Black Hills Corp. (NYSE: BKH) received a unanimous settlement from the Nebraska Public Service Commission on December 9 2025 that authorizes a new rate structure for its Nebraska natural‑gas subsidiary, Black Hills Energy. The settlement will generate roughly $23.9 million in new annual revenue and, after migrating $18.5 million of rider revenue to base rates, will lift total base‑rate revenue by $42.4 million. The new rates take effect on January 1 2026, replacing interim rates that have been in place since August 1 2025 and covering more than 304,000 customers across the state.
The agreement includes a five‑year System Safety and Integrity Rider, a new insurance tracker, a manufactured‑gas plant tracker, and a weather‑normalization pilot program. These mechanisms are designed to fund accelerated pipeline replacement and safety upgrades, ensuring that the company can meet evolving regulatory and safety standards while maintaining reliable service for its customers. The rider and trackers also provide a structured path for future investment, reducing the need for ad‑hoc rate adjustments.
Financially, the approval allows Black Hills to recover over $453 million in system investments made since the last general rate filing in 2020. The new rates are based on a 9.85% return on equity and a capital structure of 50.5% equity and 49.5% debt, aligning with the company’s long‑term financing strategy. The settlement comes as Black Hills is pursuing a tax‑free, all‑stock merger with NorthWestern Energy, expected to close in the second half of 2026; the Nebraska approval is one of several regulatory milestones required for that transaction.
Linn Evans, president and CEO, said the settlement “supports our ability to safely and reliably serve our customers and communities in Nebraska.” The announcement was met with a positive reaction from investors, reflecting confidence that the rate increase will underpin the company’s earnings guidance for 2025 and provide a stable revenue base for the merger and ongoing capital expenditures.
The regulatory win strengthens Black Hills’ financial position, enabling continued investment in infrastructure safety and reliability while delivering a predictable revenue stream to support dividend commitments and future growth initiatives. By securing a higher base‑rate revenue, the company can better manage capital spending, mitigate inflationary cost pressures, and maintain its competitive edge in the regulated utility market.
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