate, contain, eradicate, and recover from a cybersecurity incident .
Added
From time to time, our Board of Directors also engages third-party consultants to provide further education about cybersecurity risks.

Item 4. Mine Safety Disclosures

Mine Safety Disclosures — required of mining issuers

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Biggest changeJones has a total of 22 years of experience with the Company and has advanced through roles of increasing responsibility in finance, accounting, corporate services, regulatory and utility operations. Erik D. Keller , age 60, joined the Company as Senior Vice President and Chief Information Officer on July 27, 2020.
Biggest changeShe served as VP Electric Utilities from 2021 to 2023, Vice President Regulatory and Finance from 2018 to 2021, and Vice President Regulatory from 2016 to 2018. Ms. Jones has a total of 23 years of experience with the Company and has advanced through roles of increasing responsibility in finance, accounting, corporate services, regulatory, and utility operations. Erik D.
ITEM 4. MINE SAFETY DISCLOSURES Information concerning mine safety violations or other regulatory matters required by Sections 1503(a) of the Dodd-Frank Wall Street Reform and Consumer Protection Act is included in Exhibit 95 of this Annual Report. 31 Table of Contents INFORMATION ABOUT OUR EXECUTIVE OFFICERS Linden R.
ITEM 4. MINE SAFETY DISCLOSURES Information concerning mine safety violations or other regulatory matters required by Sections 1503(a) of the Dodd-Frank Wall Street Reform and Consumer Protection Act is included in Exhibit 95 of this Annual Report. 31 Table of Contents INFORMATION ABOUT OUR EXECUTIVE OFFICERS Phillip A.
Evans, age 61, has been President and Chief Executive Officer since January 1, 2019, President and Chief Operating Officer from 2016 through 2018, and President and Chief Operating Officer - Utilities from 2004 through 2015. Mr.
Evans, age 62, has been President and Chief Executive Officer since January 1, 2019, President and Chief Operating Officer from 2016 through 2018, and President and Chief Operating Officer - Utilities from 2004 through 2015. Mr.
Prior to joining the company, he was an Information Technology consultant to Ontic Inc., a global provider of parts and services for legacy aerospace platforms, from January 2020 to July 2020, and Chief Information Officer for BBA Aviation, a global aviation support and aftermarket services provider, from February 2012 to January 2020. Kimberly F.
Prior to joining the company, he was an Information Technology consultant to Ontic Inc., a global provider of parts and services for legacy aerospace platforms, from January 2020 to July 2020, and Chief Information Officer for BBA Aviation, a global aviation support and aftermarket services provider, from 2012 to January 2020. As previously disclosed, Mr.
Nooney , age 52, has been Senior Vice President and Chief Financial Officer since April 1, 2023. She served as Vice President – Treasurer from 2015 to 2023, and also served as the Corporate Controller from 2018 to 2022. Ms.
Keller announced that he will resign from the Company, effective February 28, 2025. Kimberly F. Nooney , age 54, has been Senior Vice President and Chief Financial Officer since April 1, 2023. She served as Vice President – Treasurer from 2015 to 2023, and also served as the Corporate Controller from 2018 to 2022. Ms.
Evans served as the Vice President and General Manager of our former communication subsidiary in 2003 and 2004, and Associate Counsel from 2001 to 2003. Mr. Evans has 22 years of experience with the Company. Brian G. Iverson, age 61, has been Senior Vice President, General Counsel and Chief Compliance Officer since August 26, 2019.
Evans served as the Vice President and General Manager of our former communication subsidiary in 2003 and 2004, and Associate Counsel from 2001 to 2003. Mr. Evans has 23 years of experience with the Company. Marne M. Jones , age 51, has been Senior Vice President Utilities since June 15, 2023.
Nooney has a total of 27 years of experience with the Company across numerous roles within accounting, internal audit, corporate development, accounting systems, treasury and financial planning and analysis. 32 Table of Contents PART II
Nooney has a total of 28 years of experience with the Company across numerous roles within accounting, internal audit, corporate development, accounting systems, treasury, and financial planning and analysis. Sarah A. Wiltse , age 46, joined the Company as Senior Vice President and Chief Human Resources Officer on October 28, 2024.
Removed
He served as Senior Vice President, General Counsel, Chief Compliance Officer and Corporate Secretary from February 1, 2019 to August 26, 2019, Senior Vice President, General Counsel and Chief Compliance Officer from 2016 to February 2019, Senior Vice President - Regulatory and Governmental Affairs and Assistant General Counsel from 2014 to 2016, Vice President and Treasurer from 2011 to 2014, Vice President - Electric Regulatory Services from 2008 to 2011 and as Corporate Counsel from 2004 to 2008.
Added
Casey , age 62, joined the Company as Senior Vice President and Chief Legal Officer on November 13, 2024. Prior to joining the company, he led the Indianapolis office of Calfee, Halter & Griswold from 2019 to November 2024 and co-chaired the firm's energy and utilities practice. Mr.
Removed
Mr. Iverson has 20 years of experience with the Company. Todd Jacobs, age 55, has been Senior Vice President Growth and Strategy since June 15, 2023. Mr.
Added
Casey also served as Vice President of Administration and General Counsel for Prairie State Generating Company from 2015 to 2018 and Vice President and Deputy General Counsel-Regulatory for NiSource from 2009 to 2015. Linden R.
Removed
Jacobs spent seven years in operations roles at the company, serving as the state leader for our Kansas and Arkansas utilities from 2014 to 2019 and then as the segment leader of our natural gas utilities from 2019 to 2021.
Added
Keller , age 61, has been Senior Vice President and Chief Information Officer since July 27, 2020.
Removed
He led our strategic planning and growth efforts from 2021 to 2023 before moving into this newly expanded role in 2023, which includes growth, strategic planning, business development, regulatory, government affairs, sustainability, communications and community affairs. He served in legal and corporate services leadership roles with other investor-owned utilities before joining the company in 2014. Mr.
Added
Prior to joining the company, she was Vice President of Human Resources for ACCO Brands, a publicly traded global consumer goods company, from 2021 to October 2024, Director and Vice President Human Resources for Compass Minerals from 2018 to 2021, and held various leadership roles at Union Pacific from 2004 to 2018. 32 Table of Contents PART II
Removed
Jacobs served on active duty for seven years as a U.S. Army officer. Marne M. Jones , age 50, has been Senior Vice President Utilities since June 15, 2023. She served as VP Electric Utilities from 2021 to 2023, Vice President Regulatory and Finance from 2018 to 2021 and Vice President Regulatory from 2016 to 2018. Ms.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeISSUER PURCHASES OF EQUITY SECURITIES The following table contains monthly information about our acquisitions of equity securities for the three months ended December 31, 2023: Period Total Number of Shares Purchased (a) Average Price Paid per Share Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs Maximum Number (or Approximate Dollar Value) of Shares That May Yet Be Purchased Under the Plans or Programs October 1, 2023 - October 31, 2023 47 $ 48.44 — — November 1, 2023 - November 30, 2023 991 $ 51.52 — — December 1, 2023 - December 31, 2023 7,018 $ 54.62 — — Total 8,056 $ 54.20 — — ____________________ (a) Shares were acquired under the share withholding provisions of the Amended and Restated 2015 Omnibus Incentive Plan for payment of taxes associated with the vesting of various equity compensation plans.
Biggest changeSECURITIES AUTHORIZED FOR ISSUANCE UNDER EQUITY COMPENSATION PLANS See Item 12 in this Annual Report on Form 10-K for information regarding Securities Authorized for Issuance Under Equity Compensation Plans. 33 Table of Contents ISSUER PURCHASES OF EQUITY SECURITIES The following table contains monthly information about our acquisitions of equity securities for the three months ended December 31, 2024: Period Total Number of Shares Purchased (a) Average Price Paid per Share Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs Maximum Number (or Approximate Dollar Value) of Shares That May Yet Be Purchased Under the Plans or Programs October 1, 2024 - October 31, 2024 1 $ 60.93 — — November 1, 2024 - November 30, 2024 1 $ 57.92 — — December 1, 2024 - December 31, 2024 3,238 $ 60.96 — — Total 3,240 $ 60.96 — — ____________________ (a) Shares were acquired under the share withholding provisions of the Amended and Restated 2015 Omnibus Incentive Plan for payment of taxes associated with the vesting of various equity compensation plans.
COMPARATIVE STOCK PERFORMANCE The following performance graph compares the cumulative total stockholder return from Black Hills Corporation common stock, as compared with the S&P 500 Index, S&P 500 Utilities index, and our Performance Peer Group for the past five years. The graph assumes an initial investment of $100 on December 31, 2018, and assumes all dividends were reinvested.
COMPARATIVE STOCK PERFORMANCE The following performance graph compares the cumulative total stockholder return from Black Hills Corporation common stock, as compared with the S&P 500 Index, S&P 500 Utilities index, and our Performance Peer Group for the past five years. The graph assumes an initial investment of $100 on December 31, 2019, and assumes all dividends were reinvested.
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Our common stock is traded on the New York Stock Exchange under the symbol BKH.
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Our common stock is traded on the New York Stock Exchange under the symbol BKH. As of January 31, 2025, we had 3,102 common shareholders of record and approximately 82,684 beneficial owners.
As of December 31, 2018 2019 2020 2021 2022 2023 Black Hills Corporation $ 100.00 $ 128.59 $ 104.05 $ 123.69 $ 127.49 $ 102.08 S&P 500 100.00 131.49 155.68 200.37 164.08 207.21 S&P 500 Utilities 100.00 126.35 126.96 149.39 151.73 140.99 Performance Peer Group (a) 100.00 125.79 124.33 145.61 147.29 134.47 ____________________ (a) Performance Peer Group represents the Edison Electric Institute Index, which was used in our 2023 Proxy Statement filed with the SEC on March 15, 2023.
As of December 31, 2019 2020 2021 2022 2023 2024 Black Hills Corporation $ 100.00 $ 80.92 $ 96.19 $ 99.15 $ 79.38 $ 90.09 S&P 500 100.00 118.40 152.39 124.79 157.59 197.02 S&P 500 Utilities 100.00 100.48 118.24 120.09 111.59 137.73 Performance Peer Group (a) 100.00 98.84 115.76 117.09 106.90 127.32 ____________________ (a) Performance Peer Group represents the Edison Electric Institute Index, which was used in our 2024 Proxy Statement filed with the SEC on March 15, 2024.
Removed
As of January 31, 2024, we had 3,244 common shareholders of record and 63,074 beneficial owners, representing all 50 states, the District of Columbia, Puerto Rico and 5 foreign countries.
Added
UNREGISTERED SECURITIES ISSUED There were no unregistered securities sold during 2024.
Removed
UNREGISTERED SECURITIES ISSUED There were no unregistered securities sold during 2023. 33 Table of Contents SECURITIES AUTHORIZED FOR ISSUANCE UNDER EQUITY COMPENSATION PLANS See Item 12 in this Annual Report on Form 10-K for information regarding Securities Authorized for Issuance Under Equity Compensation Plans.

