x | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended March 31, 2017 | |
OR | |
o | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from __________ to __________. | |
Commission File Number 1-7978 |
Black Hills Power, Inc. | |
Incorporated in South Dakota | IRS Identification Number 46-0111677 |
625 Ninth Street | |
Rapid City, South Dakota 57701 | |
Registrant’s telephone number (605) 721-1700 | |
Former name, former address, and former fiscal year if changed since last report | |
NONE |
Yes x | No o |
Yes x | No o |
Large accelerated filer | o | Accelerated filer | o | |
Non-accelerated filer | x | (Do not check if a smaller reporting company) | ||
Smaller reporting company | o | |||
Emerging growth company | o |
Yes o | No x |
Page | ||
GLOSSARY OF TERMS AND ABBREVIATIONS | ||
PART 1. | FINANCIAL INFORMATION | |
Item 1. | Financial Statements | |
Condensed Statements of Income and Comprehensive Income - unaudited | ||
Three Months Ended March 31, 2017 and 2016 | ||
Condensed Balance Sheets - unaudited | ||
March 31, 2017 and December 31, 2016 | ||
Condensed Statements of Cash Flows - unaudited | ||
Three Months Ended March 31, 2017 and 2016 | ||
Notes to Condensed Financial Statements - unaudited | ||
Item 2. | Managements’ Discussion and Analysis of Financial Condition and Results of Operations | |
Item 4. | Controls and Procedures | |
PART II. | OTHER INFORMATION | |
Item 1. | Legal Proceedings | |
Item 1A. | Risk Factors | |
Item 6. | Exhibits | |
Signatures | ||
Exhibit Index |
AFUDC | Allowance for Funds Used During Construction |
ASC | Accounting Standards Codification |
ASU | Accounting Standards Update issued by the FASB |
BHC | Black Hills Corporation; the Parent Company |
Black Hills Energy | The name used to conduct the business of BHC utility companies |
Black Hills Utility Holdings | Black Hills Utility Holdings, Inc. a direct, wholly-owned subsidiary of Black Hills Corporation (doing business as Black Hills Energy) |
Black Hills Service Company | Black Hills Service Company, LLC, a direct, wholly-owned subsidiary of BHC |
Cheyenne Light | Cheyenne Light, Fuel and Power Company, a direct, wholly-owned subsidiary of Black Hills Corporation (doing business as Black Hills Energy) |
FASB | Financial Accounting Standards Board |
FERC | United States Federal Energy Regulatory Commission |
Fitch | Fitch Ratings |
GAAP | Accounting principles generally accepted in the United States of America |
Happy Jack | Happy Jack Wind Farms, LLC, a subsidiary of Duke Energy Generation Services |
Heating degree day | A heating degree day is equivalent to each degree that the average of the high and the low temperatures for a day is below 65 degrees. The colder the climate, the greater the number of heating degree days. Heating degree days are used in the utility industry to measure the relative coldness of weather and to compare relative temperatures between one geographic area and another. Normal degree days are based on the National Weather Service data for selected locations over a 30-year average. |
kV | Kilovolt |
LIBOR | London Interbank Offered Rate |
Moody’s | Moody’s Investors Service, Inc. |
MW | Megawatts |
SEC | U. S. Securities and Exchange Commission |
Silver Sage | Silver Sage Windpower, LLC, a subsidiary of Duke Energy Generation Services |
S&P | Standard & Poor’s, a division of The McGraw-Hill Companies, Inc. |
WRDC | Wyodak Resources Development Corp., an indirect, wholly-owned subsidiary of BHC |
Three Months Ended March 31, | |||||||
(unaudited) | 2017 | 2016 | |||||
(in thousands) | |||||||
Revenue | $ | 73,794 | $ | 68,642 | |||
Operating expenses: | |||||||
Fuel and purchased power | 23,149 | 20,730 | |||||
Operations and maintenance | 16,954 | 17,031 | |||||
Depreciation and amortization | 8,694 | 8,612 | |||||
Taxes - property | 1,621 | 1,489 | |||||
Total operating expenses | 50,418 | 47,862 | |||||
Operating income | 23,376 | 20,780 | |||||
Other income (expense): | |||||||
Interest expense | (6,336 | ) | (5,454 | ) | |||
AFUDC - borrowed | 192 | 223 | |||||
Interest income | 707 | 202 | |||||
AFUDC - equity | 471 | 423 | |||||
Other income (expense), net | (53 | ) | 74 | ||||
Total other income (expense) | (5,019 | ) | (4,532 | ) | |||
Income from continuing operations before income taxes | 18,357 | 16,248 | |||||
Income tax expense | (5,787 | ) | (5,062 | ) | |||
Net income | 12,570 | 11,186 | |||||
Other comprehensive income (loss): | |||||||
Reclassification adjustments of cash flow hedges settled and included in net income (net of tax (expense) benefit of $(6) and $(6) for the three months ended March 31, 2017 and 2016, respectively) | 10 | 10 | |||||
Reclassification adjustment of benefit plan liability - net gain (loss) (net of tax (expense) benefit of $(8) and $(7) for the three months ended March 31, 2017 and 2016, respectively) | 14 | 14 | |||||
Other comprehensive income | 24 | 24 | |||||
Comprehensive income | $ | 12,594 | $ | 11,210 |
(unaudited) | March 31, 2017 | December 31, 2016 | ||||
(in thousands) | ||||||
ASSETS | ||||||
Current assets: | ||||||
Cash and cash equivalents | $ | 1,127 | $ | 234 | ||
Receivables - customers, net | 27,457 | 30,614 | ||||
Receivables - affiliates | 5,390 | 9,526 | ||||
Other receivables, net | 420 | 351 | ||||
Money pool notes receivable, net | 32,949 | 28,409 | ||||
Materials, supplies and fuel | 23,244 | 22,389 | ||||
Regulatory assets, current | 20,536 | 18,119 | ||||
Other, current assets | 3,286 | 3,876 | ||||
Total current assets | 114,409 | 113,518 | ||||
Investments | 4,849 | 4,841 | ||||
Property, plant and equipment | 1,254,710 | 1,236,387 | ||||
Less accumulated depreciation and amortization | (342,400 | ) | (338,828 | ) | ||
Total property, plant and equipment, net | 912,310 | 897,559 | ||||
Other assets: | ||||||
Regulatory assets, non-current | 73,445 | 74,015 | ||||
Other, non-current assets | 3,545 | 3,816 | ||||
Total other assets | 76,990 | 77,831 | ||||
TOTAL ASSETS | $ | 1,108,558 | $ | 1,093,749 |
(unaudited) | March 31, 2017 | December 31, 2016 | ||||
(in thousands, except common stock par value and share amounts) | ||||||
LIABILITIES AND STOCKHOLDER’S EQUITY | ||||||
Current liabilities: | ||||||
Accounts payable | $ | 16,809 | $ | 14,158 | ||
Accounts payable - affiliates | 27,289 | 31,799 | ||||
Accrued liabilities | 44,891 | 37,436 | ||||
Regulatory liabilities, current | — | 84 | ||||
Total current liabilities | 88,989 | 83,477 | ||||
Long-term debt | 339,791 | 339,756 | ||||
Deferred credits and other liabilities: | ||||||
Deferred income tax liability, net, non-current | 214,657 | 211,443 | ||||
Regulatory liabilities, non-current | 53,896 | 53,866 | ||||
Benefit plan liabilities | 19,617 | 19,544 | ||||
