Q4 2024 Black Hills Corp Earnings Call
Good day and thank you for standing by welcome to the Black Hills Corporation Q4, and full year 2024 earnings webcast and conference call. At this time all participants are in a listen only mode. Please be advised that today's conference is being recorded after the speaker's presentation there'll be a question and answer.
Saudi: Session to ask a question. Please press star one one on your telephone and wait for your name to be announced to withdraw. Your question. Please press star one again I would now like to hand, the conference over to your Speaker today, Saudi is director of Investor Relations.
Speaker Change: Thank you operator, good morning, and welcome to Black Hills Corporation's fourth quarter and full year 2024 earnings conference call.
Speaker Change: You can find our earnings release and materials for our call. This morning on our website at Www Dot Black Hills Corp, Dot com under the Investor Relations heading.
Speaker Change: Leading our quarterly earnings call are Linn Evans, President and Chief Executive Officer, Kimberly Nooney, Senior Vice President and Chief Financial Officer, and Marty Jones, Senior Vice President utilities.
Speaker Change: During our earnings discussion today comments, we make may contain forward looking statements as defined by the Securities and Exchange Commission and there are a number of uncertainties inherent in such comments.
Speaker Change: Although we believe that our expectations are based on reasonable assumptions actual results may differ materially.
Speaker Change: We direct you to our earnings release slide two of the Investor presentation on our website and our most recent Form 10-K and Form 10-Q filed with the Securities and Exchange Commission for a list of some of the factors that could cause future results to differ materially from our expectations.
Speaker Change: With that I will now turn the call over to Linn Evans Lynn.
Speaker Change: Good morning, and thank you all for joining US today I'll begin my comments with a brief overview of our successful 2024 and long term outlook Kimberly will provide our financial update.
Speaker Change: Marty will provide more detail on our team's operational performance and our strategic progress.
Speaker Change: I'll begin on slide three we delivered on our key objectives in 2020 for advancing our customer focused strategy I'm very proud of our team who delivered excellent service to our customers delivered on our financial commitments and advanced our regulatory and growth initiatives.
Speaker Change: In 2024, we made strong progress on our strategic growth plan with industry, leading reliability, while successfully serving the 19th consecutive year of increasing peak loads for Wyoming Electric recently recording a new peak demand of 318 megawatts, we also invested over $800 million.
Speaker Change: For the core energy needs of our customers and the communities across our growing footprint.
Speaker Change: We delivered on our earnings guidance, and we are well positioned to achieve our long term EPS growth target even through challenges from mild weather and unplanned generation outages, our team's relentless focus on expense management put us right down the middle of a fairly with our guidance range.
Speaker Change: <unk> growth was four 3% in 2024 off our 2023 guidance midpoint of $3 75.
Speaker Change: And we expect to deliver approximately 5% EPS growth in 2025 off of 2024 as reflected in our earnings guidance for the year.
Speaker Change: Our financial position remains solid during the year, we achieved our capitalization target successfully completed our financing plan and maintained our solid investment grade credit ratings.
Speaker Change: Our team has also demonstrated notable progress managing our diversified multi state service territory, continuing our cadence of approximately three rate reviews annually as we recover investments for our customers and the inflationary impacts of our cost to serve in 'twenty 'twenty four we implemented constructive settlements for Arkansas gas and Iowa gas.
Speaker Change: We also continued to make solid progress in our growth initiatives in 2024, we added further clarity to our data center growth plan and announced our service to support Meadows, New AI data center beginning to ramp in 2026.
Speaker Change: And as we look to serve the growing needs of our customers. We obtained final approval for our clean energy plan for Colorado Electric and we're finalizing plans for a new electric generation for South Dakota Electric and.
Speaker Change: In Wyoming, we energize the initial phase of already Wyoming electric transmission expansion a remarkable achievement in only two years after receiving approval for the project.
Speaker Change: We're excited about this project as it enhances our ability to cost effectively deliver energy for our customers. It also opens up additional opportunities for strategic growth and Wyoming.