Item 6. [Reserved]

Selected Financial Data — reserved (removed by SEC in 2021)

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Biggest changeMANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS 34 Executive Summary 34 Key Elements of our Business Strategy 35 Recent Developments 38 Results of Operations - Consolidated Summary and Overview 40 Non-GAAP Financial Measure 40 Electric Utilities 41 Gas Utilities 43 Corporate and Other 46 Consolidated Interest Expense, Impairment of Investment, Other Income (Expense) and Income Tax Benefit (Expense) 46 Liquidity and Capital Resources 47 Cash Flow Activities 47 Capital Resources 49 Credit Ratings 50 Capital Requirements 51 Critical Accounting Estimates 52 ITEM 7A.
Biggest changeMANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS 34 Executive Summary 34 Key Elements of our Business Strategy 34 Recent Developments 38 Results of Operations - Consolidated Summary and Overview 39 Non-GAAP Financial Measure 40 Electric Utilities 40 Gas Utilities 43 Corporate and Other 44 Consolidated Interest Expense, Other Income (Expense) and Income Tax Benefit (Expense) 44 Liquidity and Capital Resources 45 Cash Flow Activities 46 Capital Resources 47 Credit Ratings 48 Capital Requirements 49 Critical Accounting Estimates 50 ITEM 7A.
Fair Value Measurements 88 Note 11. Other Comprehensive Income 89 Note 12. Variable Interest Entity 90 Note 13. Employee Benefit Plans 90 Note 14. Share-based Compensation Plans 95 Note 15. Income Taxes 98 Note 16. Business Segment Information 100 Note 17. Subsequent Events 101
Fair Value Measurements 87 Note 11. Other Comprehensive Income 88 Note 12. Variable Interest Entity 89 Note 13. Employee Benefit Plans 90 Note 14. Share-based Compensation Plans 94 Note 15. Income Taxes 96 Note 16. Business Segment Information 99 Note 17. Subsequent Events 101
Business Description and Significant Accounting Policies 66 Note 2. Regulatory Matters 74 Note 3. Commitments, Contingencies and Guarantees 76 Note 4. Revenue 79 Note 5. Property, Plant and Equipment 80 Note 6. Jointly Owned Facilities 81 Note 7. Asset Retirement Obligations 81 Note 8. Financing 82 Note 9. Risk Management and Derivatives 85 Note 10.
Business Description and Significant Accounting Policies 64 Note 2. Regulatory Matters 72 Note 3. Commitments, Contingencies and Guarantees 75 Note 4. Revenue 77 Note 5. Property, Plant and Equipment 79 Note 6. Jointly Owned Facilities 80 Note 7. Asset Retirement Obligations 80 Note 8. Financing 81 Note 9. Risk Management and Derivatives 84 Note 10.
FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA 56 Management’s Report on Internal Controls Over Financial Reporting 56 Reports of Independent Registered Public Accounting Firm 57 Consolidated Statements of Income 60 Consolidated Statements of Comprehensive Income 61 Consolidated Balance Sheets 62 Consolidated Statements of Cash Flows 64 Consolidated Statements of Equity 65 Notes to Consolidated Financial Statements 66 Note 1.
FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA 54 Management’s Report on Internal Controls Over Financial Reporting 54 Reports of Independent Registered Public Accounting Firm 55 Consolidated Statements of Income 58 Consolidated Statements of Comprehensive Income 59 Consolidated Balance Sheets 60 Consolidated Statements of Cash Flows 62 Consolidated Statements of Equity 63 Notes to Consolidated Financial Statements 64 Note 1.
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK 54 2 ITEM 8.
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK 52 2 Table of Contents ITEM 8.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

94 edited+26 added−42 removed52 unchanged
Biggest changeConsolidated Summary and Overview For the Years Ended December 31, 2023 2022 2023 vs 2022 Variance 2021 2022 vs 2021 Variance (in millions, except per share amounts) Operating income (loss): Electric Utilities $ 248.8 $ 214.3 $ 34.5 $ 202.7 $ 11.6 Gas Utilities 228.8 244.2 (15.4 ) 211.2 33.0 Corporate and Other (a) (4.9 ) (3.3 ) (1.6 ) (4.5 ) 1.2 Operating Income 472.7 455.2 17.5 409.4 45.8 Interest expense, net (167.9 ) (161.0 ) (6.9 ) (152.4 ) (8.6 ) Other income (expense), net (3.2 ) 1.8 (5.0 ) 1.4 0.4 Income tax (expense) (25.6 ) (25.2 ) (0.4 ) (7.2 ) (18.0 ) Net income 276.0 270.8 5.2 251.3 19.5 Net income attributable to non-controlling interest (13.8 ) (12.4 ) (1.4 ) (14.5 ) 2.1 Net income available for common stock $ 262.2 $ 258.4 $ 3.8 $ 236.7 $ 21.7 Total earnings per share of common stock, Diluted $ 3.91 $ 3.97 $ (0.06 ) $ 3.74 $ 0.23 (a) Includes inter-segment eliminations. 2023 Compared to 2022 The variance to the prior year included the following: • Electric Utilities’ operating income increased $34.5 million primarily due to new rates and rider recovery, a one-time gain on the planned sale of Northern Iowa Windpower assets, a gain on a strategic sale of land in Wyoming to a customer to support continued load growth, and a one-time recovery from our business interruption insurance related to the 2021 Wygen I unplanned outage partially offset by unfavorable weather, higher depreciation expense and higher employee-related expenses; • Gas Utilities’ operating income decreased $15.4 million primarily due to unfavorable weather, a prior year one-time true-up of carrying costs accrued on Winter Storm Uri regulatory assets and higher operating expenses partially offset by new rates and rider recovery and retail customer growth and demand; • Interest expense increased $6.9 million due to higher interest rates partially offset by increased interest income on higher cash and cash equivalents balances; and • Other expense, net increased $5.0 million primarily due to higher benefit plan non-service costs driven by higher discount rates and higher costs for our non-qualified deferred compensation plan driven by market performance.
Biggest changeConsolidated Summary and Overview For the Years Ended December 31, 2024 2023 2024 vs 2023 Variance 2022 2023 vs 2022 Variance (in millions, except per share amounts) Operating income (loss): Electric Utilities $ 233.0 $ 248.8 $ (15.8 ) $ 214.3 $ 34.5 Gas Utilities 271.3 228.8 42.5 244.2 (15.4 ) Corporate and Other (a) (1.2 ) (4.9 ) 3.7 (3.3 ) (1.6 ) Operating Income 503.1 472.7 30.4 455.2 17.5 Interest expense, net (181.7 ) (167.9 ) (13.8 ) (161.0 ) (6.9 ) Other income (expense), net (1.4 ) (3.2 ) 1.8 1.8 (5.0 ) Income tax (expense) (36.3 ) (25.6 ) (10.7 ) (25.2 ) (0.4 ) Net income 283.7 276.0 7.7 270.8 5.2 Net income attributable to non-controlling interest (10.6 ) (13.8 ) 3.2 (12.4 ) (1.4 ) Net income available for common stock $ 273.1 $ 262.2 $ 10.9 $ 258.4 $ 3.8 Weighted average common shares outstanding, Diluted 69.9 67.1 2.8 65.0 2.1 Total earnings per share of common stock, Diluted $ 3.91 $ 3.91 $ — $ 3.97 $ (0.06 ) (a) Includes inter-segment eliminations. 2024 Compared to 2023 • Electric Utilities’ operating income decreased $15.8 million primarily due to unfavorable impacts from unplanned generation outages in 2024, lower off-system excess energy sales, higher insurance expense, and one-time benefits in 2023 from a gain on the sale of Northern Iowa Windpower assets, a gain on sale of land to support data center growth, and a recovery from our business interruption insurance.
These valuations require significant judgments, including, but not limited to: 1) estimates of future cash flows, based on our internal five-year business plans and adjusted as appropriate for our view of market participant assumptions, with long range cash flows estimated using a terminal value calculation; 2) estimates of long-term growth rates for our businesses; 3) the determination of an appropriate weighted-average cost of capital or discount rate; and 4) the utilization of market information such as recent sales transactions for comparable assets within the utility and energy industries.
These valuations require significant judgments, including, but not limited to: 1) estimates of future cash flows, based on our internal five-year business plans and adjusted as appropriate for our view of market participant assumptions, with long range cash flows estimated using a terminal value calculation; 2) estimates of long-term growth rates for our businesses; 3) the determination of an appropriate weighted-average cost of capital or discount rate; and 4) the utilization of market information such as recent sales transactions for comparable assets within the utility and energy industry.
Gas Utilities • See Note 2 of the Notes to Consolidated Financial Statements in this Annual Report on Form 10-K for recent rate review activity for Arkansas Gas, Colorado Gas, RMNG and Wyoming Gas. • See Key Elements of our Business Strategy section above for discussion of recent developments related to BHERR's purchase of a RNG production facility in Iowa.
Gas Utilities • See Note 2 of the Notes to Consolidated Financial Statements in this Annual Report on Form 10-K for recent rate review activity for Arkansas Gas, Colorado Gas, Iowa Gas, Kansas Gas and Wyoming Gas. • See Key Elements of our Business Strategy section above for discussion of recent developments related to BHERR's purchase of a RNG production facility in Iowa.
For the years ended December 31, 2023, 2022, and 2021, there were no impairment losses recorded. At December 31, 2023, the fair value exceeded the carrying value at all reporting units. See Item 1A - Risk Factors and Note 1 of the Notes to Consolidated Financial Statements in this Annual Report on Form 10-K for additional information.
For the years ended December 31, 2024, 2023, and 2022, there were no impairment losses recorded. At December 31, 2024, the fair value exceeded the carrying value at all reporting units. See Item 1A - Risk Factors and Note 1 of the Notes to Consolidated Financial Statements in this Annual Report on Form 10-K for additional information.
Long-term Debt For information on our long-term debt, see Note 8 of the Notes to Consolidated Financial Statements in this Annual Report on Form 10-K. Covenant Requirements The Revolving Credit Facility and Wyoming Electric’s financing agreements contain covenant requirements. We were in compliance with these covenants as of December 31, 2023.
Long-term Debt For information on our long-term debt, see Note 8 of the Notes to Consolidated Financial Statements in this Annual Report on Form 10-K. Financial Covenants The Revolving Credit Facility and Wyoming Electric’s financing agreements contain covenant requirements. We were in compliance with these covenants as of December 31, 2024.
At December 31, 2023, we had sufficient liquidity to cover collateral that could be required to be posted under these contracts. The cash collateral we were required to post at December 31, 2023 was not material. See Note 9 of the Notes to Consolidated Financial Statements in this Annual Report on Form 10-K.
At December 31, 2024, we had sufficient liquidity to cover collateral that could be required to be posted under these contracts. The cash collateral we were required to post at December 31, 2024, was not material. See Note 9 of the Notes to Consolidated Financial Statements in this Annual Report on Form 10-K.
For discussion and analysis for the year ended December 31, 2022, compared to 2021, please refer to Item 7 of Part II, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K for the year ended December 31, 2022, which was filed with the SEC on February 14, 2023.
For discussion and analysis for the year ended December 31, 2023, compared to 2022, please refer to Item 7 of Part II, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K for the year ended December 31, 2023, which was filed with the SEC on February 14, 2024.
We estimate the fair value of our reporting units using a combination of an income approach, which estimates fair value based on discounted future cash flows, and a market approach, which estimates fair value based on market comparables within the utility and energy industries.
