Incorporated in South Dakota |
IRS Identification Number 46-0458824 | |
625 Ninth Street
Rapid City, South Dakota 57701 |
||
Registrant's telephone number, including area code
(605) 721-1700 | ||
Securities registered pursuant to Section 12(b) of the Act: | ||
Title of each class |
Name of each exchange
on which registered | |
Common stock of $1.00 par value |
New York Stock Exchange |
Class |
Outstanding at January 31, 2010 |
Common stock, $1.00 par value |
38,961,358 shares |
Page | |||
GLOSSARY OF TERMS AND ABBREVIATIONS |
3 | ||
ACCOUNTING PRONOUNCEMENTS |
6 | ||
WEBSITE ACCESS TO REPORTS |
7 | ||
FORWARD-LOOKING INFORMATION |
7 | ||
Part I |
|||
ITEMS 1. and 2. |
BUSINESS AND PROPERTIES |
10 | |
ITEM 1A. |
RISK FACTORS |
49 | |
ITEM 1B. |
UNRESOLVED STAFF COMMENTS |
62 | |
ITEM 3. |
LEGAL PROCEEDINGS |
62 | |
ITEM 4. |
SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS |
62 | |
ITEM 4A. |
EXECUTIVE OFFICERS OF THE REGISTRANT |
62 | |
Part II |
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ITEM 5. |
MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES |
64 | |
ITEM 6. |
SELECTED FINANCIAL DATA |
66 | |
ITEMS 7. and 7A. |
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS AND QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK |
68 | |
ITEM 8. |
FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA |
127 | |
ITEM 9. |
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE |
212 | |
ITEM 9A. |
CONTROLS AND PROCEDURES |
212 | |
ITEM 9B. |
OTHER INFORMATION |
212 | |
Part III |
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ITEM 10. |
DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE |
213 | |
ITEM 11. |
EXECUTIVE COMPENSATION |
213 | |
ITEM 12. |
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS |
213 | |
ITEM 13. |
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE |
214 | |
ITEM 14. |
PRINCIPAL ACCOUNTING FEES AND SERVICES |
214 | |
ITEM 15. |
EXHIBITS, FINANCIAL STATEMENT SCHEDULES |
215 | |
SIGNATURES |
226 | ||
INDEX TO EXHIBITS |
227 |
Acquisition Facility |
Our $1.0 billion single-draw, senior unsecured facility from which a $383 million draw was used to provide part of the funding for our Aquila Transaction |
AFUDC |
Allowance for Funds Used During Construction |
AOCI |
Accumulated Other Comprehensive Income |
Aquila |
Aquila, Inc. |
Aquila Transaction |
Our July 14, 2008 acquisition of five utilities from Aquila |
ARO |
Asset Retirement Obligations |
Basin Electric |
Basin Electric Power Cooperative |
Bbl |
Barrel |
Bcf |
Billion cubic feet |
Bcfe |
Billion cubic feet equivalent |
BHC Pension Plan |
The Pension Plan of Black Hills Corporation |
BHCCP |
Black Hills Corporation Credit Policy |
BHCRPP |
Black Hills Corporation Risk Policies and Procedures |
BHEP |
Black Hills Exploration and Production, Inc., a direct, wholly-owned subsidiary of Black Hills Non-regulated Holdings |
Black Hills Colorado IPP |
Black Hills Colorado IPP, LLC a direct wholly-owned subsidiary of Black Hills Electric Generation |
Black Hills Corporation Plan |
Black Hills Corporation Retirement Savings Plan |
Black Hills Energy |
The name used to conduct the business of Black Hills Utility Holdings, Inc. |
Black Hills Electric Generation |
Black Hills Electric Generation, LLC, a direct, wholly-owned subsidiary of Black Hills Non-regulated Holdings |
Black Hills Non-regulated Holdings |
Black Hills Non-regulated Holdings, LLC, a direct, wholly-owned subsidiary of Black Hills Corporation |
Black Hills Power |
Black Hills Power, Inc., a direct, wholly-owned subsidiary of Black Hills Corporation |
Black Hills Utility Holdings |
Black Hills Utility Holdings, Inc., a direct, wholly-owned subsidiary of Black Hills Corporation formed to acquire and own the utility properties acquired in the Aquila Transaction, all which are now doing business as Black Hills Energy |
Black Hills Wyoming |
Black Hills Wyoming, LLC, a direct, wholly-owned subsidiary of Black Hills Electric Generation |
Btu |
British thermal unit |
CAIR |
Clean Air Interstate Rule |
CAMR |
Clean Air Mercury Rule |
CFTC |
Commodity Futures Trading Commission |
Cheyenne Light |
Cheyenne Light, Fuel and Power Company, a direct, wholly-owned subsidiary of Black Hills Corporation |
Cheyenne Light Pension Plan |
The Cheyenne Light, Fuel and Power Company Pension Plan |
Cheyenne Light Plan |
Cheyenne Light, Fuel and Power Company Retirement Savings Plan |
CO2 |
Carbon Dioxide |
Colorado Electric |
Black Hills Colorado Electric Utility Company, LP, (doing business as Black Hills Energy), an indirect, wholly-owned subsidiary of Black Hills Utility Holdings |
Colorado Gas |
Black Hills Colorado Gas Utility Company, LP, (doing business as Black Hills Energy), an indirect, wholly-owned subsidiary of Black Hills Utility Holdings |
CPUC |
Colorado Public Utilities Commission |
