Black Hills Q4 2025 Black Hills Corp Earnings Call | AllMind AI Earnings | AllMind AI
Q4 2025 Black Hills Corp Earnings Call
Operator: Good day, and thank you for standing by. Welcome to the Q4 2025 Black Hills Corporation Earnings 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 will be a question-and-answer 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 one again. I would now like to hand the conference over to your speaker today, Sal Diaz, Director of Investor Relations.
Operator: Good day, and thank you for standing by. Welcome to the Q4 2025 Black Hills Corporation Earnings 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 will be a question-and-answer 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 one again. I would now like to hand the conference over to your speaker today, Sal Diaz, Director of Investor Relations.
Speaker #1: Please be advised that today's conference is being recorded. After the speakers' presentation, there will be a question-and-answer session. To ask a question, please press star 11 on your telephone, and wait for your name to be announced.
Speaker #1: To withdraw your question, please press star 11 again. I would now like to hand the conference over to your speaker today, Sal Diaz, Director of Investor Relations.
Speaker #1: Relations. Thank
Speaker #2: you, Operator. Good morning and welcome to Black Hills Corporation's fourth quarter and full year 2025 earnings conference call. materials for our call this morning on our You can find our earnings release and website at blackhillscorp.com.
Salvador Diaz: Thank you, operator. Good morning, and welcome to Black Hills Corporation's Q4 and full year 2025 earnings conference call. You can find our earnings release and materials for our call this morning on our website at blackhillscorp.com. Leading our earnings call are Linn Evans, President and Chief Executive Officer, Kimberly Nooney, Senior Vice President and Chief Financial Officer, and Marne Jones, Senior Vice President and Chief Utility Officer. 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. Although we believe that our expectations are based on reasonable assumptions, actual results may differ materially.
Thank you, operator. Good morning, and welcome to Black Hills Corporation's Q4 and full year 2025 earnings conference call. You can find our earnings release and materials for our call this morning on our website at blackhillscorp.com. Leading our earnings call are Linn Evans, President and Chief Executive Officer, Kimberly Nooney, Senior Vice President and Chief Financial Officer, and Marne Jones, Senior Vice President and Chief Utility Officer. 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. Although we believe that our expectations are based on reasonable assumptions, actual results may differ materially.
Speaker #2: Leading our earnings call are Lynn Evans, President and Chief Executive Officer, Kimberly Nooney, Senior Vice President and Chief Financial Officer, and Marne Jones, Senior Vice President and Chief Utility Officer.
Speaker #2: During our earnings discussion today, comments we make may contain forward-looking statements as defined by the Securities and Exchange Commission. There are a number of uncertainties inherent in such comments.
Speaker #2: Although we believe that our expectations are based on reasonable assumptions, actual results may differ materially. We direct you to our earnings release, slide 2 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 will now turn the call over to Lynn Evans.
Salvador Diaz: We direct you to our earnings release, slide 2 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. With that, I will now turn the call over to Linn Evans. Linn?
Sal Diaz: We direct you to our earnings release, slide 2 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. With that, I will now turn the call over to Linn Evans. Linn?
Speaker #2: Lynn.
Speaker #1: Thank
Linn Evans: Thank you, Sal. Good morning, and thank you all for joining us today. I'll begin my comments on slide three with a summary of our achievements in 2025 and our strategic outlook, including an update on our merger with NorthWestern Energy. Kimberly will provide our financial update, and Marnie will discuss our operational performance and progress on a few key initiatives. I'll start with a sincere thank you to our Black Hills team. I'm incredibly proud of our team's accomplishments in 2025. We achieved the key commitments we made at the beginning of the year, setting the stage for ongoing success. We once again fulfilled our financial commitments, achieving the midpoint of our earnings guidance and long-term growth target. We successfully executed our financing strategy, maintaining our solid investment-grade credit ratings.
Linn Evans: Thank you, Sal. Good morning, and thank you all for joining us today. I'll begin my comments on slide three with a summary of our achievements in 2025 and our strategic outlook, including an update on our merger with NorthWestern Energy. Kimberly will provide our financial update, and Marnie will discuss our operational performance and progress on a few key initiatives. I'll start with a sincere thank you to our Black Hills team. I'm incredibly proud of our team's accomplishments in 2025. We achieved the key commitments we made at the beginning of the year, setting the stage for ongoing success. We once again fulfilled our financial commitments, achieving the midpoint of our earnings guidance and long-term growth target. We successfully executed our financing strategy, maintaining our solid investment-grade credit ratings.
Speaker #1: you, Sal. Good morning, and thank you all for joining us today. I'll begin my comments on slide 3 with a summary of our achievements in 2025 and our strategic outlook.
Speaker #1: Including an update on our merger with Northwestern Energy. Kimberly will provide our financial update, and Marne will discuss our operational performance and progress on a few key initiatives.
Speaker #1: I'll start with a sincere thank you to our Black Hills team. I'm incredibly proud of our team's accomplishments in 2025. We achieved the key commitments we made at the beginning of the year, setting the stage for ongoing success.
Speaker #1: We once again fulfilled our financial commitments, achieving the midpoint of our earnings guidance and long-term growth target. We successfully executed our financing strategy, maintaining our solid investment-grade credit ratings.
Speaker #1: We achieved strong earnings through the consistent execution of our long-term strategy, which drove new base rates, rider recovery, and enabled customer growth. Notably, we witnessed growing demand from our large load customers, such as data centers, and solid economic development in our service territories.
Linn Evans: We achieved strong earnings through the consistent execution of our long-term strategy, which drove new base rates, rider recovery, and enabled customer growth. Notably, we witnessed growing demand from our large load customers, such as data centers and solid economic development in our service territories. We also increased our dividend for the 55th consecutive year in 2025, and recently extended that industry-leading track record to 56 years. Our team made strong regulatory progress, completing 3 rate reviews and advancing several strategic project approvals. We also advanced our plans to serve data center demand, tripling our data center pipeline during the year to more than 3 gigawatts. In just 3 years, our team successfully designed, permitted, constructed, and energized our 260-mile Ready Wyoming transmission project, delivering the project on schedule. This transformative project is a great example of our commitment to innovative and customer-centric investments.
Linn Evans: We achieved strong earnings through the consistent execution of our long-term strategy, which drove new base rates, rider recovery, and enabled customer growth. Notably, we witnessed growing demand from our large load customers, such as data centers and solid economic development in our service territories. We also increased our dividend for the 55th consecutive year in 2025, and recently extended that industry-leading track record to 56 years. Our team made strong regulatory progress, completing 3 rate reviews and advancing several strategic project approvals. We also advanced our plans to serve data center demand, tripling our data center pipeline during the year to more than 3 gigawatts. In just 3 years, our team successfully designed, permitted, constructed, and energized our 260-mile Ready Wyoming transmission project, delivering the project on schedule. This transformative project is a great example of our commitment to innovative and customer-centric investments.
Speaker #1: We also increased our dividend for the 55th consecutive year in 2025, and recently extended that industry-leading track record to 56 years. Our team made strong regulatory progress, completing three rate reviews and advancing several strategic project approvals.
Speaker #1: We also advanced our plans to serve data center demand, tripling our data center pipeline during the year to more than 3 gigawatts. In just three years, our team successfully designed, permitted, constructed, and energized our 260-mile Ready Wyoming transmission project, delivering the project on schedule.
Speaker #1: This transformative project is a great example of our commitment to innovative and customer-centric investments. By strategically interconnecting our electric systems in South Dakota and Wyoming, we're providing value that will reliably and affordably serve our customers for generations to come.
Linn Evans: By strategically interconnecting our electric systems in South Dakota and Wyoming, we're providing value that will reliably and affordably serve our customers for generations to come. We're also constructing our Lange II, 99MW generation project in Rapid City. This project will replace aging resources with cutting-edge generation technology, enhancing our ability to provide resilient and reliable service to our customers and communities. Our legacy of excellent operational performance is fundamental to everything we do. We consistently achieve better than industry average safety performance, top quartile reliability, and a positive customer experience. To ensure the safety of our customers and our communities, we established an emergency public safety power shutoff program. This program serves as an additional tool in our toolbox to help mitigate the risk of wildfires. In addition to our success as a standalone business, we announced a strategic merger with NorthWestern Energy in August.
Linn Evans: By strategically interconnecting our electric systems in South Dakota and Wyoming, we're providing value that will reliably and affordably serve our customers for generations to come. We're also constructing our Lange II, 99MW generation project in Rapid City. This project will replace aging resources with cutting-edge generation technology, enhancing our ability to provide resilient and reliable service to our customers and communities. Our legacy of excellent operational performance is fundamental to everything we do. We consistently achieve better than industry average safety performance, top quartile reliability, and a positive customer experience. To ensure the safety of our customers and our communities, we established an emergency public safety power shutoff program. This program serves as an additional tool in our toolbox to help mitigate the risk of wildfires. In addition to our success as a standalone business, we announced a strategic merger with NorthWestern Energy in August.
Speaker #1: We're also constructing our Lang 299 megawatt generation project in Rapid City. This project will replace aging resources with cutting-edge generation technology, enhancing our ability to provide resilient and reliable service to our customers and communities.
Speaker #1: Our legacy of excellent operational performance is fundamental to everything we do. We consistently achieve better-than-industry average safety performance, top quartile reliability, and a positive customer experience.
Speaker #1: To ensure the safety of our customers and our communities, we established an emergency public safety power shutoff program. This program serves as an additional tool in our toolbox to help mitigate the risk of wildfires.
Speaker #1: In addition to our success as a standalone business, we announced a strategic merger with Northwestern Energy in August. 4 outlines our unwavering commitment to these Slide critical areas in 2026 as we advance our customer-centric strategy and capitalize on emerging opportunities.
Linn Evans: Slide 4 outlines our unwavering commitment to these critical areas in 2026 as we advance our customer-centric strategy and capitalize on emerging opportunities. We remain steadfast in our dedication to consistency, building upon last year's achievements as we embrace the exciting prospects ahead. We're already diligently working towards fulfilling our financial commitments, including achieving earnings growth in the upper half of our long-term growth target, as reflected in our 2026 earnings guidance, which anticipates 6% year-over-year growth. We anticipate delivering exceptional results for our stakeholders through executing on our customer-focused capital plan, continuing our regulatory progress through multiple rate reviews, meeting the growing demand of our customers, and maintaining our positive momentum through our upside data center pipeline, and completing our merger with NorthWestern Energy. Slide 5 outlines our data center pipeline of more than 3 gigawatts.
Linn Evans: Slide 4 outlines our unwavering commitment to these critical areas in 2026 as we advance our customer-centric strategy and capitalize on emerging opportunities. We remain steadfast in our dedication to consistency, building upon last year's achievements as we embrace the exciting prospects ahead. We're already diligently working towards fulfilling our financial commitments, including achieving earnings growth in the upper half of our long-term growth target, as reflected in our 2026 earnings guidance, which anticipates 6% year-over-year growth. We anticipate delivering exceptional results for our stakeholders through executing on our customer-focused capital plan, continuing our regulatory progress through multiple rate reviews, meeting the growing demand of our customers, and maintaining our positive momentum through our upside data center pipeline, and completing our merger with NorthWestern Energy. Slide 5 outlines our data center pipeline of more than 3 gigawatts.
