BKH - Earnings call transcript Q1 2024 | Black Hills Corporation

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Operator

Good day, and thank you for standing by. Welcome to the Black Hills Corporation First Quarter 2024 Earnings Conference Call. [Operator Instructions]. Please be advised that today's conference is being recorded. I would now like to hand the conference over to Dave Soderquist, Investor Relations Manager. ahead. go Please

Dave Soderquist

Good First Liz. welcome Black to Thank XXXX morning, Earnings Corporation's Quarter Conference Hills you, and Call.

and the website You can call www.blackhillscorp.com our our our discussion President today materials and heading. are under quarterly and President, Senior in Growth at Vice Officer; Linden earnings find are Marne Utilities; our today this earnings Vice attendance Todd Strategy. Jones, and Senior Chief morning Executive Chief release Vice Investor Leading President Kimberly Relations Nooney, and Senior and Evans, Jacobs, Also Financial Officer. for on President,

would Before we Forum begin to Black today, the Association XX. we Hills attending will Financial American May Gas like be that of week the note

will will leadership website be event. to our meeting team the investor prior conference Our presentation posted be at on investors the with and an

make of discussion our as are by the earnings During and inherent and comments uncertainties a in defined today, there contain statements Commission, comments. Exchange Securities number forward-looking may we such

expectations on our that believe are actual we reasonable results differ based Although materially. may assumptions,

release, for of our could differ with you over investor website future our We will XX-K the on Lin presentation of list from Exchange our materially and that expectations. the of call Slide to recent and Commission Securities Form now to our XX-Q turn X the and the Form filed to factors will a some most direct cause earnings results I Evans.

Linden Evans

for be I'll his and and with to the career many in as Good family we about joining retire they chapter. announced strategic Thank us this today. wish has XX-plus mindset intends recently his guidance, thank General over by and all next hats Brian worn us insights their and Iverson, he think you, best begin all him year Dave. October. missed, will Brian's our congratulating who Counsel, morning, you and morning start strategic Brian to

family. started our to our next for his Counsel, but and have Brian congratulations We search General

quarter. to Todd Marne first strategic operational brief our quarter. our detail provide and off providing our more Let's progress. good X% of the provide our period transition on will share initiatives. increased results targets about last I Kimberly begin and overview Earnings a will delivering same operational financial our will regulatory stakeholders, for and excellent for advancing performance, I'll the update, our and and to We're Slide on the X. delivering compared great comments a growth start year. performance per on provide to financial our quarter

the interest our which margins. expense rates than headwinds benefited We management from execution margins rates. inflation New more successful regulatory offset of and and and warm plan, higher from weather, new delivered

strategically In range systems. our electric per interconnect achieve construction We goals. Electric XXX-day to of we continue the to report generation new We South emission Dakota, advance $X.XX provides we resources ready Plan, Wyoming of will transmission of recommending project XXX to our an plans. pursue renewable we of our We're of earnings the outlook. Clean In reliably XXX Slide to guidance megawatts needs The and our electric resources. continue electric filed battery our our report proposes utility-owned recently our Colorado Energy Wyoming, customers. support Dakota XXX of our share. resource South in of additional megawatts reduction reaffirming $X X continue own to financial transmission that growing serve Wyoming and our megawatts

confidence EPS achieving of opportunities in our Our growth to strong gives growth target X%. X% us long-term

Slide We X-year clarity to and shareholders half XXXX accelerate, and I'm customer and over to to we of in and We provide continue around successfully it With scorecard is for you, very our turn service how results advancing serve I'll in financial use each Kimberly transmission key plan pleased our especially hold our our center our objectives. growing accountable and other expect that, latter of our earnings X year strategic to stakeholders. this new for scorecard. the investments growth objectives to update. and strategic loads. as place to generation this data we're ourselves Kimberly?