CT |
Combustion turbine |
Dth |
Dekatherms |
EBITDA |
Earnings before interest, taxes, depreciation and amortization |
Enserco |
Enserco Energy Inc., a wholly-owned subsidiary of Black Hills Non-regulated Holdings |
Enserco Facility |
The $300 million committed stand alone credit facility that supports Enserco's marketing and trading operations, which currently expires May 7, 2010 |
EPA |
U. S. Environmental Protection Agency |
ERISA |
Employee Retirement Income Security Act |
EWG |
Exempt Wholesale Generator |
FASB |
Financial Accounting Standards Board |
FERC |
Federal Energy Regulatory Commission |
Fitch |
Fitch Ratings |
GAAP |
Accounting principles generally accepted in the United States of America |
GCA |
Gas Cost Adjustment |
GHG |
Greenhouse gases |
Great Plains |
Great Plains Energy Incorporated |
GSRS |
Gas System Reliability Surcharge |
Happy Jack |
Happy Jack Wind Farm, LLC, owned by Duke Energy Generation Services |
Hastings |
Hastings Fund Management Ltd |
ICE |
Intercontinental Exchange |
IGCC |
Integrated Gasification Combined Cycle |
IIF |
IIF BH Investment LLC, a subsidiary of an investment entity advised by JPMorgan Asset Management |
Indeck |
Indeck Capital, Inc. |
Iowa Gas |
Black Hills Iowa Gas Utility Company, LLC, (doing business as Black Hills Energy), a direct, wholly-owned subsidiary of Black Hills Utility Holdings |
IPP |
Independent power production |
IPP Transaction |
The July 11, 2008 sale of seven of our IPP plants to affiliates of Hastings and IIF |
IRS |
Internal Revenue Service |
IUB |
Iowa Utilities Board |
Kansas Gas |
Black Hills Kansas Gas Utility Company, LLC, (doing business as Black Hills Energy), a direct, wholly-owned subsidiary of Black Hills Utility Holdings |
KCC |
Kansas Corporation Commission |
KW |
Kilowatt |
KWh |
Kilowatt-hour |
LIBOR |
London Interbank Offered Rate |
LOE |
Lease Operating Expense |
Las Vegas II |
Las Vegas II gas-fired power plant |
MAPP |
Mid-Continent Area Power Pool |
Mbbl |
Thousand barrels of oil |
Mcf |
Thousand cubic feet |
Mcfe |
Thousand cubic feet equivalent |
MDU |
Montana Dakota Utilities Co., a public utility division of MDU Resources Group, Inc. |
MEAN |
Municipal Energy Agency of Nebraska |
MMBtu |
Million British thermal units |
MMcf |
Million cubic feet |
MMcfe |
Million cubic feet equivalent |
Moody's |
Moody's Investors Service, Inc. |
MTPSC |
Montana Public Service Commission |
MW |
Megawatts |
MWh |
Megawatt-hours |
NCREIF |
National Council of Real Estate Investment Fiduciaries |
Nebraska Gas |
Black Hills Nebraska Gas Utility Company, LLC (doing business as Black Hills Energy), a direct, wholly-owned subsidiary of Black Hills Utility Holdings |
NERC |
North American Electric Reliability Corporation |
NOx |
Nitrogen Oxide |
NOL |
Net operating loss |
NPA |
Nebraska Power Association |
NPDES |
National Pollutant Discharge Elimination System |
NPSC |
Nebraska Public Service Commission |
NQDC |
Non-Qualified Deferred Compensation Plan |
NYMEX |
New York Mercantile Exchange |
PCA |
Power Cost Adjustment |
PGA |
Purchase Gas Adjustment |
PPA |
Purchase Power Agreement |
PSCo |
Public Service Company of Colorado |
PUD |
Proved undeveloped reserves |
PUHCA 2005 |
Public Utility Holding Company Act of 2005 |
PURPA |
Public Utility Regulatory Policies Act of 1978 |
QF |
Qualifying Facility |
RCRA |
Resource Conservation and Recovery Act |
RMSA |
Retiree Medical Savings Account |
RTO |
Regional Transmission Organization |
SDPUC |
South Dakota Public Utilities Commission |
SEC |
U. S. Securities and Exchange Commission |
Silver Sage |
Silver Sage Windpower, LLC, owned by Duke Energy Generation Services |
SO2 |
Sulfur Dioxide |
S&P |
Standard & Poor's, a division of The McGraw-Hill Companies, Inc. |
Valencia |
Valencia Power, LLC, a former subsidiary of Black Hills Non-regulated Holdings that was sold as part of our IPP Transaction |
VEBA |
Voluntary Employee Benefit Association |
VIE |
Variable Interest Entity |
WDEQ |
Wyoming Department of Environmental Quality |
WECC |
Western Electricity Coordinating Council |
WPSC |
Wyoming Public Service Commission |
WRDC |
Wyodak Resources Development Corporation, a direct, wholly-owned subsidiary of Black Hills Non-regulated Holdings |
ASC |
Accounting Standards Codification |
ASC 105 |
ASC 105, "FASB Accounting Standards Codification and the Hierarchy of Generally Accepted Accounting Principles - a replacement of FASB Standard No. 162" |
ASC 260 |
ASC 260, "Earnings Per Share" |
ASC 715 |
ASC 715, "Compensation – Retirement Benefits" |
ASC 805 |
ASC 805, "Business Combinations" |
ASC 810 |
ASC 810, "Consolidations" |
ASC 810-10-15 |
ASC 810-10-15, "Consolidation of Variable Interest Entities" |
ASC 815 |
ASC 815, "Derivatives and Hedging" |
ASC 820 |
ASC 820, "Fair Value Measurements and Disclosures" |
