Black Hills Corporation (NYSE:BKH) Q3 2023 Earnings Call Transcript

Linden Evans: Yeah. Lots of things to unpack there, Julien. I’ll do my best. This is Lind speaking again. Starting with our load growth, we’re still seeing and migration of customers into our territories. We’ve been seeing very strong, nice immigration that continues. We’re seeing data center expansions. We’ve mentioned in our opening comments about the mine one, the blockchain mining organization that we are now serving. They’ve exercised their option to expand that. Not a huge impact in ’24, but the point is those kinds of customers are growing for us. You mentioned the Clean Energy Plan and our IRP, at least I think you mentioned both of them. In South Dakota, we asked for a design build, build transfer contracts and so that’s what we are currently negotiating with those bidders.

So we believe we’ll be owning those assets in the long term. We’ve visited with our South Dakota commissioners about the advantage of ownership versus PPAs. We think they understand that well. With the Clean Energy Plan, we’re watching what’s happening with our counterpart Excel closely. They are ahead of us at least about six months. So we’re watching that closely. We have about 400 megawatts that we intend to add there. And as the statute says, we can own up to 50% of that reasonable cost. So we have lots of bids for that, that we’re evaluating currently very strong bids. We’ll be refiling our reports relatively soon with the commission. And I might look to Marne to see if you have something to add to that, Marne.

Marne Jones: Just a couple of additional comments on that, Julien. So in South Dakota for that build transfer, we are planning to have that in service in mid-2026. So just to give you some time frame on that. And then for the Colorado resources, those will be in service between 2026 and 2029. That will drive us to meet our clean energy plan requirements of the 80% reduction by 2030. The other asset I do want to mention too, just follow up on is our Ready Wyoming asset. So that is currently underway and permitting is in progress from a land rights of way. That asset is expected to be in service by year-end 2025.

Julien Dumoulin-Smith: Got you. Excellent. And then last little twist here. On the equity, obviously, a number of further projects you’ve already got done a good chunk of the ACM here. But still, how do you think about resolving needs that are created or expected in ’24 and/or the remainder of ’23? Do you think continue to leverage ATM or given increasing size here, pursue other avenues?

Kimberly Nooney: Yeah, Julien. We obviously look at all opportunities. It could include our ATM. It could include block trade opportunities. I just want to be clear, this year’s equity was specifically focused on strengthening our balance sheet. As we move forward, obviously, you heard Lind and Marne talk a lot about our capital growth opportunities as we think about capital going forward, it’s focused on maintaining BBB+ credit quality. So it really is going to depend on timing and what those opportunities look at that point. But we do expect equity in the future to finance our future growth opportunities from a capital investment perspective.

Julien Dumoulin-Smith: Awesome. Thank you. All right. Thank you, guys. All the best.

Linden Evans: Thank you, Julien.

Kimberly Nooney: Thank you.

Operator: Thank you. [Operator Instructions] And our next question comes from Willard Grainger with Mizuho. You may proceed.

Willard Grainger: Hi. Good morning.

Linden Evans: Good morning.

Willard Grainger: Thanks for taking my question. I just wanted to touch on the rate review progress. Are there any other rate cases that you’re looking at for 2024 that we should be thinking about besides Arkansas Gas?

Todd Jacobs: They’re currently under review. It’s nothing that we are publicly disclosing at this point. So just to recap the cases that we have in progress right now, ’23 are in Wyoming, Colorado, and we’ve indicated filing in Arkansas. We expect to file about three a year but we haven’t specifically identified jurisdictions.