We estimate the fair value of our reporting units using a combination of an income approach, which estimates fair value based on discounted future cash flows, and a market approach, which estimates fair value based on market comparables within the utility and energy industry.
By being responsive and service focused, we can help our customers and communities thrive while meeting rapidly changing customer expectations. 34 Table of Contents Key Elements of our Business Strategy Explore opportunities as an energy solutions provider. A key strategic initiative is to grow our business through innovative energy solutions with new customers and partnerships.
By being responsive and service focused, we can help our customers and communities thrive while meeting rapidly changing customer expectations. Key Elements of our Business Strategy Explore opportunities as an energy solutions provider. A key strategic initiative is to grow our business through innovative energy solutions with new customers and partnerships.
Our annual goodwill impairment testing date is as of October 1, which aligns with our financial planning process. 52 Table of Contents Accounting standards for testing goodwill for impairment require the application of either a qualitative or quantitative assessment to analyze whether or not goodwill has been impaired. Goodwill is tested for impairment at the reporting unit level.
Our annual goodwill impairment testing date is as of October 1, which aligns with our financial planning process. Accounting standards for testing goodwill for impairment require the application of either a qualitative or quantitative assessment to analyze whether or not goodwill has been impaired. Goodwill is tested for impairment at the reporting unit level.
Rate-based generation assets offer several advantages for customers and shareholders, including: • When generating assets are included in the utility rate base and reviewed and approved by government authorities, customer rates are more stable and predictable, and typically less expensive in the long run; especially when compared to power otherwise purchased from the open market through wholesale contracts or PPAs that are periodically re-priced to reflect current and varying market conditions; • Regulators participate in a planning process where long-term investments are designed to match long-term energy demand; • The lower-risk profile of rate-based generation assets contributes to stronger credit ratings which, in turn, can benefit both customers and investors by lowering the cost of capital; and • Investors are provided a long-term and stable return on their investment.
Rate-Based Generation: Rate-based generation assets offer several advantages for customers and shareholders, including: • When generating assets are included in the utility rate base and reviewed and approved by government authorities, customer rates are more stable and predictable, and typically less expensive in the long run; especially when compared to power otherwise purchased from the open market through wholesale contracts or PPAs that are periodically re-priced to reflect current and varying market conditions; • Regulators participate in a planning process where long-term investments are designed to match long-term energy demand; • The lower-risk profile of rate-based generation assets contributes to stronger credit ratings which, in turn, can benefit both customers and investors by lowering the cost of capital; • The value of controlling load to most effectively serve our customer demand; and • Investors are provided a long-term and stable return on their investment.
We plan to fund our capital plan and strategic objectives by using cash generated from operating activities and various financing alternatives, which could include our Revolving Credit Facility, our CP Program, debt offerings, the issuance of common stock under our ATM program or in an opportunistic block trade.
Future Financing Plans We plan to fund our capital plan and strategic objectives by using cash generated from operating activities and various financing alternatives, which could include our Revolving Credit Facility, our CP Program, and the issuance of common stock under our ATM program or in an opportunistic block trade.
Capital expenditures are presented net of contributions in aid of construction in the Consolidated Statements of Cash Flows. (b) Projects are being evaluated by our segments for timing, cost and other factors. Efficiently plan, construct and operate power generation facilities to serve our Electric Utilities.
Capital expenditures are presented net of CIACs in the Consolidated Statements of Cash Flows. (b) Projects are being evaluated by our segments for timing, cost and other factors. Efficiently plan, construct and operate power generation facilities to serve our Electric Utilities.
ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Executive Summary We are a customer-focused energy solutions provider with a mission of Improving Life with Energy for more than 1.3 million customers and 800+ communities we serve.
ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Executive Summary We are a customer-focused energy solutions provider with a mission of Improving Life with Energy for 1.35 million customers and 800+ communities we serve.
We also continue to expand our RNG interconnections, with seven projects actively injecting RNG into our natural gas system. • Expanded RNG Portfolio: In January 2024, Black Hills Energy Renewable Resources acquired a RNG production facility at a landfill in Dubuque, Iowa.
We also continue to expand our RNG interconnections, with 10 projects actively injecting RNG into our natural gas system. • Acquired RNG Production Facility: In January 2024, Black Hills Energy Renewable Resources acquired a RNG production facility at a landfill in Dubuque, Iowa.
See additional information in Note 8 of the Notes to Consolidated Financial Statements in this Annual Report on Form 10-K. 49 Table of Contents Equity For information regarding equity, see Note 8 of the Notes to Consolidated Financial Statements in this Annual Report on Form 10-K.
See additional information in Note 8 of the Notes to Consolidated Financial Statements in this Annual Report on Form 10-K. Equity For information regarding equity, see Note 8 of the Notes to Consolidated Financial Statements in this Annual Report on Form 10-K.
Varying by reporting unit, weighted average cost of capital in the range of 6.9% to 7.3% and long-term growth rate projections of 1.75% were utilized in the goodwill impairment test performed as of October 1, 2023.
Varying by reporting unit, weighted average cost of capital in the range of 6.3% to 6.5% and long-term growth rate projections of 1.75% were utilized in the goodwill impairment test performed as of October 1, 2024.
See Note 8 of the Notes to Consolidated Financial Statements in this Annual Report on Form 10-K for further information. 39 Table of Contents Results of Operations Our discussion and analysis for the year ended December 31, 2023, compared to 2022 is included herein.
See Note 8 of the Notes to Consolidated Financial Statements in this Annual Report on Form 10-K for additional information. 38 Table of Contents Results of Operations Our discussion and analysis for the year ended December 31, 2024, compared to 2023, is included herein.
The following table represents the credit ratings, outlook and risk profile of BHC at December 31, 2023: Rating Agency Senior Unsecured Rating Outlook S&P (a) BBB+ Stable Moody’s (b) Baa2 Stable Fitch (c) BBB+ Stable (a) On February 17, 2023, S&P reported BBB+ rating and maintained a Stable outlook.
The following table represents the credit ratings, outlook and risk profile of BHC at December 31, 2024: Rating Agency Senior Unsecured Rating Outlook S&P (a) BBB+ Stable Moody’s (b) Baa2 Stable Fitch (c) BBB+ Negative (a) On May 9, 2024, S&P reported BBB+ rating and maintained a Stable outlook.
For the year ended December 31, Contracted generating facilities availability by fuel type (a) 2023 2022 2021 Coal 93.7% 91.5% 86.7% Natural gas and diesel oil 92.1% 96.1% 95.5% Wind 92.5% 93.7% 95.8% Total availability 92.6% 94.4% 93.2% Wind Capacity Factor 37.4% 34.7% 34.0% (a) Availability and Wind Capacity Factor are calculated using a weighted average based on capacity of our generating fleet.
For the year ended December 31, Contracted generating facilities Availability (a) by fuel type 2024 2023 2022 Coal (b) 89.8% 93.7% 91.5% Natural gas and diesel oil (b) 92.9% 92.1% 96.1% Wind 90.6% 92.5% 93.7% Total availability 91.7% 92.6% 94.4% Wind Capacity Factor (a) 36.7% 37.4% 34.7% (a) Availability and Wind Capacity Factor are calculated using a weighted average based on capacity of our generating fleet.
Electric and Gas Utility margin (revenue less cost of sales) is a non-GAAP financial measure due to the exclusion of operation and maintenance expenses, depreciation and amortization expenses, and property and production taxes from the measure. 40 Table of Contents Electric Utility margin is calculated as operating revenue less cost of fuel and purchased power.
Electric and Gas Utility margin (revenue less cost of sales) is a non-GAAP financial measure due to the exclusion of operation and maintenance expenses, depreciation and amortization expenses, and taxes other than income taxes from the measure. Electric Utility margin is calculated as operating revenue less cost of fuel and purchased power.
We are proud of our track record of annual dividend increases for shareholders. 2023 represented our 53rd consecutive year of increasing dividends. In January 2024, our Board of Directors declared a quarterly dividend of $0.65 per share, equivalent to an annual dividend of $2.60 per share.
We are proud of our track record of annual dividend increases for shareholders. 2024 represented our 54th consecutive year of increasing dividends. In January 2025, our Board of Directors declared a quarterly dividend of $0.676 per share, equivalent to an annual dividend of $2.704 per share.
We conduct our business operations through two operating segments: Electric Utilities and Gas Utilities. Certain unallocated corporate expenses that support our operating segments are presented as Corporate and Other. We conduct our utility operations under the name Black Hills Energy predominantly in rural areas of the Rocky Mountains and Midwestern states.
Certain unallocated corporate expenses that support our operating segments are presented as Corporate and Other. We conduct our utility operations under the name Black Hills Energy predominantly in rural areas of the Rocky Mountains and Midwestern states. We consider ourself a domestic electric and natural gas utility company.
Our Electric Utilities own and operate 1,394 MW of generation capacity and 9,106 miles of transmission and distribution lines and our Gas Utilities own and operate approximately 47,000 miles of natural gas transmission and distribution pipelines.
Our Electric Utilities own and operate 1,394 MWs of generation capacity and 9,196 miles of transmission and distribution lines and our Gas Utilities own and operate approximately 49,000 miles of natural gas transmission and distribution pipelines.
The Revolving Credit Facility contains cross-default provisions that could result in a default under such agreements if BHC or its material subsidiaries failed to 1) make timely payments of debt obligations; or 2) triggered other default provisions under any debt agreement totaling, in the aggregate principal amount of $50 million or more that permit the acceleration of debt maturities or mandatory debt prepayment.
Although these contractual restrictions exist, we do not anticipate triggering any default measures or restrictions. 47 Table of Contents The Revolving Credit Facility contains cross-default provisions that could result in a default under such agreements if BHC or its material subsidiaries failed to 1) make timely payments of debt obligations; or 2) triggered other default provisions under any debt agreement totaling, in the aggregate principal amount of $50 million or more that permit the acceleration of debt maturities or mandatory debt prepayment.
We consider ourself a domestic electric and natural gas utility company. We have provided energy and served customers for 140 years, since the 1883 gold rush days in Deadwood, South Dakota. Throughout our history, the common thread that unites the past to the present is our commitment to serve our customers and communities.
We have provided energy and served customers for 141 years, since the 1883 gold rush days in Deadwood, South Dakota. Throughout our history, the common thread that unites the past to the present is our commitment to serve our customers and communities.
The new wind generation facility was placed in service in December 2023 and the solar facility is expected to be completed in March 2024.
The new wind generation facility was placed in service in December 2023 and the solar facility was placed in service in March 2024.
The following table provides an informational summary of our liquidity and capital structure as of December 31 (dollars in millions): 2023 2022 Cash and cash equivalents $ 86.6 $ 21.4 Available capacity under Revolving Credit Facility and CP Program (a) 746.3 189.8 Available liquidity $ 832.9 $ 211.2 Capital structure Short-term debt $ 600.0 $ 1,060.6 Long-term debt 3,801.2 3,607.3 Total debt 4,401.2 4,667.9 Total stockholders' equity (excludes non-controlling interest) 3,215.3 2,994.9 Total capitalization $ 7,616.5 $ 7,662.8 Debt to capitalization 57.8 % 60.9 % Net debt to capitalization (b) 57.3 % 60.8 % Long-term debt to total debt 86.4 % 77.3 % (a) Available capacity under Revolving Credit Facility and CP Program represents $750 million of total borrowing capacity less outstanding borrowings and letters of credit.
