CHEYENNE, Wyo. - Nov. 1, 2018 - Black Hills Corp. (BKH) announced that yesterday its Wyoming electric utility subsidiary, Cheyenne Light, Fuel and Power Co., doing business as Black Hills Energy, received approval from the Wyoming Public Service Commission for a comprehensive, multi-year settlement agreement regarding its Power Cost Adjustment (PCA) Application filed earlier this year.
Cheyenne Light`s PCA permits the recovery of costs associated with fuel, purchased electricity and other specified costs, including the portion of the company`s energy that is delivered from the Wygen I power purchase agreement (PPA) with Black Hills Wyoming (an affiliate company).
The comprehensive settlement between Cheyenne Light and the stipulating parties resolves all outstanding issues related to the company`s PCA. To settle these issues, Cheyenne Light agreed to provide a total of $7 million in customer credits through the PCA mechanism in 2018, 2019 and 2020, and to file a rate review no later than June 21, 2021.
The comprehensive settlement also stipulates that the adjustment for the variable cost segment of the Wygen I PPA will escalate by a fixed 3 percent annually through the remainder of the PPA`s term. The settlement does not modify any terms of the Wygen I PPA.
"This settlement resolves several years of disputed issues related to PCA dockets before the Commission and further provides important customer benefits, including price certainty and ongoing stable energy supply from the Wygen I PPA through the contract`s term of 2022," said Linn Evans, president and chief operating officer of Black Hills.
Cheyenne Light will provide $6 million of customer credits in 2018 and $500,000 annually in 2019 and 2020. The company had previously recognized a $2.0 million reserve for these customer credits, and will record $2.5 million in its third quarter 2018 earnings and $1.5 million in the fourth quarter.
Black Hills Corporation
Black Hills Corp. (BKH) is a customer focused, growth-oriented utility company with a tradition of improving life with energy and a vision to be the energy partner of choice. Based in Rapid City, South Dakota, the company serves 1.25 million natural gas and electric utility customers in eight states: Arkansas, Colorado, Iowa, Kansas, Montana, Nebraska, South Dakota and Wyoming. More information is available at www.blackhillscorp.com, www.blackhillscorp.com/corporateresponsibility and www.blackhillsenergy.com.
Jerome E. Nichols
24-Hour Media Relations Line
Caution Regarding Forward Looking Statement
This news release includes "forward-looking statements" as defined by the Securities and Exchange Commission, or SEC. We make these forward-looking statements in reliance on the safe harbor protections provided under the Private Securities Litigation Reform Act of 1995. All statements, other than statements of historical facts, included in this news release that address activities, events or developments that we expect, believe or anticipate will or may occur in the future are forward looking statements. This includes our ability to acquire a final written order from the Wyoming commission for the PCA settlement. These forward-looking statements are based on assumptions which we believe are reasonable based on current expectations and projections about future events and industry conditions and trends affecting our business. However, whether actual results and developments will conform to our expectations and predictions is subject to a number of risks and uncertainties that, among other things, could cause actual results to differ materially from those contained in the forward-looking statements, the risk factors described in Item 1A of Part I of our 2017 Annual Report on Form 10-K filed with the SEC, and other reports that we file with the SEC from time to time.
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Source: Black Hills Corporation via GlobeNewswire