Speaker #1: We remain steadfast in our dedication to consistency, building upon last year's achievements as we embrace the exciting prospects ahead. We're already diligently working towards fulfilling our financial commitments.
Speaker #1: Including achieving earnings growth in the upper half of our long-term growth target, as reflected in our 2026 earnings guidance, which anticipates 6% year-over-year growth.
Speaker #1: We anticipate delivering exceptional results for our stakeholders through executing on our customer-focused capital plan, continuing our regulatory progress through multiple rate reviews, meeting the growing demand of our customers and maintaining our positive momentum through our upside data center pipeline, and completing our merger with Northwestern Energy.
Speaker #1: Slide 5 outlines our data center pipeline of more than three gigawatts. Our pipeline includes only high-quality data center companies under nondisclosure agreements which we are actively negotiating to serve.
Linn Evans: Our pipeline includes only high-quality data center companies under nondisclosure agreements, which we are actively negotiating to serve. Meta is ramping up its new data center, and Microsoft's demand continues to grow. Their combined load represents approximately 600MW to be served by 2030 under our minimal capital investment model. Viewed through a financial lens, beginning in 2028, we expect this data center demand to contribute more than 10% of our growing consolidated EPS. We're also making progress in negotiations with our other high-quality partners to potentially serve the remainder of our data center pipeline. To fulfill this scale of demand, we rely upon a combination of energy resources that include the procurement of market energy, contracted generation, and investments we would make in generation and transmission.
Linn Evans: Our pipeline includes only high-quality data center companies under nondisclosure agreements, which we are actively negotiating to serve. Meta is ramping up its new data center, and Microsoft's demand continues to grow. Their combined load represents approximately 600MW to be served by 2030 under our minimal capital investment model. Viewed through a financial lens, beginning in 2028, we expect this data center demand to contribute more than 10% of our growing consolidated EPS. We're also making progress in negotiations with our other high-quality partners to potentially serve the remainder of our data center pipeline. To fulfill this scale of demand, we rely upon a combination of energy resources that include the procurement of market energy, contracted generation, and investments we would make in generation and transmission.
Speaker #1: Meta is ramping up its new data center. And Microsoft's demand continues to grow. Their combined load represents approximately 600 megawatts to be served by 2030 under our minimal capital investment model.
Speaker #1: Viewed through a financial lens beginning in 2028, we expect this data center demand to contribute more than 10% of our growing consolidated EPS. We're also making progress in negotiations with our other high-quality partners to potentially serve the remainder of our data center pipeline.
Speaker #1: To fulfill this scale of demand, we rely upon a combination of energy resources that include the procurement of market energy, contracted generation, and investments we would make in generation and transmission.
Speaker #1: Each of these energy resources has its own distinct risks and considerations, which we'll individually contribute to earnings uniquely based upon negotiated contracts with each customer.
Linn Evans: Each of these energy resources has its own distinct risks and considerations, which will individually contribute to earnings uniquely based upon negotiated contracts with each customer. Our unique tariff offers flexibility in how we serve data centers, provides speed to market, and is positively impacting affordability for our Wyoming customer base. Marne will provide more detail in her business update. Slide 6 outlines our $4.7 billion capital plan. We invest in our natural gas and electric customers' core needs for safety, reliability, and growth. As I outlined earlier with our data center pipeline, our current capital plan includes only minimal investments to support 600MW of data center demand, which we expect to serve through market energy procurement and contracted generation. We are developing opportunities for investment that aren't currently in our plan.
Linn Evans: Each of these energy resources has its own distinct risks and considerations, which will individually contribute to earnings uniquely based upon negotiated contracts with each customer. Our unique tariff offers flexibility in how we serve data centers, provides speed to market, and is positively impacting affordability for our Wyoming customer base. Marne will provide more detail in her business update. Slide 6 outlines our $4.7 billion capital plan. We invest in our natural gas and electric customers' core needs for safety, reliability, and growth. As I outlined earlier with our data center pipeline, our current capital plan includes only minimal investments to support 600MW of data center demand, which we expect to serve through market energy procurement and contracted generation. We are developing opportunities for investment that aren't currently in our plan.
Speaker #1: Our unique tariff offers flexibility in how we serve data centers, provides speed to market, and is positively impacting affordability for our Wyoming customer base.
Speaker #1: Marne will provide more detail in her business update. Slide 6 outlines our 4.7 billion capital plan. We invest in our natural gas and electric customers' core needs for safety, reliability, and growth.
Speaker #1: As I outlined earlier with our data center pipeline, our current capital plan includes only minimal investments to support 600 megawatts of data center demand which we expect to serve through market energy procurement and contracted generation.
Speaker #1: We are developing opportunities for investment that aren't currently in our plan. As I said before, this would include generation and transmission builds as a part of a mix of resources to serve demand.
Linn Evans: As I said before, this would include generation and transmission builds as a part of a mix of resources to serve additional data center demand. Moving to slides 7 and 8 for an update on our merger with NorthWestern Energy. We are very committed to the merger because combining these two companies makes great sense for our stakeholders. The merger will create a stronger, more competitive utility company, providing long-term value for stakeholders created through increased scale and improved customer diversity with our existing eight-state footprint, an improved financial profile with a larger balance sheet that expands opportunities for strategic investments, offering employees greater opportunities for growth, creating improved employee attraction and retention, and through the industrial logic of efficiencies associated with procurement and adopting best practices as a couple of examples. Importantly, the merger will enhance our capabilities and capacity to grow, especially as compared to our standalone business.
Linn Evans: As I said before, this would include generation and transmission builds as a part of a mix of resources to serve additional data center demand. Moving to slides 7 and 8 for an update on our merger with NorthWestern Energy. We are very committed to the merger because combining these two companies makes great sense for our stakeholders. The merger will create a stronger, more competitive utility company, providing long-term value for stakeholders created through increased scale and improved customer diversity with our existing eight-state footprint, an improved financial profile with a larger balance sheet that expands opportunities for strategic investments, offering employees greater opportunities for growth, creating improved employee attraction and retention, and through the industrial logic of efficiencies associated with procurement and adopting best practices as a couple of examples. Importantly, the merger will enhance our capabilities and capacity to grow, especially as compared to our standalone business.
Speaker #1: Moving to slide 7 and 8 for an update on our merger with Northwestern Energy. We are very committed to the merger because combining these two companies makes great sense for our stakeholders.
Speaker #1: The merger will create a stronger, more competitive utility company providing long-term value for stakeholders created through increased scale and improved customer diversity with our existing eight-state footprint.
Speaker #1: An improved financial profile with a larger balance sheet that expands opportunities for strategic investments. Offering employees greater opportunities for growth, creating improved employee attraction, and retention.
Speaker #1: And through the industrial logic of efficiencies associated with procurement and adopting best practices, as a couple, a merger will enhance our capabilities and capacity to grow, especially as compared to our standalone business.
Speaker #1: In short, we are committed to this strategic merger, one we have pursued for more than two decades. Today, more than ever, the combination of these two companies will enable us to unlock additional value creation opportunities for our customers and our shareholders, which excites us.
Linn Evans: In short, we are committed to this strategic merger, one we have pursued for more than two decades. Today, more than ever, the combination of these two companies will enable us to unlock additional value creation opportunities for our customers and our shareholders, which excites us. To date, we have submitted all joint applications to our regulators in Montana, Nebraska, and South Dakota, requesting their approval of our merger, and we're involved in the discovery phase in each state. We also filed our Form S-4 with the SEC last week, with special shareholder meetings scheduled for early April, and intend to secure all necessary approvals to finalize the merger within the second half of this year. With that, I'll turn the call over to Kimberly for our financial update. Kimberly?
Linn Evans: In short, we are committed to this strategic merger, one we have pursued for more than two decades. Today, more than ever, the combination of these two companies will enable us to unlock additional value creation opportunities for our customers and our shareholders, which excites us. To date, we have submitted all joint applications to our regulators in Montana, Nebraska, and South Dakota, requesting their approval of our merger, and we're involved in the discovery phase in each state. We also filed our Form S-4 with the SEC last week, with special shareholder meetings scheduled for early April, and intend to secure all necessary approvals to finalize the merger within the second half of this year. With that, I'll turn the call over to Kimberly for our financial update. Kimberly?
Speaker #1: To date, we have submitted all joint applications to our regulators in Montana, Nebraska, and South Dakota, requesting their approval of our merger and were involved in the discovery phase in each state.
Speaker #1: We also filed our Form S-4 with the SEC last week, with special shareholder meetings scheduled for early April, and intend to secure all necessary approvals to finalize the merger within the second half of this year.
Speaker #1: With that, I'll turn the call over to Kimberly for our financial update.
Speaker #1: Kimberly? Thank you,
Kimberly Nooney: Thank you, Linn, and good morning, everyone. Our team did an exceptional job of delivering on our strategy and financial commitments for 2025. Together, we are pleased to deliver another year that advanced our track record as a trusted energy partner by achieving the midpoint of our earnings guidance and maintaining our strong investment-grade credit rating, while efficiently funding our $900 million capital investment plan during the year. As Linn mentioned, regarding the merger with NorthWestern Energy, we are working towards an even stronger future, including a larger balance sheet that will support our ability to execute with confidence on the needs of our customers with a stable financial foundation. On slide 10, we provide a bridge comparing results for 2025 to the prior year. We delivered GAAP EPS of $3.98, which included $0.12 of merger-related transaction costs.
Kimberly Nooney: Thank you, Linn, and good morning, everyone. Our team did an exceptional job of delivering on our strategy and financial commitments for 2025. Together, we are pleased to deliver another year that advanced our track record as a trusted energy partner by achieving the midpoint of our earnings guidance and maintaining our strong investment-grade credit rating, while efficiently funding our $900 million capital investment plan during the year. As Linn mentioned, regarding the merger with NorthWestern Energy, we are working towards an even stronger future, including a larger balance sheet that will support our ability to execute with confidence on the needs of our customers with a stable financial foundation. On slide 10, we provide a bridge comparing results for 2025 to the prior year. We delivered GAAP EPS of $3.98, which included $0.12 of merger-related transaction costs.
Speaker #2: Lynn. And good morning, everyone. Our team did an exceptional job of delivering on our strategy and financial commitments for 2025. Together, we are pleased to deliver another year that advanced our track record as a trusted energy partner by achieving the midpoint of our earnings guidance and maintaining our strong investment-grade credit rating while efficiently funding our $900 million capital investment plan during the year.
Speaker #2: And as Lynn mentioned, regarding the merger with Northwestern Energy, we are working towards enabling stronger future, including a larger balance sheet that will support our ability to execute with confidence on the needs of our customers with a stable financial foundation.
Speaker #2: On slide 10, we provide a bridge comparing results for 2025 to the prior year. We delivered GAAP EPS of $3.98, which included 12 cents of merger-related transaction costs.