The following table provides an informational summary of our liquidity and capital structure as of December 31: 2024 2023 (dollars in millions) Cash and cash equivalents $ 16.1 $ 86.6 Available capacity under Revolving Credit Facility and CP Program (a) 612.7 746.3 Available liquidity $ 628.8 $ 832.9 Capital structure Short-term debt $ 133.8 $ 600.0 Long-term debt 4,250.2 3,801.2 Total debt 4,384.0 4,401.2 Total stockholders' equity (excludes non-controlling interest) 3,501.5 3,215.3 Total capitalization $ 7,885.5 $ 7,616.5 Debt to capitalization 55.6 % 57.8 % Long-term debt to total debt 96.9 % 86.4 % (a) Available capacity under Revolving Credit Facility and CP Program represents $750 million of total borrowing capacity less outstanding borrowings and letters of credit.
This facility includes an accordion feature that allows us to increase total commitments up to $1.0 billion with the consent of the administrative agent, the issuing agents and each bank increasing or providing a new commitment. We also have a $750 million, unsecured CP Program that is backstopped by the Revolving Credit Facility.
This facility is similar to the former revolving credit facility, which includes an accordion feature that allows us to increase total commitments up to $1.0 billion with the consent of the administrative agent, the issuing agents, and each bank increasing or providing a new commitment.
See Note 15 of the Notes to Consolidated Financial Statements in this Annual Report on Form 10-K for additional information. 53 Table of Contents
See Note 8 of the Notes to Consolidated Financial Statements in this Annual Report on Form 10-K for more information.
Consolidated Interest Expense, Other Income (Expense) and Income Tax (Expense ) (in millions) 2023 2022 2023 vs 2022 Variance 2021 2022 vs 2021 Variance Interest expense, net $ (167.9 ) $ (161.0 ) $ (6.9 ) $ (152.4 ) $ (8.6 ) Other income (expense), net (3.2 ) 1.8 (5.0 ) 1.4 0.4 Income tax (expense) (25.6 ) (25.2 ) (0.4 ) (7.2 ) (18.0 ) 2023 Compared to 2022 Interest expense, net increased due to higher interest rates partially offset by increased interest income on higher cash and cash equivalents balances.
Consolidated Interest Expense, Other Income (Expense) and Income Tax (Expense ) 2024 2023 2024 vs 2023 Variance 2022 2023 vs 2022 Variance (in millions) Interest expense, net $ (181.7 ) $ (167.9 ) $ (13.8 ) $ (161.0 ) $ (6.9 ) Other income (expense), net (1.4 ) (3.2 ) 1.8 1.8 (5.0 ) Income tax (expense) (36.3 ) (25.6 ) (10.7 ) (25.2 ) (0.4 ) 2024 Compared to 2023 Interest expense, net increased due to higher interest rates partially offset by higher interest income and higher AFUDC debt driven by higher construction work-in-progress balances.
Those capital expenditures also earn a rate of return authorized by the commissions in the jurisdictions in which we operate. Our historical capital expenditures by reportable segment are shown in Note 16 of the Notes to Consolidated Financial Statements in this Annual Report on Form 10-K.
Our historical capital expenditures by reportable segment are shown in Note 16 of the Notes to Consolidated Financial Statements in this Annual Report on Form 10-K.
To meet our electric customers’ continued expectations of high levels of reliability, a key strength of the Company, our Electric Utilities utilize an integrity program to ensure the timely repair and replacement of aging infrastructure. In alignment with this program, in November 2021, Wyoming Electric announced its Ready Wyoming electric transmission expansion initiative.
To meet our electric customers’ continued expectations of high levels of reliability, a key strength of the Company, our Electric Utilities utilize an integrity program to ensure the timely repair and replacement of aging infrastructure.
We have determined that the reporting units for goodwill impairment testing are our operating segments, or components of an operating segment, that constitute a business for which discrete financial information is available and for which the CODM regularly reviews the operating results.
Application of the goodwill impairment test requires judgment, including the identification of reporting units and determining the fair value of the reporting unit. We have determined that the reporting units for goodwill impairment testing are our operating segments, or components of an operating segment, that constitute a business for which discrete financial information is available.
CASH FLOW ACTIVITIES The following tables summarize our cash flows for the years ended December 31 (in millions): Operating Activities: 2023 2022 2023 vs 2022 2021 2022 vs 2021 Net income $ 276.0 $ 270.8 $ 5.2 $ 251.2 $ 19.6 Non-cash adjustments to Net income 313.5 295.7 17.8 276.6 19.1 Total earnings 589.5 566.5 23.0 527.8 38.7 Changes in certain operating assets and liabilities: Accounts receivable and other current assets 255.9 (259.9 ) 515.8 (78.9 ) (181.0 ) Accounts payable and accrued liabilities (109.9 ) 89.4 (199.3 ) 10.6 78.8 Regulatory assets and liabilities 236.8 203.9 32.9 (524.2 ) 728.1 Net inflow (outflow) from changes in certain operating assets and liabilities 382.8 33.4 349.4 (592.5 ) 625.9 Other operating activities (27.9 ) (15.1 ) (12.8 ) 0.1 (15.2 ) Net cash provided by (used in) operating activities $ 944.4 $ 584.8 $ 359.6 $ (64.6 ) $ 649.4 47 Table of Contents 2023 Compared to 2022 Net cash provided by operating activities was $359.6 million higher which was attributable to: • Total earnings (net income plus non-cash adjustments) were $23.0 million higher than prior year primarily as a result of increased Electric and Gas Utility margins due to new rates and increased rider revenues partially offset by higher operating expenses and higher interest expense. • Net inflows from changes in certain operating assets and liabilities were $349.4 million higher than prior year, primarily attributable to: o Cash inflows increased by approximately $515.8 million as a result of changes in accounts receivable and other current assets primarily due to higher collections on pass-through revenues and lower natural gas in storage inventories driven by fluctuations in commodity prices and timing of injections and withdrawals; o Cash outflows increased by approximately $199.3 million as a result of decreases in accounts payable and other current liabilities primarily driven by fluctuations in commodity prices, payment timing of natural gas and power purchases and changes in other working capital requirements; and o Cash inflows increased by approximately $32.9 million as a result of changes in our regulatory assets and liabilities primarily due to higher recoveries of deferred gas and fuel cost adjustments driven by fluctuations in commodity prices. • Cash outflows increased $12.8 million from other operating activities primarily due to higher costs from cloud computing arrangements.
We also plan to re-finance our $300 million, 3.95%, senior unsecured notes due January 2026, at or before maturity date. 45 Table of Contents CASH FLOW ACTIVITIES The following tables summarize our cash flows for the years ended December 31: Operating Activities: 2024 2023 2024 vs 2023 Variance 2022 2023 vs 2022 Variance (in millions) Net income $ 283.7 $ 276.0 $ 7.7 $ 270.8 $ 5.2 Non-cash adjustments to Net income 350.5 313.5 37.0 295.7 17.8 Total earnings 634.2 589.5 44.7 566.5 23.0 Changes in certain operating assets and liabilities: Materials, supplies and fuel, Accounts receivable and other current assets (12.5 ) 255.9 (268.4 ) (259.9 ) 515.8 Accounts payable and accrued liabilities 28.8 (109.9 ) 138.7 89.4 (199.3 ) Regulatory assets 90.0 236.8 (146.8 ) 203.9 32.9 Net inflow from changes in certain operating assets and liabilities 106.3 382.8 (276.5 ) 33.4 349.4 Other operating activities (21.2 ) (27.9 ) 6.7 (15.1 ) (12.8 ) Net cash provided by operating activities $ 719.3 $ 944.4 $ (225.1 ) $ 584.8 $ 359.6 2024 Compared to 2023 Net cash provided by operating activities was $225.1 million lower which was attributable to: • Total earnings (net income plus non-cash adjustments) were $44.7 million higher primarily as a result of increased Electric and Gas Utility margins due to new rates, rider recovery and customer growth, partially offset by unfavorable weather, higher operating expenses and higher financing costs. • Net inflows from changes in certain operating assets and liabilities were $276.5 million lower, primarily attributable to: o Cash inflows decreased by approximately $268.4 million as a result of changes in accounts receivable and other current assets primarily due to lower collections on pass-through revenues and lower natural gas in storage inventories driven by fluctuations in commodity prices and timing of injections and withdrawals; o Cash outflows decreased by approximately $138.7 million as a result of increases in accounts payable and other current liabilities primarily driven by fluctuations in commodity prices, payment timing of natural gas and power purchases, and changes in other working capital requirements; and o Cash inflows decreased by approximately $146.8 million as a result of changes in our regulatory assets and liabilities primarily due to lower recoveries of deferred gas and fuel cost adjustments driven by fluctuations in commodity prices. • Cash outflows decreased $6.7 million from other operating activities primarily due to lower costs from cloud computing arrangements.
The 260-mile, multi-phase transmission expansion project will provide customers long-term price stability and greater flexibility as power markets develop in the Western States. Construction of the project commenced in late 2023 and is expected to take place in multiple phases or segments through 2025 and will interconnect South Dakota Electric’s and Wyoming Electric’s transmission systems.
The project is expected to be completed in multiple segments through 2025 and will interconnect South Dakota Electric’s and Wyoming Electric’s transmission systems. The project will provide customers long-term price stability and greater flexibility as power markets develop in the Western States.
Financing Activities: 2023 2022 2023 vs 2022 2021 2022 vs 2021 Dividends paid on common stock $ (168.1 ) $ (156.7 ) $ (11.4 ) $ (145.0 ) $ (11.7 ) Common stock issued 118.3 90.1 28.2 119.0 (28.9 ) Short-term and long-term debt (repayments), net (260.6 ) 115.4 (376.0 ) 777.7 (662.3 ) Distributions to non-controlling interests (18.3 ) (17.4 ) (0.9 ) (15.7 ) (1.7 ) Other financing activities (13.0 ) 0.9 (13.9 ) (4.1 ) 5.0 Net cash provided by (used in) financing activities $ (341.7 ) $ 32.3 $ (374.0 ) $ 731.9 $ (699.6 ) 2023 Compared to 2022 Net cash used in financing activities was $374.0 million higher which was primarily attributable to: • Cash outflows increased $11.4 million due to increased dividends paid on common stock; • Cash inflows increased $28.2 million due to higher issuances of common stock; 48 Table of Contents • Net outflows from changes in short-term and long-term debt (repayments) borrowings increased $376.0 million due to: o Cash outflows increased $651.0 million as a result of net repayment activity under our Revolving Credit Facility and CP Program; o Cash outflow of $525.0 million due to repayment of our senior unsecured notes on their November 30, 2023 maturity date; and o Cash inflow of $800.0 million from the March 7, 2023 and September 15, 2023 debt offerings. • Cash outflows increased by $13.9 million for other financing activities primarily due to financing costs from the March 7, 2023 and September 15, 2023 debt offerings.
