BLACK HILLS CORP /SD/

Pending Merger with NorthWestern

On August 18, 2025, we entered into the Merger Agreement with NorthWestern and Merger Sub. We anticipate the transaction closing by year-end 2026, subject to receipt of a satisfactory approval from the MPSC. See Note 14 of the Condensed Notes to Consolidated Financial Statements for further information regarding the pending Merger.

Google Data Center Project

In September 2026, the Company entered into long-term agreements with Google and other third-party partners to serve a planned data center project to be constructed in Cheyenne, Wyoming. The project is contracted to be served through a total resource mix of 2.7 GW, including reserve margins, and is expected to begin taking energy service in late 2027 and ramp to the data center's projected peak load by the end of 2030. We expect to provide up to 590 MW of grid-connected energy service through company-owned generation and market energy. In addition, we expect to manage the output of approximately 2.1 GW of third-party contracted resources through a privately managed microgrid under the Company’s LPCS tariff.

To provide 590 MW of grid-connected service, the Company expects to invest approximately $1.8 billion to construct 564 MW (nameplate capacity) of new company-owned natural gas generation between 2027 and 2029 through a non-regulated affiliate, which will be located at the Company's existing CPGS facility. The remaining 26 MW is expected to be supplied through a combination of market energy purchases and retail utility service provided under the Company's applicable industrial tariff.

The Company expects to finance the approximately $1.8 billion of generation investment through a combination of project-generated cash flow and debt and equity instruments with a focus on earnings accretion while maintaining solid investment-grade credit ratings. In connection with the development of the project, the Company previously disclosed customer-funded refundable advances received pursuant to the parties' generation reservation agreement to support procurement of long-lead generation equipment. During the third quarter of 2026, the parties amended the generation reservation agreement to increase the permitted advances to $398.8 million and extend the repayment date to June 30, 2027. The Company expects to reimburse those advances by their June 30, 2027 maturity date.

The agreements include contractual protections throughout the 2048 contract term intended to prevent cost shifting to existing retail customers, including:

•

Cost pass-through mechanisms – protect customers from costs associated with the planned data center while protecting returns from inflation, interest rate volatility, and other cost pressures;

•

Stranded asset risk protection – provides for full recovery of all generation capital investment over the contract term, protecting customers against risk of stranded assets;

•

Early termination protection – safeguard customers and shareholders should the project terminate prior to the end of the agreements' term; and

•

Credit protections – strong collateral and financial assurance requirements back the data center's long-term commitments.

The Company has obtained or initiated key regulatory approvals for the project during 2026, including a substation CPCN approval, the filing of an industrial siting permit for the CPGS expansion, and approval of an air quality permit and an industrial siting permit for the CPGS expansion. Additionally, the Company is advancing transmission expansion opportunities through regulatory filings to serve this project and other regional large-load opportunities. See Business Segment Recent Developments section below with further details on these transmission expansion filings.

Business Segment Recent Developments

Electric Utilities

•

See Note 2 of the Condensed Notes to Consolidated Financial Statements for recent rate review activity for South Dakota Electric and Colorado Electric.

•

In 2026 to date, Wyoming Electric requested approval from the WPSC for a new LCTCAM tariff and CPCNs for two transmission expansion projects with total investment of $686 million to serve the growing energy needs of Wyoming Electric's large-load customers.

o

On June 19, 2026, Wyoming Electric filed a request with the WPSC to establish an LCTCAM tariff. The LCTCAM tariff provides a framework to directly recover transmission investment costs from LPCS customers who are served by, and benefit from, the transmission facilities. The proposed mechanism is designed to ensure that customers not directly served by those facilities are protected from bearing those costs. A WPSC decision is expected in the first quarter of 2027.

o

On September 1, 2026, Wyoming Electric filed a CPCN with the WPSC for its South Cheyenne Transmission Project. The $80 million project includes new substations and nearly 15 miles of transmission lines and upgrades to be in-service in multiple phases in late 2027 through 2028. Recovery is expected to be requested under the LCTCAM, which is currently pending with the WPSC. A WPSC decision on the South Cheyenne Transmission Project CPCN request is expected by mid-2027.

o

On November 2, 2026, Wyoming Electric filed a request with the WPSC for a CPCN for its Aeolus Transmission Project to expand transmission capacity across the Cheyenne region and key interconnection points. The $606 million project includes two new 230-kV transmission lines, with upgrade capabilities to 345-kV, spanning approximately 125 miles. Pending approval by the WPSC, completion of the project is expected by mid-2029. Recovery is expected to be requested under the LCTCAM, which is also pending approval from the WPSC. A WPSC decision on the Aeolus Transmission Project CPCN request is expected by mid-2027.