Speaker #2: Adjusting for these costs, we reported $4.10 of adjusted EPS for 2025 and increased a 5% compared to $3.91 per share in 2024. We successfully executed our regulatory strategy delivering 95 cents per share of new rates and rider recovery margin, along with ongoing customer growth, which more than offset higher operating financing and depreciation expenses.
Kimberly Nooney: Adjusting for these costs, we reported $4.10 of adjusted EPS for 2025, an increase of 5% compared to $3.91 per share in 2024. We successfully executed our regulatory strategy, delivering $0.95 per share of new rates and rider recovery margin, along with ongoing customer growth, which more than offset higher operating, financing, and depreciation expenses. Weather was favorable by $0.09 compared to a very mild 2024. However, when compared to normal, weather represented an $0.11 headwind we overcame in 2025. O&M was higher by $0.36 per share, which included $0.12 of merger-related transaction costs.
Kimberly Nooney: Adjusting for these costs, we reported $4.10 of adjusted EPS for 2025, an increase of 5% compared to $3.91 per share in 2024. We successfully executed our regulatory strategy, delivering $0.95 per share of new rates and rider recovery margin, along with ongoing customer growth, which more than offset higher operating, financing, and depreciation expenses. Weather was favorable by $0.09 compared to a very mild 2024. However, when compared to normal, weather represented an $0.11 headwind we overcame in 2025. O&M was higher by $0.36 per share, which included $0.12 of merger-related transaction costs.
Speaker #2: Weather was favorable by 9 cents compared to a very mild 2024. However, when compared to normal, weather represented an 11-cent headwind we overcame in 2025.
Speaker #2: O&M was higher by 36 cents per share, which included 12 cents of merger-related transaction costs. Excluding merger costs, our O&M expenses increased 24 cents per share year over year primarily driven by 13 cents of higher employee and outside service expense, 8 cents per share of higher insurance costs, and 5 cents of unplanned generation outages.
Kimberly Nooney: Excluding merger costs, our O&M expenses increased $0.24 per share year-over-year, primarily driven by $0.13 of higher employee and outside service expense, $0.08 per share of higher insurance costs, and $0.05 of unplanned generation outages. Financing costs increased $0.33 per share, which included $0.25 of higher interest expense, $0.19 of shared dilution, and a benefit of $0.12 per share from AFUDC, driven by large construction projects. We also incurred higher depreciation of $0.15 per share, reflecting new assets placed in service. Further details on year-over-year changes can be found in our earnings release and our 10-K to be filed with the SEC on 11 February. Slide 11 presents our solid financial position through the lens of credit quality, capital structure, and liquidity....
Kimberly Nooney: Excluding merger costs, our O&M expenses increased $0.24 per share year-over-year, primarily driven by $0.13 of higher employee and outside service expense, $0.08 per share of higher insurance costs, and $0.05 of unplanned generation outages. Financing costs increased $0.33 per share, which included $0.25 of higher interest expense, $0.19 of shared dilution, and a benefit of $0.12 per share from AFUDC, driven by large construction projects. We also incurred higher depreciation of $0.15 per share, reflecting new assets placed in service. Further details on year-over-year changes can be found in our earnings release and our 10-K to be filed with the SEC on 11 February. Slide 11 presents our solid financial position through the lens of credit quality, capital structure, and liquidity....
Speaker #2: Financing costs increased $0.33 per share, which included $0.25 of higher interest expense, $0.19 of share dilution, and a benefit of $0.12 per share from AFUDC driven by large construction projects.
Speaker #2: We also incurred higher depreciation of 15 cents per share reflecting new assets placed in service. Further details on year-over-year changes can be found in our earnings release and our 10-K to be filed with the SEC on February 11th.
Speaker #2: Slide 11 presents our solid financial position through the lens of credit quality, capital structure, and liquidity. We continue to maintain a healthy balance sheet by delivering credit metrics within our targets of 55% net debt-to-total capitalization, and 14 to 15% FFO to debt, which is 100 basis points above our downgrade threshold of 13%.
Kimberly Nooney: We continue to maintain a healthy balance sheet by delivering credit metrics within our targets of 55% net debt to total capitalization and 14% to 15% FFO to debt, which is 100 basis points above our downgrade threshold of 13%. We issued a total of $220 million of equity in 2025. Given stronger forecasted cash flows from our successful execution of strategic capital investments, regulatory plans, and increasing data center load growth, we expect a significantly lower equity need of $50 million to $70 million for 2026. In early October, we completed our planned debt offering, issuing $450 million of 4.55% notes, a portion of which was used to pay off our $300 million, 3.95% notes on their January 2026 maturity date.
Kimberly Nooney: We continue to maintain a healthy balance sheet by delivering credit metrics within our targets of 55% net debt to total capitalization and 14% to 15% FFO to debt, which is 100 basis points above our downgrade threshold of 13%. We issued a total of $220 million of equity in 2025. Given stronger forecasted cash flows from our successful execution of strategic capital investments, regulatory plans, and increasing data center load growth, we expect a significantly lower equity need of $50 million to $70 million for 2026. In early October, we completed our planned debt offering, issuing $450 million of 4.55% notes, a portion of which was used to pay off our $300 million, 3.95% notes on their January 2026 maturity date.
Speaker #2: We issued a total of 220 million dollars of equity in 2025. Given stronger forecasted cash flows, from our successful execution of strategic capital investments regulatory plans, and increasing data center load growth, we expect a significantly lower equity need of 50 million to 70 million dollars for 2026.
Speaker #2: In early October, we completed our planned debt offering issuing 450 million dollars of 4.55% notes a portion of which was used to pay off our $300 million 3.95% notes on their January 2026 maturity date.
Speaker #2: Our next maturity is in January of 2027 for 400 million dollars of 3.15% notes. We maintain strong liquidity with more than 700 million dollars of availability under our revolving credit facility at year-end.
Kimberly Nooney: Our next maturity is in January 2027 for $400 million of 3.15% notes. We maintain strong liquidity with more than $700 million of availability under our revolving credit facility at year-end. Looking forward, our financial outlook is listed on slide 12. For 2026, we initiated adjusted earnings guidance in the range of $4.25 to 4.45 per share, which represented 6% growth at the midpoint over 2025. Our capital plan, solid financial position, and organic customer growth drive strong confidence in our ability to deliver in the upper half of our current 4% to 6% plan, while maintaining 2023 as our base year.
Kimberly Nooney: Our next maturity is in January 2027 for $400 million of 3.15% notes. We maintain strong liquidity with more than $700 million of availability under our revolving credit facility at year-end. Looking forward, our financial outlook is listed on slide 12. For 2026, we initiated adjusted earnings guidance in the range of $4.25 to 4.45 per share, which represented 6% growth at the midpoint over 2025. Our capital plan, solid financial position, and organic customer growth drive strong confidence in our ability to deliver in the upper half of our current 4% to 6% plan, while maintaining 2023 as our base year.
Speaker #2: Looking forward, our financial outlook is listed on slide 12. For 2026, we initiated adjusted earnings guidance in the range of $4.25 to $4.45 per share, which represented 6% growth at the midpoint over 2025.
Speaker #2: Our capital plan, solid financial position, and organic customer growth drive strong confidence in our ability to deliver in the upper half of our current 4% to 6% plan while maintaining 2023 as our base year.
Speaker #2: Our confidence is driven by ongoing customer growth within our jurisdictions, increasing data center demand, and new rates and rider recovery on strategic investments like Ready Wyoming and Lang Benefits 2 that will provide long-term customers.
Kimberly Nooney: Our confidence is driven by ongoing customer growth within our jurisdictions, increasing data center demand, and new rates and rider recovery on strategic investments like Ready Wyoming and Lange II, that will provide long-term benefits to customers. We continue to actively pursue additional data center pipeline demand that would be additive to our five-year plan and contribute upside to earnings over time through a combination of market energy purchases, contracted generation, and utility-owned capital investments in generation and transmission. Slide 13 illustrates our success in delivering on our earnings guidance. In early 2023, we set our 4% to 6% growth target with the objective of holding ourselves accountable to consistently delivering on our financial commitments. With consistency in mind, we maintained our long-term EPS growth target, including our 2023 base year, while communicating greater clarity and confidence in the upper half of the range.
Kimberly Nooney: Our confidence is driven by ongoing customer growth within our jurisdictions, increasing data center demand, and new rates and rider recovery on strategic investments like Ready Wyoming and Lange II, that will provide long-term benefits to customers. We continue to actively pursue additional data center pipeline demand that would be additive to our five-year plan and contribute upside to earnings over time through a combination of market energy purchases, contracted generation, and utility-owned capital investments in generation and transmission. Slide 13 illustrates our success in delivering on our earnings guidance. In early 2023, we set our 4% to 6% growth target with the objective of holding ourselves accountable to consistently delivering on our financial commitments. With consistency in mind, we maintained our long-term EPS growth target, including our 2023 base year, while communicating greater clarity and confidence in the upper half of the range.
Speaker #2: We continue to actively pursue additional data center pipeline demand that would be additive to our five-year plan and contribute upside to earnings over time through a combination of market energy purchases contracted investments in generation and generation and utility-owned capital transmission.
Speaker #2: Slide 13 illustrates our success in delivering on our earnings guidance. In early 2023, we set our 4 to 6% growth target with the objective of holding ourselves accountable to consistently delivering on our financial commitments.
Speaker #2: With consistency in mind, we maintained our long-term EPS growth target including our 2023 base year while communicating greater clarity and confidence in the upper half of the range.
Speaker #2: Slide 14 illustrates our industry-leading dividend track record. In January we increased our dividend extending our track record of increases to 56 consecutive years in 2026.
Kimberly Nooney: Slide 14 illustrates our industry-leading dividend track record. In January, we increased our dividend, extending our track record of increases to 56 consecutive years in 2026. We continue to target a 55 to 65% payout ratio. A dependable and increasing dividend is an important component of our strategy to deliver long-term value for our shareholders. I will now turn the call over to Marne for a business update.
Kimberly Nooney: Slide 14 illustrates our industry-leading dividend track record. In January, we increased our dividend, extending our track record of increases to 56 consecutive years in 2026. We continue to target a 55 to 65% payout ratio. A dependable and increasing dividend is an important component of our strategy to deliver long-term value for our shareholders. I will now turn the call over to Marne for a business update.
Speaker #2: We continue to target a 55% to 65% payout ratio. A dependable and increasing dividend is an important component of our strategy to deliver long-term value for our shareholders.
Speaker #2: I will now turn the call over to Marne for a business update.
Speaker #1: Thank you, Kimberly. And good morning, everyone. As Lynn and Kim already outlined, we had a remarkable year providing safe and reliable service to our customers.