Financing Activities: 2024 2023 2024 vs 2023 Variance 2022 2023 vs 2022 Variance (in millions) Dividends paid on common stock $ (182.3 ) $ (168.1 ) $ (14.2 ) $ (156.7 ) $ (11.4 ) Common stock issued 181.4 118.3 63.1 90.1 28.2 Short-term and long-term debt borrowings (repayments), net (16.2 ) (260.6 ) 244.4 115.4 (376.0 ) Distributions to non-controlling interests (17.4 ) (18.3 ) 0.9 (17.4 ) (0.9 ) Other financing activities (8.4 ) (13.0 ) 4.6 0.9 (13.9 ) Net cash provided by (used in) financing activities $ (42.9 ) $ (341.7 ) $ 298.8 $ 32.3 $ (374.0 ) 2024 Compared to 2023 Net cash used in financing activities was $298.8 million lower which was primarily attributable to: • Cash outflows increased $14.2 million due to increased dividends paid on increased shares of common stock outstanding; • Cash inflows increased $63.1 million due to higher issuances of common stock; • Net outflows from changes in short-term and long-term debt (repayments) borrowings decreased $244.4 million due to: o Net cash inflows increased $669.4 million as a result of net borrowing activity under our Revolving Credit Facility and CP Program; and o Cash inflows decreased $350 million due to issuances of $450 million of senior unsecured notes in May 2024 compared to issuances of $350 million of senior unsecured notes in March 2023 and $450 million of senior unsecured notes in September 2023; and o Cash outflows increased $75 million due to repayment of our $600 million senior unsecured notes in August 2024 compared to repayment of our $525 million senior unsecured notes in November 2023. • Cash outflows decreased by $4.6 million for other financing activities primarily due to lower financing costs from the May 2024 debt offering compared to the March 2023 and September 2023 debt offerings.
The renewable energy from these PPAs will be used to serve our expanding partnerships with data centers. • Developed BCIS Tariff to Facilitate Growth: We have supported enabling legislation in Wyoming for the growing blockchain businesses while implementing our own BCIS Tariff to serve these customers.
The renewable energy from these PPAs is used to serve our expanding partnerships with LPCS customers. 34 Table of Contents • Expanded BCIS Load: We have supported enabling legislation in Wyoming for the growing blockchain businesses while implementing our own BCIS Tariff to serve these customers.
(b) Heating degree days are calculated based on a weighted average of total customers by state excluding Kansas due to its weather normalization mechanism.
(b) Heating degree days are calculated based on a weighted average of total customers by state excluding Kansas due to its weather normalization mechanism. Arkansas Gas is partially excluded based on the weather normalization mechanism in effect from November through April.
Although we believe our assumptions, judgments and estimates are reasonable, changes in tax laws or our interpretations of tax laws and the resolution of current and any future tax audits could significantly impact the amounts provided for income taxes in our consolidated financial statements.
Although we believe our assumptions, judgments, and estimates are reasonable, changes in tax laws or our interpretations of tax laws and the resolution of current and any future tax audits could significantly impact the amounts provided for income taxes in our consolidated financial statements. 51 Table of Contents See Note 15 of the Notes to Consolidated Financial Statements in this Annual Report on Form 10-K for additional information.
Segment Operating Results Non-GAAP Financial Measure The following discussion includes financial information prepared in accordance with GAAP, as well as another financial measure, Electric and Gas Utility margin, that is considered a “non-GAAP financial measure.” Generally, a non-GAAP financial measure is a numerical measure of a company’s financial performance, financial position or cash flows that excludes (or includes) amounts that are included in (or excluded from) the most directly comparable measure calculated and presented in accordance with GAAP.
Generally, a non-GAAP financial measure is a numerical measure of a company’s financial performance, financial position or cash flows that excludes (or includes) amounts that are included in (or excluded from) the most directly comparable measure calculated and presented in accordance with GAAP.
In order to operate and grow our business, we need to consistently maintain the ability to raise capital on favorable terms. Access to funds is dependent upon factors such as general economic and capital market conditions, regulatory authorizations and policies, the Company’s credit ratings, cash flows from routine operations and the credit ratings of counterparties.
Access to funds is dependent upon factors such as general economic and capital market conditions, regulatory authorizations and policies, the Company’s credit ratings, cash flows from routine operations, and the credit ratings of counterparties.
Electric Utilities Operating results for the years ended December 31 for the Electric Utilities were as follows (in millions): 2023 2022 2023 vs 2022 Variance 2021 2022 vs 2021 Variance Revenue: Electric - regulated $ 817.4 $ 852.2 $ (34.8 ) $ 800.7 $ 51.5 Other - non-regulated 47.6 48.0 (0.4 ) 41.5 6.5 Total revenue 865.0 900.2 (35.2 ) 842.2 58.0 Fuel and Purchased Power: Electric - regulated 198.3 261.7 (63.4 ) 244.5 17.2 Other - non-regulated 1.8 4.6 (2.8 ) 3.5 1.1 Total fuel and purchased power 200.1 266.3 (66.2 ) 248.0 18.3 Electric Utility margin (non-GAAP) 664.9 633.9 31.0 594.2 39.7 Operations and maintenance 236.2 244.8 (8.6 ) 224.5 20.3 Depreciation and amortization 142.6 135.9 6.7 131.5 4.4 Taxes - property and production 37.3 38.9 (1.6 ) 35.5 3.4 416.1 419.6 (3.5 ) 391.5 28.1 Operating income $ 248.8 $ 214.3 $ 34.5 $ 202.7 $ 11.6 2023 Compared to 2022 Electric Utility margin increased over the prior year as a result of: (in millions) New rates and rider recovery $ 29.4 Wygen I revenue recovery under business interruption insurance (a) 5.0 Integrated Generation (b) 3.3 Transmission services 3.2 Weather (6.2 ) Retail customer usage (4.4 ) Other 0.7 $ 31.0 (a) In 2021, Wygen I experienced an unplanned outage which resulted in lost revenue.
Electric Utilities Operating results for the years ended December 31 for the Electric Utilities were as follows: 2024 2023 2024 vs 2023 Variance 2022 2023 vs 2022 Variance (in millions) Total revenue $ 876.1 $ 865.0 $ 11.1 $ 900.2 $ (35.2 ) Fuel and purchased power: 206.4 200.1 6.3 266.3 (66.2 ) Electric Utility margin (non-GAAP) 669.7 664.9 4.8 633.9 31.0 Operations and maintenance 252.6 236.2 16.4 244.8 (8.6 ) Depreciation and amortization 145.3 142.6 2.7 135.9 6.7 Taxes other than income taxes 38.8 37.3 1.5 38.9 (1.6 ) 436.7 416.1 20.6 419.6 (3.5 ) Operating income $ 233.0 $ 248.8 $ (15.8 ) $ 214.3 $ 34.5 2024 Compared to 2023 Electric Utility margin increased as a result of: (in millions) New rates and rider recovery $ 15.8 Retail customer growth and usage 3.8 Weather 2.7 Off-system excess energy sales (7.8 ) 2023 Wygen I revenue recovery under business interruption insurance (a) (5.0 ) Unplanned generation outages (4.0 ) Other (0.7 ) $ 4.8 (a) In 2021, Wygen I experienced an unplanned outage which resulted in lost revenue.
Revenue (in millions) Quantities Sold and Transported (Dth in millions) For the year ended December 31, For the year ended December 31, 2023 2022 2021 2023 2022 2021 Arkansas Gas $ 268.9 $ 311.3 $ 218.5 30.2 32.3 31.5 Colorado Gas 313.6 320.9 208.0 32.8 34.3 32.3 Iowa Gas 213.6 283.9 171.7 37.9 40.9 38.0 Kansas Gas 155.6 191.4 121.6 35.5 38.6 34.5 Nebraska Gas 366.1 384.8 273.4 82.2 85.1 81.0 Wyoming Gas 166.4 176.8 131.7 36.4 36.7 32.7 Total Revenue and Quantities Sold $ 1,484.2 $ 1,669.1 $ 1,124.9 255.0 267.9 250.0 44 Table of Contents For the year ended December 31, 2023 2022 2021 Heating Degree Days Actual Variance From Normal Actual Variance From Normal Actual Variance From Normal Arkansas Gas (a) 3,197 (17)% 3,844 2% 3,565 (12)% Colorado Gas 5,916 (4)% 6,325 4% 5,866 (11)% Iowa Gas 5,921 (12)% 7,037 7% 6,239 (8)% Kansas Gas (a) 4,387 (8)% 4,968 7% 4,508 (8)% Nebraska Gas 5,579 (8)% 6,220 4% 5,599 (9)% Wyoming Gas 7,385 8% 7,644 12% 7,074 (7)% Combined (b) 6,006 (4)% 6,536 5% 5,948 (8)% (a) Arkansas and Kansas have weather normalization mechanisms that mitigate the weather impact on Gas Utility margins.
(c) Includes inter-segment rent and non-regulated services under the Service Guard Comfort Plan, Tech Services, and HomeServe. 43 Table of Contents Revenue Quantities Sold and Transported For the year ended December 31, For the year ended December 31, By Business Unit 2024 2023 2022 2024 2023 2022 (in millions) (Dth in millions) Arkansas Gas $ 248.8 $ 268.9 $ 311.3 29.9 30.2 32.3 Colorado Gas 278.8 313.6 320.9 31.0 32.8 34.3 Iowa Gas 162.3 213.6 283.9 37.3 37.9 40.9 Kansas Gas 130.4 155.6 191.4 34.8 35.5 38.6 Nebraska Gas 304.5 366.1 384.8 80.3 82.2 85.1 Wyoming Gas 144.6 166.4 176.8 37.0 36.4 36.7 Total Revenue and Quantities Sold $ 1,269.4 $ 1,484.2 $ 1,669.1 250.3 255.0 267.9 For the year ended December 31, 2024 2023 2022 Heating Degree Days Actual Variance From Normal Actual Variance From Normal Actual Variance From Normal Arkansas Gas (a) 2,998 (20)% 3,197 (17)% 3,844 2% Colorado Gas 5,662 (7)% 5,916 (4)% 6,325 4% Iowa Gas 5,543 (16)% 5,921 (12)% 7,037 7% Kansas Gas (a) 4,092 (12)% 4,387 (8)% 4,968 7% Nebraska Gas 5,172 (13)% 5,579 (8)% 6,220 4% Wyoming Gas 6,641 (10)% 7,385 8% 7,644 12% Combined (b) 5,517 (11)% 6,006 (4)% 6,536 5% (a) Arkansas and Kansas have weather normalization mechanisms that mitigate the weather impact on Gas Utility margins.
Amounts outstanding under the Revolving Credit Facility and the CP Program, either individually or in the aggregate, cannot exceed $750 million. The Revolving Credit Facility prohibits us from paying cash dividends if a default or an event of default exists prior to, or would result after, paying a dividend.
The Revolving Credit Facility prohibits us from paying cash dividends if a default or an event of default exists prior to, or would result after, paying a dividend.
This business can bid competitively due to construction expertise, fuel supply advantages and by co-locating new plants at our existing Electric Utilities’ energy complexes, reducing infrastructure and operating costs.
This business can bid competitively due to construction expertise, fuel supply advantages and by co-locating new plants at our existing Electric Utilities’ energy complexes, reducing infrastructure and operating costs. All power plants within this business are contracted to our Electric Utilities under long-term contracts, located at our utility-generating complexes and physically integrated into our Electric Utilities’ operations.
See Note 15 of the Notes to Consolidated Financial Statements in this Annual Report on Form 10-K for additional details. 46 Table of Contents Liquidity and Capital Resources OVERVIEW Our company requires significant cash to support and grow our businesses.