Speaker Change: And as we announced a couple of weeks ago, we increased our dividend by 4% representing 55 consecutive years of dividend increases our updated financial outlook is provided on slide four in 2025, we are guiding to earnings in a range of $4 to $4.20 per share.
Speaker Change: Looking ahead, we are confident in our strong capital forecast incremental investment potential and growth opportunities highlighted by increasing demand from our industry, leading data center customers building on our solid financial position and our growing data center demand, we have confidence in our long term EPS growth target of 4% to 6%.
Speaker Change: <unk>.
Speaker Change: Slide five displays our updated five year capital investment plan for 2025 to 2029.
Speaker Change: Over our five year plan period, we expect to invest $4 $7 billion, an increase of approximately 10% or more than $400 million compared to the prior five year plan.
Speaker Change: The increase was driven by clarity of timing and cost of projects, including various other customer focused opportunities throughout the planned period as a reminder, our previous and current forecast include already Wyoming transmission project dispatch of generation resources in South Dakota, and renewable generation investments for our clean energy plan in Colorado.
Speaker Change: Our capital plan is designed to incorporate investments to support customer needs for safe reliable and cost effective service and support long term growth as our team continues to identify and develop project opportunities, we fully expect to incorporate incremental investments into our plan.
Speaker Change: Moving to slide six in addition to our capital plan, we are delivering earnings contribution through our data center demand and we are optimistic about the upside potential we have successfully serve datacenters and similar customers such as supercomputers in Cheyenne, Wyoming for more than a decade customers like Microsoft and soon to be.
Speaker Change: Meta are served through our innovative tariff had service model that requires minimal capital investment through this unique tariff our customers are served efficiently through market energy, providing us utility like earnings in lieu of new generation investment.
Speaker Change: This is a triple win first it provides us earnings that are comparable to that of building generation to serve growing data center demand.
Speaker Change: Second it protects our broader customer base from the risk of stranded assets.
Speaker Change: And third the communities, we serve benefit from local economic support and infrastructure enhancements that help grow the community and improve overall reliability and resiliency.
Speaker Change: Based upon our customers consistent execution on load forecast for more than a decade and given future demand forecast, we have a pipeline of over one gigawatt of data center demand within the next 10 years from existing customers. We expect to serve approximately 500 megawatts of this one gigawatt demand by the end of <unk>.
Speaker Change: Twenty-nine with minimal capital investment.
Speaker Change: We expect EPS contribution from data centers to more than double to 10% or more of total EPS by 2029, giving us further confidence in our EPS growth target.
Speaker Change: Data center demand above and beyond what we have included in our current five year plan may drive additional infrastructure expansion and a more traditional utility service model, which would be incremental to our current capital plan.
Speaker Change: We also continue to evaluate opportunities in Colorado, and South Dakota, which could bring future upside.
Speaker Change: Slide seven illustrates our ongoing strong customer growth over the last five years customer counts in our service jurisdictions has grown more than 1% annually on average which is more than double the national average population growth of four tenths of a percent.
Speaker Change: This organic growth is led by our Arkansas, Colorado service territories, which are nearly triple the average population growth for their respective states. We're also witnessing strong growth in our Western South Dakota service territory, well above the national average with that I'll turn it over to Kimberly for our financial update Kimberly.
Kimberly Nooney: Thank you Lynn and good morning, everyone I want to start by thanking our team for their agility and resiliency in delivering strong financial results. Despite unexpected challenges we experienced during the year.
Kimberly Nooney: From a financial perspective.
Kimberly Nooney: Through our team's hard work, we delivered on our earnings guidance and financial targets for 2024, and we remain on track to deliver on our long term strategic growth and financial objectives.
Kimberly Nooney: Slide nine illustrates our success in 2020 for displaying year over year earnings drivers as compared to 2023.
Kimberly Nooney: Results were in line with our expectations, including new margins, which more than offset capital investment costs reflected in financing and depreciation.
Kimberly Nooney: We overcame mild weather.
Kimberly Nooney: Two unplanned generation outages.
Kimberly Nooney: And higher insurance costs are significant expense management.
Kimberly Nooney: Including reduced spending on outside services, and managing head count, which helped us achieve our financial targets for the full year.