Kimberly Nooney

and targets. a Lin, both strong you, good Thank everyone. operating morning, are from and to and efforts solid quarter achieve track first management our delivered contributions our margin We by driven segments expense on financial

shows and due We long-term continued achieve to target improve and expect of more strong services, Slide flows drivers to which of other offset O&M depreciation in reduction labor XX% to recovery, The operating outside year-end. costs, than the compared rider our lower our X to to debt impacts the ratio prior due drivers EPS higher by Higher an same per and combined of center period quarter $X.XX were lower positive blockchain $X.XX compared operating $X.XX in the assets. of more share expenses. in primarily costs expense. year. was per from rates year X%. earnings driven and share gain this of These sale by and last increase offset and financing XXXX, on noncore We weather to than warmer a per $X.XX share QX reported margins cash new data share per

equity year. equity $XXX million of during shares Interest issuances cash million issued dilution higher degree X% earnings to share higher year-over-year essentially In share. year, X.X% from to approximately to compared interest net expense was million equity days from prior XXXX to with this QX were We impact over quarter-over-quarter of by XXXX per $XX $XXX quarter, $X.XX a financing approximately debt income the and compared $X.XX and by and year O&M increase Heating For impacts the compared of down ongoing for Weather costs $X.XX impacted to program flat continue we the per $X.XX and total, under normal. rates, the million ATM due we by balances. new issued approximately normal. negatively per expect of first XX% were offset the expect In XXXX, QX in per interest share. $XXX inflation. impacts to to we on quarter share

interest by program. in investment this XXXX refinancing higher forward, XX-Q in Further to activity in today. later and operating was details higher due income expect on Depreciation ongoing expense release per Looking SEC year. be the year-over-year can be amortization to our changes our and slightly earnings share, filed found the expense $X.XX with by we driven

which to solid Moving X, of through displays financial position structure Slide liquidity. our capital and the quality, lens credit

improve BBB+ to work total continued reduce We metrics as our credit debt capitalization and ratio we to key other toward credit quality.

of million quarter revolving end. liquidity cash approximately strong $XXX remains facility our availability million at $XXX credit of Our under and with

August notes current We expect to refinance environment our in maturing and assumed interest rates earnings guidance. rate a our $XXX in with million the have of interest portion comparable

anticipate turn our to refinancing debt The occurs shareholders. dividend growth. and value now dividend I increasing next track will a debt for to long-term our rate XX a XXXX, A call years. in dividend growing industry-leading growing Marne our strategy illustrates for this earnings Following is for our business in our consecutive of dependable XXXX. maturity over important Slide an We component comparable at the of X record update.

Marne Jones

to source team Thank Kimberly. as am Operational I by Line through weather National safe, worked Workers during my our deliver as adverse the XX. Mechanic you, Week pride cost-effective a for we start Day. Appreciation celebrated and critical conditions recently the I'll reliable successfully grateful Utility Gas and work quarter. we comments customers. of We our service Slide excellence us for on is

the but Blast mentioned, were across And mild. normal As in was sub-zero than overall service Kimberly temperatures our January weather U.S., conditions not entire across warmer brought Arctic territory.

energy serving today our safely your localized you and that all Our my territory, cross-functional and our of customers, that systems of team dedication our values, improving with teamwork takes outages to efficiently life and resilient restoring remarkable. power is our to to wind service mission planning are events performing and diligent your and for responded reliable in place listening inevitable types ongoing representing The snow company keep also colleagues in admirably to those of in vision parts often for Thank work energy. conditions.

