Black Hills Natural Gas Operations Report on URI Costs
Black Hills Corp. Utilities absorbed more than $ 600 million in additional costs in February related to the effects of extremely cold temperatures.
Most of the $ 565 million in additional fees for the Rapid City, SD-based operator went to natural gas utilities in Arkansas, Colorado, Iowa, Kansas, Nebraska and Wyoming.
“During this extreme weather event, the company’s electrical and natural gas systems performed remarkably well and delivered energy safely and reliably to its customers,” CEO Linn Evans said during the call for first quarter 2021 results. “Our utilities all performed exceptionally well during the deep freeze in Storm Uri.”
Initial estimates of incremental commodity costs to meet “extraordinary demand” from utility customers for natural gas and electricity during winter storm Uri totaled $ 625 million, Evans said.
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“As we do a real in-depth analysis on Uri, the investments we’ve made with new interconnections, adding pipelines to increase resiliency and reliability have been very helpful, so we’re definitely looking at what we’ve learned from it. ‘Uri and will continue in this direction of investments that will help us mitigate the things that we have learned from the storm and that we can control, ”he said.
The effects of the storm on earnings were estimated at $ 12 million, or 15 cents / share. Despite Uri’s impacts, Black Hills maintains its full-year and five-year profit forecast, along with a $ 3 billion capital budget. Over $ 1.7 billion is included for gas utilities.
Net income was $ 96.3 million ($ 1.54 / share) in 1Q2021, compared to $ 93.2 million ($ 1.51) in 1Q2020.