Kimberly Nooney: In 2024, we delivered 74 cents per share of new margins driven by the successful execution of our regulatory strategy.
Kimberly Nooney: And <unk> <unk> per share driven by customer growth.
Kimberly Nooney: This margin growth was partially offset by lower off system sales.
Kimberly Nooney: Unplanned generation outages and an insurance recovery payment received in 2023.
Kimberly Nooney: During 2024 exceptionally mild weather reduced EPS by <unk> 20, compared to normal and 15 cents compared to 2023.
Kimberly Nooney: Mark to market adjustments provided a gain of one <unk> per share for the year and <unk> compared to 2023.
Kimberly Nooney: Moving to O&M and.
Kimberly Nooney: I'm extremely proud of our team's success in managing our expenses well below our projected three 5% year over year increase.
Our accidents assisted in offsetting the 15th of mild weather discussed earlier.
Kimberly Nooney: Nine cents due to rising insurance costs.
Kimberly Nooney: <unk> associated with unplanned generation outages.
Kimberly Nooney: And 13 cents related to onetime gains from sales of assets and land completed in 2023.
Kimberly Nooney: Overall, our O&M management efforts substantially reduce the year over year, O&M increase to less than 1% or six cents per share.
Kimberly Nooney: Execution of our $800 million capital investment plan for customers resulted in higher financing and depreciation costs in 2024 compared to 2023.
Kimberly Nooney: This included a 16% increase in interest expense attributable to higher interest rates.
Kimberly Nooney: <unk> 17 impact from new shares issued.
Kimberly Nooney: And 15th of additional depreciation expense due to new assets placed in service.
Kimberly Nooney: Income tax was higher due to one Nebraska state income tax rate decrease which occurred in 2023.
Kimberly Nooney: In summary.
Kimberly Nooney: Our strong margin growth in O&M management efforts, offset depreciation and financing costs mild weather.
Kimberly Nooney: <unk> outages and increasing insurance costs.
Further details on year over year changes can be found in our earnings release and 10-K to be filed with the SEC next week.
Kimberly Nooney: 10 illustrates our commitment to execute our strategic plan and deliver on the financial targets, we set in 2023.
Kimberly Nooney: This includes growing our long term EPS growth by 4% to 6% off the midpoint of our 2023 earnings guidance range or $3 75.
Kimberly Nooney: We made it clear that we are committed to holding ourselves accountable and delivering on those financial commitments. We did just that in 2024 by delivering on our earnings guidance meeting our growth expectations and maintaining credit quality.
Kimberly Nooney: Looking ahead to 2025.
Kimberly Nooney: We have established an earnings guidance range of $4 to $4 20 per share.
Kimberly Nooney: Which reflects approximately 5% growth over 2024.
Kimberly Nooney: Our earnings guidance assumes normal weather, no unplanned generation outages constructive and timely outcomes of regulatory dockets and excludes mark to market adjustments.
Kimberly Nooney: We project O&M expense to be in line with a compounded annual growth rate of approximately three 5% of 2020, Three's expense, which was $552 million.
Kimberly Nooney: We also expect to issue between $215 million and $235 million of additional equity to finance, our $1 billion capital investment plan for 2025.
Kimberly Nooney: Finally, we estimate an effective tax rate of 13% for the full year.
Please see the appendix and forward looking statements in this presentation for a full list of earnings guidance assumptions and risks.
Kimberly Nooney: Slide 11 depicts our solid financial position <unk> lines of credit quality capital structure and liquidity.
Kimberly Nooney: During 2024, we achieved our net debt to capitalization ratio and maintained other key credit metrics and our commitment to maintain our solid investment grade credit ratings.
Kimberly Nooney: The chart on the lower left illustrates the success of our multi year effort to strengthen our balance sheet.
Kimberly Nooney: We reached our debt debt to total capitalization target of 55% in 2024 and.
Kimberly Nooney: And are close to achieving our 14% to 15% episodes that target.
Kimberly Nooney: Looking forward new equity issued will be in support of capital investments made on behalf of our customers as we continue to maintain our credit metrics and liquidity.