Association During were the the Gas in prevention. by a accident we leader quarter, as first American recognized

to a team. electric safety we XX were our just one with XXXX, gas During utilities employee of record. better-than-average combination, Congratulations and

XX. Slide Moving to

our Our be ready by XXXX. project. is expanded When through our project XXX recovered long-term line in transmission and Colorado. Colorado this provides reached multiple of We complete, is renewable Public The phases response to Wyoming report energy our customers. to as to completed update report largest being Colorado to summarized and our milestone access constructed to segments in stabilize in rider and for the submission add capacity, year-end battery in serve will resources in remains a service. to target clean are expanded active XXX than bids energy capital of Utilities Slide transmission mile transmission Commission. and key request April placed project plan is cost expected proposals provide to be energy our for this Wyoming will markets The our storage project megawatts with on more investment XXX-day renewable energy XX The for the on XXX customers. received an

a preferred battery bids solar project transfer resources, project. build Our XXX including XX-megawatt of XXX-megawatt top megawatts a utility-owned portfolio build transfer of and includes

We energy review evaluator by subject preferred a portfolio assessed a and Commission. wind also purchase third-party is Public was Utilities proposed through and XXX Colorado by to megawatts the approval of power The agreement.

Slide included in XX expect the has of The plan these in year. We resource this investment majority a plan. in of anticipated Phase outlines our X-year of resources South X capital Electric quarter our third on been forecast. decision our our Dakota renewable

We reliably long-term utility-owned customers continue megawatts cost that to and effectively will serve and growth pursue needs. our of generation their XXX

an risk public and necessity XXXX. Wyoming and for in the wildfire of targeting in-service a with an mitigation of Public overview provides are convenience to our XX date of resources half needed second activities. mid-XXXX, Commission file Service Slide We certificate of plan the

these decades managed have our across We for service risks territory.

for our improve and we and our systems and reliability coworkers, change conditions approach communities. to continue technology of reduce and advances, our resiliency refine risk to our As customers

mitigation into day. provide comprehensive approach response. mitigation every deeper insight can integrity our plan operational wildfire to and to broad layered be programs, we In observe into asset categories: summarized second plan, publish X will the procedures which and we quarter, wildfire policies the programs practices, Our

working I We groups, review our local will program and regulatory growth Todd broad stakeholder and and and safety we to and advance our over turn continue stakeholders it progress. wildfire are public agencies, our plan. to formalize community regulators for to now update it these With with including or peers review to to that implement In industry spirit, mitigation year. on that, an engage PSPS, early strategic power next and shutoff expect

Todd Jacobs

reviews we've We Thanks, states greatly with Marne. approval update year, Since those in rates appreciated and XX. start for the a the both Wyoming new February. final stakeholders our rate gas during of received each engagement by settlements of the Colorado cases. in effective regulatory with I'll start Slide on in constructive

expect review we costs XX since new of other revenue rates fourth million our request and and rates planned as advance of effective customers rates X, May in On million $XXX final serve to requested continued we the Iowa QX new $XX.X rate in rates requested includes approximately review This Gas rate with in gas XXXX. for of last Arkansas May interim new Our quarter. to recover XXXX. annual to and investment

well of vision maintaining customers. We that Colorado for choice review are all of XXXX. being and of June safety while Electric our review also regulatory rate a in for rate into with preparing file partner focused strong relationships our as standpoint, on system, as energy From investing our the to utility regulatory the we a are in for in approach living our last reliability

while majority to continue investment billion in reflect forecast capital file a CapEx of of you investment XX per outlined in we reviews anticipate billion that year. X we averages in approach adding over plans. green peak the period, incremental includes for million in years. those in certainty our shows our $XXX incremental fully resource capital Slide that capital $X.X generation more shows out that opportunities capital around The have per forecast X XX which plan. X-year the X-year mix see to costs. capital and in we high and see 'XX $X.X arrows our Slide plan We our have year. than to The investments and projections years, only those a and 'XX that fact projects conservative rate We we electric the categories include our 'XX projects to timing for expect

either safety, note You'll customer and our those on customer-focused mechanisms the reliability XX or focused outlines of primarily recovered capital that majority our initiatives. are growth or that key growth. Slide vast are accelerated investments investments through customer

behalf particular gas the We're power paying supply of to attention evaluate access customers, In natural generation electric discussed, addition generation to for expanding continue needs. market Marne needs opportunities we gas on resiliency electric to transmission opportunities. and and community to

serve data increased for capital center in through customers. in utility-like protections load. provides prior providing customers market drive our a lieu model, continue energy to returns customers all noted We unique which and blockchain procurement calls, As of while investment, other these

the and for data Our blockchain with center from earnings purposes. ratemaking are customers customers tariffs separated under our approved retail served

