false0001130464 0001130464 2019-11-04 2019-11-04

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 8-K

CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
	Date of Report (Date of earliest event reported)	November 4, 2019

Black Hills Corporation
(Exact name of registrant as specified in its charter)
South Dakota
(State or other jurisdiction of incorporation)

001-31303		46-0458824
(Commission File Number)		(IRS Employer Identification No.)
7001 Mount Rushmore Road	Rapid City	South Dakota	57702
(Address of principal executive offices)			(Zip Code)
	(605)	721-1700
(Registrants telephone number, indicating area code)
Not Applicable
(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

☐		Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐		Soliciting materials pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐		Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(d))
☐		Pre-commencement communications pursuant to Rule 13e-e(c) under the Exchange Act (17 CFR 240.13e-4(c)

Securities registered pursuant to Section 12(b) of the Act:
Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common stock of $1.00 par value	BKH	New York Stock Exchange

Indicate by check mark whether the Registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o

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Item 2.02    Results of Operations and Financial Condition

On Nov. 4, 2019, Black Hills Corporation ("the Company") issued a press release announcing financial results for the third quarter of 2019.

The press release is attached as Exhibit 99 to this Form 8-K. This information is being furnished pursuant to Item 2.02 of Form 8-K and shall not be deemed to be "filed" for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, except as shall be expressly set forth by specific reference in such filing.

Item 9.01    Financial Statements and Exhibits.

(d)	Exhibits

The following exhibits are furnished or filed herewith:

99	Press Release dated November 4, 2019
101.SCH	XBRL Taxonomy Extension Schema Document
101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF	XBRL Taxonomy Extension Definition Linkbase Document
101.LAB	XBRL Taxonomy Extension Label Linkbase Document
101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document
104	Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibits 101.*)

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

BLACK HILLS CORPORATION

By: /s/ Richard W. Kinzley    

Richard W. Kinzley

Senior Vice President

and Chief Financial Officer

Date: Nov. 4, 2019

•	Capital investment forecast for 2019 through 2023 increased by $148 million

•	Guidance for 2019 EPS, as adjusted, narrowed to a range of $3.45 to $3.55

•	Guidance for 2020 EPS, as adjusted, narrowed to a range of $3.55 to $3.75

•	Quarterly dividend increased 5.9 percent to $0.535 per share

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•	On Sept. 17, South Dakota Electric completed construction on the final 94-mile segment of a 175-mile electric transmission line from Rapid City, South Dakota, to Stegall, Nebraska. The first 48-mile segment was placed in service on July 25, 2018, and the second 33-mile segment was placed in service on Nov. 20, 2018.

•	On July 19, Colorado Electric set a new all-time peak load of 422 megawatts, surpassing the previous peak of 413 megawatts set in July 2018.

•	On July 19, Wyoming Electric set a new all-time peak load of 265 megawatts, surpassing the previous peak of 254 megawatts set in July 2018.

•

In July, South Dakota Electric and Wyoming Electric received approvals for the Renewable Ready Service Tariffs and related jointly-filed certificate of public convenience and necessity to construct the $57 million, 40-megawatt Corriedale Wind Energy Project. The wind project will be jointly owned by the two electric utilities to deliver renewable energy for large commercial, industrial and governmental agency customers. The project is expected to be in service by year-end 2020. In September, the customer subscription period was completed with customer interest exceeding the 40 megawatts of available energy. On Nov. 1, South Dakota Electric filed with the South Dakota Public Utilities Commission an amendment seeking approval to increase the generating capacity under the tariff for the South Dakota portion by 12.5 megawatts to a total of 32.5 megawatts.

•	Black Hills’ natural gas utility subsidiaries continued to consolidate utility jurisdictions within the states of Colorado, Nebraska and Wyoming.

◦	On Oct. 29, Nebraska Gas received approval from the Nebraska Public Service Commission to merge its two natural gas distribution companies in Nebraska. Consolidation is expected to be effective Jan. 1, 2020. A rate review is expected to be filed by mid-year 2020 to consolidate the rates, tariffs and services of its two existing natural gas distribution companies.

◦

On June 3, Wyoming Gas filed a rate review application with the Wyoming Public Service Commission to consolidate the rates, tariffs and services of its four existing gas distribution territories in Wyoming. The rate review requests $16 million in new revenue to recover investments in safety, reliability and system integrity. Wyoming Gas is also requesting a new rider mechanism to recover future safety and integrity investments in its system. A settlement was recently reached with the intervening parties in the rate review filing and filed with the Wyoming Public Service Commission on Nov. 1. The stipulation and agreement are subject to review and approval by the commission, with a decision expected by year-end.

◦

During the third quarter, Colorado Gas continued progress on its rate review application to consolidate rates, tariffs and services of its two existing gas distribution territories in Colorado. The rate review requests $2.5 million in new revenue to recover investments in safety, reliability and system integrity. Colorado Gas is also requesting a new rider mechanism to recover future safety and integrity investments in its system. A decision from the Colorado Public Utilities Commission is expected by the end of the first quarter of 2020.

•

During the third quarter, Wyoming Gas continued construction on the $54 million, 35-mile Natural Bridge pipeline project to enhance supply reliability and delivery capacity for customers in central Wyoming. The new 12-inch steel pipeline will interconnect from a supply point near Douglas, Wyoming, to existing facilities near Casper, Wyoming. Construction of the pipeline is nearly complete and the project is expected to be in service in the fourth quarter of 2019, with the associated investment included in the Wyoming Gas rate review filed on June 3, 2019.