Kimberly Nooney: Consistent with our recent history of efficient issuance of new shares we expect to utilize our aftermarket equity program and we'll consider other available equity financing instruments.
Kimberly Nooney: Our liquidity remains strong at yearend with over $600 million of availability under our revolving credit facility and short term borrowings of approximately $130 million.
Kimberly Nooney: We are evaluating timing and refinancing options for our next debt maturity of $300 million in early 2026.
Kimberly Nooney: Slide 12 illustrates our industry, leading dividend track record of 55 consecutive years.
Kimberly Nooney: We continue to target a 55% to 65% payout ratio.
Kimberly Nooney: A dependable and increasing dividend is an important component of our strategy to deliver long term value for our shareholders.
Marty Jones: I will now turn the call over to Marty for a business update.
Marty Jones: Thank you Kimberly and good morning, everyone.
Marty Jones: On slide 14, I'm proud of our operational execution in 2024, as we delivered excellent electric and natural gas service to our 135 million customers across our eight states, we delivered on key operational objectives, including providing top quartile reliability.
Marty Jones: Lynn mentioned earlier that our customer count is growing at a robust pace across our service territories in Wyoming. We have served nearly two decades of consecutive annual increases in our electric system peak load as we serve this increasing demand the expectations of our customers are also expanding we are listening and working to be ready for the future.
Marty Jones: By advancing our strategic initiatives, which in the near term includes already Wyoming Electric transmission project, our Colorado Clean energy plan renewable generation edition and are linked to project, which will add 99 megawatts of dispatch full generation for South Dakota electric.
Marty Jones: I will also provide an update on our regulatory progress and wildfire management and mitigation plans.
Marty Jones: Slide 15 highlights our success in managing over a decade of growth in datacenter load.
Marty Jones: Our anchor customers our respected leaders in the technology industry and have recognized Cheyenne, Wyoming ideal attributes for datacenter operations and future expansion opportunities.
Marty Jones: <unk>, our existing data center customers projected total load exceeding one gigawatt.
Marty Jones: Take pride in our track record as a trusted energy partner delivering customized and innovative solutions to meet our customers' unique needs.
Our distinctive market energy procurement model provides utility like returns without the need for material capital investment.
Marty Jones: Providing benefits for other customers.
Marty Jones: Sequentially. Our current service model generally requires minimal capital investment as compared to traditional utility rate base projects.
Marty Jones: It's important to note that our data center customers are served through our crew tariffs with the earnings separated from our retail customers for ratemaking purposes.
Marty Jones: This model also provides access to market energy, including renewables and speed to market to support their expansion plans.
Marty Jones: Based on current projected market conditions, we're positioned to serve approximately 500 megawatts of data center demand by the end of 2029.
Marty Jones: As Lynn mentioned meeting demand beyond this forecast will drive incremental infrastructure investment opportunities and new generation and expanded transmission.
Marty Jones: Moving to slide 16, which describes our 260 mile $350 million ready, Wyoming electric transmission project the <unk>.
Marty Jones: <unk> reduced dependence on third party transmission system and enhanced system resiliency through increased market access including renewables.
Marty Jones: Our interconnected and expanded electric system helps maintain long term price stability for our customers, while also enabling ongoing growth in energy demand.
Marty Jones: Construction is progressing well and the initial phase representing approximately $40 million was placed in service and included in our 2020 for Wyoming electric transmission rider filing.
Marty Jones: When placed in service the remainder of the project cost will be recovered in our 2025 annual filing in Q4 of this year.
Marty Jones: Our Colorado Energy plan update is on slide 17 during the fourth quarter. We received final approval for 350 megawatts of renewable resources to reduce emissions for our Colorado customers by 80%.
Marty Jones: The approved portfolio include the utility owned 100 megawatt solar project a utility owned 50 megawatt battery storage project and a 200 megawatt solar power purchase agreement.
Marty Jones: We are in contract negotiations and when finalized will determine project cost and timing.
Marty Jones: Our refreshed capital plan includes updated assumptions for these projects with timing anticipated between 2026 and 2028.