ASC 825 |
ASC 825, "Financial Instruments" |
ASC 855 |
ASC 855, "Subsequent Events" |
ASC 932-10-S99 |
ASC 932-10-S99, "Extractive Activities – Oil and Gas, SEC Materials" |
|
· |
Our ability to successfully integrate and profitably operate any recent and future acquisitions; |
|
· |
Macro- and micro-economic changes in the economy and energy industry, including the impact of (i) consolidations and changes in competition, (ii) changing conditions in the capital and credit markets, which affect our ability to raise capital on favorable terms, and (iii) general economic and political conditions, including tax rates or policies and inflation rates; |
|
· |
Our ability to successfully maintain our corporate credit rating; |
|
· |
Our ability to access revolving credit capacity and comply with loan covenants; |
|
· |
Capital market conditions and market uncertainties related to interest rates, which may affect our ability to raise capital on favorable terms; |
|
· |
The amount and timing of capital deployment in new investment opportunities or for the repurchase of debt or stock; |
|
· |
Our ability to obtain permanent financing for capital expenditures on reasonable terms either through long-term debt or issuance of equity; |
|
· |
The outcome of any ongoing or future litigation or similar disputes and the impact of any such outcome or related settlements on our financial condition or results of operations; |
|
· |
Price risk due to marketable securities held as investments in employee benefit plans; |
|
· |
The effect of accounting policies issued periodically by accounting standard-setting bodies; |
|
· |
The accounting treatment and earnings impact associated with interest rate swaps; |
|
· |
Our ability to comply, or to make expenditures required to comply, with changes in laws and regulations, particularly those relating to energy markets, taxation, safety and protection of the environment, and our ability to recover those expenditures in customer rates, where applicable; |
|
· |
Federal and state laws concerning climate change and air emissions, including emission reduction mandates, carbon emissions and renewable energy portfolio standards, may materially increase our generation and production costs and could render some of our generating units uneconomical to operate and maintain; |
|
· |
Changes in business, regulatory compliance and financial reporting practices arising from the enactment of the Energy Policy Act of 2005 and subsequent rules and regulations promulgated thereunder; |
|
· |
Additional liabilities for environmental conditions, including remediation and reclamation obligations, under environmental laws; |
|
· |
Our ability to minimize losses related to defaults on amounts due from customers and counterparties, including counterparties to trading and other commercial transactions; |
|
· |
The timing, volatility and extent of changes in energy and commodity prices, supply or volume, the cost and availability of transportation of commodities, changes in interest or foreign exchange rates, and the demand for our services, any of which can affect our earnings, our financial liquidity and the underlying value of our assets; |
|
· |
The cost and effects on our business, including insurance, resulting from terrorist actions or responses to such actions or events; |
|
· |
Our ability to obtain adequate cost recovery for our utility operations through regulatory proceedings and receive favorable rulings in periodic applications to recover costs for fuel, transportation, transmission and purchased power in our regulated utilities; |
|
· |
Our ability to receive regulatory approval in rate base for new power generation facilities; |
|
· |
Our ability to recover our borrowing costs, including debt service costs, in our customer rates; |
|
· |
The timing and extent of scheduled and unscheduled outages of power generation facilities; |
|
· |
The possibility that we may be required to take impairment charges to reduce the carrying value of some of our long-lived assets when indicators of impairment emerge; |
|
· |
Our ability to complete the permitting, construction, start-up and operation of power generating facilities in a cost-effective and timely manner; |
|
· |
Our ability to successfully complete labor negotiations with four of the six unions currently or soon to be in contract renewal negotiations; |
|
· |
Our ability to accurately estimate demand from our customers for natural gas; |
|
· |
Weather and other natural phenomena; |
|
· |
Changes in state laws or regulations that could cause us to curtail our independent power production or exploration and production activities; |
|
· |