Other, non-current liabilities | 1,351 | 1,001 | ||||
Total deferred credits and other liabilities | 289,521 | 285,854 | ||||
Commitments and contingencies (Notes 4, 5 and 8) | ||||||
Stockholder’s equity: | ||||||
Common stock $1 par value; 50,000,000 shares authorized; 23,416,396 shares issued | 23,416 | 23,416 | ||||
Additional paid-in capital | 39,575 | 39,575 | ||||
Retained earnings | 328,504 | 322,933 | ||||
Accumulated other comprehensive loss | (1,238 | ) | (1,262 | ) | ||
Total stockholder’s equity | 390,257 | 384,662 | ||||
TOTAL LIABILITIES AND STOCKHOLDER’S EQUITY | $ | 1,108,558 | $ | 1,093,749 |
(unaudited) | Three Months Ended March 31, | |||||
2017 | 2016 | |||||
(in thousands) | ||||||
Operating activities: | ||||||
Net income | $ | 12,570 | $ | 11,186 | ||
Adjustments to reconcile net income to net cash provided by operating activities- | ||||||
Depreciation and amortization | 8,694 | 8,612 | ||||
Deferred income tax | 2,704 | 18,076 | ||||
Employee benefits | 205 | 443 | ||||
AFUDC - equity | (471 | ) | (423 | ) | ||
Other adjustments, net | 559 | 296 | ||||
Change in operating assets and liabilities - | ||||||
Accounts receivable and other current assets | 7,908 | (3,409 | ) | |||
Accounts payable and other current liabilities | (380 | ) | (7,656 | ) | ||
Regulatory assets - current | (2,170 | ) | (4,193 | ) | ||
Regulatory liabilities - current | (84 | ) | — | |||
Other operating activities, net | (152 | ) | 481 | |||
Net cash provided by (used in) operating activities | 29,383 | 23,413 | ||||
Investing activities: | ||||||
Property, plant and equipment additions | (16,976 | ) | (18,928 | ) | ||
Change in money pool notes receivable, net | (11,540 | ) | 13,683 | |||
Other investing activities | 26 | (27 | ) | |||
Net cash provided by (used in) investing activities | (28,490 | ) | (5,272 | ) | ||
Financing activities: | ||||||
Net cash provided by (used in) financing activities | — | — | ||||
Net change in cash and cash equivalents | 893 | 18,141 | ||||
Cash and cash equivalents, beginning of period | 234 | 297 | ||||
Cash and cash equivalents, end of period | $ | 1,127 | $ | 18,438 |
(2) | ACCOUNTS RECEIVABLE AND ALLOWANCE FOR DOUBTFUL ACCOUNTS |
March 31, 2017 | December 31, 2016 | |||||
Accounts receivable trade | $ | 16,197 | $ | 16,972 | ||
Unbilled revenues | 11,524 | 13,799 | ||||
Allowance for doubtful accounts | (264 | ) | (157 | ) | ||
Receivables - customers, net | $ | 27,457 | $ | 30,614 |
(3) | REGULATORY ACCOUNTING |
Recovery/Amortization Period (in years) | March 31, 2017 | December 31, 2016 | ||||||
Regulatory assets: | ||||||||
Unamortized loss on reacquired debt (a) | 8 | $ | 1,745 | $ | 1,815 | |||
Deferred taxes on AFUDC (b) | 45 | 9,607 | 9,367 | |||||
Employee benefit plans (c) | 12 | 20,100 | 20,100 | |||||
Deferred energy and fuel cost adjustments - current (a) | Less than 1 year | 23,075 | 23,016 | |||||
Deferred taxes on flow through accounting (a) | 35 | 12,802 | 12,545 | |||||
Decommissioning costs, net of amortization(b) | 8 | 12,025 | 12,456 | |||||
Other regulatory assets (a) (d) | 2 | 14,627 | 12,835 | |||||
Total regulatory assets | $ | 93,981 | $ | 92,134 |
Regulatory liabilities: | ||||||||
Cost of removal for utility plant (a) | 61 | $ | 41,592 | $ | 41,541 | |||
Employee benefit plan costs and related deferred taxes (c) | 12 | 12,304 | 12,304 | |||||
Other regulatory liabilities | 13 | — | 105 | |||||
Total regulatory liabilities | $ | 53,896 | $ | 53,950 |
(a) | Recovery of costs, but we are not allowed a rate of return. |
(b) | In addition to recovery of costs, we are allowed a rate of return. |
(c) | In addition to recovery or repayment of costs, we are allowed a return on a portion of this amount or a reduction in rate base, respectively. |
(d) | Includes approximately $14 million and $12 million of vegetation management expenses at March 31, 2017 and December 31, 2016, respectively, for which we are allowed a rate of return. |
(4) | RELATED-PARTY TRANSACTIONS |
March 31, 2017 | December 31, 2016 | ||||||
Receivables - affiliates | $ | 5,390 | $ | 9,526 | |||
Accounts payable - affiliates | $ | 27,289 | $ | 31,799 |
March 31, 2017 | December 31, 2016 | ||||||
Money pool notes receivable, net | $ | 32,949 | $ | 28,409 |
Three Months Ended March 31, | ||||||
2017 | 2016 | |||||
Net interest income (expense) | $ | 126 | $ | 278 |
Three Months Ended March 31, | ||||||
2017 | 2016 | |||||
Revenue: | ||||||
Energy sold to Cheyenne Light | $ | 878 | $ | 661 | ||
Rent from electric properties | $ | 1,272 | $ | 1,213 | ||
Fuel and purchased power: | ||||||
Purchases of coal from WRDC | $ | 4,280 | $ | 4,796 | ||
Purchase of excess energy from Cheyenne Light | $ | 40 | $ | 55 | ||
Purchase of renewable wind energy from Cheyenne Light - Happy Jack | $ | 606 | $ | 664 | ||
Purchase of renewable wind energy from Cheyenne Light - Silver Sage | $ | 1,019 | $ | 1,127 | ||
Gas transportation service agreement: | ||||||
Gas transportation service agreement with Cheyenne Light for firm and interruptible gas transportation | $ | 99 | $ | 136 | ||
Corporate support: | ||||||
Corporate support services and fees from Parent, Black Hills Service Company and Black Hills Utility Holdings | $ | 6,611 | $ | 6,721 |
(5) | EMPLOYEE BENEFIT PLANS |
Three Months Ended March 31, | |||||||
2017 | 2016 | ||||||
Service cost | $ | 136 | $ | 151 | |||
Interest cost | 585 | 625 | |||||
Expected return on plan assets | (897 | ) | (908 | ) | |||
Prior service cost | 11 | 11 | |||||
Net loss (gain) | 307 | 499 | |||||
Net periodic benefit cost | $ | 142 | $ | 378 |
Three Months Ended March 31, | |||||||
2017 | 2016 | ||||||
Service cost | $ | 52 | $ | 51 | |||
Interest cost | 44 | 47 | |||||
Prior service cost (benefit) | (84 | ) | (84 | ) | |||
Net periodic benefit cost | $ | 12 | $ | 14 |
Three Months Ended March 31, | |||||||
2017 | 2016 | ||||||
Interest cost | $ | 29 | $ | 30 | |||
Net loss (gain) | 22 | 21 | |||||
Net periodic benefit cost | $ | 51 | $ | 51 |
Contributions Three Months Ended March 31, 2017 | Remaining Anticipated Contributions for 2017 | Anticipated Contributions for 2018 | |||||||
Defined Benefit Pension Plan | $ | — | $ | 1,305 | $ | 660 | |||
Defined Benefit Postretirement Healthcare Plan | $ | 135 | $ | 406 | $ | 565 | |||
Supplemental Non-qualified Defined Benefit Plans | $ | 62 | $ | 185 | $ | 246 |
(6) | FAIR VALUE OF FINANCIAL INSTRUMENTS |
March 31, 2017 | December 31, 2016 | ||||||||||||
Carrying Amount | Fair Value | Carrying Amount | Fair Value | ||||||||||
Cash and cash equivalents (a) | $ | 1,127 | $ | 1,127 | $ | 234 | $ | 234 | |||||
Long-term debt, including current maturities (b) | $ | 339,791 | $ | 424,453 | $ | 339,756 | $ | 410,466 |