Marty Jones: Final contracts are signed we will update our capital plan for material shifts in timing or cost.
Marty Jones: Slide 18 outlines our South Dakota Electric resource plan, we continue to pursue our link to project a 99 megawatt utility owned natural gas fired generation facility that will cost effectively and reliably serve our customers.
Marty Jones: With an in service date targeted in the second half of 2026, we plan to file a certificate of public convenience and necessity with the Wyoming Public Service Commission during the first quarter.
Marty Jones: Slide 19 summarizes our regulatory progress on rate reviews. During the year, we continued to focus on maintaining proactive constructive relationships with our regulators. We're pleased we have obtained commission approved settlement in two of our rate reviews in 2024 in Arkansas, We received approval for new rates effective in October.
Marty Jones: In Iowa, our rate review settlement was approved allowing for $15 million of new annual revenues with new rates effective in January replacing interim rates from last may.
Marty Jones: Our Colorado Electric rate review was filed in June with the hearing completed in December We expect commission deliberations a final decision and new rates in late Q1.
Marty Jones: Earlier this week, we filed a request for new rates for Kansas gas the application request, new annual revenue of $17 $2 million based on a 10, 5% Roe.
Marty Jones: And a 54% equity capital structure, we are seeking new rates in the second half of this year, which will also allow for the renewal of our five year capital reliability rider.
Marty Jones: Slide 20 outlines our wildfire management and risk mitigation plans, we have been successful in reducing operational risks with our multi layered approach to asset programs integrity programs and operational response, which is detailed in our wildfire mitigation plan available on our website.
Marty Jones: Continue to engage stakeholders, including community and local agencies regulators legislative bodies, and our industry peers to define reveal and advance our wildfire management and mitigation plans. This.
Marty Jones: This includes our public safety power Shutoff program, or PSP, which we expect to formalize in mid 2025.
Marty Jones: To further mitigate our wildfire exposure, we are actively engaged in the legislative process across our three electric states in <unk>.
Marty Jones: South Dakota, and Wyoming, we are strongly supporting newly introduced wildfire liability legislation and we are working with legislators and stakeholders on a similar bill in Colorado.
Lynn: With that I will now turn the call back to Lynn.
Lynn: Thank you Marni, we had an excellent year delivering on our strategy, we continue to cost effectively serve customers with industry leading reliability.
Lynn: We demonstrated success in constructive rate reviews, we achieved our financial objectives, including earnings guidance, our long term EPS growth target and our strengthened balance sheet, we have confidence in our earnings growth potential given a 10% increase in our capital plan to $4 $7 billion and over one gigawatt of total data center demand from existing.
Lynn: <unk> our teams focus continues to be to provide safe reliable and cost effective energy for our customers and finally I want to express my sincere appreciation to the Black hills team for safely effectively and efficiently serving our customers while managing through unexpected challenges throughout the year and with that we're happy to take your questions.
Lynn: Thank you as a reminder to ask a question. Please press star one one on your telephone and wait for your name to be announced to withdraw. Your question. Please press star one again, one moment for questions.
Lynn: Yeah.
Speaker Change: Our first question comes from Anthony <unk> with Mizuho you May proceed.
Speaker Change: Hey, good morning team hope all is well.
Speaker Change: I appreciate the disclosures if I could just.
Two hopefully quick ones on on slide five the company gives the capex forecast when I compare that to the.
Speaker Change: The Capex forecast all of the third quarter call there was previously.
Speaker Change: Spike in Capex in 2026 that has since come down just wondering if you can give some clarity on the changing of the capex spread.
Kimberly Nooney: Yes. This is Kimberly good morning Anthony.
Speaker Change: Different things going on here originally when we set our previous capital forecast last year, we had some significant projects that were assumed to go into service in 2026.
Speaker Change: Since then we've had some updated outcome.
Speaker Change: Outcomes that have redistributed those cost within the plan and so that's why you'll see maybe higher capital expense capital investments in 2025 versus some of the other years the.
Speaker Change: The other comment I would like to make is we have added 400.