Our ability to meet production targets for our oil and gas properties, which may be dependent upon issuance by federal, state and tribal governments, or agencies thereof, of drilling, environmental and other permits, and the availability of specialized contractors, work force and equipment, or the possibility of reductions in our drilling program resulting from the current economic climate and commodity prices, which
also may prevent us from maintaining production rates and replacing reserves for our oil and gas properties; |
|
· |
The amount of collateral required to be posted from time to time in our transactions; |
|
· |
Our ability to effectively use derivative financial instruments to hedge commodity, currency exchange rate and interest rate risks; |
|
· |
The possibility that we may be required to take impairment charges under the SEC's full cost ceiling test for the accumulated costs of our natural gas and oil reserves; |
|
· |
The extent of our success in connecting natural gas supplies to gathering, processing and pipeline systems; |
|
· |
Our ability to provide accurate estimates of proved oil and gas reserves, coal reserves and future production rates and associated costs; and |
|
· |
The cost and effect on our business, including insurance, resulting from terrorist actions or responses to such actions or events. |
ITEMS 1 AND 2. |
BUSINESS AND PROPERTIES |
Business Group |
Financial Segment |
Utilities |
Electric Utilities |
Gas Utilities | |
Non-regulated Energy |
Oil and Gas |
Power Generation | |
Coal Mining | |
Energy Marketing |
System Peak Demand (in MW) |
||||||||||||||||||||||||
2009 |
2008 |
2007 |
||||||||||||||||||||||
Summer |
Winter |
Summer |
Winter |
Summer |
Winter |
|||||||||||||||||||
Black Hills Power |
387 | 392 | 409 | 407 | 430 | 361 | ||||||||||||||||||
Cheyenne Light |
169 | 171 | 166 | 168 | 163 | 152 | ||||||||||||||||||
Colorado Electric |
365 | 296 | 306 | (a) | 298 | (a) | - | - | ||||||||||||||||
Total Electric Utilities |
921 | 859 | 881 | 873 | 593 | 513 |
(a) |
For the period July 14, 2008 to December 31, 2008. |
Unit |
Fuel
Type |
Location |
Ownership
Interest
% |
Gross
Capacity
(MW) |
Year
Installed |
|||||||||
Black Hills Power(1): |
||||||||||||||
Neil Simpson II |
Coal |
Gillette, WY |
100 | 90.0 | 1995 | |||||||||
Wyodak(2) |
Coal |
Gillette, WY |
20 | 72.4 | 1978 | |||||||||
Osage |
Coal |
Osage, WY |
100 | 34.5 | 1948-1952 | |||||||||
Ben French |
Coal |
Rapid City, SD |
100 | 25.0 | 1960 | |||||||||
Neil Simpson I |
Coal |
Gillette, WY |
100 | 21.8 | 1969 | |||||||||
Neil Simpson CT |
Gas |
Gillette, WY |
100 | 40.0 | 2000 | |||||||||
Lange CT |
Gas |
Rapid City, SD |
100 | 40.0 | 2002 | |||||||||
Ben French Diesel #1-5 |
Oil |
Rapid City, SD |
100 | 10.0 | 1965 | |||||||||
Ben French CTs #1-4 |
Gas/Oil |
Rapid City, SD |
100 | 100.0 | 1977-1979 | |||||||||
Cheyenne Light: |
||||||||||||||
Wygen II |
Coal |
Gillette, WY |
100 | 95.0 | 2008 | |||||||||
Colorado Electric(3): |
||||||||||||||
W.N. Clark #1-2 |
Coal |
Canon City, CO |
100 | 42.0 | 1955, 1959 | |||||||||
Pueblo #6 |
Gas |
Pueblo, CO |
100 | 20.0 | 1949 | |||||||||
Pueblo #5 |
Gas |
Pueblo, CO |
100 | 9.0 | 1941, 2001 | |||||||||
AIP Diesel |
Oil |
Pueblo, CO |
100 | 10.0 | 2001 | |||||||||
Diesel #1-5 |
Oil |
Pueblo, CO |
100 | 10.0 | 1964 | |||||||||
Diesel #1-5 |
Oil |
Rocky Ford, CO |
100 | 10.0 | 1964 |
(1) |
During 2008, we mobilized for the construction of Wygen III, a 110 MW mine-mouth coal-fired power plant. The plant is scheduled to be completed in April 2010. Black Hills Power will operate the plant and owns a 75% interest in the facility and MDU owns the remaining 25%. Our WRDC coal mine will furnish all of the coal fuel supply for the plant. |
(2) |
Wyodak is a 362 MW mine-mouth coal-fired plant owned 80% by PacifiCorp and 20% (or 72.4 MW) by Black Hills Power. The baseload plant is operated by PacifiCorp and our WRDC coal mine furnishes all of the coal fuel supply for the plant. |
(3) |
During 2009, we began the preparation to construct two 90 MW gas-fired power generation facilities to support the customers of Colorado Electric. These facilities are expected to be completed by December 31, 2011. |
2009 |
2008(1) |
2007(2) |
||||||||||
Coal |
$ | 13.99 | $ | 11.41 | $ | 8.94 | ||||||
Gas and Oil |
$ | 85.52 | $ | 88.60 | $ | 68.04 | ||||||
Total Average Fuel Cost |
$ | 15.22 | $ | 13.18 | $ | 11.84 | ||||||
Purchased Power(3) |
$ | 28.93 | $ | 38.06 | $ | 29.87 |
(1) |
2008 includes Colorado Electric from July 14, 2008 through December 31, 2008. |
(2) |
Excludes Colorado Electric, which we did not acquire until July 14, 2008. |
(3) |
Includes Colorado Electric acquired on July 14, 2008, Happy Jack commencing in October 2008, and Silver Sage commencing in October 2009. |
2009 |
2008 |
2007 |
||||||||||
Coal-fired |
39 | % | 44 | % | 42 | % | ||||||
Gas and Oil |
1 | 1 | 2 | |||||||||
Total Generated |
40 | % | 45 | % | 44 | % | ||||||
Purchased |