(a) | Carrying value approximates fair value due to either short-term length of maturity or variable interest rates that approximate prevailing market rates and therefore is classified in Level 1 in the fair value hierarchy. |
(b) | Long-term debt is valued using the market approach based on observable inputs of quoted market prices and yields available for debt instruments either directly or indirectly for similar maturities and debt ratings in active markets and therefore is classified in Level 2 in the fair value hierarchy. The carrying amount of our variable rate debt approximates fair value due to the variable interest rates with short reset periods. |
(7) | SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION |
Three months ended March 31, | 2017 | 2016 | |||||
(in thousands) | |||||||
Non-cash investing and financing activities - | |||||||
Property, plant and equipment acquired with accrued liabilities | $ | 10,998 | $ | 5,087 | |||
Non-cash (decrease) to money pool notes receivable, net | $ | (7,000 | ) | $ | (12,500 | ) | |
Non-cash dividend to Parent | $ | 7,000 | $ | 12,500 | |||
Cash (paid) refunded during the period for - | |||||||
Interest (net of amounts capitalized) | $ | (3,014 | ) | $ | (2,989 | ) |
(8) | COMMITMENTS AND CONTINGENCIES |
Three Months Ended March 31, | |||||||||
2017 | 2016 | Variance | |||||||
(in thousands) | |||||||||
Revenue | $ | 73,794 | $ | 68,642 | $ | 5,152 | |||
Fuel and purchased power | 23,149 | 20,730 | 2,419 | ||||||
Gross margin | 50,645 | 47,912 | 2,733 | ||||||
Operating expenses | 27,269 | 27,132 | 137 | ||||||
Operating income | 23,376 | 20,780 | 2,596 | ||||||
Interest income (expense), net | (5,437 | ) | (5,029 | ) | (408 | ) | |||
Other income (expense), net | 418 | 497 | (79 | ) | |||||
Income tax expense | (5,787 | ) | (5,062 | ) | (725 | ) | |||
Net income | $ | 12,570 | $ | 11,186 | $ | 1,384 |
Electric Revenue by Customer Type | |||||||||
Three Months Ended March 31, | |||||||||
(in thousands) | |||||||||
2017 | Percentage Change | 2016 | |||||||
Residential | $ | 20,071 | 4% | $ | 19,315 | ||||
Commercial | 24,291 | 3% | 23,589 | ||||||
Industrial | 8,454 | (1)% | 8,501 | ||||||
Municipal | 836 | 1% | 831 | ||||||
Total retail revenue | 53,652 | 3% | 52,236 | ||||||
Contract wholesale (a) | 7,843 | 88% | 4,174 | ||||||
Wholesale off-system (b) | 3,833 | (16)% | 4,586 | ||||||
Other revenue | 8,466 | 11% | 7,646 | ||||||
Total revenue | $ | 73,794 | 8% | $ | 68,642 |
(a) | Increase from the prior year is primarily due to a new power-sales agreement which was effective January 1, 2017. |
(b) | Decrease in 2017 revenue was primarily driven by commodity prices that impacted power marketing sales. |
Megawatt Hours Sold by Customer Type | |||||||
Three Months Ended March 31, | |||||||
2017 | Percentage Change | 2016 | |||||
Residential | 149,572 | 5% | 142,753 | ||||
Commercial | 196,406 | 4% | 188,888 | ||||
Industrial | 109,796 | 2% | 108,021 | ||||
Municipal | 7,605 | 2% | 7,441 | ||||
Total retail quantity sold | 463,379 | 4% | 447,103 | ||||
Contract wholesale (a) | 186,116 | 193% | 63,453 | ||||
Wholesale off-system (b) | 154,496 | (20)% | 193,373 | ||||
Total quantity sold | 803,991 | 14% | 703,929 | ||||
Losses and company use | 41,841 | 6% | 39,324 | ||||
Total energy | 845,832 | 14% | 743,253 |
(a) | Effective January 1, 2017, we have an energy sales agreement with Cargill through December 31, 2021 to supply 50 MW of energy during heavy and light load timing intervals. |
(b) | Decrease in 2017 sales was primarily driven by commodity prices that impacted power marketing sales. |
Megawatt Hours Generated and Purchased | |||||||
Three Months Ended March 31, | |||||||
Generated - | 2017 | Percentage Change | 2016 | ||||
Coal-fired | 387,985 | —% | 388,001 | ||||
Gas-fired (a) | 10,350 | (33)% | 15,562 | ||||
Total generated | 398,335 | (1)% | 403,563 | ||||
Total purchased (b) | 447,497 | 32% | 339,690 | ||||
Total generated and purchased (b) | 845,832 | 14% | 743,253 |
(a) | Decrease is primarily due to the ability to purchase excess generation in the open market at a lower cost than to generate for the three months ended March 31, 2017. |
(b) | Increase in 2017 is primarily driven by resource needs from a new 50 MW power sales agreement with Cargill, effective January 1, 2017. |
Power Plant Availability | ||||||
Three Months Ended March 31, | ||||||
2017 | 2016 | |||||
Coal-fired plants (a) | 89.2 | % | 92.4 | % | ||
Other plants | 99.4 | % | 98.3 | % | ||
Total availability | 94.6 | % | 95.8 | % |
(a) | Decrease is primarily due to a planned outage at Neil Simpson II during the three months ended March 31, 2017. |
Degree Days | |||||||||
Three Months Ended March 31, | |||||||||
2017 | 2016 | ||||||||
Actual | Variance from 30-year Average | Actual | Variance from 30-year Average | ||||||
Heating degree days | 3,130 | (3 | )% | 2,806 | (13 | )% |
Rating Agency | Secured Rating |
S&P | A- |
Moody’s | A1 |
Fitch | A |
ITEM 4. | CONTROLS AND PROCEDURES |
Item 1. | Legal Proceedings |
Item 1A. | Risk Factors |
Item 6. | Exhibits |
Exhibit 3.1* | Restated Articles of Incorporation of the Registrant dated March 30, 2015 (filed as Exhibit 3.1 to Registrant’s Form 10-Q for the quarterly period ended March 31, 2015). |
Exhibit 3.2* | Amended and Restated Bylaws of the Registrant dated March 30, 2015 (filed as Exhibit 3.2 to Registrant’s Form 10-Q for the quarterly period ended March 31, 2015). |
Exhibit 4.1* | Restated and Amended Indenture of Mortgage and Deed of Trust of Black Hills Corporation (now called Black Hills Power, Inc.) dated as of September 1, 1999 (filed as Exhibit 4.19 to the Registrant’s Post-Effective Amendment No. 1 to the Registrant’s Registration Statement on Form S-3 (No. 333-150669-01)). First Supplemental Indenture, dated as of August 13, 2002, between Black Hills Power, Inc. and The Bank of New York Mellon (as successor to J.P. Morgan Chase Bank), as Trustee (filed as Exhibit 4.20 to the Registrant’s Post-Effective Amendment No. 1 to the Registrant’s Registration Statement on Form S-3 (No. 333-150669-01)). Second Supplemental Indenture, dated as of October 27, 2009, between Black Hills Power, Inc. and The Bank of New York Mellon (filed as Exhibit 4.21 to the Registration Statement on Form S-3 (No. 333-150669-01)). Third Supplemental Indenture, dated as of October 1, 2014, between Black Hills Power, Inc. and The Bank of New York Mellon (filed as Exhibit 10.1 to the Registrant’s Form 8-K filed on October 2, 2014). |
Exhibit 31.1 | Certification of Chief Executive Officer pursuant to Rule 13a - 14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes - Oxley Act of 2002. |