Speaker Change: Million to the overall plan from last year. There is a combination of things going on there. We continue to see a lot of really good organic growth within our service territories and we're continuing to invest in.
Speaker Change: Safety and reliability investments on behalf of our customers and then you know some of the large projects that we have going on.
Speaker Change: Specifically, we have ready Wyoming.
Speaker Change: We're focused on the leg to that Marty mentioned, we've seen increases in inflation and financing costs related to those projects. So those are components that helped drive the additional $400 million of capital investments.
Speaker Change: Youre seeing in the plan.
Speaker Change: Great and then I don't mean to.
Speaker Change: Just maybe I'm looking too deep into that I'm curious.
Speaker Change: On slide six you guys talk about the expect no more than.
Speaker Change: I guess, 10% plus of contribution from the data center load the capital light opportunities.
Speaker Change: In this.
Speaker Change: David Slide deck can you say that 10% plus by 2029 and your previous disclosures, we actually were getting 10% plus by 2028 is there a delay in the plan or I'm, just reading too far into the plus sign there.
Speaker Change: No Anthony Great question, So maybe just a couple of thoughts around that.
Speaker Change: We have a compounded annual growth rate of 4% to 6%. What we've said is where we're extremely confident in that growth rate and we expect to grow to the higher end of that.
Speaker Change: Range in the latter part of the plan when you think about that growth rate and then you specifically think about our 10 plus percent related to the data centers.
Speaker Change: We still have great organic growth within our business model. So it's not a static or linear calculation. So as you think about our EPS continuing to grow over the long term.
Speaker Change: Component of the datacenter growth based on our current customers and their projected growth will be that 10 plus percent. So I think it's a combination of both our continued organic growth combined with our data center growth that still gets you to that relative 10%, but just think about that as an increasing percentage over the long term and getting us to the higher end of that four to six.
Speaker Change: <unk> growth rate.
Speaker Change: Okay.
Speaker Change: And I.
Speaker Change: I just want to make sure Im understanding I guess on how you think about the growth rate really.
Speaker Change: Has it changed or is there a material change between 2028 and 2029 and if it's taking up so much or Mike can pick it up offline.
Mike: No Anthony it's a great question I think others may have it so thank you for asking.
Mike: We set our base year as off a 2023. So that's how we think about that 4% to 6% growth, we think about it long term so.
Mike: We've always said at the front of the plan that was in 2023 that we were going to grow a little bit slower just because of some things going on we've also indicated that the back end of the plan, we'd be growing faster and at the higher end of that right and so as you think about 28 and 29.
Mike: With the addition of the 2029 year, you can think about us growing at the higher end, if not exceeding that rate on an annual year over year basis, that's how we think about it.
Great. Thanks for taking my questions.
Marty Jones: Thank you Anthony.
Mike: Thank you.
Speaker Change: Our next question comes from Andrew Weisel with Scotiabank you May proceed.
Andrew Weisel: Hi, good morning, everyone.
Speaker Change: Good morning, and good morning.
Speaker Change: First I just wanted to clarify one you remove the comment in the slides that youre committed to triple B plus equivalent credit ratings.
Speaker Change: Just to clarify are you trying to indicate any change in messaging there.
Speaker Change: Absolutely not we are very focused on.
Speaker Change: Our solid investment grade credit ratings, our targets have not changed.
Speaker Change: You heard Len mentioned that we achieved our debts.
Speaker Change: Debt to total cap of 55%, which was our target we are very close.
Speaker Change: Maintaining our 14% to 15% <unk> to debt. So nothing has changed it's still part of our core assumptions as we are.
Speaker Change: Devise our financial objectives.
Speaker Change: Very good I thought that would be the case I just wanted to clarify.
Speaker Change: One thing for it.
Speaker Change: Give me if I missed this but in 2020 for your actual Capex was a hair under $800 million I think you were targeting $840 million.
Speaker Change: Can you explain the shortfall was it just timing or was there something else going on there.
Marty Jones: Hi, Andrew This is Marty yes. Thanks for the question you're spot on it's just a little bit of timing.
