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: June 23, 1999
BLACK HILLS CORPORATION
State of South Dakota File Number 1-7978 IRS Number 46-0111677
625 Ninth Street
Rapid City, South Dakota 57709
Registrant's telephone number (605) 348-1700
Item 5. Other Events
BLACK HILLS CORPORATION'S ELECTRIC UTILITY OPERATIONS AGREE TO RATE FREEZE
Black Hills Corporation's electric utility operations, Black Hills
Power and Light Company (Company) has agreed to extend its rate freeze for South
Dakota retail customers until January 1, 2005, barring extraordinary
circumstances. The Company froze electric rates in 1995 when the Company's new
power plant, Neil Simpson Unit #2, was placed in service: the current rate
freeze ends January 1, 2000. The extension of the rate freeze was approved by
the South Dakota Public Utilities Commission on June 22, 1999.
The rate freeze is subject to the following terms and conditions:
1. The Company will not file any additional applications with the
Commission, which would result in an increase in revenues for the
period between January 1, 2000 through December 31, 2004 ("Rate Freeze
Period"); provided, however, that the Rate Freeze Period does not
prevent the Company for filing for a rate increase subsequent to
January 1, 2005, or from filing for a rate increase if the Company's
cost of service is expected to increase as a result of an
"Extraordinary Event" as defined below, nor is the Rate Freeze Period
intended to prohibit the Company from filing a rate application that
requests changes in rates for reasons other than to obtain a general
rate increase.
An Extraordinary Event is defined as the occurrence of one of the
following:
(a) New federal, state or local governmental requirements or
governmental charges, including, but not limited to, income
taxes, taxes or charges imposed on energy, emissions,
environmental externalities or reclamation obligations,
imposed after January 1, 2000, upon the Company or its
subsidiary, Wyodak Resources Development Corp. that project to
cause the Company's cost of service to South Dakota customers
to increase in an material amount. Increases in the cost of
service of less than $2,000,000 will be presumed not to be
material for the purposes of this paragraph.
(b) Forced outages, caused by an act of nature or criminal
activity or resulting from fire or explosion from any cause,
occurring to both the Wyodak Plant and Neil Simpson Unit #2
which are projected to continue simultaneously over a period
exceeding 60 days.
(c) Forced outage occurring to either the Wyodak Plant or Neil
Simpson Unit #2 which has continued for a period of three
months and is projected to be nine months or more.
(d) The Consumers Price Index, All Urban, as compiled by the
United States Department of Labor increases to a monthly rate
for six consecutive months which if continuing for the
following six months would result in a 10 percent or more
annual inflation rate.
(e) The loss of a South Dakota customer or revenue from an
existing South Dakota customer that, if projected, would
result in a loss of revenue to the Company of $2,000,000 or
more during any 12-month period.
(f) The cost of coal to the Company's South Dakota customers
increases and is projected to increase by more than $2,000,000
over the cost of the most recent calendar year.
(g) Electric deregulation as a result of either federal or state
mandate which allows any customer of the Company to choose its
provider of electricity at any time during the Rate Freeze
Period.
2. The Company shall not include a fuel and purchased power adjustment
tariff, nor make any application to reinstate a fuel and purchased
power adjustment tariff to take effect prior to January 1, 2005, except
if any Extraordinary Event occurs.
3. The Company shall continue to retain without adjustment to rates
charged its South Dakota customers all revenues and benefits realized
from the sale of wholesale capacity and energy.
4. The Company may effect a transfer and/or assignment of any right it has
in any sale of wholesale capacity and energy without review of the
consideration, subject to the Commission reviewing the reasonableness
and prudency of such actions in any subsequent general rate proceeding
which is initiated with the intent to raise or reduce rates.
5. The Company may enter into power purchase transactions or power
resource transfers with its affiliated exempt wholesale generator,
subject to the Commission's review for reasonableness and prudency in
any subsequent general rate proceeding which is initiated with the
intent to raise or reduce rates.
6. The Commission shall have the right in its discretion to adjust rates
if there is any material reduction in federal, state, or local taxes
occur which is projected to be material to the Company's cost of
service for its South Dakota customers. Decreases in the cost of
service of less than $1,000,000 are deemed to be not material for this
purpose.
Item 7c. Exhibits
Exhibit 99 Black Hills Corporations News Release announcing its agreement
to a five-year rate freeze.
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/ Roxann R. Basham
Roxann R. Basham, Vice President -
Finance and Principal Financial Officer
Dated June 23, 1999