Exhibit 31.2 | Certification of Chief Financial Officer pursuant to Rule 13a - 14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes - Oxley Act of 2002. |
Exhibit 32.1 | Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes - Oxley Act of 2002. |
Exhibit 32.2 | Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes - Oxley Act of 2002. |
Exhibit 101 | Financial Statements for XBRL Format |
* | Previously filed as part of the filing indicated and incorporated by reference herein. |
Exhibit Number | Description |
Exhibit 3.1* | Restated Articles of Incorporation of the Registrant dated March 30, 2015 (filed as Exhibit 3.1 to Registrant’s Form 10-Q for the quarterly period ended March 31, 2015). |
Exhibit 3.2* | Amended and Restated Bylaws of the Registrant dated March 30, 2015 (filed as Exhibit 3.2 to Registrant’s Form 10-Q for the quarterly period ended March 31, 2015). |
Exhibit 4.1* | Restated and Amended Indenture of Mortgage and Deed of Trust of Black Hills Corporation (now called Black Hills Power, Inc.) dated as of September 1, 1999 (filed as Exhibit 4.19 to the Registrant’s Post-Effective Amendment No. 1 to the Registrant’s Registration Statement on Form S-3 (No. 333-150669-01)). First Supplemental Indenture, dated as of August 13, 2002, between Black Hills Power, Inc. and The Bank of New York Mellon (as successor to J.P. Morgan Chase Bank), as Trustee (filed as Exhibit 4.20 to the Registrant’s Post-Effective Amendment No. 1 to the Registrant’s Registration Statement on Form S-3 (No. 333-150669-01)). Second Supplemental Indenture, dated as of October 27, 2009, between Black Hills Power, Inc. and The Bank of New York Mellon (filed as Exhibit 4.21 to the Registration Statement on Form S-3 (No. 333-150669-01)). Third Supplemental Indenture, dated as of October 1, 2014, between Black Hills Power, Inc. and The Bank of New York Mellon (filed as Exhibit 10.1 to the Registrant’s Form 8-K filed on October 2, 2014). |
Exhibit 31.1 | Certification of Chief Executive Officer pursuant to Rule 13a - 14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes - Oxley Act of 2002. |
Exhibit 31.2 | Certification of Chief Financial Officer pursuant to Rule 13a - 14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes - Oxley Act of 2002. |
Exhibit 32.1 | Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes - Oxley Act of 2002. |
Exhibit 32.2 | Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes - Oxley Act of 2002. |
Exhibit 101 | Financial Statements for XBRL Format |
* | Previously filed as part of the filing indicated and incorporated by reference herein. |
1. | I have reviewed this quarterly report on Form 10-Q of Black Hills Power, Inc.; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; and |
b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; and |
c) | Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d) | Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting. |
5. | The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent functions): |
a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and |
b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. |
Date: | May 8, 2017 | |
/S/ DAVID R. EMERY | ||
David R. Emery | ||
Chairman and Chief Executive Officer |
1. | I have reviewed this quarterly report on Form 10-Q of Black Hills Power, Inc.; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c) | Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d) | Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting. |
5. | The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent functions): |
a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and |
b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. |
Date: | May 8, 2017 | |
/S/ RICHARD W. KINZLEY | ||
Richard W. Kinzley | ||
Senior Vice President and Chief Financial Officer |
(1) | The Report fully complies with the requirements of Section 13 (a) or |
(2) | The information contained in the Report fairly presents, in all material |
Date: | May 8, 2017 | |
/S/ DAVID R. EMERY | ||
David R. Emery | ||
Chairman and Chief Executive Officer |
(1) | The Report fully complies with the requirements of Section 13 (a) or |
(2) | The information contained in the Report fairly presents, in all material |
Date: | May 8, 2017 | |
/S/ RICHARD W. KINZLEY | ||
Richard W. Kinzley | ||
Senior Vice President and Chief Financial Officer |
Document and Entity Information Document - shares |
3 Months Ended | |
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Mar. 31, 2017 |
Apr. 30, 2017 |
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Document Information [Line Items] | ||
Entity Registrant Name | BLACK HILLS POWER INC | |
Entity Central Index Key | 0000012400 | |
Document Type | 10-Q | |
Document Period End Date | Mar. 31, 2017 | |
Amendment Flag | false | |
Document Fiscal Year End Focus | 2017 | |
Document Fiscal Period Focus | Q1 | |
Current Fiscal Year End Date | --12-31 | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Common Stock, Shares Outstanding | 23,416,396 |
Condensed Statements of Income and Comprehensive Income OCI Parenthetical - USD ($) $ in Thousands |
3 Months Ended | |
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Mar. 31, 2017 |
Mar. 31, 2016 |
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Income Statement [Abstract] | ||
Reclassification adjustment of cash flow hedges settled, (tax) benefit | $ (6) | $ (6) |
Reclassification adjustment of benefit and other postretirement plans included in net income, (tax) benefit | $ (8) | $ (7) |
Balance Sheet Parentheticals - $ / shares |
Mar. 31, 2017 |
Dec. 31, 2016 |
---|---|---|
Statement of Financial Position [Abstract] | ||
Common Stock, Par Value (usd per share) | $ 1 | $ 1 |
Common Stock, Shares authorized | 50,000,000 | 50,000,000 |
Common Stock, Shares Issued | 23,416,396 | 23,416,396 |
Management's Statement: |
3 Months Ended |