Marty Jones: And in major projects between the two years, so nothing changed materially besides some timing.
Andrew Weisel: Would it be fair to assume that is spilled into early 2025 then.
Marty Jones: That's correct that those dollars will.
Andrew Weisel: We spent in 2025.
Andrew Weisel: Okay. So thats part of the roll forward, then into the new 25% to 29 Glenn.
Andrew Weisel: Correct.
Andrew Weisel: Okay got it and then lastly, just maybe I'm being too.
Andrew Weisel: Looking for something that's not there, but the clean energy plan in Colorado, the timing of new resources entering service now looks like 2027% to 2028. It was previously 2006 through 28.
Andrew Weisel: I believe the key is to have them in service by 2030, but is there anything to look into as far as the slight slippage in timing there.
Marty Jones: So Andrew this is Marty again, so when we initiated the clean energy plan really unknown on what we would get for bids and associated timing.
Marty Jones: As we talked over the course of 2024 and were those bids have come through and were now negotiating contracts, we have deeper insight into that timing and that's really what's driven that change and movement.
Marty Jones: When we initially talked about 2026, we knew that likely was not going to be the case, but that's kind of the best information we had at the time and as again as we've worked through those through the process and through the bids that's where we're seeing some some change in that timing.
Understood. Thank you very much.
Marty Jones: Yeah. Thanks, Andrew Thanks, Andrew.
Marty Jones: Thank you.
Speaker Change: Our next question comes from Julien Dumoulin Smith with Jefferies. You May proceed.
Marty Jones: Okay.
Speaker Change: Yeah, Hi, it's Brian and Sue.
Marty Jones: For Julian.
Hi, Brian Hi, Brian.
Marty Jones: Hey, I'm just curious.
Marty Jones: How active we are involved in Colorado wildfire risk mitigation legislation.
Marty Jones: Would you characterize it as a top.
Marty Jones: Priorities have there been any bills proposed yes.
Speaker Change: Brian Yes, we are working through wildfire legislation in each of our electric utilities.
Speaker Change: Specific to your question on Colorado, we have not yet had a bill.
Speaker Change: Bill taken up by the legislation.
Speaker Change: We're working with our peers in the state obviously focused on how do we mitigate risk on the backend at the utility level, how do we mitigate non economic damages.
Speaker Change: We're also focused on can we create standard of care. So those are all of the conversations that are ongoing at this time. Unfortunately, we don't have anything introduced but continue to work that educate our stakeholders an error and legislators.
Speaker Change: We will continue working through that and progressing.
Speaker Change: Our system I will say, though however in South Dakota, and Wyoming, We have had legislation introduced and it is stepping through the process most aggressively in Wyoming, So feel really good about where we're headed there.
Speaker Change: Okay, Great and then.
Speaker Change: One gigawatts of data center load, which are to existing customers.
Speaker Change: Are you what states or is that in and is there a way to specify that.
Speaker Change: Right now most of that is in Wyoming, Brian we're talking to other potential customers in South Dakota, and Colorado, but we feel very good about the one gigawatt forecast we have in Wyoming alone.
Speaker Change: Got it understood. Thank you very much.
Speaker Change: Welcome. Thank you Brian.
Speaker Change: Thank you and as a reminder to ask a question. Please press star one on your telephone. Our next question comes from Chris <unk> with Siebert Williams Shang you May proceed.
Speaker Change: Chris The only house your line is now open.
Speaker Change: Alright, guys.
Speaker Change: <unk>.
Speaker Change: Yes.
Speaker Change: The data center growth sort of post 2029, where you talked about.
Speaker Change: Meetings.
Speaker Change: Incremental resources.
Speaker Change: Capex there have you got any sense of.
Speaker Change: What kind of magnitude that might be and are you talking about dispatch of all resources there.
Speaker Change: Good question, Chris Lin, Yes, we're talking potentially dispatch of our resources and transmission assets as well.
Speaker Change: We're constantly evaluating what capacity is out there for these customers are taking advantage of through the energy market program that we have with them. We believe as we get closer to 2029. These loans continued to grow there could be opportunity for us to serve them in different ways beyond our or excuse me. The tariff that we have in place today it would be more of a tradition.
