Black Hills Corporation
| Company type | Public |
|---|---|
| Industry | Energy |
| Founded | 1883 |
| Headquarters | Rapid City , United States |
Area served | South Dakota, Montana, Wyoming, Colorado, Arkansas, Kansas, Nebraska, Iowa |
| Products | Electric and gas utility services; coal mining; oil and gas production |
Black Hills Corporation is a diversified energy firm headquartered in Rapid City, South Dakota, providing electric and gas utility services across South Dakota, Montana, Wyoming, Colorado, Arkansas, Kansas, Nebraska, and Iowa. It distributes electricity throughout the western United States.
History
The company traces its roots back to 1883 with the establishment of the Black Hills Electric Light Company of Deadwood. In 1905, it combined with the Belt Light and Power Company of Lead to create the Consolidated Power and Light Company of South Dakota. By 1910, the Dakota Power Company began serving customers in Rapid City. Following regulatory reforms during the Roosevelt administration aimed at breaking up large utility holding companies, the Black Hills Power & Light Company was formed in 1941 by consolidating assets from General Public Utilities, Inc. and Dakota Power Company, thereby covering most of western South Dakota.
In 1956, Black Hills expanded into mining, oil, and gas sectors through acquiring the Wyodak Coal Company (currently known as Wyodak Resources Development Corporation) from Homestake Mining Company.
A settlement was reached in July 2002 with the U.S. Commodity Futures Trading Commission concerning Enserco Energy, Inc., Black Hills' natural gas marketing subsidiary that serves wholesale and independent producers. That same year, Deloitte & Touche LLP completed audits of Black Hills’ financial reports spanning 1999 to 2001.
Growth continued via acquisitions: in 2004, it acquired Cheyenne Light from Xcel Energy, retaining it as a separate subsidiary. A substantial purchase in 2008 involved Aquila, Inc.’s natural gas utilities across Colorado, Kansas, Nebraska, and Iowa, which expanded its customer base from 137,000 to 753,000 and workforce from 916 to 2,000 employees.
In July 2015, Black Hills completed a $1.89 billion acquisition of SourceGas, adding about 425,000 customers across Arkansas, Colorado, Nebraska, and Wyoming along with a regulated intrastate natural gas pipeline spanning 512 miles in Colorado.
By late 2016, the company announced plans for a $700 million investment to construct a one million square foot facility dedicated to drilling and pipe manufacturing in Norfolk, Nebraska. This site was projected to create around 400 jobs and source large quantities of steel from Nucor Steel.
In March 2018, Black Hills publicly declined a $1.1 billion unsolicited acquisition proposal from San Isabel Electric Association in Colorado by publishing a full-page newspaper statement affirming its intention to remain independent.
Pueblo, Colorado pushback
Since 2008, Black Hills Energy’s activities in Pueblo have encountered resistance largely due to four rate increases between 2010 and 2018 that cumulatively approached 50%. In 2010, local voters endorsed a two-decade franchise agreement with the company.
Julie Rodriguez, program manager for community affairs and economic development within Black Hills Energy’s Colorado electric division, highlighted the company’s approach: "Our key objectives are to secure an energy source that is economically viable for customers while also producing enough renewable energy to satisfy Colorado’s regulatory standards." In June 2017, Black Hills issued requests for proposals targeting up to 60 megawatts of renewable energy—including wind power and greenhouse gas-neutral sources—as part of its Electric Resource Plan (2016) and Renewable Energy Standard Compliance Plan for 2018-2021 approved by the Colorado Public Utilities Commission.
By mid-2017, renewable resources accounted for 19% of Black Hills Energy’s electricity generation; the remainder came from natural gas. To comply with Colorado’s mandate requiring a minimum of 30% renewable energy by 2020, the company has invested in natural gas plants alongside wind and solar projects. Rodriguez noted that advancing cost-effective renewables supports business expansion while maintaining dependable service.
In August 2018, Pueblo’s city council unanimously authorized a $122,000 contract with a consulting firm tasked with examining options for early termination of the franchise agreement with Black Hills and exploring the potential formation of a municipal utility. The study was scheduled to provide preliminary findings by November and final recommendations by January.
Components
The company provides services to 64,200 clients through its Black Hills Power division, spanning from Rapid City, South Dakota to Newcastle, Wyoming and parts of southeastern Montana. Its Cheyenne Light, Fuel & Power Company subsidiary supports 80,000 customers in Cheyenne, Wyoming and the surrounding southeastern Wyoming region. Via Black Hills Energy, the company manages 1,000 MW of power generation capacity distributed across Colorado, Nevada, Wyoming, and California, including two facilities supplying energy to Las Vegas, Nevada. The wholesale energy segment constitutes the largest portion of the company’s business.
A key asset is the Wyodak Mine, situated near Gillette, Wyoming in the Powder River Basin. This mine is recognized as the oldest active surface coal mine in the United States and has authorized reserves amounting to 286 million tons. Additionally, the company possesses oil and gas reserves totaling , predominantly natural gas (76%), with primary locations in New Mexico, Colorado, and Wyoming.