60 | 55 | 56 | |||||||||
Total |
100 | % | 100 | % | 100 | % |
|
· |
Black Hills Power's PPA with PacifiCorp expiring in 2023, which provides for the purchase of 50 MW of coal-fired baseload power; |
|
· |
Black Hills Power's reserve capacity integration agreement with PacifiCorp expiring in 2012, which makes available 100 MW of reserve capacity in connection with the utilization of the Ben French CT units; |
|
· |
Colorado Electric's PPA with PSCo expiring at the end of 2011, whereby Colorado Electric purchases a majority of its power. The contract provides for 290 MW of capacity and energy in 2010, increasing to 300 MW in 2011; |
|
· |
Black Hills Wyoming provides Cheyenne Light with 40 MW of energy and capacity from their Gillette CT and 60 MW of unit-contingent capacity and energy from their Wygen I facility under purchase power agreements. The 10-year PPA for the Gillette CT expires in August 2011. The PPA for the 60 MW of unit-contingent capacity and energy from the Wygen I facility had an extension approved by FERC in September
2009 and expires December 31, 2022. The Wygen I PPA includes an option for Cheyenne Light to purchase Black Hills Wyoming's ownership interest in the Wygen I facility during years one through seven during the term of the agreement. The purchase price related to the option is $2.55 million per MW which is equivalent of the estimated initial per MW price of new construction of the Wygen III facility. This price is reduced annually by an amount of annual depreciation assuming a facility
life of 35 years; |
|
· |
Cheyenne Light's 20-year PPA with Duke Energy, expiring in 2028, provides up to 29.4 MW of renewable energy from the Happy Jack Wind Farm to Cheyenne Light. Under separate intercompany agreements, Cheyenne Light sells 50% of the facility's output to Black Hills Power; |
|
· |
Cheyenne Light and Black Hills Power's Generation Dispatch Agreement requires Black Hills Power to purchase all of Cheyenne Light's excess energy; |
|
· |
Cheyenne Light's 20-year PPA with Duke Energy's Silver Sage wind farm, expiring in 2029, provides 30 MW of wind energy. Silver Sage commenced commercial operation in October 2009. Under separate intercompany agreements, Cheyenne Light sells 20 MW of energy from Silver Sage to Black Hills Power; and |
|
· |
Colorado Electric's 20-year PPA with Black Hills Colorado IPP, expiring in 2031, will provide 200 MW of power to Colorado Electric from Black Hills Colorado IPP's combined-cycle turbines beginning on January 1, 2012 |
|
· |
Black Hills Power's agreement to supply up to 74 MW of capacity and energy to MDU for the Sheridan, Wyoming electric service territory through 2016. The sales to MDU have been integrated into Black Hills Power's control area and are considered part of our firm native load. This agreement permitted MDU the option to participate in the ownership of the Wygen III plant that is currently being constructed. In
April 2009, MDU exercised this option and purchased a 25% ownership interest in Wygen III. In conjunction with the ownership interest transaction, the agreement to supply capacity and energy through 2016 was modified. The agreement now provides that once in commercial operation, the first 25 MW of the required 74 MW will be supplied from MDU's ownership interest in Wygen III. During periods of reduced production at Wygen III, or during periods when Wygen III is offline, MDU will
be provided with its 25 MW from our other generation facilities or from system purchases; |
|
· |
Black Hills Power's agreement with the City of Gillette, Wyoming, to provide the City its first 23 MW of capacity and energy annually. The sales to the City of Gillette have been integrated into Black Hills Power's control area and are considered part of our firm native load. The agreement renews automatically and requires a seven year notice of termination. As of December 31, 2009,
neither party to the agreement had given a notice of termination; |
|
· |
Black Hills Power's agreement to supply 20 MW of energy and capacity to MEAN under a contract that expires in 2023. This contract is unit-contingent based on the availability of our Neil Simpson II and Wygen III plants, with capacity purchase decreasing to 15 MW in 2018, 12 MW in 2020 and 10 MW in 2022. The unit-contingent capacity amounts from Wygen III and Neil Simpson II are as follows: |
2010-2017 |
20 MW - 10 MW contingent on Wygen III and 10 MW contingent on Neil Simpson II |
2018-2019 |
15 MW - 10 MW contingent on Wygen III and 5 MW contingent on Neil Simpson II |
2020-2021 |
12 MW - 6 MW contingent on Wygen III and 6 MW contingent on Neil Simpson II |
2022-2023 |
10 MW - 5 MW contingent on Wygen III and 5 MW contingent on Neil Simpson II; and |
|
· |