The effective tax rate was higher primarily due to a $8.2 million tax benefit in 2023 from a Nebraska income tax rate decrease. See Note 15 of the Notes to Consolidated Financial Statements in this Annual Report on Form 10-K for additional details. Liquidity and Capital Resources OVERVIEW Our company requires significant cash to support and grow our businesses.
For the year ended December 31, Quantities Generated and Purchased (GWh) 2023 2022 2021 Generated: Colorado Electric 653.9 474.4 412.1 South Dakota Electric 2,018.5 1,890.0 1,980.7 Wyoming Electric 908.3 905.8 883.6 Integrated Generation 1,802.5 1,768.6 1,842.4 Total Generated 5,383.2 5,038.8 5,118.8 Purchased: Colorado Electric 588.2 1,005.4 1,027.7 South Dakota Electric 604.6 826.4 563.6 Wyoming Electric 1,028.5 757.2 643.9 Integrated Generation 55.2 85.1 87.9 Total Purchased 2,276.5 2,674.1 2,323.1 Total Generated and Purchased 7,659.7 7,712.9 7,441.9 42 Table of Contents For the year ended December 31, Degree Days 2023 2022 2021 Actual Variance from Normal Actual Variance from Normal Actual Variance from Normal Heating Degree Days: Colorado Electric 5,330 1% 5,551 9% 5,023 (11)% South Dakota Electric 6,969 (4)% 7,495 6% 6,819 (5)% Wyoming Electric 6,783 (1)% 7,051 3% 6,702 (6)% Combined (a) 6,185 (1)% 6,518 6% 5,974 (7)% Cooling Degree Days: Colorado Electric 1,046 (10)% 1,362 9% 1,245 39% South Dakota Electric 497 (21)% 814 27% 827 30% Wyoming Electric 329 (30)% 701 47% 604 74% Combined (a) 713 (15)% 1,040 18% 973 40% (a) Degree days are calculated based on a weighted average of total customers by state.
See Key Elements of our Business Strategy section above for additional information. 41 Table of Contents For the year ended December 31, Quantities Generated and Purchased by Business Unit 2024 2023 2022 (in GWh) Generated: Colorado Electric 865.0 653.9 474.4 South Dakota Electric 2,045.4 2,018.5 1,890.0 Wyoming Electric 866.5 908.3 905.8 Integrated Generation 1,600.7 1,802.5 1,768.6 Total Generated 5,377.6 5,383.2 5,038.8 Purchased: Colorado Electric 447.4 588.2 1,005.4 South Dakota Electric 590.7 604.6 826.4 Wyoming Electric 1,147.7 1,028.5 757.2 Integrated Generation 62.1 55.2 85.1 Total Purchased 2,247.9 2,276.5 2,674.1 Total Generated and Purchased 7,625.5 7,659.7 7,712.9 For the year ended December 31, 2024 2023 2022 Degree Days Actual Variance from Normal Actual Variance from Normal Actual Variance from Normal Heating Degree Days: Colorado Electric 4,926 (8)% 5,330 1% 5,551 9% South Dakota Electric 6,311 (13)% 6,969 (4)% 7,495 6% Wyoming Electric 6,272 (10)% 6,783 (1)% 7,051 3% Combined (a) 5,676 (10)% 6,185 (1)% 6,518 6% Cooling Degree Days: Colorado Electric 1,269 11% 1,046 (10)% 1,362 9% South Dakota Electric 913 49% 497 (21)% 814 27% Wyoming Electric 491 7% 329 (30)% 701 47% Combined (a) 989 20% 713 (15)% 1,040 18% (a) Degree days are calculated based on a weighted average of total customers by state.
We have removed all cast- and wrought-iron from our natural gas transmission and distribution systems and continue to replace aging infrastructure through programs that prioritize safety and reliability for our customers.
Under the programmatic approach, obsolete, at-risk and vintage materials are replaced in a proactive and systematic time frame. We have removed all cast- and wrought-iron from our natural gas transmission and distribution systems and continue to replace aging infrastructure through programs that prioritize safety and reliability for our customers.
Goodwill We perform a goodwill impairment test on an annual basis or upon the occurrence of events or changes in circumstances that indicate that the asset might be impaired.
See Note 2 of the Notes to Consolidated Financial Statements in this Annual Report on Form 10-K for further information. Goodwill We perform a goodwill impairment test on an annual basis or upon the occurrence of events or changes in circumstances that indicate that the asset might be impaired.
Accordingly, we employ a customer-focused strategy for complying with standards and regulations that balances our customers’ rate concerns with environmental considerations and administrative and legislative mandates. We attempt to strike this balance by prudently and proactively incorporating renewable energy into our resource supply, while seeking to minimize the magnitude and frequency of rate increases for our utility customers.
We attempt to strike this balance by prudently and proactively incorporating renewable energy into our resource supply, while seeking to minimize the magnitude and frequency of rate increases for our utility customers.
The analysis focused on the least-cost resource needs to best meet customers’ future peak energy needs while maintaining system flexibility and achieving the Company’s generation emissions reduction goals.
The IRP outlines a range of options over a 20-year planning horizon to meet long-term forecasted energy needs while strengthening reliability and resiliency of the grid. The analysis focused on the least-cost resource needs to best meet customers’ future peak energy needs while maintaining system flexibility and achieving the Company’s generation emissions reduction goals.
Under the agreement, the customer is responsible for costs of service, and the load is interruptible to prioritize the needs of Wyoming Electric’s existing retail customers. • Established Green Forward: In 2022 and 2023, we filed regulatory applications to launch Green Forward, a voluntary RNG and carbon offset program, to eligible residential and small business natural gas customers to offset up to 100% or more of the emissions from their natural gas usage.
New resources are expected to be placed in service in 2027-2028. • Established Green Forward and Expanded RNG Interconnect Projects: In 2022 and 2023, we filed regulatory applications to launch Green Forward, a voluntary RNG and carbon offset program, to eligible residential and small business natural gas customers to offset up to 100% or more of the emissions from their natural gas usage.
Revenue (in millions) Quantities Sold (GWh) For the year ended December 31, 2023 2022 2021 2023 2022 2021 Colorado Electric $ 285.7 $ 321.1 $ 302.9 2,397.2 2,440.0 2,574.0 South Dakota Electric 321.1 335.2 319.4 2,554.3 2,626.2 2,389.4 Wyoming Electric 212.2 197.7 180.4 2,124.1 1,903.7 1,733.6 Integrated Generation 46.0 46.2 39.5 120.6 293.0 269.6 Total Revenue and Quantities Sold $ 865.0 $ 900.2 $ 842.2 7,196.2 7,262.9 6,966.6 For the year ended December 31, Quantities Generated and Purchased by Fuel Type (GWh) 2023 2022 2021 Generated: Coal 2,683.4 2,708.8 2,546.9 Natural Gas 2,021.4 1,454.2 1,817.2 Wind (a) 678.5 875.8 842.6 Total Generated 5,383.3 5,038.8 5,206.7 Purchased: Coal, Natural Gas, Diesel Oil and Other Market Purchases 1,842.9 2,280.8 1,866.4 Wind and Solar 433.5 393.3 368.8 Total Purchased 2,276.4 2,674.1 2,235.2 Total Generated and Purchased 7,659.7 7,712.9 7,441.9 (a) Wind generation decreased due to the sale of Northern Iowa Windpower assets in March 2023.
Revenue Quantities Sold For the year ended December 31, For the year ended December 31, By Business Unit 2024 2023 2022 2024 2023 2022 (in millions) (in GWh) Colorado Electric $ 276.9 $ 285.7 $ 321.1 2,392.7 2,397.2 2,440.0 South Dakota Electric 322.0 321.1 335.2 2,556.5 2,554.3 2,626.2 Wyoming Electric 234.3 212.2 197.7 2,190.1 2,124.1 1,903.7 Integrated Generation 42.9 46.0 46.2 95.9 120.6 293.0 Total Revenue and Quantities Sold $ 876.1 $ 865.0 $ 900.2 7,235.2 7,196.2 7,262.9 For the year ended December 31, Quantities Generated and Purchased by Fuel Type 2024 2023 2022 (in GWh) Generated: Coal 2,478.3 2,683.4 2,708.8 Natural Gas 2,239.1 2,021.4 1,454.2 Wind 660.2 678.5 875.8 Total Generated 5,377.6 5,383.3 5,038.8 Purchased: Coal, Natural Gas, Diesel Oil and Other Market Purchases (a) 1,117.8 1,842.9 2,280.8 Wind and Solar (a) 1,130.1 433.5 393.3 Total Purchased 2,247.9 2,276.4 2,674.1 Total Generated and Purchased 7,625.5 7,659.7 7,712.9 (a) The shift in purchases by fuel type for 2024 compared to 2023 is primarily due to Wyoming Electric's new wind and solar energy PPAs, which replaced market purchases from other fuel types, and are used to serve our LPCS customers.
Depreciation and amortization increased primarily due to higher asset base driven by prior and current year capital expenditures.
Depreciation and amortization increased primarily due to a higher asset base driven by capital expenditures. Taxes other than income taxes were comparable.
To the extent we are able to pass through such costs to our customers, and a state regulatory commission subsequently determines that such costs should not have been paid by the customers, we may be required to refund such costs.
To the extent we are able to pass through such costs to our customers, and a state regulatory commission subsequently determines that such costs should not have been paid by the customers, we may be required to refund such costs. 50 Table of Contents As of December 31, 2024, and 2023, we had total regulatory assets of $427.7 million and $480.1 million, respectively, and total regulatory liabilities of $568.7 million and $566.6 million, respectively.
Additionally, there are certain statutory limitations that could affect future cash dividends paid. Federal law places limits on the ability of public utilities within a holding company structure to declare dividends. Specifically, under the Federal Power Act, a public utility may not pay dividends from any funds properly included in a capital account.
Federal law places limits on the ability of public utilities within a holding company structure to declare dividends. Specifically, under the Federal Power Act, a public utility may not pay dividends from any funds properly included in a capital account. The utility subsidiaries’ dividends may be limited directly or indirectly by state regulatory commissions or bond indenture covenants.
Our Gas Utilities are authorized to use system safety, integrity and replacement cost recovery mechanisms that provide for customer rate adjustments, between rate reviews, which allow timely recovery of costs incurred in repairing and replacing the gas delivery systems with a return on the investment. 35 Table of Contents As of December 31, 2023, we estimate our five-year capital investment to be approximately $4.3 billion, with most of that investment targeted toward upgrading existing utility infrastructure supporting customer and community growth needs, and complying with safety requirements.
Our Gas Utilities are authorized to use system safety, integrity and replacement cost recovery mechanisms that provide for customer rate adjustments, between rate reviews, which allow timely recovery of costs incurred in repairing and replacing the gas delivery systems with a return on the investment.
Our Colorado and Wyoming gas-fired generating facilities are located close to major natural gas energy hubs that provide trading liquidity and transparent pricing. Due to their location in the resource rich areas of Colorado and Wyoming, natural gas supply to fuel our gas-fired generation can be sourced at competitive prices.
Generation Fuel Supply: Our generating facilities are strategically located close to energy hubs that help reduce fuel supply costs. Our Colorado and Wyoming gas-fired generating facilities are located close to major natural gas energy hubs that provide trading liquidity and transparent pricing.