Marne Jones: Thank you, Kimberly, and good morning, everyone. As Linn and Kim already outlined, we had a remarkable year, providing safe and reliable service to our customers. Operational performance was excellent, as we continued to deliver top quartile reliability and invest in a resilient and reliable energy future, advancing electric transmission and generation projects, as well as safety and integrity-focused projects for our gas utilities. We advanced regulatory and growth initiatives and continued to work to address wildfire risk. I'm pleased to report on our success this year, which did not come without hard work and dedication. An example of the resilience of our team and system was the response to an extreme wind event in December.
Marne Jones: Thank you, Kimberly, and good morning, everyone. As Linn and Kim already outlined, we had a remarkable year, providing safe and reliable service to our customers. Operational performance was excellent, as we continued to deliver top quartile reliability and invest in a resilient and reliable energy future, advancing electric transmission and generation projects, as well as safety and integrity-focused projects for our gas utilities. We advanced regulatory and growth initiatives and continued to work to address wildfire risk. I'm pleased to report on our success this year, which did not come without hard work and dedication. An example of the resilience of our team and system was the response to an extreme wind event in December.
Speaker #1: Operational performance was excellent. As we continued to deliver top quartile reliability and invest in a resilient and reliable energy future, we advanced electric transmission and generation projects, as well as safety- and integrity-focused projects for our gas utilities.
Speaker #1: We advanced regulatory and growth initiatives and continued to work to address wildfire risk. I'm pleased to report on our success this year, which did not come without hard work and dedication.
Speaker #1: An example of the resilience of our team and system was the response to an extreme wind event in December. With winds reaching 100 miles per hour and rapid cities South Dakota, our teams and mutual aid partners worked throughout our communities to restore power safely and as efficiently as possible replacing damaged poles and lines.
Marne Jones: With winds reaching 100 miles per hour in Rapid City, South Dakota, our teams and mutual aid partners worked throughout our communities to restore power safely and as efficiently as possible, replacing damaged poles and lines. Thank you to our dedicated team members and the response from our community in our restoration efforts. I'll start on slide 16 with our 2025 accomplishments. In December, we completed construction of our 260-mile Ready Wyoming transmission project and energized the final segments on schedule. This is a milestone in our history, and I couldn't be more proud of our team and partners, as this project is transformational to our ability to serve customers reliably and cost effectively. It reduces our reliance on third-party transmission, enhances resiliency, and increases access to market energy.
Marne Jones: With winds reaching 100 miles per hour in Rapid City, South Dakota, our teams and mutual aid partners worked throughout our communities to restore power safely and as efficiently as possible, replacing damaged poles and lines. Thank you to our dedicated team members and the response from our community in our restoration efforts. I'll start on slide 16 with our 2025 accomplishments. In December, we completed construction of our 260-mile Ready Wyoming transmission project and energized the final segments on schedule. This is a milestone in our history, and I couldn't be more proud of our team and partners, as this project is transformational to our ability to serve customers reliably and cost effectively. It reduces our reliance on third-party transmission, enhances resiliency, and increases access to market energy.
Speaker #1: Thank you to our dedicated team members and the response from our community in our restoration efforts. I'll start on slide 16 with our 2025 accomplishments.
Speaker #1: In December, we completed construction of our 260-mile Ready Wyoming transmission project and energized the final segments on schedule. This is a milestone in our history, and I couldn't be more proud of our team and partners as this project is transformational to our ability to serve customers reliably and cost-effectively.
Speaker #1: It reduces our reliance on third-party transmission, enhances resiliency, and increases access to market energy. Our interconnected transmission network will support long-term price stability for our customers and enable continued growth across our reminder, the bulk of this investment is being recovered through our Wyoming transmission rider.
Marne Jones: Our interconnected transmission network will support long-term price stability for our customers and enable continued growth across our service territory. As a reminder, the bulk of this investment is being recovered through our Wyoming transmission rider. Moving to slide 17. In 2025, we broke ground on our Lange II project, a 99-megawatt utility-owned natural gas-fired generation resource located in Rapid City, South Dakota. This new resource will replace aging generation facilities with modern Wärtsilä engines and address updated reserve margin requirements. Major components are already procured and on-site, including six reciprocating internal combustion engines, and we are on pace for the facility to be in service in Q4 of 2026. We plan to recover this investment through the South Dakota generation rider. Our Colorado Clean Energy Plan is listed on Slide 18.
Marne Jones: Our interconnected transmission network will support long-term price stability for our customers and enable continued growth across our service territory. As a reminder, the bulk of this investment is being recovered through our Wyoming transmission rider. Moving to slide 17. In 2025, we broke ground on our Lange II project, a 99-megawatt utility-owned natural gas-fired generation resource located in Rapid City, South Dakota. This new resource will replace aging generation facilities with modern Wärtsilä engines and address updated reserve margin requirements. Major components are already procured and on-site, including six reciprocating internal combustion engines, and we are on pace for the facility to be in service in Q4 of 2026. We plan to recover this investment through the South Dakota generation rider. Our Colorado Clean Energy Plan is listed on Slide 18.
Speaker #1: Moving to slide 17, in 2025 we broke ground on our Lang 2 project, a 99-megawatt utility-owned natural gas fire generation resource located in Rapid City, South Dakota.
Speaker #1: This new resource will replace aging generation facilities with modern Wartsilla engines and address updated reserve margin requirements. Major components are already procured and on site, including six reciprocating internal combustion engines and we are on pace for the facility to be in service in Q4 of 2026.
Speaker #1: We plan to recover this investment through the South Dakota Generation Rider. Our Colorado Clean Energy Plan is listed on slide 18. We obtained approval for our plan in 2024 and worked toward finalizing our project contracts during 2025.
Marne Jones: We obtained approval for our plan in 2024 and worked towards finalizing our project contracts during 2025. In November, we received approval of our 50-MW utility-owned battery storage project to be placed in service in 2027, which is already included in our capital plan. We are negotiating the 200-MW solar PPA and expect to sign an agreement during Q1. Slide 19 summarizes our regulatory progress. Over decades of strategic acquisition and investment, we have grown our scale and the diversity of our large electric and gas systems, growing long-term value for the benefit of our customers and stakeholders. From a regulatory perspective, we manage this valuable diversity by executing 3 to 4 rate reviews annually as normal course of business. 2025 was another productive year as we completed 3 rate reviews, representing over $52 million in new annual revenue.
Marne Jones: We obtained approval for our plan in 2024 and worked towards finalizing our project contracts during 2025. In November, we received approval of our 50-MW utility-owned battery storage project to be placed in service in 2027, which is already included in our capital plan. We are negotiating the 200-MW solar PPA and expect to sign an agreement during Q1. Slide 19 summarizes our regulatory progress. Over decades of strategic acquisition and investment, we have grown our scale and the diversity of our large electric and gas systems, growing long-term value for the benefit of our customers and stakeholders. From a regulatory perspective, we manage this valuable diversity by executing 3 to 4 rate reviews annually as normal course of business. 2025 was another productive year as we completed 3 rate reviews, representing over $52 million in new annual revenue.
Speaker #1: In November, we received approval of our 50-megawatt utility-owned battery storage project to be placed in service in 2027, which is already included in our capital plan.
Speaker #1: We are negotiating the $200-megawatt solar PPA and expect to sign an agreement during the first quarter. Slide 19 summarizes our regulatory progress. Over decades of strategic acquisition and investment, we have grown our scale and the diversity of our large electric and gas systems.
Speaker #1: Growing long-term value for the benefit of our customers and stakeholders. From a regulatory perspective, we manage this valuable diversity by executing three to four rate reviews annually as a normal course of business.
Speaker #1: 2025 was another productive year as we completed three rate reviews representing over 52 million in new annual revenue. Within those rate reviews, we also received approval for deferred accounting insurance trackers in Kansas and Nebraska and a new weather normalization pilot program in Nebraska.
Marne Jones: Within those rate reviews, we also received approval for deferred accounting insurance trackers in Kansas and Nebraska, and a new weather normalization pilot program in Nebraska. Both mechanisms help to reduce volatility in future earnings. In December, we also filed a new rate review for Arkansas Gas, seeking recovery of $147 million of new investments since our last rate review in 2023. We are requesting $29.4 million in new annual revenue at a return on equity of 10.5% at approximately 50/50 capital structure, with new rates anticipated in the second half of this year. We are also planning to file an abbreviated rate review in Kansas during Q1, as outlined in our last rate review, and is expected to recover capital invested through 2025 at the previously agreed upon weighted average cost of capital.
Marne Jones: Within those rate reviews, we also received approval for deferred accounting insurance trackers in Kansas and Nebraska, and a new weather normalization pilot program in Nebraska. Both mechanisms help to reduce volatility in future earnings. In December, we also filed a new rate review for Arkansas Gas, seeking recovery of $147 million of new investments since our last rate review in 2023. We are requesting $29.4 million in new annual revenue at a return on equity of 10.5% at approximately 50/50 capital structure, with new rates anticipated in the second half of this year. We are also planning to file an abbreviated rate review in Kansas during Q1, as outlined in our last rate review, and is expected to recover capital invested through 2025 at the previously agreed upon weighted average cost of capital.
Speaker #1: Both mechanisms helped to reduce volatility in future earnings. In December, we also filed a new rate review for Arkansas Gas, seeking recovery of $147 million of new investment since our last rate review in 2023.
Speaker #1: We are requesting $29.4 million in new annual revenue at a return on equity of 10.5%, with an approximately 50/50 capital structure. We anticipate new rates going into effect in the second half of this year.
Speaker #1: We are also planning to file an abbreviated rate review in Kansas during the first quarter as outlined in our last rate review. And as expected to recover capital invested through 2025 at the previously agreed-upon weighted average cost of capital.
Speaker #1: Looking ahead, we are preparing for a rate review in South Dakota within the next few weeks. After holding base rates unchanged for more than a decade, the request will recover our customer-focused investments and increase costs to serve customers since our last rate review in 2014.
Marne Jones: Looking ahead, we are preparing for a rate review in South Dakota within the next few weeks. After holding base rates unchanged for more than a decade, the request will recover our customer-focused investments and increase costs to serve customers since our last rate review in 2014. Given we have operations in both South Dakota and Wyoming for this utility, we will have separate filings in each state. Additionally, we recently received approval for a new tariff for interruptible large load service in South Dakota to serve blockchain growth opportunities. And lastly, in Wyoming, wildfire liability legislation was signed into law in early 2025. In accordance with this legislation, we filed our wildfire mitigation plan in November for commission approval anticipated in March. As a result, we expect to obtain significant liability protections as we remain in compliance with our approved plan.
Marne Jones: Looking ahead, we are preparing for a rate review in South Dakota within the next few weeks. After holding base rates unchanged for more than a decade, the request will recover our customer-focused investments and increase costs to serve customers since our last rate review in 2014. Given we have operations in both South Dakota and Wyoming for this utility, we will have separate filings in each state. Additionally, we recently received approval for a new tariff for interruptible large load service in South Dakota to serve blockchain growth opportunities. And lastly, in Wyoming, wildfire liability legislation was signed into law in early 2025. In accordance with this legislation, we filed our wildfire mitigation plan in November for commission approval anticipated in March. As a result, we expect to obtain significant liability protections as we remain in compliance with our approved plan.
