Black Hills Corporation

Black Hills Corporation supplies electricity and natural gas to about 1.37 million customers in eight states through businesses operating as Black Hills Energy. It is based in Rapid City, South Dakota, and trades as BKH on the New York Stock Exchange. Its electric utilities also own generation and mining operations that support their service businesses.

Financial record

Adjusted results exclude the after-tax costs of the pending NorthWestern merger, with rounding in the reconciliation. Q3 pretax merger costs were $3.1 million versus $8.4 million a year earlier. Electric operating profit rose to $76.9 million from $62.4 million; gas operating profit increased to $25.0 million from $20.8 million.

The annual adjusted EPS target remains $4.25 to $4.45, unchanged from August. It excludes merger-related costs, mark-to-market items and the proposed merger itself. The company continues to expect performance in the upper half of its existing long-term earnings-growth target, language already used in August.

Google and the transmission proposals

Black Hills signed agreements with Google and other partners on September 30, announced October 6, to serve a planned Cheyenne data center through 2048. It plans $1.8 billion of spending between 2027 and 2029 on 564 megawatts of company-owned natural-gas generation and will manage about 2.1 gigawatts of third-party resources.

The company expects generation returns to begin in 2027 and management-fee revenue in late 2027, with about $150 million of project-related net income in 2030. Its approximately $2.4 billion forecast for unlevered free cash flow is for the contract term through 2048, after the $1.8 billion generation investment.

Two transmission applications would add $686 million of investment. South Cheyenne, filed September 1, is estimated at $80 million, with construction phases entering service in late 2027 through 2028. Aeolus, filed November 2, is estimated at $606 million, with two lines spanning approximately 125 miles and completion expected by mid-2029. The company expects decisions on both applications in mid-2027.

A separate proposed tariff would recover transmission costs from the large customers benefiting from the infrastructure. Black Hills now expects a decision in Q1 2027. In August, it had said it requested approval by September 1, 2026, with a January 1, 2027 effective date.

Rates and projects already advancing

The November 4 South Dakota settlement provides $27.4 million of expected annual revenue. New rates begin in December and replace August interim rates. The utility originally requested $51 million of annual revenue. The settlement limits further base-rate increases until August 2030, with an extraordinary-event exception and additional regulatory mechanisms outside the moratorium.

A Wyoming settlement approved October 7 provides $4.0 million of expected annual revenue from December 1. Arkansas Gas rates effective October 12 provide $17.9 million. The 99-megawatt Lange II gas plant remains under construction, with service expected in Q4; recovery of its approximately $320 million cost through a separate rider is pending.

Cash and financing

Operating cash flow was $542.6 million in the first nine months versus $505.3 million a year earlier. Cash capital spending was $756.0 million versus $550.2 million. Operating cash less that spending was negative $213.4 million, compared with negative $44.9 million. The company also paid $160.2 million of common dividends and raised $68.9 million through its share-issuance program.

Cash and equivalents were $18.2 million at September 30; a separate $8.3 million was restricted. Carrying borrowings totaled $4,466.8 million. The company's broader total-debt measure was $4,865.6 million because it also includes $398.8 million of refundable Google advances due June 30, 2027.

Those advances appear in financing cash flow and are excluded from debt under the credit-facility covenant definition. The shared revolving credit and commercial-paper capacity was $750 million, with $684.8 million available after borrowings and letters of credit. Black Hills plans to refinance $400 million of senior notes due January 15, 2027.

The board declared a quarterly dividend of $0.703 a share, payable December 1 to holders of record November 17.

Pending merger and other transactions

The NorthWestern merger was agreed in August 2025. Each NorthWestern share would receive 0.98 Black Hills shares. Both sets of shareholders and the other required regulators have approved it; satisfactory Montana approval remains outstanding. The current statutory decision deadline is November 12, and the companies expect closing by year-end 2026.

If completed, Black Hills would become Bright Horizon Energy Corporation, trading as HZN, with NorthWestern as its subsidiary. BKH and NWE remain the tickers while the merger is pending. Black Hills has also agreed to sell a minority investment in a private oil and gas company, with closing expected in Q4; no gain or loss had been recognized through September.