Speaker Change: Model, if you will.
Speaker Change: Hey, Chris This is Kimberly the other thing I'd add to that is you mentioned that it's beyond 2029. Some of the efforts that we're looking at could also potentially positively impact the capital investments that we have within the five year plan those are not incorporated in there today.
Speaker Change: Got you.
Speaker Change: Given that.
Speaker Change: These might be dispatched thermal resources does that also maybe suggest some clean energy to sort of balance the portfolio might also be required.
Speaker Change: This is Chris Good question again is Atlanta, I'd say very much. So these customers are highly interested in renewables and clean energy and so yes, I think thats the beauty of how we've been able to work with these customers they have certain needs and women able as an agile organization to find ways to serve them effectively and I think that's why they're continuing to grow.
Speaker Change: Okay. That's helpful.
Speaker Change: This could really be something.
Speaker Change: Rather consequential from a capital perspective, and that 29 plus time period.
Speaker Change: It may be yes, okay.
Speaker Change: Vis vis your sort of state conversation about the wildfire mitigation legislation.
Speaker Change: Sure.
Speaker Change: Given the changes in Washington, It would seem like this is.
Speaker Change: Maybe a fortuitous time for some national legislation do you guys foresee any potential there.
Speaker Change: Chris again, yes. It's good question. This Atlanta again, the short answer is yes. In fact, some legislation has been introduced at the house of Representatives at the federal level.
Speaker Change: Thats coming primarily through partnerships I would say through E. Edison Electric Institute and so yes. We believe we can have some success at the federal level as well.
Speaker Change: And lastly.
Speaker Change: Also given the executive orders that we've seen so far there is sort of.
Speaker Change: Some positives and negatives in terms of thinking about new infrastructure.
Speaker Change: One being.
Speaker Change: Helpful in terms of dispatch herbal permitting and things like that somewhat nebulous details at this point, but do you feel like there is.
Speaker Change: Anything material from the federal side that would help you on permitting there and also like say the Colorado clean energy plan. There is some roadblocks for clean energy at this point also so does that give you some concern about the timelines.
Speaker Change: You have for your capital there.
Lynn: Good questions, Chris will unpack there again this is Lynn.
Speaker Change: I would start by suggesting we're very early into the administration as you indicated in your question, we'll see where these executive orders actually take us I would suggest that in the prior Trump administration, we thrive as an organization and I would believe in this administration, we could as well with respect to permitting I think it can.
Speaker Change: Can be very helpful to us, especially around transmission building here in the west so much of our land is owned by federal owned by the Feds. If you will it's federal land and therefore, any kind of permitting that allow us to be more efficient and streamline on federal land would be very helpful. You mentioned, the clean energy plan in Colorado.
Speaker Change: We'll watch that closely.
Speaker Change: Right now, Colorado very clear about the plan they want to take they've been on this road for a decade or more.
Speaker Change: Don't think there'll be huge changes there however, there could be something that happens to some of the bids we might receive as an example things of that nature based on tax credits et cetera. So that's why we are.
Speaker Change: Continuing to negotiate those contracts, we'll see where they take us, but I think it's a little too early to tell for sure.
Speaker Change: Okay, great. Thanks for the details I appreciate it.
Speaker Change: Thank you Chris Chris.
Linn Evans: Thank you I would now like to turn the call back over to Linn Evans for any closing remarks.
Linn Evans: Well. Thank you everyone for joining us today. Thank you very much for your interest in Black Hills. Once again I want to thank our team for a fantastic year and what they delivered for 2020 for behalf of customers and for shareholders. We appreciate your interest in our company and I encourage you to have a black Hills energy safety.
Linn Evans: Yeah.
Linn Evans: Thank you. This concludes the conference. Thank you for your participation you may now disconnect.
Linn Evans: Okay.
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Linn Evans: Yes.
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Linn Evans: Thanks.
Linn Evans: Okay.
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Linn Evans: Yeah.
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Yes.
Linn Evans: Okay.
Linn Evans: Yes.
Dan.