Our have anticipate at RNG we on for our producers XX% and evaluate our landfill our of January. investment opportunity contributions emerging managing we and Dubuque, customers. capital-light continue be this We're our an by expertise in and are both mind, meaningful of agreements We first total last structure end strategic costs service plan. that focused offtake pipeline fit which the our our we'll a top business that in interconnections territories. facility X% interstate this of successfully XX Iowa, of RNG interconnects plus certainly continue long-term of EPS. streams leveraged this core the production We and rich will revenue RNG strategy. also by thesis on could year-end. with business tariff to with opportunities has in anticipate by We've approximately that be decade new pace continues an operating acquired Cheyenne remain stable EPS our to our long-term but pipelines both contribute to in from grow of a nonregulated in area to dedicated innovative earnings X-year building served to and in slide, for that currently RNG for representing to customers existing construction is on growth agriculture service And

have and on I'll customers, blockchain drive developing by to turn our strategic on the to plan, make regulatory strategic and We progress and team call executing serving transformation of major opportunities and in summary, systems load processes investing In order our growth. continues our center improve efficiencies. ongoing back to strong initiatives growth behalf to our initiatives data Lin. now

Linden Evans

Thanks, up I'll wrap Todd. and Kimberly Marne. XX. Slide on

and model footprint. and diversity provide utility strategic our list to investment integrated natural of electric across Our gas continue a opportunities X-state growing

data organic achieve provide very your customers we'll capital confidence on focus to and team's to our growth and cost questions. blockchain our $X.X center Our billion execution. disciplined And EPS plan, target. X% I'm proud opportunities customer in for team's and X% our our take our growth our that, long-term ability of continued with

Operator

comes the from with of [Operator Scotiabank. Weisel line Instructions] question Our first Andrew

Andrew Weisel

calls understanding of a question will expectation First, state the on process the something from we might at Colorado. My And resources XXX your reconcile to new get out to your of XX-XX? log ownership preferred filing me cap Is Help there closer approval XX.X%. megawatts that own how that. Black the or with Hills your XX%, for end XXX utility portfolio? of

Marne Jones

question This is Marne. energy plan. the appreciate and I clean on our Colorado

a report a certainly to XXX-day of our we utility We file valuable side would have we've the from do a the solid customer think is I really did that And a we that yes, mentioned. recommend with that you and ownership it. from proposed. lens, utility reliability from -- ownership cost additional So there portfolio

So put we're with run we and to able pleased through forth, regulatory portfolio process are as the usual. the we'll

Andrew Weisel

Okay. I to that be guess going following one. we're

very the continue nature. on clear on know, outlook. were Todd, conservative to you you course, point upside. Slide question XX, Next I to of CapEx the Unchanged about

be decision announcements, we more to of to what or or so that's a latest type terms And not tangible of sure in materialize you'll are spending catalyst? on how you process details able I'm might whether customer regulatory much a about thoughts talk get able of might when or but comment, category

Linden Evans

the question. to answer happy Andrew, Yes.