Speaker #1: Given we have operations in both South Dakota and Wyoming for this utility, we will have separate filings in each state. Additionally, we recently received approval for a new tariff for interruptible large load service in South Dakota to serve blockchain growth opportunities.
Speaker #1: And lastly, in Wyoming, wildfire liability legislation was signed into law in early 2025. In accordance with this legislation, we filed our wildfire mitigation plan in November for commission approval anticipated in March.
Speaker #1: As a result, we expect to obtain significant liability protections as we remain in compliance with our approved plan. We are also supporting similar legislation introduced in South Dakota.
Marne Jones: We are also supporting similar legislation introduced in South Dakota. Slide 20 provides an update on our progress towards serving more than 3 gigawatts of data center demand. We have successfully served growing demand from Microsoft's hyperscale data centers for more than a decade through market energy procurement, with benefits to other customers in the region. We are also serving Meta's new AI data center under construction in Cheyenne, which we expect to transition from construction power to permanent service this quarter. We have built into our plan and expect to serve 600 megawatts of demand from existing data center customers by 2030. Based on current market conditions, demand of approximately 600 megawatts will require investment in generation and transmission infrastructure. Given large load requests, should we reach that level sooner than expected, the need for generation and transmission could be accelerated.
Marne Jones: We are also supporting similar legislation introduced in South Dakota. Slide 20 provides an update on our progress towards serving more than 3 gigawatts of data center demand. We have successfully served growing demand from Microsoft's hyperscale data centers for more than a decade through market energy procurement, with benefits to other customers in the region. We are also serving Meta's new AI data center under construction in Cheyenne, which we expect to transition from construction power to permanent service this quarter. We have built into our plan and expect to serve 600 megawatts of demand from existing data center customers by 2030. Based on current market conditions, demand of approximately 600 megawatts will require investment in generation and transmission infrastructure. Given large load requests, should we reach that level sooner than expected, the need for generation and transmission could be accelerated.
Speaker #1: Slide 20 provides an update on our progress toward serving more than three gigawatts of data center demand. We have successfully served growing demand for Microsoft's hyperscale data centers for more than a decade through market energy procurement, with benefits to other customers in the region.
Speaker #1: We are also serving Meta's new AI data center under construction in Cheyenne, which we expect to transition from construction power to permanent service this quarter.
Speaker #1: We have built into our plan and expect to serve 600 megawatts of demand from existing data center customers by 2030. Based on current market conditions, demand of approximately 600 megawatts will require investment in generation and transmission infrastructure.
Speaker #1: Given large load requests, should we reach that level sooner than expected, the need for generation and transmission could be accelerated. In addition to our five-year plan, our pipeline offers compelling and significant upside.
Marne Jones: In addition to our five-year plan, our pipeline offers compelling and significant upside. We're making progress negotiating with high-quality customers around a mix of resources to serve this demand under our flexible Wyoming tariff. Serving the scale of this demand will require a mix of energy resources, including energy procurement, subject to market availability, contracted generation through PPAs, including third-party and customer co-located generation, and utility-owned generation and transmission investments. We have an opportunity to earn on total customer demand from each project. However, each customer's need is unique, requiring varying resources to meet their needs, which will impact margins in different ways as we negotiate within the framework of our LPCS tariff. Where we have investment opportunities, we expect risk-adjusted, utility-like returns.
Marne Jones: In addition to our five-year plan, our pipeline offers compelling and significant upside. We're making progress negotiating with high-quality customers around a mix of resources to serve this demand under our flexible Wyoming tariff. Serving the scale of this demand will require a mix of energy resources, including energy procurement, subject to market availability, contracted generation through PPAs, including third-party and customer co-located generation, and utility-owned generation and transmission investments. We have an opportunity to earn on total customer demand from each project. However, each customer's need is unique, requiring varying resources to meet their needs, which will impact margins in different ways as we negotiate within the framework of our LPCS tariff. Where we have investment opportunities, we expect risk-adjusted, utility-like returns.
Speaker #1: We are making progress negotiating with high-quality customers around a mix of resources to serve this demand under our flexible Wyoming tariff. Serving the scale of this demand will require a mix of energy resources, including energy procurement, subject-to-market availability, contracted generation through PPAs, including third-party and customer co-located generation, and utility-owned generation and transmission investments.
Speaker #1: We have an opportunity to earn on total customer demand from each project. However, each customer's need is unique. Requiring varying resources to meet their needs which will impact margins in different ways as we negotiate within the framework of our LPCS tariff.
Speaker #1: Where we have investment opportunities, we expect risk-adjusted utility-like returns. And where investment outlays are not necessary, the pricing is negotiated by project and is reflective of speed-to-market value.
Marne Jones: And where investment outlays are not necessary, the pricing is negotiated by project and is reflective of speed to market value, operational, and financial risks, and is intentionally designed to incentivize the utility as a replacement for traditional utility investment. As we work to contract the new load, we are prudently analyzing and negotiating the potential mix of resources to achieve a mutually beneficial long-term solution that protects customers, communities, and shareholders. Specific to the Crusoe and Tallgrass project, we are working through several agreements that would ultimately support 1.8 gigawatts of demand. As examples of our incremental progress, we recently filed a CPCN with the Wyoming Public Service Commission in support of a substation for this project and are engaging with all partners involved in solutioning for the mix of resources to serve this demand, including fuel cells.
Marne Jones: And where investment outlays are not necessary, the pricing is negotiated by project and is reflective of speed to market value, operational, and financial risks, and is intentionally designed to incentivize the utility as a replacement for traditional utility investment. As we work to contract the new load, we are prudently analyzing and negotiating the potential mix of resources to achieve a mutually beneficial long-term solution that protects customers, communities, and shareholders. Specific to the Crusoe and Tallgrass project, we are working through several agreements that would ultimately support 1.8 gigawatts of demand. As examples of our incremental progress, we recently filed a CPCN with the Wyoming Public Service Commission in support of a substation for this project and are engaging with all partners involved in solutioning for the mix of resources to serve this demand, including fuel cells.
Speaker #1: Operational and financial risks and is intentionally designed to incentivize the utility as a replacement for traditional utility investment. As we work to contract the new load, we are prudently analyzing and negotiating the potential mix of resources to achieve a mutually beneficial long-term solution that protects customers, communities, and shareholders.
Speaker #1: Specific to the Caruso and Tallgrass project, we are working through several agreements that would ultimately support $1.8 gigawatts of demand. As examples of our incremental progress, we recently filed a CPCN with the Wyoming Public Service Commission in support of a substation for this project and are engaging with all partners involved in solutioning for the mix of resources to serve this demand.
Speaker #1: Including fuel cells. As you can imagine, a project of this magnitude is complex and has many components involving multiple parties. As such, the project contracts must be thoughtfully structured and negotiated to manage operational and financial risk.
Marne Jones: As you can imagine, a project of this magnitude is complex and has many components involving multiple parties. As such, the project contracts must be thoughtfully structured and negotiated to manage operational and financial risk. Keeping with our normal practice, additional details will be provided upon signing of binding service agreements. With that, I will now turn the call back to Linn.
Marne Jones: As you can imagine, a project of this magnitude is complex and has many components involving multiple parties. As such, the project contracts must be thoughtfully structured and negotiated to manage operational and financial risk. Keeping with our normal practice, additional details will be provided upon signing of binding service agreements. With that, I will now turn the call back to Linn.
Speaker #1: Keeping with our normal practice, additional details will be provided upon signing of binding service agreements. With that, I will now
Speaker #1: Lynn. Thank you, Marnie.
Linn Evans: Thank you, Marne. I'm excited about all that we've accomplished as a Black Hills team over the past year... with a long list of other wins beyond what we had time to mention today. As you heard, we continue to consistently achieve our financial commitments and make excellent progress on our regulatory plan, our growth initiatives, and our strategic goals. We're already off and running with a consistent focus in 2026, with customer-centric innovation as we pursue our mission of improving life with energy and how we do business and be the energy partner of choice. As we look forward, Black Hills offers a compelling long-term value proposition when considering our customer-focused growth, competitive yield, and significant upside opportunities above and beyond our five-year plan.
Linn Evans: Thank you, Marne. I'm excited about all that we've accomplished as a Black Hills team over the past year... with a long list of other wins beyond what we had time to mention today. As you heard, we continue to consistently achieve our financial commitments and make excellent progress on our regulatory plan, our growth initiatives, and our strategic goals. We're already off and running with a consistent focus in 2026, with customer-centric innovation as we pursue our mission of improving life with energy and how we do business and be the energy partner of choice. As we look forward, Black Hills offers a compelling long-term value proposition when considering our customer-focused growth, competitive yield, and significant upside opportunities above and beyond our five-year plan.
Speaker #2: I'm excited about all that we've accomplished as a Black Hills team over the past year. With a long list of other wins beyond what we had time to mention today.
Speaker #2: As you've heard, we continue to consistently achieve our financial regulatory plan, our growth initiatives, and our strategic goals. We're already off and running with a consistent focus in 2026, with customer-centric innovation as we pursue our mission of improving life with energy and how we do business and be the energy partner of choice.
Speaker #2: As we look forward, Black Hills offers a compelling long-term value proposition when considering our customer-focused growth, competitive yield, and significant upside opportunities above and beyond our five-year plan.
Speaker #2: Additionally, our plan merger with Northwestern Energy will provide us with the advantages of increased scale and new opportunities as a larger and premier regional electric and natural gas utility company.
Linn Evans: Additionally, our planned merger with NorthWestern Energy will provide us with the advantages of increased scale and new opportunities as a larger and premier regional electric and natural gas utility company. Thank you for your interest and your trust in the Black Hills team as we partner to grow long-term value for our customers and stakeholders. This concludes our prepared remarks, and we're happy to take your questions.
Linn Evans: Additionally, our planned merger with NorthWestern Energy will provide us with the advantages of increased scale and new opportunities as a larger and premier regional electric and natural gas utility company. Thank you for your interest and your trust in the Black Hills team as we partner to grow long-term value for our customers and stakeholders. This concludes our prepared remarks, and we're happy to take your questions.
Speaker #2: Thank you for your interest and your trust in the Black Hills team as we partner to grow long-term value for our customers and stakeholders.
Speaker #2: This concludes our prepared remarks, and we're happy to take your questions.
Speaker #3: Thank you. As a reminder, to ask a question, please press star 11 on your telephone and wait for your name to be announced. To withdraw your question, please press star 11 again.
Operator: 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 one again. One moment for questions. Our first question comes from Chris Ellinghaus with Siebert Williams Shank. You may proceed.
Operator: 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 one again. One moment for questions. Our first question comes from Chris Ellinghaus with Siebert Williams Shank. You may proceed.
Speaker #3: One moment for questions. Our first question comes from Chris Ellinghouse with Seabird Williams Shank. You may proceed.
Speaker #4: Hey, everybody.
Chris Ellinghaus: Hey, everybody. How are you?
Chris Ellinghaus (Sieber: Hey, everybody. How are you?
