RAPID CITY, S.D., June 01, 2021 (GLOBE NEWSWIRE) -- Black Hills Corp. (BKH) - Get Black Hills Corporation Report today announced that its natural gas utility subsidiaries in Colorado and Iowa separately filed rate review applications to recover investments made in natural gas infrastructure systems in their respective states. These critical investments were required to meet system growth, ensure the safe and reliable delivery of natural gas to customers' homes and businesses, and meet compliance requirements of state and federal regulations.
The importance of these investments was recently demonstrated by the excellent performance of Black Hills' pipeline systems to serve extraordinary demand during the extreme cold conditions of the polar vortex and Winter Storm Uri in February. These investments in replacing and upgrading pipeline materials have also contributed to more than a one-third reduction in greenhouse gas emissions intensity for the company's pipeline systems since 2005.
Black Hills Colorado Gas Rate Review Request
Black Hills Colorado Gas, Inc., doing business as Black Hills Energy, filed a rate review application with the Colorado Public Utilities Commission requesting $14.6 million in new annual revenue. From July 2018 through year-end 2020, the company has invested $144 million in replacing, upgrading and expanding its natural gas system in the state. The more than 7,000 miles of natural gas transmission and distribution pipeline provide the critical infrastructure required to meet the growing needs of its 194,000 Colorado customers.
As filed, the rate review is requesting a capital structure of 50.26% equity and 49.74% debt and a return on equity of 9.95%. The company is seeking to implement new rates in the first quarter of 2022.
Black Hills Iowa Gas Rate Review Request
Black Hills / Iowa Gas Utility Company, LLC, doing business as Black Hills Energy, filed a rate review application with the Iowa Utilities Board requesting $8.3 million in new annual revenue. The company has invested over $250 million in safety, reliability and system integrity in its more than 5,000-mile natural gas pipeline system in Iowa since its last rate review filing more than 10 years ago.
Black Hills Energy is also seeking to implement a five-year System Safety and Integrity Rider to prioritize safety-focused investments using a consistent, long-term approach to benefit customers and allow the company to recover its capital investments in these infrastructure upgrades. The rider will also support the company's clean energy goals for reducing greenhouse gas emissions.
If approved as filed, the request will shift approximately $2.2 million of rider revenue to base rates and generate approximately $8.3 million per year in additional revenue. The request is based on a capital structure of 50% equity and 50% debt and a return on equity of 10.15%. Black Hills Energy will implement interim rates beginning June 11, subject to adjustment or refund. The company is seeking to implement final rates in the first quarter of 2022.
"These rate review requests reflect our commitment to our customers for safe and reliable service and to support economic growth in Colorado and Iowa," said Linn Evans, president and CEO of Black Hills Corp. "These investments are also critical in helping meet our clean energy goals while ensuring that our customers continue to have natural gas as an energy choice."
Black Hills Corp.Black Hills Corp. (BKH) - Get Black Hills Corporation Report is a customer focused, growth-oriented utility company with a tradition of improving life with energy and a vision to be the energy partner of choice. Based in Rapid City, South Dakota, the company serves 1.3 million natural gas and electric utility customers in eight states: Arkansas, Colorado, Iowa, Kansas, Montana, Nebraska, South Dakota and Wyoming. More information is available at www.blackhillscorp.com.
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Caution Regarding Forward Looking StatementThis news release includes "forward-looking statements" as defined by the Securities and Exchange Commission, or SEC. We make these forward-looking statements in reliance on the safe harbor protections provided under the Private Securities Litigation Reform Act of 1995. All statements, other than statements of historical facts, included in this news release that address activities, events or developments that we expect, believe or anticipate will or may occur in the future are forward looking statements, including anticipated revenues from the new rate increases, approval for the rider request and our ability to deliver an appropriate return to investors. These forward-looking statements are based on assumptions which we believe are reasonable based on current expectations and projections about future events and industry conditions and trends affecting our business. However, whether actual results and developments will conform to our expectations and predictions is subject to a number of risks and uncertainties that, among other things, could cause actual results to differ materially from those contained in the forward-looking statements, the risk factors described in Item 1A of Part I of our 2020 Annual Report on Form 10-K filed with the SEC, and other reports that we file with the SEC from time to time.
New factors that could cause actual results to differ materially from those described in forward looking statements emerge from time-to-time, and it is not possible for us to predict all such factors, or the extent to which any such factor or combination of factors may cause actual results to differ from those contained in any forward-looking statement. We assume no obligation to update publicly any such forward-looking statements, whether as a result of new information, future events or otherwise.