See above in Key Elements of our Business Strategy for forecasted capital expenditure requirements. A significant portion of our capital expenditures are for safety, reliability and integrity of our system and is included in utility rate base and eligible for recovery from our utility customers with regulatory approval.
A significant portion of our capital expenditures are for safety, reliability, and integrity of our system and is included in utility rate base and eligible for recovery from our utility customers with regulatory approval. Those capital expenditures also earn a rate of return authorized by the commissions in the jurisdictions in which we operate.
A report with Colorado Electric's recommended resources is due to the CPUC in the second quarter of 2024. 37 Table of Contents Many states have enacted, and others are considering, mandatory renewable energy standards, requiring utilities to meet certain thresholds of renewable energy generation. In addition, some states have either enacted or are considering legislation setting GHG emission reduction targets.
Many states have enacted, and others are considering, mandatory renewable energy standards, requiring utilities to meet certain thresholds of renewable energy generation. In addition, some states have either enacted or are considering legislation setting GHG emission reduction targets. Federal legislation for renewable energy standards and GHG emission reductions has been considered and may be implemented in the future.
Federal legislation for renewable energy standards and GHG emission reductions has been considered and may be implemented in the future. Mandates for the use of renewable energy or the reduction of GHG emissions will likely drive the need for significant investment in our Electric Utilities and Gas Utilities segments.
Mandates for the use of renewable energy or the reduction of GHG emissions will likely drive the need for significant investment in our Electric Utilities and Gas Utilities segments. These mandates will also likely increase prices for electricity and/or natural gas for our utility customers.
A claim for these losses was submitted under our business interruption insurance policy. During the third quarter of 2023, we recovered $5.0 million from our business interruption insurance which was recognized as Revenue. See Note 3 of the Notes to Consolidated Financial Statements in this Annual Report on Form 10-K for further information.
A claim for these losses was submitted under our business interruption insurance policy. In 2023, we recovered $5.0 million from our business interruption insurance which was recognized as Revenue.
Investing Activities: 2023 2022 2023 vs 2022 2021 2022 vs 2021 Capital expenditures $ (555.6 ) $ (604.4 ) $ 48.8 $ (677.5 ) $ 73.1 Other investing activities 18.9 0.5 18.4 13.3 (12.8 ) Net cash (used in) investing activities $ (536.7 ) $ (603.9 ) $ 67.2 $ (664.2 ) $ 60.3 2023 Compared to 2022 Net cash used in investing activities was $67.2 million lower which was attributable to: • Cash outflows from capital expenditures (which are net of $33.8 million contributions in aid of construction) decreased $48.8 million as a result of lower programmatic safety, reliability and integrity spending at our Gas and Electric Utilities and higher receipts related to contributions in aid of construction driven by strategic projects in Wyoming; • Cash inflows increased $18.4 million for other investing activities primarily due to proceeds from the sale of Northern Iowa Windpower assets and the strategic sale of land in Wyoming.
Investing Activities: 2024 2023 2024 vs 2023 Variance 2022 2023 vs 2022 Variance (in millions) Capital expenditures $ (744.2 ) $ (555.6 ) $ (188.6 ) $ (604.4 ) $ 48.8 Other investing activities (1.8 ) 18.9 (20.7 ) 0.5 18.4 Net cash (used in) investing activities $ (746.0 ) $ (536.7 ) $ (209.3 ) $ (603.9 ) $ 67.2 2024 Compared to 2023 Net cash used in investing activities was $209.3 million higher which was attributable to: • Cash outflows from capital expenditures (which are net of contributions in aid of construction) increased $188.6 million primarily as a result of Wyoming Electric's Ready Wyoming electric transmission expansion project and Black Hills Energy Renewable Resources' acquisition of a RNG production facility at a landfill in Dubuque, Iowa. 46 Table of Contents • Cash outflows increased $20.7 million for other investing activities primarily due to 2023 proceeds from the sale of Northern Iowa Windpower assets and a sale of land to support data center growth.
We see value creation by recruiting new customers and expanding existing partnerships with data centers and blockchain opportunities; exploring energy markets such as RTOs; and expanding our transmission capabilities, establishing a RNG program and expanding our RNG portfolio.
We see value creation by recruiting new customers and expanding existing partnerships with data centers and blockchain customers; exploring energy markets; and expanding our transmission capabilities. A few recent examples of our initiatives to grow our business as an energy solutions provider include: • Announced Partnership with Meta.
The table below provides our dividends paid (in millions), dividend payout ratio and dividends paid per share for the three years ended December 31: 2023 2022 2021 Common Stock Dividends Paid $ 168.1 $ 156.7 $ 145.0 Dividend Payout Ratio 64 % 61 % 61 % Dividends Per Share $ 2.50 $ 2.41 $ 2.29 Our three-year compound annualized dividend growth rate was 4.8%. 51 Table of Contents Collateral Requirements Our Utilities maintain wholesale commodity contracts for the purchases and sales of electricity and natural gas which have performance assurance provisions that allow the counterparty to require collateral postings under certain conditions, including when requested on a reasonable basis due to a deterioration in our financial condition or nonperformance.
Collateral Requirements Our Utilities maintain wholesale commodity contracts for the purchases and sales of electricity and natural gas which have performance assurance provisions that allow the counterparty to require collateral postings under certain conditions, including when requested on a reasonable basis due to a deterioration in our financial condition or nonperformance.
Most notably, the IRA includes provisions that extend and expand the production and investment tax credits for wind and solar; includes energy storage, EVs, RNG, and carbon capture and sequestration; and allows for the transferability of clean energy tax credits on existing and qualifying new facilities.
Most notably, the IRA includes provisions that extend and expand the production and investment tax credits for wind and solar; includes energy storage, EVs, RNG, and carbon capture and sequestration; and contains a tax credit transferability provision that allows us to transfer (e.g. sell) PTCs produced after December 31, 2022, to third parties.
See further information in Note 13 of the Notes to Consolidated Financial Statements in this Annual Report on Form 10-K. Common Stock Dividends Future cash dividends, if any, will be dependent on our results of operations, financial position, cash flows, reinvestment opportunities and other factors, and will be evaluated and approved by our Board of Directors.
Common Stock Dividends Future cash dividends, if any, will be dependent on our results of operations, financial position, cash flows, reinvestment opportunities, and other factors, and will be evaluated and approved by our Board of Directors. Additionally, there are certain statutory limitations that could affect future cash dividends paid.
We also plan to re-finance our $600 million, 1.0375%, senior unsecured notes due August 2024, at or before maturity date. CREDIT RATINGS Financing for operational needs and capital expenditure requirements, not satisfied by operating cash flows, depends upon the cost and availability of external funds through both short and long-term financing.
CREDIT RATINGS Financing for operational needs and capital expenditure requirements, not satisfied by operating cash flows, depends upon the cost and availability of external funds through both short and long-term financing. In order to operate and grow our business, we need to consistently maintain the ability to raise capital on favorable terms.
The IRP’s preferred options for South Dakota Electric in the near-term planning period through 2026 are the addition of 100 MW of renewable generation, the conversion of Neil Simpson II to dual fuel (natural gas and coal) in 2025 and consideration of up to 20 MW of battery storage.
South Dakota Electric's resource plan in the near-term planning period through 2026 includes the conversion of Neil Simpson II to dual fuel (natural gas and coal) in 2025, and addition of 99 MWs of utility-owned, dispatchable natural gas generation by the second half of 2026.
The following table represents the credit ratings of South Dakota Electric at December 31, 2023: Rating Agency Senior Secured Rating S&P (a) A Fitch (b) A (a) On February 17, 2023, S&P reported A rating (b) On January 26, 2024, Fitch reported A rating We have not had any triggering events (i.e. an acceleration of repayment of outstanding indebtedness, an increase in interest costs, or the posting of additional cash collateral) tied to our stock price and have not executed any transactions that require us to issue equity based on our credit ratings. 50 Table of Contents CAPITAL REQUIREMENTS Capital Expenditures Capital expenditures are a substantial portion of our cash requirements each year and we continue to forecast a robust capital expenditure program during the next five years.
We have not had any triggering events (i.e. an acceleration of repayment of outstanding indebtedness, an increase in interest costs, or the posting of additional cash collateral) tied to our stock price and have not executed any transactions that require us to issue equity based on our credit ratings.
Gas Utilities Operating results for the years ended December 31 for the Gas Utilities were as follows (in millions): 2023 2022 2023 vs 2022 Variance 2021 2022 vs 2021 Variance Revenue: Natural gas - regulated $ 1,399.1 $ 1,584.6 $ (185.5 ) $ 1,051.6 $ 533.0 Other - non-regulated services 85.1 84.5 0.6 73.3 11.2 Total revenue 1,484.2 1,669.1 (184.9 ) 1,124.9 544.2 Cost of natural gas sold: Natural gas - regulated 760.2 942.1 (181.9 ) 480.3 461.8 Other - non-regulated services 23.0 23.0 — 14.4 8.6 Total cost of natural gas sold 783.2 965.1 (181.9 ) 494.7 470.4 Gas Utility margin (non-GAAP) 701.0 704.0 (3.0 ) 630.2 73.8 Operations and maintenance 328.7 317.3 11.4 290.2 27.1 Depreciation and amortization 113.9 114.7 (0.8 ) 104.2 10.5 Taxes - property and production 29.6 27.8 1.8 24.6 3.2 472.2 459.8 12.4 419.0 40.8 Operating income $ 228.8 $ 244.2 $ (15.4 ) $ 211.2 $ 33.0 43 Table of Contents 2023 Compared to 2022 Gas Utility margin decreased over the prior year as a result of: (in millions) New rates and rider recovery $ 19.8 Retail customer growth and demand 7.6 Weather (14.5 ) Prior year true-up of Winter Storm Uri carrying costs (a) (10.3 ) Mark-to-market on non-utility natural gas commodity contracts (3.5 ) Other (2.1 ) $ (3.0 ) (a) In certain jurisdictions, we have commission approval to recover carrying costs on Winter Storm Uri regulatory assets which offset increased interest expense.
(b) 2024 included unplanned outages at Wygen I and Pueblo Airport Generation #4-5. 42 Table of Contents Gas Utilities Operating results for the years ended December 31 for the Gas Utilities were as follows: 2024 2023 2024 vs 2023 Variance 2022 2023 vs 2022 Variance (in millions) Total revenue $ 1,269.4 $ 1,484.2 $ (214.8 ) $ 1,669.1 $ (184.9 ) Cost of natural gas sold 524.3 783.2 (258.9 ) 965.1 (181.9 ) Gas Utility margin (non-GAAP) 745.1 701.0 44.1 704.0 (3.0 ) Operations and maintenance 320.7 328.7 (8.0 ) 317.3 11.4 Depreciation and amortization 124.7 113.9 10.8 114.7 (0.8 ) Taxes other than income taxes 28.4 29.6 (1.2 ) 27.8 1.8 473.8 472.2 1.6 459.8 12.4 Operating income $ 271.3 $ 228.8 $ 42.5 $ 244.2 $ (15.4 ) 2024 Compared to 2023 Gas Utility margin increased as a result of: (in millions) New rates and rider recovery $ 48.7 Mark-to-market on non-utility natural gas commodity contracts 4.9 Retail customer growth and usage 3.6 Weather (15.9 ) Other 2.8 $ 44.1 Operations and maintenance expense decreased primarily due to $10.8 million of lower employee-related expenses driven by lower headcount, $2.9 million decreased bad debt expense attributable to lower customer billings, and $1.2 million of lower training expense partially offset by $3.3 million of higher insurance expense and $2.8 million of higher IT-related expenses.
