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Black Hills (BKH) - 2024 Q4 - Earnings Call Transcript
BKHBlack Hills (BKH)2025-02-06 18:07
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Financial Data and Key Metrics Changes - The company achieved EPS growth of 4.3% in 2024, with a guidance midpoint of 3.75for2023,andexpectsapproximately53.75 for 2023, and expects approximately 5% EPS growth in 2025 [9][31] - The financial position remains solid, with successful completion of the financing plan and maintenance of investment-grade credit ratings [10][34] - The company delivered 0.74 per share of new margins driven by regulatory strategy execution and 0.08persharefromcustomergrowth[26]BusinessLineDataandKeyMetricsChanges−Thecompanyinvestedover0.08 per share from customer growth [26] Business Line Data and Key Metrics Changes - The company invested over 800 million for core energy needs, achieving a new peak demand of 318 megawatts for Wyoming Electric [8][9] - O&M management efforts reduced year-over-year O&M increase to less than 1% or 0.06pershare,despitechallengesfrommildweatherandunplannedoutages[27][28]MarketDataandKeyMetricsChanges−Customercountinservicejurisdictionsgrewmorethan10.06 per share, despite challenges from mild weather and unplanned outages [27][28] Market Data and Key Metrics Changes - Customer count in service jurisdictions grew more than 1% annually, significantly above the national average of 0.4% [22] - The company is witnessing strong growth in its Western South Dakota service territory, which is also above the national average [22] Company Strategy and Development Direction - The company is focused on a customer-centric strategy, with a long-term EPS growth target of 4% to 6% [14][30] - A five-year capital investment plan of 4.7 billion is set, reflecting a 10% increase compared to the previous plan, driven by project timing and customer-focused opportunities [15][14] - The company is advancing its data center growth plan, with expectations of serving approximately 500 megawatts of data center demand by the end of 2029 [19][20] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the strong capital forecast and growth opportunities driven by increasing demand from data center customers [14][55] - The company is committed to maintaining solid investment-grade credit ratings and has achieved its debt to total capitalization target of 55% [34][35] Other Important Information - The company increased its dividend by 4%, marking 55 consecutive years of dividend increases [13][37] - The Ready Wyoming electric transmission project is progressing well, enhancing system resiliency and market access [44][45] Q&A Session Summary Question: Clarification on CapEx forecast changes - Management explained that the CapEx forecast was adjusted due to timing of significant projects and increased investments driven by organic growth and inflation [58][60] Question: Contribution from data center load - Management clarified that the expectation of data center load contributing 10% or more to EPS by 2029 remains unchanged, with growth driven by both organic and data center growth [63][66] Question: Wildfire risk mitigation legislation involvement - Management confirmed active involvement in wildfire legislation discussions, with ongoing efforts in Colorado and successful progress in South Dakota and Wyoming [90][91] Question: Timing of clean energy plan resources - Management indicated that the timing for new resources in the Colorado clean energy plan has shifted due to better insights from bids and contract negotiations [83][85]