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Mar. 31, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Management's Statement | MANAGEMENT’S STATEMENT The unaudited condensed financial statements included herein have been prepared by Black Hills Power, Inc. (the “Company,” “we,” “us,” or “our”), pursuant to the rules and regulations of the SEC. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted pursuant to such rules and regulations; however, we believe that the footnotes adequately disclose the information presented. These condensed financial statements should be read in conjunction with the financial statements and the notes thereto, included in our 2016 Annual Report on Form 10-K filed with the SEC. The information furnished in the accompanying condensed financial statements reflects certain estimates required and all adjustments, including accruals, which are, in the opinion of management, necessary for a fair presentation of the March 31, 2017, December 31, 2016 and March 31, 2016 financial information and are of a normal recurring nature. The results of operations for the three months ended March 31, 2017 and March 31, 2016, and our financial condition as of March 31, 2017 and December 31, 2016 are not necessarily indicative of the results of operations and financial condition to be expected as of or for any other period. Revisions Certain revisions have been made to prior years’ financial information to conform to the current year presentation. We revised our presentation of cash and certain cash transactions processed on behalf of affiliates. We have banking arrangements at certain financial institutions whereby if required, payments of one account are cleared with cash from other accounts at the same financial institution; therefore, book overdrafts are presented on a combined basis by bank as cash and cash equivalents. Cash collected or disbursed on behalf of affiliates is presented as Receivables - affiliates or Accounts Payable - affiliates. Prior year amounts were corrected to conform to the current year presentation, which decreased cash and cash equivalents by $11 million as of March 31, 2016. It also decreased net cash flows provided by operations by $3.3 million for the three months ended March 31, 2016. We assessed the materiality of these changes, taking into account quantitative and qualitative factors, and determined them to be immaterial to the balance sheet as of March 31, 2016 and to the Statements of Cash Flows for the three months ended March 31, 2016. There is no impact to the Statements of Income or Statements of Comprehensive Income (Loss) for any period reported. Recently Issued and Adopted Accounting Standards Compensation - Retirement Benefits: Improving the Presentation of Net Periodic Pension Cost and Net Periodic Post-Retirement Benefit Cost, ASU 2017-07 In March 2017, the FASB issued ASU 2017-07, Compensation – Retirement Benefits (Topic 715): Improving the Presentation of Net Periodic Pension Cost and Net Periodic Post-Retirement Benefit Cost”. The changes to the standard require employers to report the service cost component in the same line item(s) as other compensation costs, and require the other components of net periodic pension and post-retirement benefit costs to be separately presented in the income statement outside of income from operations. Additionally, only the service cost component may be eligible for capitalization, when applicable. However, all cost components remain eligible for capitalization under FERC regulations. ASU 2017-07 will be applied retrospectively for the presentation of the service cost component and the other components of net periodic pension and post-retirement benefit costs in the income statement. The capitalization of the service cost component of net period pension and post-retirement benefit costs in assets will be applied on a prospective basis. ASU 2017-07 is effective for annual periods beginning after December 15, 2017, including interim periods within those annual periods. We are currently assessing the changes to the standard. The presentation changes required for net periodic pension and post-retirement costs will result in offsetting changes to Operating income and Other income and are not expected to be material. Statement of Cash Flows: Classification of Certain Cash Receipts and Cash Payments, ASU 2016-15 In August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments (a consensus of the Emerging Issues Task Force). This ASU requires changes in the presentation of certain items including but not limited to debt prepayment or debt extinguishment costs; contingent consideration payments made after a business combination; proceeds from the settlement of insurance claims; proceeds from the settlement of corporate-owned life insurance policies and distributions received from equity method investees. The ASU will be effective for fiscal years beginning after December 15, 2017. We will use the retrospective transition method to adopt this standard with fiscal years beginning after December 15, 2017. The adoption of this standard will not have a material impact on our financial position, results of operations or cash flows. Leases, ASU 2016-02 In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842), which supersedes ASC 840, Leases. This ASU requires lessees to recognize a right-of-use asset and lease liability for all leases with terms of more than 12 months. Lessees are permitted to make an accounting policy election to not recognize the asset and liability for leases with a term of 12 months or less. The ASU does not significantly change the lessees’ recognition, measurement and presentation of expenses and cash flows from the previous accounting standard. Lessors’ accounting under the ASC is largely unchanged from the previous accounting standard. In addition, the ASU expands the disclosure requirements of lease arrangements. Lessees and lessors will use a modified retrospective transition approach, which includes a number of practical expedients. The guidance is effective for us beginning after December 15, 2018. Early adoption is permitted. We are currently assessing the impact that adoption of ASU 2016-02 will have on our financial position, results of operations or cash flows. Revenue from Contracts with Customers, ASU 2014-09 In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers. The standard provides companies with a single model for use in accounting for revenue arising from contracts with customers and supersedes current revenue recognition guidance, including industry-specific revenue guidance. The core principle of the model is to recognize revenue when control of the goods or services transfers to the customer. The new disclosure requirements will provide information about the nature, amount, timing and uncertainty of revenue and cash flows from revenue contracts with customers. The guidance is effective for annual and interim reporting periods beginning after December 15, 2017 with early adoption on January 1, 2017 permitted. Entities will have the option of using either a full retrospective or modified retrospective approach to adopting this guidance. Under the modified approach, an entity would recognize the cumulative effect of initially applying the guidance with an adjustment to the opening balance of retained earnings in the period of adoption. We will adopt this standard for annual and interim reporting periods beginning after December 15, 2017. We continue to actively assess all of our sources of revenue to determine