Arkansas Gas is partially excluded based on the weather normalization mechanism in effect from November through April. 45 Table of Contents Corporate and Other Corporate and Other operating results, including inter-segment eliminations, for the years ended December 31 were as follows: (in millions) 2023 2022 2023 vs 2022 Variance 2021 2022 vs 2021 Variance Operating (loss) $ (4.9 ) $ (3.3 ) $ (1.6 ) $ (4.5 ) $ 1.2 2023 Compared to 2022 Operating (loss) was comparable to the prior year.
Corporate and Other Corporate and Other operating results, including inter-segment eliminations, for the years ended December 31 were as follows: 2024 2023 2024 vs 2023 Variance 2022 2023 vs 2022 Variance (in millions) Operating (loss) $ (1.2 ) $ (4.9 ) $ 3.7 $ (3.3 ) $ (1.6 ) 2024 Compared to 2023 Operating (loss) decreased primarily due to lower unallocated outside services expenses and a gain on the sale of a Corporate asset.
Net Zero will be achieved through pipeline material and main replacements, advanced leak detection, third-party damage reduction, expanding the use of RNG and hydrogen, and utilizing carbon credit offsets. Since 2005, we have reduced GHG emissions intensity from our Electric Utilities by one-third.
Net Zero will be achieved through pipeline material and main replacements, advanced leak detection, third-party damage reduction, expanding the use of RNG and hydrogen, and utilizing carbon credit offsets. During the second quarter of 2024, we published our 2023 Corporate Sustainability Report, highlighting our environmental, social and governance impacts and our progress on major projects and climate goals.
The RNG produced from the landfill facility captures methane that would otherwise vent into the atmosphere. It is delivered under long-term contracts to a third party that purchases the RNG and its related environmental attributes, in conformity with the EPA's Renewable Fuel Standard Program.
It is delivered under long-term contracts to a third party that purchases the RNG and its related environmental attributes, in conformity with the EPA's Renewable Fuel Standard Program. 37 Table of Contents Inflation Reduction Act The IRA, enacted in August 2022, features spending and tax incentives on clean energy provisions.
Operating Statistics Revenue (in millions) Quantities Sold and Transported (Dth in millions) For the year ended December 31, For the year ended December 31, 2023 2022 2021 2023 2022 2021 Residential $ 839.2 $ 940.2 $ 613.5 60.1 66.9 60.1 Commercial 340.1 398.6 242.1 29.4 32.4 29.1 Industrial 33.2 63.0 33.4 5.7 7.7 6.2 Other 9.1 8.7 3.8 — — — Total Distribution 1,221.6 1,410.5 892.8 95.2 107.0 95.4 Transportation and Transmission 177.5 174.1 158.8 159.8 160.9 154.6 Total Regulated 1,399.1 1,584.6 1,051.6 255.0 267.9 250.0 Non-regulated Services (a) 85.1 84.5 73.3 — — — Total Revenue and Quantities Sold $ 1,484.2 $ 1,669.1 $ 1,124.9 255.0 267.9 250.0 (a) Includes Black Hills Energy Services and non-regulated services under the Service Guard Comfort Plan, Tech Services and HomeServe.
Operating Statistics Revenue Quantities Sold and Transported For the year ended December 31, For the year ended December 31, By Customer Class 2024 2023 2022 2024 2023 2022 (in millions (Dth in millions) Retail Revenue - Residential $ 691.9 $ 830.3 $ 942.3 56.7 60.1 66.9 Commercial 266.3 337.3 399.2 28.4 29.4 32.4 Industrial 23.7 33.1 63.0 6.0 5.7 7.7 Other Retail (a) 40.7 48.1 48.8 — — — Subtotal Retail Revenue - Gas (b) 1,022.6 1,248.8 1,453.3 91.1 95.2 107.0 Transportation 178.2 176.8 173.3 159.2 159.8 160.9 Other (c) 68.6 58.6 42.5 — — — Total Revenue and Quantities Sold $ 1,269.4 $ 1,484.2 $ 1,669.1 250.3 255.0 267.9 (a) Includes Black Hills Energy Services revenue under the Choice Gas Program.
Colorado Electric has achieved a nearly 50% reduction in GHG emissions since 2005 and is on track to reach the State of Colorado’s 80% carbon reduction goal by 2030. Our goals are based on prudent and proven solutions to reduce our emissions while minimizing cost impacts to our customers.
Additionally, we have reduced our electric utility GHG emissions by nearly one-third since 2005 and are on track to achieve our goals to reduce electric emissions intensity by 40% by 2030 and 70% by 2040 compared to 2005. Our goals are based on prudent and proven solutions to reduce our emissions while minimizing cost impacts to our customers.
The new Equity Distribution Sales Agreement is similar to our prior agreement and allows us to sell shares of common stock up to an aggregate of $400 million through our ATM program utilizing our shelf registration statement. As of December 31, 2023, we have $329 million available to issue under this program.
In 2025, we plan to renew our Equity Distribution Sales Agreement and assess the renewal of our shelf registration statement. Our Equity Distribution Sales Agreement allows us to sell shares of common stock, from time to time, through our ATM program utilizing our shelf registration statement.
See Note 8 of the Notes to Consolidated Financial Statements in this Annual Report on Form 10-K for recent updates regarding our shelf registration statement. Short-term Debt We have a $750 million Revolving Credit Facility that matures on July 19, 2026, with two one-year extension options (subject to consent from lenders).
Short-term Debt We have a $750 million Revolving Credit Facility that matures on May 31, 2029, with two one-year extension options (subject to consent from lenders).
How we operate our company for the social good has never been more important. We are committed to cleaner energy and a low carbon future, integrating the Energy Transition and more renewable energy into our overall strategy and decision making.
A critical component of our strategy involves sustainable operations and reducing emissions. We are committed to cleaner energy and a low carbon future, integrating the Energy Transition and more renewable energy into our overall strategy and decision making. We strongly believe that multiple energy sources, working together, will provide the solutions for a cleaner and resilient energy future.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeWinter Storm Uri), geopolitical events, market speculation, recession, inflation, pipeline constraints, and other factors that may impact natural gas and electric energy supply and demand; and • Interest rate risk associated with future debt, including reduced access to liquidity during periods of extreme capital markets volatility, such as the 2008 financial crisis and the COVID-19 pandemic.
Biggest changeMarket fluctuations may occur due to unpredictable factors such as weather, wildfires, geopolitical events, pandemics, market speculation, recession, inflation, pipeline constraints, and other factors that may impact natural gas and electric energy supply and demand; and • Interest rate risk associated with future debt, including reduced access to liquidity during periods of extreme capital markets volatility.
At December 31, 2023 and 2022, a 10% change in market prices for our derivative instruments would not materially impact pre-tax income, the fair values of our derivative assets and liabilities, or OCI. See additional commodity risk and derivative information in Note 9 of the Notes to Consolidated Financial Statements in this Annual Report on Form 10-K.
At December 31, 2024, and 2023, a 10% change in market prices for our derivative instruments would not materially impact pre-tax income, the fair values of our derivative assets and liabilities, or OCI. See additional commodity risk and derivative information in Note 9 of the Notes to Consolidated Financial Statements in this Annual Report on Form 10-K.
Interest Rate Risk Periodically, we have engaged in activities to manage risks associated with changes in interest rates. We have utilized pay-fixed interest rate swap agreements to reduce exposure to interest rate fluctuations associated with floating rate debt obligations and anticipated debt refinancings. At December 31, 2023, we had no interest rate swaps in place.
Interest Rate Risk Periodically, we have engaged in activities to manage risks associated with changes in interest rates. We have utilized pay-fixed interest rate swap agreements to reduce exposure to interest rate fluctuations associated with floating rate debt obligations and anticipated debt refinancings. At December 31, 2024, we had no interest rate swaps in place.
These policies relate to numerous matters including governance, control infrastructure, authorized commodities and trading instruments, prohibited activities and employee conduct. We report any issues or concerns pertaining to the Risk Policies and Procedures to the Audit Committee of our Board of Directors.
These policies relate to numerous matters including governance, control infrastructure, authorized commodities and trading instruments, prohibited activities, and employee conduct. We report significant issues or concerns pertaining to the Risk Policies and Procedures to the Audit Committee of our Board of Directors.
See more information in Notes 1 and 9 of the Notes to Consolidated Financial Statements in this Annual Report on Form 10-K. 55 Table of Contents
See more information in Notes 1 and 9 of the Notes to Consolidated Financial Statements in this Annual Report on Form 10-K. 53 Table of Contents
A hypothetical 100 basis point increase in the benchmark rate on our variable rate debt would have increased annual pretax interest expense by approximately $0.9 million and $4.1 million for the years ended December 31, 2023 and 2022, respectively. See Note 8 for further information on cash amounts outstanding under short- and long-term variable rate borrowings.
A hypothetical 100 basis point increase in the benchmark rate on our variable rate debt would have increased annual pretax interest expense by approximately $0.3 million and $0.9 million for the years ended December 31, 2024, and 2023, respectively. See Note 8 for further information on cash amounts outstanding under short- and long-term variable rate borrowings.
Further details of past swap agreements are set forth in Note 9 of the Notes to Consolidated Financial Statements in this Annual Report on Form 10-K. At December 31, 2023, over 99% of our debt is fixed rate debt, which limits our exposure to variable interest rate fluctuations.
Further details of past swap agreements are set forth in Note 9 of the Notes to Consolidated Financial Statements in this Annual Report on Form 10-K. At December 31, 2024, 96.9% of our debt is fixed rate debt, which limits our exposure to variable interest rate fluctuations.
To manage such risk, we restrict wholesale off-system sales to amounts by which our anticipated generating capabilities and purchased power resources exceed our anticipated load requirements plus a required reserve margin. 54 Table of Contents Black Hills Energy Services To support our Choice Gas Program customers, we buy and sell natural gas at competitive prices by managing commodity price risk.
To manage such risk, we restrict wholesale off-system sales to amounts by which our anticipated generating capabilities and purchased power resources exceed our anticipated load requirements plus a required reserve margin. 52 Table of Contents Black Hills Energy Services Through our non-regulated natural gas commodity supplier, we buy and sell natural gas in Nebraska and Wyoming at competitive prices by managing commodity price risk.
Changes in the fair value of these commodity derivatives are recognized in the Consolidated Statements of Income. There is a potential risk that our wholesale power sales could exceed our current generating capacity, which may arise from unplanned plant outages or from unanticipated load demands.
Wholesale Power There is a potential risk that our wholesale power sales could exceed our current generating capacity, which may arise from unplanned plant outages or from unanticipated load demands.
Removed
Market fluctuations may occur due to unpredictable factors such as the COVID-19 pandemic, weather (e.g.
Removed
Wholesale Power We periodically have wholesale power purchase and sale contracts used to manage purchased power costs and load requirements associated with serving our electric customers that are considered derivative instruments and do not qualify for the normal purchase and normal sales exception for derivative accounting.

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