BLACK HILLS CORP SD
For the period ended Dec 31, 2023. Filed Feb 14, 2024.
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FY2023 · Filed Feb 14, 2024
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Gas Utilities
Operating results for the years ended December 31 for the Gas Utilities were as follows (in millions):
| 2023 | 2022 | 2023 vs 2022 Variance | 2021 | 2022 vs 2021 Variance | |
|---|---|---|---|---|---|
| Revenue: | |||||
| Natural gas - regulated | $1,399.1 | $1,584.6 | $(185.5) | $1,051.6 | $533.0 |
| Other - non-regulated services | 85.1 | 84.5 | 0.6 | 73.3 | 11.2 |
| Total revenue | 1,484.2 | 1,669.1 | (184.9) | 1,124.9 | 544.2 |
| Cost of natural gas sold: | |||||
| Natural gas - regulated | 760.2 | 942.1 | (181.9) | 480.3 | 461.8 |
| Other - non-regulated services | 23.0 | 23.0 | — | 14.4 | 8.6 |
| Total cost of natural gas sold | 783.2 | 965.1 | (181.9) | 494.7 | 470.4 |
| Gas Utility margin (non-GAAP) | 701.0 | 704.0 | (3.0) | 630.2 | 73.8 |
| Operations and maintenance | 328.7 | 317.3 | 11.4 | 290.2 | 27.1 |
| Depreciation and amortization | 113.9 | 114.7 | (0.8) | 104.2 | 10.5 |
| Taxes - property and production | 29.6 | 27.8 | 1.8 | 24.6 | 3.2 |
| 472.2 | 459.8 | 12.4 | 419.0 | 40.8 | |
| Operating income | $228.8 | $244.2 | $(15.4) | $211.2 | $33.0 |
Gas Utility margin decreased over the prior year as a result of:
| (in millions) | |
|---|---|
| New rates and rider recovery | $19.8 |
| Retail customer growth and demand | 7.6 |
| Weather | (14.5) |
| Prior year true-up of Winter Storm Uri carrying costs (a) | (10.3) |
| Mark-to-market on non-utility natural gas commodity contracts | (3.5) |
| Other | (2.1) |
| $(3.0) | |
(a)
In certain jurisdictions, we have commission approval to recover carrying costs on Winter Storm Uri regulatory assets which offset increased interest expense. Additionally, the carrying costs accrued during the year ended December 31, 2022 included a one-time, $10.3 million true-up to reflect commission authorized rates.
Operations and maintenance expense increased primarily due to $14.8 million of higher employee-related expenses partially offset by $5.0 million of lower outside services expenses.
Depreciation and amortization was comparable to the prior year.
Taxes - property and production were comparable to the prior year.
Operating Statistics
| Revenue (in millions) · Quantities Sold and Transported (Dth in millions) | ||||||
|---|---|---|---|---|---|---|
| For the year ended December 31, | For the year ended December 31, | |||||
| 2023 | 2022 | 2021 | 2023 | 2022 | 2021 | |
| Residential | $839.2 | $940.2 | $613.5 | 60.1 | 66.9 | 60.1 |
| Commercial | 340.1 | 398.6 | 242.1 | 29.4 | 32.4 | 29.1 |
| Industrial | 33.2 | 63.0 | 33.4 | 5.7 | 7.7 | 6.2 |
| Other | 9.1 | 8.7 | 3.8 | — | — | — |
| Total Distribution | 1,221.6 | 1,410.5 | 892.8 | 95.2 | 107.0 | 95.4 |
| Transportation and Transmission | 177.5 | 174.1 | 158.8 | 159.8 | 160.9 | 154.6 |
| Total Regulated | 1,399.1 | 1,584.6 | 1,051.6 | 255.0 | 267.9 | 250.0 |
| Non-regulated Services (a) | 85.1 | 84.5 | 73.3 | — | — | — |
| Total Revenue and Quantities Sold | $1,484.2 | $1,669.1 | $1,124.9 | 255.0 | 267.9 | 250.0 |
(a)
Includes Black Hills Energy Services and non-regulated services under the Service Guard Comfort Plan, Tech Services and HomeServe.
| Revenue (in millions) · Quantities Sold and Transported (Dth in millions) | ||||||
|---|---|---|---|---|---|---|
| For the year ended December 31, | For the year ended December 31, | |||||
| 2023 | 2022 | 2021 | 2023 | 2022 | 2021 | |
| Arkansas Gas | $268.9 | $311.3 | $218.5 | 30.2 | 32.3 | 31.5 |
| Colorado Gas | 313.6 | 320.9 | 208.0 | 32.8 | 34.3 | 32.3 |
| Iowa Gas | 213.6 | 283.9 | 171.7 | 37.9 | 40.9 | 38.0 |
| Kansas Gas | 155.6 | 191.4 | 121.6 | 35.5 | 38.6 | 34.5 |
| Nebraska Gas | 366.1 | 384.8 | 273.4 | 82.2 | 85.1 | 81.0 |
| Wyoming Gas | 166.4 | 176.8 | 131.7 | 36.4 | 36.7 | 32.7 |
| Total Revenue and Quantities Sold | $1,484.2 | $1,669.1 | $1,124.9 | 255.0 | 267.9 | 250.0 |
| For the year ended December 31, | ||||||
|---|---|---|---|---|---|---|
| 2023 | 2022 | 2021 | ||||
| Heating Degree Days | Actual | Variance From Normal | Actual | Variance From Normal | Actual | Variance From Normal |
| Arkansas Gas (a) | 3,197 | (17)% | 3,844 | 2% | 3,565 | (12)% |
| Colorado Gas | 5,916 | (4)% | 6,325 | 4% | 5,866 | (11)% |
| Iowa Gas | 5,921 | (12)% | 7,037 | 7% | 6,239 | (8)% |
| Kansas Gas (a) | 4,387 | (8)% | 4,968 | 7% | 4,508 | (8)% |
| Nebraska Gas | 5,579 | (8)% | 6,220 | 4% | 5,599 | (9)% |
| Wyoming Gas | 7,385 | 8% | 7,644 | 12% | 7,074 | (7)% |
| Combined (b) | 6,006 | (4)% | 6,536 | 5% | 5,948 | (8)% |
(a)
Arkansas and Kansas have weather normalization mechanisms that mitigate the weather impact on Gas Utility margins.
(b)
Heating degree days are calculated based on a weighted average of total customers by state excluding Kansas due to its weather normalization mechanism. Arkansas Gas is partially excluded based on the weather normalization mechanism in effect from November through April.
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