the impact that adoption of the new standard will have on our financial position, results of operations and cash flows. Our evaluation includes identifying revenue streams by like contracts to allow for ease of implementation. A majority of our revenues are from regulated tariff offerings that provide electricity with a defined contractual term. For such arrangements, we expect that the revenue from contracts with the customer will be equivalent to the electricity delivered in that period. Therefore, we do not expect that there will be a significant shift in the timing or pattern of revenue recognition for regulated tariff-based sales. The evaluation of other revenue streams is ongoing, including those tied to longer term contractual commitments. However, a number of industry-specific implementation issues are still unresolved and the final resolution of these issues could impact our current accounting policies and/or patterns for revenue recognition, as well as the transition method selected. |
Accounts Receivable and Allowance For Doubtful Accounts: |
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Accounts Receivable, Net [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||
Accounts Receivable and Allowance for Doubtful Accounts | ACCOUNTS RECEIVABLE AND ALLOWANCE FOR DOUBTFUL ACCOUNTS Following is a summary of Receivables - customers, net included in the accompanying Condensed Balance Sheets (in thousands) as of:
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Regulatory Accounting: |
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Regulated Operations [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Regulatory Accounting | REGULATORY ACCOUNTING Our regulated electric operations are subject to regulation by various state and federal agencies. The accounting policies followed are generally subject to the Uniform System of Accounts of the FERC. Our regulatory assets and liabilities were as follows (in thousands) as of:
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Related Party Transactions: |
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Related Party Transactions [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Related-Party Transactions | RELATED-PARTY TRANSACTIONS Receivables and Payables We have accounts receivable and accounts payable balances related to transactions with other BHC subsidiaries. The balances were as follows (in thousands) as of:
Money Pool Notes Receivable and Notes Payable We have entered into a Utility Money Pool Agreement (the “Agreement”) with BHC, Black Hills Service Company and the utility companies conducting business as Black Hills Energy. We are the administrator of the Money Pool. Under the Agreement, we may borrow from BHC; however the Agreement restricts us from loaning funds to BHC or to any of BHC’s non-utility subsidiaries. The Agreement does not restrict us from paying dividends to BHC. Borrowings and advances under the Agreement bear interest at the weighted average daily cost of our parent company’s external 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 plus 1.0%. At March 31, 2017, the average cost of borrowing under the Utility Money Pool was 1.47%. We had the following balances with the Utility Money Pool (in thousands) as of:
Our net interest income (expense) relating to balances with the Utility Money Pool was as follows (in thousands):
Other related party activity was as follows (in thousands):
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Employee Benefit Plans: |
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Defined Benefit Pension Plans and Defined Benefit Postretirement Plans Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Employee Benefit Plans | EMPLOYEE BENEFIT PLANS The components of net periodic benefit cost for the Defined Benefit Pension Plan were as follows (in thousands):
Defined Benefit Postretirement Healthcare Plan The components of net periodic benefit cost for the Defined Benefit Postretirement Healthcare Plan were as follows (in thousands):
Supplemental Non-qualified Defined Benefit Plans The components of net periodic benefit cost for the Supplemental Non-qualified Defined Benefit Plans were as follows (in thousands):
Contributions Contributions to the Defined Benefit Pension Plan are cash contributions made directly to the Pension Plan Trust. Contributions to the Healthcare and Supplemental Plans are made in the form of benefit payments. Contributions made for 2017 and anticipated contributions for 2017 and 2018 are as follows (in thousands):
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Fair Value of Financial Instruments: |
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value of Financial Instruments | FAIR VALUE OF FINANCIAL INSTRUMENTS Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Accounting guidance on fair value measurements establishes a hierarchy for grouping assets and liabilities, based on significance of inputs. For additional information see Note 1 included in our 2016 Annual Report on Form 10-K filed with the SEC. The estimated fair values of our financial instruments were as follows (in thousands) as of:
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Supplemental Disclosure of Cash Flow Information: |
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Supplemental Disclosure of Cash Flow Information | SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
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Commitment and Contingencies: |
3 Months Ended |
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Mar. 31, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | COMMITMENTS AND CONTINGENCIES There have been no significant changes to commitments and contingencies from those previously disclosed in Note 11 of our Notes to the Financial Statements in our 2016 Annual Report on Form 10-K. |
Management's Statement: (Policies) |
3 Months Ended |
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Mar. 31, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Revisions | Revisions Certain revisions have been made to prior years’ financial information to conform to the current year presentation. We revised our presentation of cash and certain cash transactions processed on behalf of affiliates. We have banking arrangements at certain financial institutions whereby if required, payments of one account are cleared with cash from other accounts at the same financial institution; therefore, book overdrafts are presented on a combined basis by bank as cash and cash equivalents. Cash collected or disbursed on behalf of affiliates is presented as Receivables - affiliates or Accounts Payable - affiliates. Prior year amounts were corrected to conform to the current year presentation, which decreased cash and cash equivalents by $11 million as of March 31, 2016. It also decreased net cash flows provided by operations by $3.3 million for the three months ended March 31, 2016. We assessed the materiality of these changes, taking into account quantitative and qualitative factors, and determined them to be immaterial to the balance sheet as of March 31, 2016 and to the Statements of Cash Flows for the three months ended March 31, 2016. There is no impact to the Statements of Income or Statements of Comprehensive Income (Loss) for any period reported. |
