Related Party Transactions

12 Months Ended

Dec. 31, 2015

Related Party Transactions [Abstract]

Related Party Transactions

RELATED-PARTY TRANSACTIONS

Non-Cash Dividend to Parent

In 2015, we recorded a non-cash dividend to our Parent for approximately $28.5 million and decreased the utility money pool note receivable, net for approximately $28.5 million. No amounts were recorded for 2014.

Receivables and Payables

We have accounts receivable and accounts payable balances related to transactions with other BHC subsidiaries. These balances as of December 31 were as follows (in thousands):

	2015		2014
Receivable - affiliates	$	5,747	$	5,350
Accounts payable - affiliates	$	30,032	$	19,242

Money Pool Notes Receivable and Notes Payable

We have a Utility Money Pool Agreement (the Agreement) with BHC, Cheyenne Light and Black Hills Utility Holdings. Under the agreement, we may borrow from BHC however the Agreement restricts us from loaning funds to BHC or to any of BHCs’ non-utility subsidiaries. The Agreement does not restrict us from making dividends to BHC. Borrowings under the agreement bear interest at the weighted average daily cost of our parent company’s credit facility borrowings as defined under the Agreement, or if there are no external funds outstanding on that date, then the rate will be the daily one month LIBOR rate plus 1.0%.

The cost of borrowing under the Utility Money Pool was 1.45% at December 31, 2015.

We had the following balances with the Utility Money Pool as of December 31 (in thousands):

	2015		2014
Notes receivable (payable), net	$	76,813	$	68,626

Net interest income (expense) relating to the Utility Money Pool for the years ended December 31, was as follows (in thousands):

	2015		2014		2013
Net interest income (expense)	$	1,153	$	304	$	505

Other Balances and Transactions

We have the following Power Purchase and Transmission Services Agreements with affiliated entities:

• An agreement, expiring September 3, 2028, with Cheyenne Light to acquire 15 MW of the facility output from Happy Jack. Under a separate inter-company agreement expiring on September 3, 2028, Cheyenne Light has agreed to sell up to 15 MW of the facility output from Happy Jack to us.

• An agreement, expiring September 30, 2029, with Cheyenne Light to acquire 20 MW of the facility output from Silver Sage. Under a separate inter-company agreement expiring on September 30, 2029, Cheyenne Light has agreed to sell 20 MW of energy from Silver Sage to us.

• A Generation Dispatch Agreement with Cheyenne Light that requires us to purchase all of Cheyenne Light’s excess energy.

Related-party Gas Transportation Service Agreement

On October 1, 2014, we entered into a gas transportation service agreement with Cheyenne Light in connection with gas supply for Cheyenne Prairie. The agreement is for a term of 40 years, in which we pay a monthly service and facility fee for firm and interruptible gas transportation.

We had the following related party transactions for the years ended December 31 included in the corresponding captions in the accompanying Statements of Income:

	2015		2014		2013
	(in thousands)
Revenues:
Energy sold to Cheyenne Light	$	1,857	$	1,894	$	1,338
Rent from electric properties	$	4,772	$	4,102	$	3,627
Purchases:
Purchase of coal from WRDC	$	16,401	$	16,861	$	18,542
Purchase of excess energy from Cheyenne Light	$	898	$	3,033	$	3,640
Purchase of renewable wind energy from Cheyenne Light - Happy Jack	$	1,578	$	1,959	$	1,886
Purchase of renewable wind energy from Cheyenne Light - Silver Sage	$	2,739	$	3,200	$	3,207
Corporate support services from Parent, Black Hills Service Company and Black Hills Utility Holdings	$	26,655	$	32,332	$	30,738