Black Hills Power's five-year PPA with MEAN executed in July 2009, which commences the month following the onset of commercial operations of Wygen III. Under this contract, MEAN will purchase 5 MW of unit-contingent capacity from Neil Simpson II and 5 MW of unit-contingent capacity from Wygen III. |
|
· |
We have a purchase agreement with Basin Electric for the supply of 80 MW of capacity and energy through 2012 and a separate agreement to receive 80 MW of capacity and energy through 2012. The agreements were entered into with Basin Electric to accommodate delivery of electricity to Cheyenne Light's service territory. |
Utility |
State |
Transmission
(in Line Miles) |
Distribution
(in Line Miles) |
||||||
Black Hills Power |
SD, WY |
1,007 | 2,403 | ||||||
Black Hills Power - Jointly Owned |
SD, WY |
47 | - | ||||||
Cheyenne Light |
SD, WY |
25 | 1,172 | ||||||
Colorado Electric |
CO |
509 | 3,019 |
2009 |
2008 |
2007 |
||||||||||
Residential: |
||||||||||||
Black Hills Power |
$ | 48,586 | $ | 46,854 | $ | 45,657 | ||||||
Cheyenne Light |
29,198 | 31,394 | 24,060 | |||||||||
Colorado Electric |
66,548 | 32,620 | - | |||||||||
Total Residential |
144,332 | 110,868 | 69,717 | |||||||||
Commercial: |
||||||||||||
Black Hills Power |
59,897 | 58,289 | 55,991 | |||||||||
Cheyenne Light |
51,280 | 51,609 | 38,871 | |||||||||
Colorado Electric |
56,002 | 28,531 | - | |||||||||
Total Commercial |
167,179 | 138,429 | 94,862 | |||||||||
Industrial: |
||||||||||||
Black Hills Power |
20,014 | 21,432 | 21,974 | |||||||||
Cheyenne Light |
11,121 | 9,716 | 7,306 | |||||||||
Colorado Electric |
31,067 | 16,280 | - | |||||||||
Total Industrial |
62,202 | 47,428 | 29,280 | |||||||||
Municipal: |
||||||||||||
Black Hills Power |
2,735 | 2,734 | 2,697 | |||||||||
Cheyenne Light |
932 | 973 | 797 | |||||||||
Colorado Electric |
4,408 | 2,289 | - | |||||||||
Total Municipal |
8,075 | 5,996 | 3,494 | |||||||||
Contract Wholesale: |
||||||||||||
Black Hills Power |
25,358 | 26,643 | 25,240 | |||||||||
Off-system Wholesale: |
||||||||||||
Black Hills Power |
32,212 | 63,770 | 35,210 | |||||||||
Cheyenne Light |
8,565 | 6,105 | - | |||||||||
Colorado Electric |
14,008 | 11,194 | - | |||||||||
Total Off-system Wholesale |
54,785 | 81,069 | 35,210 | |||||||||
Other Sales Revenue: |
||||||||||||
Black Hills Power |
18,277 | 12,950 | 12,932 | |||||||||
Cheyenne Light |
718 | 394 | 208 | |||||||||
Colorado Electric |
4,226 | 1,346 | - | |||||||||
Total Other Sales Revenue |
23,221 | 14,690 | 13,140 | |||||||||
Total Sales Revenues |
$ | 485,152 | $ | 425,123 | $ | 270,943 |
2009 |
2008 |
2007 |
||||||||||
Generated - |
||||||||||||
Coal-fired: |
||||||||||||
Black Hills Power |
1,721,074 | 1,731,838 | 1,758,280 | |||||||||
Cheyenne Light(1) |
766,943 | 740,051 | - | |||||||||
Colorado Electric |
252,603 | 138,424 | - | |||||||||
Total Coal |
2,740,620 | 2,610,313 | 1,758,280 | |||||||||
Gas and Oil-fired: |
||||||||||||
Black Hills Power |
46,723 | 61,801 | 90,618 | |||||||||
Cheyenne Light |
- | - | - | |||||||||
Colorado Electric |
2,705 | 306 | - | |||||||||
Total Gas and Oil |
49,428 | 62,107 | 90,618 | |||||||||
Total Generated: |
||||||||||||
Black Hills Power |
1,767,797 | 1,793,639 | 1,848,898 | |||||||||
Cheyenne Light |
766,943 | 740,051 | - | |||||||||
Colorado Electric |
255,308 | 138,730 | - | |||||||||
Total Generated |
2,790,048 | 2,672,420 | 1,848,898 | |||||||||
Purchased: |
||||||||||||
Black Hills Power |
1,686,455 | 1,703,088 | 1,279,005 | |||||||||
Cheyenne Light |
651,201 | 590,622 | 1,047,782 | |||||||||
Colorado Electric |
1,991,058 | 1,028,029 | - | |||||||||
Total Purchased |
4,328,714 | 3,321,739 | 2,326,787 | |||||||||
Total Generated and Purchased |
7,118,762 | 5,994,159 | 4,175,685 |
(1) |
Represents the Wygen II plant that began providing electricity to Cheyenne Light customers on January 1, 2008. |
2009 |
2008 |
2007 |
||||||||||
Residential: |
||||||||||||
Black Hills Power |
529,825 | 524,413 | 518,148 | |||||||||
Cheyenne Light |
255,134 | 255,345 | 251,313 | |||||||||
Colorado Electric |
589,526 | 284,294 | - | |||||||||
Total Residential |
1,374,485 | 1,064,052 | 769,461 | |||||||||
Commercial: |
||||||||||||
Black Hills Power |
723,360 | 699,734 | 690,702 | |||||||||
Cheyenne Light |
583,986 | 586,151 | 561,963 | |||||||||
Colorado Electric |
666,563 | 330,870 | - | |||||||||
Total Commercial |
1,973,909 | 1,616,755 | 1,252,665 | |||||||||
Industrial: |
||||||||||||
Black Hills Power |
353,041 | 414,421 | 434,627 | |||||||||
Cheyenne Light |
174,792 | 144,179 | 141,353 | |||||||||
Colorado Electric |
452,584 | 235,218 | - | |||||||||
Total Industrial |
980,417 | 793,818 | 575,980 | |||||||||
Municipal: |
||||||||||||
Black Hills Power |
33,948 | 34,368 | 34,661 | |||||||||
Cheyenne Light |
3,456 | 3,669 | 3,658 | |||||||||
Colorado Electric |
37,244 | 19,740 | - | |||||||||
Total Municipal |
74,648 | 57,777 | 38,319 | |||||||||