So in very just during outlined, a you is CapEx that that see hit I in resource definitely spike much related 'XX to do Those our like electric frame. plan. time

historically from shifts some seen do you've As in see we us, capital.

a be the to we in detail. get we absolutely additional the that are around that in make investments conservative we anticipate that adding that? the but closer want frame we capital certainty anything out add that put forecast. Kimberly, years, sure time plan. before to We we plan, to We have As closer we how it those to incremental very add to about high will

Kimberly Nooney

thing would working additional opportunities, whether transmission on Andrew, growth. I is is on with I partnering only constantly the the add think team potential peers it's

mentioned, team his As in on is growth Todd very additional focused opportunities center perspective. the data

a and continue haven't there's this lot we'll plan to we potential updates. that and provide So obviously of opportunities in we'll generation additional have not do, evaluate just when included we that those solidified

Andrew Weisel

on good. as in more, Very one we centers. patient Then could as if it data I we can. squeeze Well,

lot comments or specifics latest activity, about whether a you Any customers? from up outlook. the up? that recently Or of or existing pop talked have new it's popped kind You can soon of give might trends more customers the demand on any

Linden Evans

question significant in I centers. our data without a see lot We of that requests evaluate. in amount can territory service or we load confirm a that study growth there load is of interest

a we've lot Cheyenne, that outer of while today yes, years. unique. there's that XX-plus XX% why got about for customers been So customers, plus of is is the Wyoming One do tariff And we years. activity to into We've EPS, a we under unique a all in thing absolutely, there. X% of up new what our space. serving see tariff up We've as see for currently. talked EPS approximately add particularly Current in

lines, area climate, to to So area, of the access high-speed Denver. unique it's of area a Cheyenne data metropolitan access in like a qualities terms lot to

any will that and other be becomes center that increased request absolutely absolutely customer The provide seeing more see that are data the and to new today solidified. today plan, we'll as detail on request have additional incremental that we're and we to based so load data forecast continue or we And expansions interest. existing customers

Operator

comes with Brandon question next Mizuho. Our from Lee

Brandon Lee

Congrats quarter. on the

and Just the is to capital-light prices risk baked also a the the guidance? of that Can start into go are it? on the for whether hook just you that quick if question. there's XX% can commodity centers long-term like then you any EPS data already for you up, -- opportunities, for comment blockchain, on And to are

Todd Jacobs

the with and we XX% baked existing the is to see years. customers what's new into that baked -- growth yes, on plus current out into It's customers from guidance, Yes. respect that

risk, exposure first So have no, that's commodity don't that an answer to respect contracts. with question. we the to With these in

Brandon Lee

just you're pretty that I something you if And your to $X with I billion out per profile? of to think guess Slide for numbers, -- or purposes, conservative year. appreciate outlook. of how about billion model you run the exact should Great. just think on for XX, it's XXXX, we typically we know modeling at we and I closer should like little a appreciate then 'XX, but rate early 'XX CapEx year per the I just the $X.X probably -- CapEx shape post give

Kimberly Nooney

Yes, question. XXXX we've Brandon, a What is unique great year. is normally said

the And and perspective, million, that additional rate you working we're think earlier, from about roughly in out of million update CapEx $XXX $XXX it run can we'll some a data so talked get as about in projects the you we years, as as actively that on look on. we that

Brandon Lee

you range? can And to XX% just of plan, to additional Okay. your CapEx that is financed us it by much XX% then Is equity? for how remind

Kimberly Nooney

on BBB+ year. that guidance haven't know, credit obviously, equity as it, we're as solid focused we perspective. But past quality you generally, think you Yes, this about given,

on And we to so about $X.XX as cash that dollar. $X.XX think or the you get once it can storm through every flows,

Operator

closing in no for I'd queue the turn showing to I'm call at to Instructions]. questions further this like [Operator remarks. back Evans Lin time.

Linden Evans

But for for your team, and thank shareholders to you look productive you you Financial our for you job as great Association American can seeing to my coworkers time. Hills Energy for day, in many Gas talented their questions, customers our driving finally, for in answering done, very of a in tell. wishes thank Black forward Thank and Hills much your I And and we joining about today. value XX and at best interest you Black you, fellow and think, on of thank delivering Corporation our well you Conference, job focus Liz, days. and us. quarter Thank thank I safe my great the

Operator

for This conference Thank participating. concludes today's call. you

may disconnect. You now

Black Hills (BKH) 9 May 242024 Q1 Earnings call transcript