While acknowledging uncertainty for the rest of the year, Rapid City, SD-based Black Hills Corp. executives reported lighter impacts from Covid-19 in the eight-state utility service territories.
The corporate-wide $2.7 billion, five-year capital expenditure program is moving along, and growth in customers and gross margins for the natural gas and electric utilities have continued in the midst of operational changes prompted by the coronavirus pandemic, CEO Linn Evans said during a 2Q2020 earnings conference call on Tuesday.
Black Hills utilities are eyeing growth in renewable natural gas (RNG) and the renewable-generated electricity program, he said.
“Our service territories, despite Covid-19, continue to grow,” Evans said. “We’re on a record pace, for example, in Colorado and northwest Arkansas, in installing new meter sets this year, and we continue to see migration to our territories,” many of which are rural. “There are some theories that the pandemic may accelerate that growth for us as some people may want to leave the more populated areas.”
In terms of growth opportunities, Evans said there are a lot of RNG sources for the utilities, of which 83% of the customers are gas users, and 56% of the rate base is in gas utility infrastructure. Tthe company also is looking to replace up to 6,500 miles of pipeline.
More quarterly earnings coverage by NGI may be found here.
Ahead of the earnings call, investor relations executive Jerome Nichols told NGI that some of the utilities have seen increasing pressure to address decarbonization and reduce carbon dioxide (CO) emissions.
The company is working “with policymakers at all levels to help them develop responsible energy policies,” Nichols said. “Some areas we serve have expressed increasing interest in policies directed at addressing climate issues, including through the reduction of carbon dioxide emissions. Colorado, for example, approved legislation last year which sets greenhouse gas and CO2 emissions reduction targets through 2050 across sectors of the state’s economy.”
The electric utility in Colorado is on track to meet the state’s 30% standard for renewable-based power this year and is committed to increasing its renewable portfolio. “We continue to work on strategies to meet both electric and gas customers’ need for sustainable energy by reducing emissions, exploring new technology and developing renewable energy options, including RNG,” Nichols said.
Over the coming months, Black Hills plans to embrace more environmental, social and corporate governance (ESG) initiatives, which he said is “important to our industry. All the dollars we invest these days are essentially ESG dollars.” Companywide ESG goals are planned to be introduced before year’s end.
Black Hills reported earnings in 2Q2020 of $21 million (33 cents/share), compared with $14.6 million (24 cents) for the year-ago period.
© 2020 Natural Gas Intelligence. All rights reserved.
ISSN © 1532-1231 | ISSN © 2577-9877 |