Black Hills' (BKH) Natural Gas Utility Gets New Rate Approval
Black Hills Corporation’s BKH Colorado intrastate natural gas pipeline, Rocky Mountain Natural Gas LLC, doing business as Black Hills Energy, recently received state regulators’ approval for new rates, effective from Jul 15, 2023.
The Colorado Public Utility Commission approved BKH's new rate appeal to recoup about $110 million in investments made in the 600-mile pipeline system since 2017. This approval marks the company’s second increase in 2023.
Essential Rate Hike
Maintaining and upgrading natural gas pipelines requires a large amount of investment. The systematic investment made in infrastructure increases the resilience of operations and enables the company to meet the demand of its expanding customer base.
No doubt, the rate increases create a financial burden for customers, even then utilities require rate revisions at regular intervals. Infrastructure additions and maintenance are continuous processes. Rate hikes at intervals allow utilities to continue with infrastructure spending as they have funds at their disposal.
Price Performance
Shares of BKH have experienced a relatively wider decline compared with the broader industry over the past three months.
Image Source: Zacks Investment Research
Zacks Rank
Black Hills currently has a Zacks Rank #3 (Hold).
Key Picks
Some better-ranked utilities in the same industry are Consolidated Edison Inc. ED, Alliant Energy Corp. LNT and Entergy Corp. ETR, each carrying a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Consolidated Edison’s long-term (three-to-five-years) earnings growth rate is pegged at 2%. ED boasts a four-quarter average earnings surprise of 9.51%.
Alliant Energy’s long-term earnings growth rate is pegged at 6.5%. The Zacks Consensus Estimate for LNT’s 2023 sales indicates an increase of 8% over 2022’s reported figure.
Entergy’s long-term earnings growth rate is pegged at 5.7%. ETR exhibits a four-quarter average earnings surprise of 7.53%.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Entergy Corporation (ETR) : Free Stock Analysis Report
Consolidated Edison Inc (ED) : Free Stock Analysis Report
Black Hills Corporation (BKH) : Free Stock Analysis Report
Alliant Energy Corporation (LNT) : Free Stock Analysis Report