Recently Issued and Adopted Accounting Standards | Recently Issued and Adopted Accounting Standards Compensation - Retirement Benefits: Improving the Presentation of Net Periodic Pension Cost and Net Periodic Post-Retirement Benefit Cost, ASU 2017-07 In March 2017, the FASB issued ASU 2017-07, Compensation – Retirement Benefits (Topic 715): Improving the Presentation of Net Periodic Pension Cost and Net Periodic Post-Retirement Benefit Cost”. The changes to the standard require employers to report the service cost component in the same line item(s) as other compensation costs, and require the other components of net periodic pension and post-retirement benefit costs to be separately presented in the income statement outside of income from operations. Additionally, only the service cost component may be eligible for capitalization, when applicable. However, all cost components remain eligible for capitalization under FERC regulations. ASU 2017-07 will be applied retrospectively for the presentation of the service cost component and the other components of net periodic pension and post-retirement benefit costs in the income statement. The capitalization of the service cost component of net period pension and post-retirement benefit costs in assets will be applied on a prospective basis. ASU 2017-07 is effective for annual periods beginning after December 15, 2017, including interim periods within those annual periods. We are currently assessing the changes to the standard. The presentation changes required for net periodic pension and post-retirement costs will result in offsetting changes to Operating income and Other income and are not expected to be material. Statement of Cash Flows: Classification of Certain Cash Receipts and Cash Payments, ASU 2016-15 In August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments (a consensus of the Emerging Issues Task Force). This ASU requires changes in the presentation of certain items including but not limited to debt prepayment or debt extinguishment costs; contingent consideration payments made after a business combination; proceeds from the settlement of insurance claims; proceeds from the settlement of corporate-owned life insurance policies and distributions received from equity method investees. The ASU will be effective for fiscal years beginning after December 15, 2017. We will use the retrospective transition method to adopt this standard with fiscal years beginning after December 15, 2017. The adoption of this standard will not have a material impact on our financial position, results of operations or cash flows. Leases, ASU 2016-02 In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842), which supersedes ASC 840, Leases. This ASU requires lessees to recognize a right-of-use asset and lease liability for all leases with terms of more than 12 months. Lessees are permitted to make an accounting policy election to not recognize the asset and liability for leases with a term of 12 months or less. The ASU does not significantly change the lessees’ recognition, measurement and presentation of expenses and cash flows from the previous accounting standard. Lessors’ accounting under the ASC is largely unchanged from the previous accounting standard. In addition, the ASU expands the disclosure requirements of lease arrangements. Lessees and lessors will use a modified retrospective transition approach, which includes a number of practical expedients. The guidance is effective for us beginning after December 15, 2018. Early adoption is permitted. We are currently assessing the impact that adoption of ASU 2016-02 will have on our financial position, results of operations or cash flows. Revenue from Contracts with Customers, ASU 2014-09 In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers. The standard provides companies with a single model for use in accounting for revenue arising from contracts with customers and supersedes current revenue recognition guidance, including industry-specific revenue guidance. The core principle of the model is to recognize revenue when control of the goods or services transfers to the customer. The new disclosure requirements will provide information about the nature, amount, timing and uncertainty of revenue and cash flows from revenue contracts with customers. The guidance is effective for annual and interim reporting periods beginning after December 15, 2017 with early adoption on January 1, 2017 permitted. Entities will have the option of using either a full retrospective or modified retrospective approach to adopting this guidance. Under the modified approach, an entity would recognize the cumulative effect of initially applying the guidance with an adjustment to the opening balance of retained earnings in the period of adoption. We will adopt this standard for annual and interim reporting periods beginning after December 15, 2017. We continue to actively assess all of our sources of revenue to determine the impact that adoption of the new standard will have on our financial position, results of operations and cash flows. Our evaluation includes identifying revenue streams by like contracts to allow for ease of implementation. A majority of our revenues are from regulated tariff offerings that provide electricity with a defined contractual term. For such arrangements, we expect that the revenue from contracts with the customer will be equivalent to the electricity delivered in that period. Therefore, we do not expect that there will be a significant shift in the timing or pattern of revenue recognition for regulated tariff-based sales. The evaluation of other revenue streams is ongoing, including those tied to longer term contractual commitments. However, a number of industry-specific implementation issues are still unresolved and the final resolution of these issues could impact our current accounting policies and/or patterns for revenue recognition, as well as the transition method selected. |
Accounts Receivable and Allowance For Doubtful Accounts: (Tables) |