Contract Wholesale: |
||||||||||||
Black Hills Power |
645,297 | 665,795 | 652,931 | |||||||||
Off-system Wholesale: |
||||||||||||
Black Hills Power |
1,009,574 | 1,074,398 | 678,581 | |||||||||
Cheyenne Light |
309,122 | 246,542 | - | |||||||||
Colorado Electric |
373,495 | 230,333 | - | |||||||||
Total Off-system Wholesale |
1,692,191 | 1,551,273 | 678,581 | |||||||||
Total Quantity Sold: |
||||||||||||
Black Hills Power |
3,295,045 | 3,413,129 | 3,009,650 | |||||||||
Cheyenne Light |
1,326,490 | 1,235,886 | 958,287 | |||||||||
Colorado Electric |
2,119,412 | 1,100,455 | - | |||||||||
Total Quantity Sold |
6,740,947 | 5,749,470 | 3,967,937 | |||||||||
Losses and Company Use: |
||||||||||||
Black Hills Power |
159,207 | 83,598 | 118,253 | |||||||||
Cheyenne Light |
91,654 | 94,787 | 89,495 | |||||||||
Colorado Electric |
126,954 | 66,304 | - | |||||||||
Total Losses and Company Use |
377,815 | 244,689 | 207,748 | |||||||||
Total Energy |
7,118,762 | 5,994,159 | 4,175,685 |
2009 |
2008 |
2007 |
||||||||||||||||||||||
Heating Degree Days: |
Actual |
Variance from
30-Year Average |
Actual |
Variance from
30-Year Average |
Actual |
Variance from
30-Year Average |
||||||||||||||||||
Actual - |
||||||||||||||||||||||||
Black Hills Power |
7,753 | 8 | % | 7,676 | 6 | % | 6,627 | (7 | )% | |||||||||||||||
Cheyenne Light |
7,411 | - | 7,435 | 1 | % | 6,964 | (6 | )% | ||||||||||||||||
Colorado Electric |
5,546 | (1 | )% | 2,204 | (5 | )% | - | - | ||||||||||||||||
Cooling Degree Days: |
||||||||||||||||||||||||
Actual - |
||||||||||||||||||||||||
Black Hills Power |
354 | (41 | )% | 482 | (19 | )% | 1,033 | 74 | % | |||||||||||||||
Cheyenne Light |
203 | (26 | )% | 372 | 36 | % | 536 | 96 | % | |||||||||||||||
Colorado Electric |
804 | (13 | )% | 500 | (12 | )% | - | - |
2009 |
2008 |
2007 |
||||||||||
Residential: |
||||||||||||
Black Hills Power |
54,470 | 53,765 | 53,057 | |||||||||
Cheyenne Light |
35,943 | 35,205 | 35,175 | |||||||||
Colorado Electric |
81,622 | 81,561 | - | |||||||||
Total Residential |
172,035 | 170,531 | 88,232 | |||||||||
Commercial: |
||||||||||||
Black Hills Power |
12,261 | 12,213 | 12,073 | |||||||||
Cheyenne Light |
4,932 | 4,563 | 4,381 | |||||||||
Colorado Electric |
11,101 | 11,155 | - | |||||||||
Total Commercial |
28,294 | 27,931 | 16,454 | |||||||||
Industrial: |
||||||||||||
Black Hills Power |
38 | 40 | 41 | |||||||||
Cheyenne Light |
2 | 2 | 2 | |||||||||
Colorado Electric |
90 | 93 | - | |||||||||
Total Industrial |
130 | 135 | 43 | |||||||||
Contract Wholesale: |
||||||||||||
Black Hills Power |
3 | 3 | 3 | |||||||||
Other Electric Customers: |
||||||||||||
Black Hills Power |
143 | 3,010 | 3,012 | |||||||||
Cheyenne Light |
13 | 6 | 6 | |||||||||
Colorado Electric |
499 | 480 | - | |||||||||
Total Other Electric Customers |
655 | 3,496 | 3,018 | |||||||||
Total Customers: |
||||||||||||
Black Hills Power |
66,915 | 69,031 | 68,186 | |||||||||
Cheyenne Light |
40,890 | 39,776 | 39,564 | |||||||||
Colorado Electric |
93,312 | 93,289 | - | |||||||||
Total Customers |
201,117 | 202,096 | 107,750 |
2009 |
2008 |
2007 |
||||||||||
Sales Revenues (in thousands): |
||||||||||||
Residential |
$ | 21,495 | $ | 28,059 | $ | 18,985 | ||||||
Commercial |
9,821 | 13,751 | 9,437 | |||||||||
Industrial |
3,537 | 5,668 | 3,340 | |||||||||
Other Sales Revenues |
760 | 818 | 706 | |||||||||
Total Sales Revenues |
$ | 35,613 | $ | 48,296 | $ | 32,468 | ||||||
Sales Margins (in thousands): |
||||||||||||
Residential |
$ | 10,219 | $ | 10,083 | $ | 6,408 | ||||||
Commercial |
3,266 | 3,177 | 2,268 | |||||||||
Industrial |
509 | 483 | 436 | |||||||||
Other Sales Margins |
760 | 818 | 707 | |||||||||
Total Sales Margins |
$ | 14,754 | $ | 14,561 | $ | 9,819 | ||||||
Volumes Sold (Dth): |
||||||||||||
Residential |
2,516,699 | 2,582,248 | 2,380,945 | |||||||||
Commercial |
1,502,002 | 1,501,025 | 1,382,150 | |||||||||
Industrial |
722,776 | 689,945 | 664,807 | |||||||||
Total Volumes Sold |
4,741,477 | 4,773,218 | 4,427,902 |
Intrastate Gas
Transmission Pipelines |
Gas Distribution
Mains |
Gas Distribution
Service Lines |
||||||||||
Colorado |
122 | 2,967 | 871 | |||||||||
Nebraska |
51 | 3,406 | 3,462 | |||||||||
Iowa |
170 | 2,753 | 2,313 | |||||||||
Kansas |
283 | 2,578 | 1,288 | |||||||||
Total |
626 | 11,704 | 7,934 |
Sales Revenues |
2009 |
2008(1) |
||||||
Residential: |
||||||||
Colorado |
$ | 62,732 | $ | 27,928 | ||||
Nebraska |
127,120 | 60,624 | ||||||
Iowa |
113,781 | 47,338 | ||||||
Kansas |
70,848 | 31,456 | ||||||
Total Residential |
374,481 | 167,346 | ||||||
Commercial: |
||||||||
Colorado |
13,357 | 6,356 | ||||||
Nebraska |
43,472 | 20,705 | ||||||
Iowa |
54,587 | 26,003 | ||||||
Kansas |
22,629 | 10,092 | ||||||
Total Commercial |
134,045 | 63,156 | ||||||
Industrial: |
||||||||
Colorado |