Speaker #4: How are you?
Speaker #5: Good morning. Hi,
Marne Jones: Morning.
Marne Jones: Morning.
Operator: Hi, Chris.
Kimberly Nooney: Hi, Chris.
Speaker #6: Chris.
Chris Ellinghaus: Linn, vis-a-vis the 3-gigawatt pipeline, can you give us any sense of, you know, what proportion that might fall within your five-year window, or how much of it is beyond the five-year plan? Can you give us any color on timing or even geography?
Speaker #4: Lynn, vis-à-vis the three-gigawatt pipeline, can you give us any sense of what proportion that might fall within your five-year window, or how much of it is beyond the five-year plan?
Chris Ellinghaus (Sieber: Linn, vis-a-vis the 3-gigawatt pipeline, can you give us any sense of, you know, what proportion that might fall within your five-year window, or how much of it is beyond the five-year plan? Can you give us any color on timing or even geography?
Speaker #4: Can you give us any color on timing, or even geography?
Linn Evans: Chris, good morning, and thank you for the question. I appreciate that. Yeah, happy to provide some color as best I can here. We have two existing customers in Microsoft and Meta. They continue to be in our pipeline. We indicated in our opening comments that we would be 600MW by 2030. That's our estimate based upon forecast and conversations, things of that nature. And then beyond that, we do have the three GW plus. And I would say the best way to describe that is the ones that we are negotiating with, the most aggressively might be the right phrase, or the most, right now, are want to take service in that 2027 time frame. And then realize when they start to take service, you know, it will ramp up.
Linn Evans: Chris, good morning, and thank you for the question. I appreciate that. Yeah, happy to provide some color as best I can here. We have two existing customers in Microsoft and Meta. They continue to be in our pipeline. We indicated in our opening comments that we would be 600MW by 2030. That's our estimate based upon forecast and conversations, things of that nature. And then beyond that, we do have the three GW plus. And I would say the best way to describe that is the ones that we are negotiating with, the most aggressively might be the right phrase, or the most, right now, are want to take service in that 2027 time frame. And then realize when they start to take service, you know, it will ramp up. It won't be all at once, as they construct, as they expand their data centers, et cetera. So hopefully that gives you some idea about how we think about it, Chris.
Speaker #2: Chris, good morning, and thank you for the question. I appreciate that. Yeah, I'm happy to provide some color as best I can here. We have two existing customers in Microsoft and Meta.
Speaker #2: They continue to be in our pipeline. We indicated in our opening comments that we would be at 600 megawatts by 2030. That's our estimate. Based upon forecast and conversations, things of that nature.
Speaker #2: And then beyond that, we do have the three gigawatt plus. And I would say the the ones that we are negotiating with, the most aggressively, might be the right phrase, are the most right now, are the ones that take service in that 2027 timeframe.
Speaker #2: to take service, it will ramp And then realize when they start up. It won't be all at once. As they construct, as they expand their data centers, etc., so hopefully that gives you some idea about how we think
Linn Evans: It won't be all at once, as they construct, as they expand their data centers, et cetera. So hopefully that gives you some idea about how we think about it, Chris.
Speaker #2: about it, Chris. Okay, that
Chris Ellinghaus: Okay, that helps. So obviously you have a much better sense of, you know, what's likely and, and what the time frames are, and, you know, the equipment queue is tight. Can you file CPCNs in advance of, you know, having exact specificity of what resources you might need to sort of get that ball rolling and, you know, maybe get some greater security for yourself in terms of trying to get in equipment queues and whatnot?
Chris Ellinghaus (Sieber: Okay, that helps. So obviously you have a much better sense of, you know, what's likely and, and what the time frames are, and, you know, the equipment queue is tight. Can you file CPCNs in advance of, you know, having exact specificity of what resources you might need to sort of get that ball rolling and, you know, maybe get some greater security for yourself in terms of trying to get in equipment queues and whatnot?
Speaker #4: That helps. So obviously, you have a much better sense of what's likely and what the timeframes are. And the equipment queue's tight. Can you file CPCNs in advance of having exact specificity of what resources you might need, to sort of get that ball rolling and maybe get some greater security for yourself in terms of trying to get in equipment queues and whatnot?
Speaker #5: Hi, Chris, good morning. This is Marnie. So, I can talk to you a little bit about the CPCN process. Typically, you want to have as many of the facts present as possible when you look at a CPCN.
Marne Jones: Hi, Chris, good morning. This is Marne. So I can talk to you a little bit about the CPCN process. So, so typically, you want to have as many of the facts present as possible when you look at a CPCN. As we are working through this, you know, as you mentioned, the equipment queue is tight. We, we are in those queues. We are starting to get some of those, you know, specific details about a CPCN, but really, it's also important to recognize, too, how we'll recover on those, any of those CPCNs. And so all of this really ties together. We're still navigating. This is new territory.
Marne Jones: Hi, Chris, good morning. This is Marne. So I can talk to you a little bit about the CPCN process. So, so typically, you want to have as many of the facts present as possible when you look at a CPCN. As we are working through this, you know, as you mentioned, the equipment queue is tight. We, we are in those queues. We are starting to get some of those, you know, specific details about a CPCN, but really, it's also important to recognize, too, how we'll recover on those, any of those CPCNs. And so all of this really ties together. We're still navigating. This is new territory. Obviously, CPCNs aren't new to us, but new territory as we're working on that speed to market, that we'll be working through, you know, how do we, how do we bring those CPCNs as quickly as we can?
Speaker #5: As we are working through this as you mentioned, the equipment queue is tight. We are in those queues. We are starting to get some of those specific details about a CPCN, but really it's also important to recognize too how we'll recover on those any of those CPCNs.
Speaker #5: And so all of this really ties together. We're still navigating. This is new territory. Obviously, CPCNs aren't new to us, but new territory as we're working on that speed to market.
Marne Jones: Obviously, CPCNs aren't new to us, but new territory as we're working on that speed to market, that we'll be working through, you know, how do we, how do we bring those CPCNs as quickly as we can?
Speaker #5: But we'll be working through how do we bring those CPCNs as quickly as we can.
Speaker #2: Yeah, just emphasizing what Marne said, we're in the queue, and as importantly, our customers are also in equipment queues, so that's been helpful, too.
Linn Evans: You know, just emphasizing what Marne said, we're in the queue, and as importantly, our customers are also in equipment queues, so that's been helpful to us.
Linn Evans: You know, just emphasizing what Marne said, we're in the queue, and as importantly, our customers are also in equipment queues, so that's been helpful to us.
Speaker #2: us. Okay, that
Chris Ellinghaus: Okay, that helps. And, as far as the NorthWestern merger goes, you've made filings, but have you had any significant interface with the Montana Commission to sort of gauge, you know, what their attitude is at this point?
Chris Ellinghaus (Sieber: Okay, that helps. And, as far as the NorthWestern merger goes, you've made filings, but have you had any significant interface with the Montana Commission to sort of gauge, you know, what their attitude is at this point?
Speaker #4: Helps. And as far as the Northwestern merger goes, you've made filings, but have you had any significant interface with the Montana Commission to sort of gauge what their attitude is at this—
Speaker #4: point? I'd say the best way to describe
Linn Evans: I'd say the best way to describe that, Chris, is we are in discovery stage right now, so we have to be very careful of ex parte, things of that nature. But we are in discovery phase. We're getting the kind of questions that we would fully anticipate, and that's going, I'd say, just kind of almost according to plan, if you will. Certainly according to our expectations about questions that would be asked, information that they need to make a good decision.
Linn Evans: I'd say the best way to describe that, Chris, is we are in discovery stage right now, so we have to be very careful of ex parte, things of that nature. But we are in discovery phase. We're getting the kind of questions that we would fully anticipate, and that's going, I'd say, just kind of almost according to plan, if you will. Certainly according to our expectations about questions that would be asked, information that they need to make a good decision.
Speaker #3: That, Chris, is—we are in the discovery stage right now, so we have to be very careful of ex parte, things of that nature. But we are in the discovery phase.
Speaker #3: We're getting the kind of questions that we would fully anticipate, and that's going I'd say just kind of almost according to plan, if you will, certainly according to our expectations about questions.
Speaker #3: It would be asked information that they need to make a good decision.
Speaker #4: Okay. Maybe one last question about data centers, since that's a topic du jour. Can you give us any sense of the scale or numbers of data centers in your pipeline?
Chris Ellinghaus: Okay. Maybe one last question about data centers, since that's a topic du jour. Can you give us any sense of the scale or numbers of data centers in your pipeline? Or is there a bunch of... You know, I guess this is subjective, what's large to you, but is there a bunch of large ones, you know, are they sort of moderate scale? Can you give us any sense of how many candidates there are in the queue?
Chris Ellinghaus (Sieber: Okay. Maybe one last question about data centers, since that's a topic du jour. Can you give us any sense of the scale or numbers of data centers in your pipeline? Or is there a bunch of... You know, I guess this is subjective, what's large to you, but is there a bunch of large ones, you know, are they sort of moderate scale? Can you give us any sense of how many candidates there are in the queue?
Speaker #4: Is there a bunch of—I guess this is subjective, what's large to you—but is there a bunch of large ones? Or are they sort of moderate scale?
Speaker #4: Can you give us any sense of how many candidates there are in the
Speaker #4: queue? Hi, Chris.
Marne Jones: Hi, Chris. You know, as Lynn mentioned up front, you know, we do have our two customers today, Microsoft and Meta. Both are looking for, you know, potential opportunities to expand. We've talked a bit about Tallgrass Crusoe. I would say in general, you know, that's a big chunk of what we consider as our pipeline. Obviously, there's some others out there too, but that's the big chunk of it.
Marne Jones: Hi, Chris. You know, as Lynn mentioned up front, you know, we do have our two customers today, Microsoft and Meta. Both are looking for, you know, potential opportunities to expand. We've talked a bit about Tallgrass Crusoe. I would say in general, you know, that's a big chunk of what we consider as our pipeline. Obviously, there's some others out there too, but that's the big chunk of it.
Speaker #5: As Lynn mentioned upfront, we do have our two customers today, Microsoft and Meta. Both are looking for potential opportunities to expand. We've talked a bit about Tallgrass Caruso.
Speaker #5: I would say, in general, that's a big chunk of what we consider as our pipeline. Obviously, there are some others out there too, but that's the—
Speaker #5: big chunk of it. And I
Linn Evans: ... And then I would add, you know, one of the advantages of Wyoming and Cheyenne, in particular, where we're seeing a lot of these data centers, bloom and blossom, is the fact that, the land is relatively available and is relatively inexpensive. So, from our perspective, quite a bit of land is being acquired for these, so I think they're going to be large, hyperscale data centers for the most part.
Linn Evans: ... And then I would add, you know, one of the advantages of Wyoming and Cheyenne, in particular, where we're seeing a lot of these data centers, bloom and blossom, is the fact that, the land is relatively available and is relatively inexpensive. So, from our perspective, quite a bit of land is being acquired for these, so I think they're going to be large, hyperscale data centers for the most part.