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Accounts Receivable, Net [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Accounts Receivable | Following is a summary of Receivables - customers, net included in the accompanying Condensed Balance Sheets (in thousands) as of:
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Regulatory Accounting: (Tables) |
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Mar. 31, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Regulated Operations [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Regulatory Assets | Our regulatory assets and liabilities were as follows (in thousands) as of:
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Schedule of Regulatory Liabilities |
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Related Party Transactions: (Tables) |
3 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2017 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Related Party Transactions [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Related Party Accounts Receivable and Payable | The balances were as follows (in thousands) as of:
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Schedule of Related Party Notes | We had the following balances with the Utility Money Pool (in thousands) as of:
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Schedule of Related Party Interest Income Expense | Our net interest income (expense) relating to balances with the Utility Money Pool was as follows (in thousands):
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Schedule of Revenues and Purchases from Related Parties | Other related party activity was as follows (in thousands):
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Employee Benefit Plans: (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Defined Benefit Pension Plans and Defined Benefit Postretirement Plans Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Net Benefit Costs | The components of net periodic benefit cost for the Defined Benefit Pension Plan were as follows (in thousands):
Defined Benefit Postretirement Healthcare Plan The components of net periodic benefit cost for the Defined Benefit Postretirement Healthcare Plan were as follows (in thousands):
Supplemental Non-qualified Defined Benefit Plans The components of net periodic benefit cost for the Supplemental Non-qualified Defined Benefit Plans were as follows (in thousands):
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Schedule of Defined Benefit Plans Contributions | Contributions made for 2017 and anticipated contributions for 2017 and 2018 are as follows (in thousands):
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Fair Value of Financial Instruments: (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Fair Value of Financial Instruments | The estimated fair values of our financial instruments were as follows (in thousands) as of:
_________________
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Supplemental Disclosure of Cash Flow Information: (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Supplemental Cash Flow Information [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Cash Flow, Supplemental Disclosures |
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Management's Statement: Revision (Details) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2017 |
Mar. 31, 2016 |
|
Prior Period Adjustments Restatement [Line Items] | ||
Net Cash Provided by (Used in) Operating Activities | $ 29,383 | $ 23,413 |
Restatement Adjustment | ||
Prior Period Adjustments Restatement [Line Items] | ||
Net Cash Provided by (Used in) Operating Activities | 3,300 | |
Cash and Cash Equivalents | ||
Prior Period Adjustments Restatement [Line Items] | ||
Prior Period Reclassification Adjustment | $ 11,000 |
Accounts Receivable and Allowance For Doubtful Accounts: (Details) - USD ($) $ in Thousands |
Mar. 31, 2017 |
Dec. 31, 2016 |
---|---|---|
Accounts Receivable, Net [Abstract] | ||
Accounts receivable, trade | $ 16,197 | $ 16,972 |
Unbilled Receivables, Current | 11,524 | 13,799 |
Allowance for doubtful accounts | (264) | (157) |
Receivables - customers, net | $ 27,457 | $ 30,614 |
Regulatory Accounting: Regulatory Liabilities (Details) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2017 |
Dec. 31, 2016 |
|
Regulatory Liabilities [Line Items] | ||
Regulatory Liabilities | $ 53,896 | $ 53,950 |
Cost Of Removal | ||
Regulatory Liabilities [Line Items] | ||
Recovery/Amortization Period (in years) | 61 years | |
Regulatory Liabilities | $ 41,592 | 41,541 |
Pension and Other Postretirement Plans Costs | ||
Regulatory Liabilities [Line Items] | ||
Recovery/Amortization Period (in years) | 12 years | |
Regulatory Liabilities | $ 12,304 | 12,304 |
Other Regulatory Liabilities | ||
Regulatory Liabilities [Line Items] | ||
Recovery/Amortization Period (in years) | 13 years | |
Regulatory Liabilities | $ 0 | $ 105 |
Regulatory Accounting: Recovery Period (Details) |
3 Months Ended |
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Mar. 31, 2017 | |
Deferred Fuel Costs | |
Regulatory Assets [Line Items] | |
Regulatory Assets Amortization Period, Unclassified (less than) | 1 year |
Fair Value of Financial Instruments: (Details) - USD ($) $ in Thousands |
Mar. 31, 2017 |
Dec. 31, 2016 |
Mar. 31, 2016 |
Dec. 31, 2015 |
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Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||
Cash and cash equivalents, carrying amount | $ 1,127 | $ 234 | $ 18,438 | $ 297 |
Carrying Amount | ||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||
Cash and cash equivalents, carrying amount | 1,127 | 234 | ||
Long-term debt, including current maturities, carrying amount | 339,791 | 339,756 | ||
Fair Value | ||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||
Cash and cash equivalents, fair value | 1,127 | 234 | ||
Long-term debt, including current maturities, fair value | $ 424,453 | $ 410,466 |
Supplemental Disclosure of Cash Flow Information: (Details) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2017 |
Mar. 31, 2016 |
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Noncash Investing and Financing Items [Abstract] | ||
Property, plant and equipment acquired with accrued liabilities | $ 10,998 | $ 5,087 |
Interest and Income Taxes Paid Net [Abstract] | ||
Interest (net of amounts capitalized) | (3,014) | (2,989) |
Subsidiary of Common Parent | ||
Noncash Investing and Financing Items [Abstract] | ||
Non-cash (decrease) to money pool notes receivable, net | (7,000) | (12,500) |
Parent | ||
Noncash Investing and Financing Items [Abstract] | ||
Non-cash dividend to Parent | $ 7,000 | $ 12,500 |
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