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•

On Aug. 2, Black Hills Wyoming and affiliate Wyoming Electric jointly filed a request with the Federal Energy Regulatory Commission for approval of a new 60-megawatt power purchase agreement. If approved, Black Hills Wyoming will continue to deliver 60 megawatts of energy to Wyoming Electric from its Wygen I power plant starting Jan. 1, 2023, for 20 additional years. A decision from the FERC is pending.

•

During the third quarter, Black Hills Electric Generation continued construction of the $71 million, 60-megawatt Busch Ranch II Wind Farm near Pueblo, Colorado. The project is expected to be fully in service by mid-November. Through a competitive bidding process, Black Hills Electric Generation was selected to deliver renewable energy under a 25-year power purchase agreement to its Black Hills electric utility affiliate in Colorado.

•	In October, negotiations were completed for the price reopener in the contract with the Wyodak power plant. The new price was reset at $17.94 per ton effective July 1, 2019, compared to the prior contract price of $18.25 per ton.

•	Effective Nov. 1, Black Hills appointed Tony A. Jensen and Kathleen S. McAllister to its board of directors. In anticipation of previously announced future board retirements, the board also temporarily increased the size of the board from 10 to 12 directors.

•	On Oct. 29, Black Hills’ board of directors approved a 5.9 percent, or $0.03 per share, increase in the quarterly dividend. Shareholders of record on Nov. 18, 2019, will receive $0.535 per share payable on Dec. 1, 2019. The annual payout of $2.05 in 2019 represents 49 consecutive years of dividend increases.

•	On Oct. 3, Black Hills issued $400 million of 3.05 percent 10-year senior notes due 2029 and $300 million of 3.875 percent 30-year senior notes due 2049. Proceeds were used to repay the $400 million corporate term loan due 2021, retire the $200 million 5.875 percent senior notes due 2020 and repay a portion of short-term debt.

•	During the third quarter, Black Hills issued a total of 389,237 shares of common stock under its at-the-market equity offering program for net proceeds of $30 million. Year to date, the company has issued a total of 1,328,332 shares of common stock for net proceeds of $99 million under this program. Issuance under the program is complete for 2019.

•	On Aug. 29, Fitch Ratings reaffirmed its corporate credit rating of Black Hills Corp. at BBB+, maintaining a stable outlook.

•

In the third quarter, Black Hills recorded a non-cash, pre-tax $20 million impairment of its investment in a minority ownership interest in a third-party, privately held oil and gas company. This investment was received in exchange for contributing $28 million of assets in early 2018. This contribution represented the final assets of the divestiture of the oil and gas business. The impairment was triggered by a deterioration in earnings performance in the third party oil and gas company and an adverse change in future natural gas prices. The remaining book value of the investment is $8 million.

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(a)	In 2019, we changed our segment measure of performance to Adjusted operating income.

(b)	Adjusted operating income removes the impacts of finance lease accounting relating to the 20-year PPA between Black Hills Colorado IPP and Colorado Electric for the Electric Utilities and Power Generation segments and Corporate and Other. These changes had no impact on consolidated financial results.

(c)	Income tax benefit (expense) for the nine months ended Sept. 30, 2018 included a $49 million tax benefit resulting from legal entity restructuring.

(d)	Income tax benefit (expense) for the three and nine months ended Sept. 30, 2018 included approximately $5.3 million and $7.5 million, respectively, of income tax expense associated with changes in the prior estimated impact of tax reform on deferred income taxes.

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•	Capital spending of $820 million in 2019;

•	No further equity issuances in 2019 through our at-the-market equity offering program;

•	Normal weather conditions for the remainder of the year within our utility service territories including temperatures, precipitation levels and wind conditions;

•	Normal operations and weather conditions for the remainder of the year for planned construction, maintenance and/or capital investment projects;

•	Completion of utility regulatory dockets;

•	Completion of construction and placing in service the Busch Ranch II wind energy project and Natural Bridge pipeline project by year-end 2019;

•	No significant unplanned outages at any of our facilities; and

•	No significant acquisitions or divestitures.

*

Earnings per share from continuing operations, as adjusted, is defined as GAAP Earnings per share from continuing operations, adjusted for expenses and gains that the company believes do not reflect the company’s core operating performance. Examples of these types of adjustments may include unique one-time events, impairment of assets, and acquisition and disposition costs. The company is not able to provide forward-looking quantitative GAAP to non-GAAP reconciliation for the 2019 earnings guidance, as adjusted, because we do not know the unplanned or unique events that may occur.

•	Capital spending of $820 million and $623 million in 2019 and 2020, respectively;

•	Normal weather conditions within our utility service territories including temperatures, precipitation levels and wind conditions;

•	Normal operations and weather conditions for planned construction, maintenance and/or capital investment projects;

•	Completion of utility regulatory dockets;

•	Complete construction and place in service the Busch Ranch II wind energy project and Natural Bridge pipeline project by year-end 2019 and Corriedale Wind Energy Project by year-end 2020;

•	No significant unplanned outages at any of our facilities;

•	No further equity issuances in 2019 and $80 million to $100 million of equity issuances in 2020 through our at-the-market equity offering program; and

•	No significant acquisitions or divestitures.

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•	The accuracy of our assumptions on which our earnings guidance is based;

•	Our ability to obtain adequate cost recovery for our utility operations through regulatory proceedings and favorable rulings on periodic applications to recover costs for capital additions, plant retirements and decommissioning, fuel, transmission, purchased power, and other operating costs and the timing in which new rates would go into effect;

•	Our ability to complete our capital program in a cost-effective and timely manner;

•	Our ability to execute our utility jurisdiction consolidation plan;

•	The impact of future governmental regulation; and

•	Other factors discussed from time to time in our filings with the SEC.

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