Black Hills Power

Black Hills Corporation

Company type	Public
Industry	Energy
Founded	1941
Headquarters	Rapid City , United States
Area served	Western United States (South Dakota, Montana, Wyoming, Colorado, Arkansas, Kansas, Nebraska, Iowa)
Products	Electric and gas utility services; coal mining; oil and gas reserves

Black Hills Corporation is a diversified American energy firm that functions as an electric and gas utility provider across multiple states including South Dakota, Montana, Wyoming, Colorado, Arkansas, Kansas, Nebraska, and Iowa. Headquartered in Rapid City, South Dakota, the company primarily serves the western United States and derives its name from the Black Hills area in South Dakota.

History

The company's roots trace back to 1883 with the establishment of the Black Hills Electric Light Company of Deadwood. In 1905, it merged with the Belt Light and Power Company of Lead, resulting in the formation of the Consolidated Power and Light Company of South Dakota. Meanwhile, Dakota Power Company began operations in Rapid City in 1910. Both entities were acquired by holding companies during the 1920s. In 1941, prompted by Roosevelt-era legislation targeting the breakup of large utility holding companies, Black Hills Power & Light Company was created by merging assets from General Public Utilities, Inc. and Dakota Power Company, thereby supplying electricity to much of western South Dakota.

A significant expansion into mining and energy resources occurred in 1956 when Black Hills acquired the Wyodak Coal Company (currently known as Wyodak Resources Development Corporation) from Homestake Mining Company.

In July 2002, Black Hills resolved matters with the U.S. Commodity Futures Trading Commission concerning its marketing division, Enserco Energy, Inc., which handles natural gas marketing for wholesale markets and independent producers. Later that year, Deloitte & Touche LLP completed audits covering Black Hills' financial records from 1999 through 2001.

The acquisition of Cheyenne Light from Xcel Energy took place in 2004, with the utility retained as a distinct subsidiary. Subsequently, in July 2008, Black Hills finalized a deal initiated in 2007 to purchase natural gas utilities across Colorado, Kansas, Nebraska, Iowa, as well as electric utilities in Colorado from Aquila, Inc.. This transaction expanded its customer base from 137,000 to 753,000 and increased employee numbers from 916 to approximately 2,000.

In July 2015, Black Hills completed the $1.89 billion acquisition of SourceGas, adding nearly 425,000 customers located in Arkansas, Colorado, Nebraska, and Wyoming. The purchase also included a regulated natural gas pipeline extending 512 miles within Colorado.

Toward the end of 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 project was projected to create around 400 jobs and consume about 500,000 tons of steel annually sourced from Nucor Steel.

In March 2018, Black Hills publicly rejected an unsolicited $1.1 billion acquisition proposal from San Isabel Electric Association based in Colorado by placing an advertisement affirming its intention to remain independent.

Pueblo, Colorado pushback

Since 2008, Black Hills Energy’s presence in Pueblo has encountered resistance largely due to four separate rate increases between 2010 and 2018 that cumulatively approached a 50% rise. Despite this opposition, voters approved a twenty-year franchise agreement with the company in 2010.

Julie Rodriguez—program manager for community affairs and economic development within Black Hills Energy’s Colorado electric division—outlined the company’s priorities: "Our primary goals are to identify an energy resource that is cost effective for our customers, while also generating sufficient renewable energy to comply with the Colorado… requirements." In June 2017, Black Hills issued requests for proposals seeking up to 60 megawatts of renewable energy sources such as wind and other carbon-neutral or recycled options to fulfill its commitments under the 2016 Electric Resource Plan and the Renewable Energy Standard Compliance Plan for 2018-2021 approved by the Colorado Public Utilities Commission.

By mid-2017, approximately 19% of Black Hills Energy’s electricity supplied in Colorado came from renewable sources; the balance was generated using natural gas. To address increasing demand alongside state mandates requiring at least 30% renewable energy generation by 2020, investments have been made into new natural gas plants as well as wind and solar installations. Rodriguez stressed their dedication to "developing renewable energy at a reasonable cost" while ensuring safe and reliable service delivery.

In August 2018, Pueblo’s city council unanimously agreed to allocate $122,000 toward hiring a consulting firm—chosen from eight candidates—to investigate options for early termination of the franchise agreement with Black Hills Energy. This move raised the possibility of establishing a municipal energy utility. A preliminary report was anticipated by November 2018 with final recommendations expected by January 2019.

Components

The company provides electric utility services to 64,200 customers spanning from Rapid City, South Dakota to Newcastle, Wyoming, as well as southeastern Montana, through its subsidiary Black Hills Power. Its other subsidiary, Cheyenne Light, Fuel & Power Company, caters to 80,000 customers located in Cheyenne, Wyoming and the surrounding southeastern Wyoming region. Operating under the name Black Hills Energy, the firm manages a total generating capacity of 1,000 MW distributed across Colorado, Nevada, Wyoming, and California, which includes two power plants supplying Las Vegas, Nevada. The wholesale energy segment represents the company’s largest operational division.

At the heart of its assets lies the Wyodak Mine, situated near Gillette, Wyoming within the Powder River Basin. This mine holds the distinction of being the longest-running surface coal mine in the United States and possesses permitted coal reserves amounting to 286 million tons. In addition to coal, the company maintains oil and gas reserves—comprising 76% natural gas—primarily concentrated in New Mexico, Colorado, and Wyoming.

See also

• List of S&P 400 companies