Black Hills Corp to invest $2.9 bln through 2023, consolidate utilities and embrace wind

Published on November 12, 2019 by Chris Galford


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Black Hills Corporation announced it expected the company to spend $2.9 billion on capital investments through 2023 as it establishes new transmission lines, invests more heavily in renewables and navigates regulatory consolidation.

A natural gas and electric utility company that serves 1.2 million customers, Black Hills’ territory spans Arkansas, Colorado, Iowa, Kansas, Montana, Nebraska, South Dakota and Wyoming. The company’s operations provide 46,000 miles of natural gas gathering and transmission lines, as well as storage and distribution systems, and 1.1 gigawatts of electric generation to customers.

Black Hills’ latest expectations were presented on Tuesday at the 2019 Edison Electric Institute (EEI) Financial Conference in Orlando, Fla., and were primarily split into three areas: electric utilities, natural gas utilities and power generation/mining.

The first yielded large successes, including a new, 94-mile segment of a 175-mile transmission line put into service earlier this year. At the same time, the company is investing $57 million into a wind project near Cheyenne, Wyoming. Currently expected to reach 40 megawatts (MW), the Corriedale Wind Energy Project could expand to 52 MW once complete. It’s part of a larger, renewable energy subscriber effort known as Renewable Ready, which will provide a voluntary tariff system for large commercial and industrial customers in South Dakota and Wyoming, along with governmental agencies. Both utilities in the region, South Dakota Electric and Wyoming Electric, have received approval for the program.

Black Hills is also focused on energy efficiency efforts throughout its territory.

“We have programs in each one of our states both in electric and gas that have been highly successful, primarily focused on the customer,” Lindon Evans, president & CEO of Black Hills Corp., said.

Elsewhere, Black Hills’ natural gas efforts include a lot of consolidation and a new pipeline. The $54 million Natural Bridge Pipeline natural gas transmission line project is in Wyoming and its full 35-mile span is nearly complete. Once complete, the pipeline will expand supply reliability and capacity in the area.

Wyoming is also one of three states, along with Nebraska and Colorado, where Black Hills owns and operates multiple natural gas distribution utilities. As a result, the company has undertaken a corporate-wide effort to consolidate the assets, liabilities and operations of the utilities into a single utility structure in each state.

According to information supplied by Black Hills, on Nov. 1, Wyoming Gas filed a settlement agreement for its consolidated rate review, which is subject to commission approval. A decision on that review is expected by year-end. On Oct. 29, Nebraska Gas received approval for a legal consolidation, which is expected to become effective on Jan. 1, 2020. The company plans to file a consolidated rate review in mid-year 2020. Additionally,, a decision on the Colorado Gas consolidated rate review is expected in the first quarter of 2020.

Meanwhile, Black Hills has submitted a request to the Federal Energy Regulatory Commission (FERC) for a 60 MW, 20-year power purchase agreement through which Black Hills Wyoming would supply Wyoming Electric, beginning on Jan. 1, 2023. A similar, 25-year power purchase agreement in Colorado is expected to bring 60 MW of wind generation to Colorado Electric beginning in mid-November, when work finishes on the Busch Ranch II Wind project near Pueblo, Colorado.

With the increase to $2.9 billion that they will spend in the coming years, an additional $148 million of that is going primarily to gas utilities.

Black Hills is also helping things along on the environmental front. According to company figures, the company reduced its CO2 generation figures by 16 percent over the last 14 years. And, as seen previously, it is investing more heavily in wind energy. While coal still plays a sizeable role in Black Hills’ electric generation, it is dominated by natural gas, and wind is making up an increasing share.