Speaker #3: would add one of the advantages of Wyoming and Cheyenne in particular, where we're seeing a lot of these data centers bloom and blossom, is the fact that the land is relatively available and is relatively inexpensive.
Speaker #3: So from our perspective, quite a bit of land is being acquired for these, so I think they're going to be large, hyperscale data centers for the most
Speaker #3: part. Okay,
Operator: Okay, great. Thanks for the call. I appreciate it.
Chris Ellinghaus (Sieber: Okay, great. Thanks for the call. I appreciate it.
Speaker #4: Great, thanks for the color. I appreciate it.
Speaker #3: Thank you, Chris. Thanks,
Linn Evans: Thank you, Chris.
Linn Evans: Thank you, Chris.
Marne Jones: Thanks, Chris.
Marne Jones: Thanks, Chris.
Speaker #2: Thank Chris. you. Our next question comes from Andrew Weissel with Scotiabank. You may proceed.
Operator: Thank you. Our next question comes from Andrew Weisel with Scotiabank. You may proceed.
Operator: Thank you. Our next question comes from Andrew Weisel with Scotiabank. You may proceed.
Speaker #7: Hey, good morning,
Andrew Weisel: Hey, good morning, everybody.
Andrew Weisel: Hey, good morning, everybody.
Speaker #7: everybody.
Speaker #2: Good morning,
Linn Evans: Good morning, Andrew.
Linn Evans: Good morning, Andrew.
Speaker #2: Andrew.
Andrew Weisel: I have, unsurprisingly, a couple more questions about the Crusoe Tallgrass project. First, based on the regulatory filings, and Marnie, you alluded to some of this in your comments, but you're proposing to build some transmission infrastructure, including this Robinson Substation and some transmission lines, to connect it to your grid. You're proposing a pretty unique setup where the customer would pay for construction to help alleviate risk and cost to the Cheyenne Light customers. I think that's a great setup. My question is, given this interconnection, do you see, do these assets essentially ensure that the entire data center project will be quote, unquote, "grid connected," and therefore would all related spending qualify for the LPCS tariff? Is that your expectation? Basically, I just want to understand how this would be applied. You talked about certain fees being negotiated.
Andrew Weisel: I have, unsurprisingly, a couple more questions about the Crusoe Tallgrass project. First, based on the regulatory filings, and Marnie, you alluded to some of this in your comments, but you're proposing to build some transmission infrastructure, including this Robinson Substation and some transmission lines, to connect it to your grid. You're proposing a pretty unique setup where the customer would pay for construction to help alleviate risk and cost to the Cheyenne Light customers. I think that's a great setup. My question is, given this interconnection, do you see, do these assets essentially ensure that the entire data center project will be quote, unquote, "grid connected," and therefore would all related spending qualify for the LPCS tariff? Is that your expectation? Basically, I just want to understand how this would be applied. You talked about certain fees being negotiated. How should we think about what's objective versus subjective, maybe?
Speaker #7: I have an unsurprisingly a couple more questions about the Caruso, Tallgrass project. First, based on the regulatory filings and, Marnie, you alluded to some of this in your comments, but you're proposing to build some transmission infrastructure including this Robinson substation and some transmission lines to connect it to your grid.
Speaker #7: And you're proposing a pretty unique setup, where the customer would pay for construction to help alleviate risk and cost to the Cheyenne-like customers. I think that's a great setup.
Speaker #7: My question is, given this interconnection, do you see do these assets essentially ensure that the entire data center project will be "grid connected" and therefore would all related spending qualify for the LPCS tariff?
Speaker #7: Is that your expectation? Basically, I just want to understand how this would be applied. You talk about certain fees being negotiated. How should we think about what's objective versus subjective,
Andrew Weisel: How should we think about what's objective versus subjective, maybe?
Speaker #7: maybe? Yeah.
Marne Jones: Yeah. Andrew, coming to me, I want to make sure I got your question here, so I'll give it a shot. You know, from a microgrid management fee perspective, we really apply that to peak demand. So as we, as I think all of us have mentioned, there's three different types of resources we can use to serve that type of load, and each type of resource that we use comes with a different type of a microgrid management fee or a typical, you know, utility or risk-adjusted return. That's really that the fees that are charged based on their peak demand.
Marne Jones: Yeah. Andrew, coming to me, I want to make sure I got your question here, so I'll give it a shot. You know, from a microgrid management fee perspective, we really apply that to peak demand. So as we, as I think all of us have mentioned, there's three different types of resources we can use to serve that type of load, and each type of resource that we use comes with a different type of a microgrid management fee or a typical, you know, utility or risk-adjusted return. That's really that the fees that are charged based on their peak demand.
Speaker #5: Andrew, coming through, I want to make sure I got your question here, so I'll give it a shot. From a microgrid management fee perspective, we really apply that to peak demand.
Speaker #5: So as I think all of us had mentioned, there's three different types of resources we can use to serve that type of load. And each type of resource that we use comes with a different type of a microgrid management fee or a typical utility or risk-adjusted return.
Speaker #5: That's really that the fees that are charged are based on their peak.
Andrew Weisel: Okay, um-
Andrew Weisel: Okay, um-
Speaker #3: And Andrew, I believe Okay. and Andrew, sorry to interrupt you, but I think further to that is that these networks, to date, as we everything's being negotiated, not everything is cemented, obviously, or we'd be making other kinds of announcements.
Linn Evans: Andrew, I believe, First, Andrew, sorry to interrupt you, but I think further to that is the these networks to date, as we... You know, that everything's being negotiated, not everything is cemented, obviously, or we'd be making other kinds of announcements. But much of this, these megawatts, this energy, yes, it's tied to our system, if you will, to date.
Linn Evans: Andrew, I believe, First, Andrew, sorry to interrupt you, but I think further to that is the these networks to date, as we... You know, that everything's being negotiated, not everything is cemented, obviously, or we'd be making other kinds of announcements. But much of this, these megawatts, this energy, yes, it's tied to our system, if you will, to date.
Speaker #3: But much of this, these megawatts, this energy, yes, it's tied to our system, if you will, to date.
Speaker #7: Okay. That's helpful. I guess maybe if I could get a little more specific on the generation needs as so far. It's not your project, and you haven't announced contracts, of course.
Andrew Weisel: Okay. That's helpful. I guess maybe if I could get a little more specific on the generation side. You, you haven't talked about generation needs so far; it's not your project, and you haven't announced contracts, of course. But Tallgrass has publicly talked about investing $7 billion of energy infrastructure in your service territory. You alluded to fuel cells, and of course, a big utility had an SEC document, about $3 billion of fuel cells in Cheyenne. Some investors are confused about whether these would qualify for utility fees and the LPCS tariff. So I guess maybe could you just elaborate, is there anything about fuel cells or anything else? How, how should we think about all those billions of dollars and, and whether or not that would apply to your fee structure?
Andrew Weisel: Okay. That's helpful. I guess maybe if I could get a little more specific on the generation side. You, you haven't talked about generation needs so far; it's not your project, and you haven't announced contracts, of course. But Tallgrass has publicly talked about investing $7 billion of energy infrastructure in your service territory. You alluded to fuel cells, and of course, a big utility had an SEC document, about $3 billion of fuel cells in Cheyenne. Some investors are confused about whether these would qualify for utility fees and the LPCS tariff. So I guess maybe could you just elaborate, is there anything about fuel cells or anything else? How, how should we think about all those billions of dollars and, and whether or not that would apply to your fee structure?
Speaker #7: But Tallgrass has publicly talked about investing $7 billion of energy infrastructure, and your service territory you alluded to fuel cells and, of course, a big utility had an SEC document about $3 billion of fuel cells in Cheyenne.
Speaker #7: Some investors are confused about whether these would qualify for utility fees and the LPCS tariff. So I guess maybe could you just elaborate? Is there anything about fuel cells or anything else?
Speaker #7: How should we think about all those billions of dollars, and whether or not that would apply to your fee structure?
Speaker #5: Yeah, Andrew. So as I mentioned, the resource mix is still being evaluated in how ultimately we would serve that load. As I noted, and you're very familiar with, as we use market, that's more reliant on in lieu of building.
Marne Jones: Yeah, Andrew. So, you know, as I mentioned, the resource mix is still being evaluated in how ultimately we would serve that load. As I noted, you know, as and you're very familiar with, as we use market, that's more reliant on in lieu of building. When we're looking at contracted or co-located generation, that comes with a different type of pricing.
Marne Jones: Yeah, Andrew. So, you know, as I mentioned, the resource mix is still being evaluated in how ultimately we would serve that load. As I noted, you know, as and you're very familiar with, as we use market, that's more reliant on in lieu of building. When we're looking at contracted or co-located generation, that comes with a different type of pricing.
Speaker #5: When we're looking at contracted or co-located generation, that comes with a different type of build, we would look that through the lens of risk-adjusted utility return very similar to what we do today from a regulated rate-based perspective.
Andrew Weisel: Mm-hmm.
Andrew Weisel: Mm-hmm.
Marne Jones: And certainly, if there's opportunity to build, we would look at that through the lens of risk-adjusted utility return, very similar to, you know, what we do today from a regulated rate base perspective. So all of that goes into play in the pricing. That pricing is then what is basically applied to the peak demand.
Marne Jones: And certainly, if there's opportunity to build, we would look at that through the lens of risk-adjusted utility return, very similar to, you know, what we do today from a regulated rate base perspective. So all of that goes into play in the pricing. That pricing is then what is basically applied to the peak demand.
Speaker #5: So all of that goes into play in the pricing. That pricing is then what is basically applied to the peak demand.
Speaker #7: Okay, okay. Then I guess, going back to the T&D side—or transmission side, really—are there other assets that you're looking to fast-track to accommodate this, or other big data center customers?
Andrew Weisel: Okay. Okay, then I guess going back to the T&D side, or transmission side, really, are there other assets that you're looking to fast track to accommodate this or other big data center customers? Should we expect more filings like that, Robinson Substation filing?
Andrew Weisel: Okay. Okay, then I guess going back to the T&D side, or transmission side, really, are there other assets that you're looking to fast track to accommodate this or other big data center customers? Should we expect more filings like that, Robinson Substation filing?
Speaker #7: Should we expect more filings like that, Robinson substation filing?
Marne Jones: You know, as we've talked in the past, you know, that 500 and 600-- 500 to 600 megawatts, we believe, is gonna require some additional investment beyond that timeframe. So whether it's, you know, this project, other projects, we certainly see there's opportunities for additional investment beyond our current plan, based on this pipeline.
Marne Jones: You know, as we've talked in the past, you know, that 500 and 600-- 500 to 600 megawatts, we believe, is gonna require some additional investment beyond that timeframe. So whether it's, you know, this project, other projects, we certainly see there's opportunities for additional investment beyond our current plan, based on this pipeline.
Speaker #5: As we've talked in the past, that $500 and $600, 5 to 600 megawatts, we believe is going to require some additional investment beyond that time frame.