•

During the third quarter of 2026, South Dakota Electric continued with construction of its Lange II project which is anticipated to be in service by year-end 2026. The addition of these resources will replace generation facilities planned for retirement and support updated planning reserve margin requirements. On August 4, 2026, South Dakota Electric filed an application with the SDPUC for a PIPR rider which requests recovery of $320 million of Lange II project costs outside of a general rate review. If approved by the SDPUC, the rider is anticipated to be effective on December 1, 2026.

•

On September 11, 2026, Colorado Electric filed its 2026 Clean Energy Plan with the CPUC. The updated plan builds on Colorado Electric's 2022 Clean Energy Plan. The plan includes a 25-year planning horizon and reliably achieves Colorado’s statutory requirement to reduce greenhouse gas emissions by 80% by 2030, based on 2005 levels. To meet these objectives, the plan proposes the addition of 100 MW of wind energy, 200 MW of battery energy storage systems and 125 MW of firm, dispatchable natural gas-fired generation.

•

On March 12, 2026, the state of South Dakota enacted comprehensive wildfire liability mitigation legislation (Senate Bill 36), effective July 1, 2026. The legislation provides material liability protections for a utility that complies with its published wildfire mitigation plan. On July 2, 2026, South Dakota Electric filed its WMP with the SDPUC. Under Senate Bill 36, a utility's WMP is valid and current if it is on file and all annual reports are timely filed with the SDPUC. In 2025, the state of Wyoming enacted similar legislation. In November 2025, Wyoming Electric filed its WMP with the WPSC, which was approved on July 9, 2026.

•

On June 30, 2026, Wyoming Electric submitted an IRP to the WPSC. The IRP, which is based on 20-year planning period including a near-term planning period through 2033, identified a near-term capacity shortfall of 95 MW beginning in 2027. Based on its forecasts and analysis, Wyoming Electric recommends the addition of natural gas-fired generation, battery storage assets and energy market purchases to meet the identified resource need. Wyoming Electric's IRP does not address any LPCS Tariff capacity needs, which are handled separately under customer-specific agreements.

•

In 2026, Wyoming Electric has set multiple all-time records for System Peak Demand driven by growth in large-load data center demand. The most recent all-time peak of 439 MW was set on July 20, 2026. Prior to 2026, the previous all-time peak was 379 MW set on June 20, 2025.

•

In 2025, Colorado Electric received CPUC approval for the addition of 250 MW of new renewable generation resources in support of its Clean Energy Plan, which included a 50-MW utility-owned battery storage project and a 200-MW solar PPA. During the fourth quarter of 2025, Colorado Electric commenced construction of the 50-MW battery storage project. The project is expected to be completed by year-end 2027. On February 18, 2026, Colorado Electric entered into a 200-MW solar PPA. See Note 3 of the Condensed Notes to Consolidated Financial Statements for additional information regarding the PPA.

Gas Utilities

•

See Note 2 of the Condensed Notes to Consolidated Financial Statements for recent rate review activity for Arkansas Gas, Kansas Gas and Nebraska Gas.

Corporate and Other

•

See Note 5 of the Condensed Notes to Consolidated Financial Statements for information regarding recent financing activities.

•

During the second quarter of 2026, we published our 2025 Corporate Sustainability Report, highlighting our environmental, social and governance impacts and our progress on major projects and climate goals. We reported a 43% reduction in electric utility emissions intensity compared to 2005, driven by the addition of renewable and natural gas resources and the retirement of aging power plants. We also reduced natural gas utility emissions by 25% since 2022, including a 53% reduction from transfer stations, reflecting progress toward our net-zero by 2035 goal through expanded leak detection and repair efforts.