Black Hills Corp. utilities absorbed more than $600 million in added costs in February related to the impacts from extreme cold weather.
The bulk of the $565 million in additional charges for the Rapid City, SD-based operator were attributed to the natural gas utilities in Arkansas, Colorado, Iowa, Kansas, Nebraska and Wyoming.
“During this extreme weather event, the company’s electric and natural gas systems performed remarkably and delivered energy safely and reliably to its customers,” said CEO Linn Evans during the first quarter 2021 earnings call. “Our utilities all performed exceptionally well during the deep freeze of Storm Uri.”
The initial estimates of the incremental commodity costs to serve its natural gas and electric utilities’ customers’ “extraordinary demand” during Winter Storm Uri totaled $625 million, Evans said.
“As we do a real deep analysis on Uri, the investments we have been making with new interconnects, adding pipelines to increase resiliency and reliability has been very helpful, so we are certainly looking at what we have learned from Uri and will continue the kinds of investments that will help us mitigate those things we learned from the storm that we can control,” he said.
Earnings impacts from the storm were estimated to be $12 million, or 15 cents/share. Despite the impacts from Uri, Black Hills is maintaining earnings guidance for the full year and the five-year, and a $3 billion capital budget. More than $1.7 billion is included for gas utilities.
Net income was $96.3 million ($1.54/share) in 1Q2021, compared with $93.2 million ($1.51) for 1Q2020.
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