Speaker #5: So whether it's this project, other projects, we certainly see there's opportunities for additional investment beyond our current plan based on this
Speaker #5: pipeline. Okay,
Andrew Weisel: Okay, great. Maybe one last one, and you know, answer this best you can, I guess. You obviously still have not yet signed an energy service agreement with the hyperscaler for the Crusoe project. We'll be as patient as we can. My question is, they're looking to move pretty quickly, and the timing of your CPCN filing calls for in-service, I believe, by March of next year, which is very fast. By when would you need to sign and announce something to keep everything on track? Is there some kind of timeframe we should be watching for on the calendar?
Andrew Weisel: Okay, great. Maybe one last one, and you know, answer this best you can, I guess. You obviously still have not yet signed an energy service agreement with the hyperscaler for the Crusoe project. We'll be as patient as we can. My question is, they're looking to move pretty quickly, and the timing of your CPCN filing calls for in-service, I believe, by March of next year, which is very fast. By when would you need to sign and announce something to keep everything on track? Is there some kind of timeframe we should be watching for on the calendar?
Speaker #7: great. Maybe one last one, and answer this best you can, I guess. You obviously still have not yet signed an energy service agreement with the hyperscaler for the Caruso project.
Speaker #7: Will be as patient as we can. My question is, they're looking to move pretty quickly, and the timing of your CPCN filing calls for in-service, I believe, by March of next year, which is very fast.
Speaker #7: By when would you need to sign an announcement to keep everything on track? Is there some kind of time frame we should be watching for on the calendar?
Speaker #5: Well, we do know—I mean, there's intention from the customer, I think, to begin taking service in Q1 of 2027. So, obviously, we are working in alignment with them, as well as all the parties, to meet both of our—
Marne Jones: Well, we do know... I mean, there's intention from the customer, I think, to begin taking service in, in Q1 of 2027. So obviously-
Marne Jones: Well, we do know... I mean, there's intention from the customer, I think, to begin taking service in, in Q1 of 2027. So obviously-
Andrew Weisel: Mm-hmm.
Andrew Weisel: Mm-hmm.
Marne Jones: We are working in alignment with them as well as all the parties. We want to meet both of our goals.
Marne Jones: We are working in alignment with them as well as all the parties. We want to meet both of our goals.
Speaker #5: goals. Okay,
Andrew Weisel: Okay, great. I will leave it there. Thank you so much for the details. Appreciate it.
Andrew Weisel: Okay, great. I will leave it there. Thank you so much for the details. Appreciate it.
Speaker #7: Great, I will leave it there. Thank you so much for the—
Speaker #7: Appreciate it.
Speaker #3: Thank you.
Marne Jones: Thanks, Andrew.
Marne Jones: Thanks, Andrew.
Speaker #5: Thanks, details.
Speaker #3: Thank you, Andrew. And as a reminder, to ask a question, please press *11 on your telephone. Our next question comes from Ross Fowler with Bank of America.
Operator: Thank you. And as a reminder, to ask a question, please press star one one on your telephone. Our next question comes from Ross Fowler with Bank of America. You may proceed.
Operator: Thank you. And as a reminder, to ask a question, please press star one one on your telephone. Our next question comes from Ross Fowler with Bank of America. You may proceed.
Speaker #3: You may
Speaker #8: Morning. Hopefully not beating a dead horse here, but I just wanted to go back to kind of what we factually know at this point and kind of walk through some numbers and make sure my understanding is correct.
Ross Fowler: Morning. Hopefully not beating a dead horse here, but I just wanted to go back to kind of what we factually know at this point and kind of walk through some numbers and make sure my understanding is correct. So, we have 600 megawatts currently in the plan, and we know that that is 200 megawatts from Microsoft. Is the other 400 megawatts of that the Meta site, or is there something else in that gap?
Ross Fowler: Morning. Hopefully not beating a dead horse here, but I just wanted to go back to kind of what we factually know at this point and kind of walk through some numbers and make sure my understanding is correct. So, we have 600 megawatts currently in the plan, and we know that that is 200 megawatts from Microsoft. Is the other 400 megawatts of that the Meta site, or is there something else in that gap?
Speaker #8: So we have 600 megawatts currently in the plan, and we know that that is 200 megawatts from Microsoft. Is the other 400 megawatts of that the Meta site, or is there something else in that?
Speaker #8: gap? Good morning,
Linn Evans: Good morning, Ross. I, I think I'll step back and correct you on that. We have not disclosed, nor has Microsoft disclosed, the number of megawatts that they take from us, but we can say on a combined basis for both Microsoft and Meta, we anticipate it'll be 600MW by 2030. Hopefully, that's helpful.
Linn Evans: Good morning, Ross. I, I think I'll step back and correct you on that. We have not disclosed, nor has Microsoft disclosed, the number of megawatts that they take from us, but we can say on a combined basis for both Microsoft and Meta, we anticipate it'll be 600MW by 2030. Hopefully, that's helpful.
Speaker #9: Ross. I think I'll step back and correct you on that. We have not disclosed and nor has Microsoft disclosed the number of megawatts that they take from us, but we can say on a combined basis for both Microsoft and Meta we anticipate it'd be 600 megawatts by 2030.
Speaker #9: that's helpful. Hopefully
Ross Fowler: Okay. That is helpful. And then we know that Meta's data center is in Laramie County, and so we know some piece of the 600 is in Laramie County, and there's about 1,150MW of generation in the interconnection queue filings in Laramie County. So the rest of that, beyond whatever I estimate Meta might be, of the 600, where is that coming from? Is that the Tallgrass site? Is that some other site? Is that... You know, I'm just trying to scale things based on what we know from public filings.
Ross Fowler: Okay. That is helpful. And then we know that Meta's data center is in Laramie County, and so we know some piece of the 600 is in Laramie County, and there's about 1,150MW of generation in the interconnection queue filings in Laramie County. So the rest of that, beyond whatever I estimate Meta might be, of the 600, where is that coming from? Is that the Tallgrass site? Is that some other site? Is that... You know, I'm just trying to scale things based on what we know from public filings.
Speaker #7: helpful. And then we know that Meta's data centers in Laramie County, and so we know some piece of the 600 is in Laramie County.
Speaker #7: And there's about 1,150 interconnection Q megawatts of generation in the filings in Laramie County. So the rest of that beyond whatever I estimate Meta might be of the 600, where is that coming from?
Speaker #7: Is that the Tallgrass site? Is that some other site? I'm just trying to scale things based on what we know from public filings.
Marne Jones: So, yeah, Ross, you know, we've shared, I guess, kind of, you know, what we can share. We are still under negotiations. We're still determining resource mix. As with any queue, you're gonna have a lot of parties in queues, and so these are things that we'll continue to work through as we firm up our mixes.
Marne Jones: So, yeah, Ross, you know, we've shared, I guess, kind of, you know, what we can share. We are still under negotiations. We're still determining resource mix. As with any queue, you're gonna have a lot of parties in queues, and so these are things that we'll continue to work through as we firm up our mixes.
Speaker #5: So yeah, Ross, we've shared, I guess, kind of what we can share. We are still under negotiations. We're still determining resource mix. As with any queue, you're going to have a lot of parties in queues.
Speaker #5: And so, these are things that we'll continue to work through as we firm up our mixes.
Speaker #9: And Ross, I might add to that. I'd ask you to remember that both Meta and Microsoft are taking market energy, and therefore the megawatts of interconnection don't always connect, if you will, or add up.
Linn Evans: And Ross, I might add to that. I'd ask you to re-remember that both Meta and Microsoft are taking market energy, and therefore, the megawatts of interconnection don't always connect, if you will, or, or add up.
Linn Evans: And Ross, I might add to that. I'd ask you to re-remember that both Meta and Microsoft are taking market energy, and therefore, the megawatts of interconnection don't always connect, if you will, or, or add up.
Speaker #8: Okay. All right. So it's not additive because they're taking market and we're.
Ross Fowler: Okay. All right. So it's not additive because they're taking market and-
Ross Fowler: Okay. All right. So it's not additive because they're taking market and-
Linn Evans: There you go.
Linn Evans: There you go.
Speaker #9: There you go.
Ross Fowler: Okay, so.
Speaker #8: Somehow to myself. Okay. So.
Ross Fowler: Okay, so.
Linn Evans: You got it. You got it.
Linn Evans: You got it. You got it.
Speaker #8: And then. You've got.
Speaker #9: You've
Speaker #9: got. Thank you.
Ross Fowler: Thank you. And then the 4 to 6 EPS CAGR, right? Through 2028, that is inside, or I should say, the 4 to 6% EPS CAGR includes that 10% EPS contribution. It's not on top of the 4 to 6, right? It's within the 4 to 6.
Ross Fowler: Thank you. And then the 4 to 6 EPS CAGR, right? Through 2028, that is inside, or I should say, the 4 to 6% EPS CAGR includes that 10% EPS contribution. It's not on top of the 4 to 6, right? It's within the 4 to 6.
Speaker #8: And then the 4% to 6% EPS CAGR, right? Through 2028, that is— or I should say, the 4% to 6% EPS CAGR includes that 10% EPS contribution.
Speaker #8: It's not on top of the four to six, right? It's within the four to
Speaker #8: six. You're correct. Okay. All right. Thank you very much.
Marne Jones: You're correct.
Marne Jones: You're correct.
Ross Fowler: Okay. All right. Thank you very much.
Ross Fowler: Okay. All right. Thank you very much.
Speaker #9: Thank you, Ross. Appreciate your
Linn Evans: Thank you, Ross.
Linn Evans: Thank you, Ross.
Marne Jones: Thanks, Ross.
Marne Jones: Thanks, Ross.
Linn Evans: Appreciate your interest.
Linn Evans: Appreciate your interest.
Operator: Thank you. I would now like to turn the call back over to Linn Evans for any closing remarks.
Operator: Thank you. I would now like to turn the call back over to Linn Evans for any closing remarks.
Speaker #3: To Lynn Evans for any closing.
Speaker #3: remarks. Well, thank you very much for your
Linn Evans: Well, thank you very much for your questions. Thank you very much for your interest in Black Hills Energy and Black Hills Corporation. I want to once again say thank you to our team for a fantastic 2025, and thank you for leaning in to 2026. And we appreciate all of you attending today, and have a Black Hills Energy safe day. Thank you.
Linn Evans: Well, thank you very much for your questions. Thank you very much for your interest in Black Hills Energy and Black Hills Corporation. I want to once again say thank you to our team for a fantastic 2025, and thank you for leaning in to 2026. And we appreciate all of you attending today, and have a Black Hills Energy safe day. Thank you.
Speaker #9: Black Hills Energy and Black Hills questions. Corporation. Thank you very much for your interest in I want to once again say thank you to our team for a fantastic 2025, and thank you for leaning into 2026.
Speaker #9: And we appreciate all of you attending today. And have a Black Hills Energy-safe day. Thank you.
Operator: Thank you. This concludes the conference. Thank you for your participation. You may now disconnect.
Operator: Thank you. This concludes the conference. Thank you for your participation. You may now disconnect.