1,348 | 1,495 | ||||||
Nebraska |
3,425 | 1,640 | ||||||
Iowa |
2,191 | 1,581 | ||||||
Kansas |
11,057 | 14,667 | ||||||
Total Industrial |
18,021 | 19,383 | ||||||
Transportation: |
||||||||
Colorado |
732 | 278 | ||||||
Nebraska |
10,569 | 4,703 | ||||||
Iowa |
3,876 | 1,609 | ||||||
Kansas |
5,389 | 2,409 | ||||||
Total Transportation |
20,566 | 8,999 | ||||||
Other Sales Revenue: |
||||||||
Colorado |
100 | 39 | ||||||
Nebraska |
2,077 | 907 | ||||||
Iowa |
1,073 | 457 | ||||||
Kansas |
3,213 | 1,600 | ||||||
Total Other Sales Revenue |
6,463 | 3,003 | ||||||
Total Regulated: |
||||||||
Colorado |
78,269 | 36,096 | ||||||
Nebraska |
186,663 | 88,579 | ||||||
Iowa |
175,508 | 76,988 | ||||||
Kansas |
113,136 | 60,224 | ||||||
Total Regulated |
553,576 | 261,887 | ||||||
Non-regulated Services |
26,736 | 15,189 | ||||||
Total Sales Revenues |
$ | 580,312 | $ | 277,076 |
(1) |
2008 reported amounts include the regulated Gas Utilities for the period July 14, 2008 to December 31, 2008. |
Sales Margins |
2009 |
2008(1) |
||||||
Residential: |
||||||||
Colorado |
$ | 17,443 | $ | 5,984 | ||||
Nebraska |
44,638 | 19,460 | ||||||
Iowa |
42,734 | 16,335 | ||||||
Kansas |
28,999 | 12,436 | ||||||
Total Residential |
133,814 | 54,215 | ||||||
Commercial: |
||||||||
Colorado |
3,176 | 1,131 | ||||||
Nebraska |
11,785 | 4,952 | ||||||
Iowa |
12,749 | 5,210 | ||||||
Kansas |
6,484 | 2,693 | ||||||
Total Commercial |
34,194 | 13,986 | ||||||
Industrial: |
||||||||
Colorado |
375 | 232 | ||||||
Nebraska |
431 | 173 | ||||||
Iowa |
244 | 105 | ||||||
Kansas |
1,766 | 1,041 | ||||||
Total Industrial |
2,816 | 1,551 | ||||||
Transportation: |
||||||||
Colorado |
732 | 278 | ||||||
Nebraska |
10,569 | 4,703 | ||||||
Iowa |
3,876 | 1,609 | ||||||
Kansas |
5,389 | 2,409 | ||||||
Total Transportation |
20,566 | 8,999 | ||||||
Other Sales Margins: |
||||||||
Colorado |
101 | 39 | ||||||
Nebraska |
2,077 | 907 | ||||||
Iowa |
1,073 | 457 | ||||||
Kansas |
2,312 | 1,177 | ||||||
Total Other Sales Margins |
5,563 | 2,580 | ||||||
Total Regulated: |
||||||||
Colorado |
21,827 | 7,664 | ||||||
Nebraska |
69,500 | 30,195 | ||||||
Iowa |
60,676 | 23,716 | ||||||
Kansas |
44,950 | 19,756 | ||||||
Total Regulated |
196,953 | 81,331 | ||||||
Non-regulated Services |
11,643 | 3,895 | ||||||
Total Sales Margins |
$ | 208,596 | $ | 85,226 |
(1) |
2008 reported amounts include the regulated Gas Utilities for the period July 14, 2008 to December 31, 2008. |
Volumes |
2009 |
2008(1) |
||||||
Residential: |
||||||||
Colorado |
6,355,275 | 2,344,549 | ||||||
Nebraska |
12,619,682 | 5,115,805 | ||||||
Iowa |
10,976,268 | 4,126,150 | ||||||
Kansas |
6,878,243 | 2,682,850 | ||||||
Total Residential |
36,829,468 | 14,269,354 | ||||||
Commercial: |
||||||||
Colorado |
1,444,360 | 563,169 | ||||||
Nebraska |
5,189,630 | 2,133,433 | ||||||
Iowa |
6,597,035 | 2,749,234 | ||||||
Kansas |
2,696,870 | 1,063,356 | ||||||
Total Commercial |
15,927,895 | 6,509,192 | ||||||
Industrial: |
||||||||
Colorado |
263,134 | 164,112 | ||||||
Nebraska |
581,892 | 248,256 | ||||||
Iowa |
333,324 | 196,841 | ||||||
Kansas |
2,524,126 | 1,586,306 | ||||||
Total Industrial |
3,702,476 | 2,195,515 | ||||||
Transportation: |
||||||||
Colorado |
807,999 | 347,822 | ||||||
Nebraska |
25,311,501 | 12,930,165 | ||||||
Iowa |
14,915,602 | 6,312,050 | ||||||
Kansas |
14,069,182 | 7,215,038 | ||||||
Total Transportation |
55,104,284 | 26,805,075 | ||||||
Other Volumes: |
||||||||
Colorado |
- | - | ||||||
Nebraska |
1,400 | 320 | ||||||
Iowa |
68,290 | 18,301 | ||||||
Kansas |
141,909 | 60,917 | ||||||
Total Other Volumes |
211,599 | 79,538 | ||||||
Total Volumes: |
||||||||
Colorado |
8,870,768 | 3,419,652 | ||||||
Nebraska |
43,704,105 | 20,427,979 | ||||||
Iowa |
32,890,519 | 13,402,576 | ||||||
Kansas |
26,310,330 | 12,608,467 | ||||||
Total Volumes |
111,775,722 | 49,858,674 |
(1) |
2008 reported amounts include the regulated Gas Utilities for the period July 14, 2008 to December 31, 2008. |
2009 |
2008 |
|||||||||||||||
Heating Degree Days: |
Actual |
Variance From
30-Year Average |
Actual |
Variance From
30-Year Average |
||||||||||||
Colorado |
6,299 | 2 | % | 2,376 | (7 | )% | ||||||||||
Nebraska |
6,238 | 5 | % | 2,458 | - | |||||||||||
Iowa |
7,279 | 6 | % | 2,909 | 3 | % | ||||||||||
Kansas |
4,989 | - | 1,897 | (3 | )% |
2009 |
2008 |
|||||||
Natural gas in storage |
6,866,550 | 7,317,931 |
Customers |
December 31,
2009 |
December 31,
2008 |
||||||
Residential: |
||||||||
Colorado |
65,586 | 64,601 | ||||||
Nebraska |
179,873 | 177,432 | ||||||
Iowa |
133,712 | 133,442 | ||||||
Kansas |
97,446 | 96,593 | ||||||
Total Residential |
476,617 | 472,068 | ||||||
Commercial: |
||||||||
Colorado |
3,590 | 3,579 | ||||||
Nebraska |
15,218 | 15,034 | ||||||
Iowa |
15,403 | 15,467 | ||||||
Kansas |
9,510 | 9,463 |