-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, F9lBntIt7rdYbmoYjNpTK8wSHkOga4Lv8PY15ZJwK7k5jDFma0gN3lyBv3U1/jua u+DIu7qPpdQdRzsTzvt+Kw== 0000012400-99-000017.txt : 19990624 0000012400-99-000017.hdr.sgml : 19990624 ACCESSION NUMBER: 0000012400-99-000017 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19990623 ITEM INFORMATION: ITEM INFORMATION: FILED AS OF DATE: 19990623 FILER: COMPANY DATA: COMPANY CONFORMED NAME: BLACK HILLS CORP CENTRAL INDEX KEY: 0000012400 STANDARD INDUSTRIAL CLASSIFICATION: ELECTRIC SERVICES [4911] IRS NUMBER: 460111677 STATE OF INCORPORATION: SD FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: SEC FILE NUMBER: 001-07978 FILM NUMBER: 99651056 BUSINESS ADDRESS: STREET 1: 625 NINTH ST STREET 2: PO BOX 1400 CITY: RAPID CITY STATE: SD ZIP: 57709 BUSINESS PHONE: 6053481700 MAIL ADDRESS: STREET 1: P O BOX 1400 CITY: RAPID CITY STATE: SD ZIP: 57709 FORMER COMPANY: FORMER CONFORMED NAME: BLACK HILLS POWER & LIGHT CO DATE OF NAME CHANGE: 19860409 8-K 1 FORM 8-K DATED JUNE 23, 1999 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Form 8-K CURRENT REPORT Pursuant to Section 13 or 15(d) of THE SECURITIES EXCHANGE ACT OF 1934 Date of Report: June 23, 1999 BLACK HILLS CORPORATION State of South Dakota File Number 1-7978 IRS Number 46-0111677 625 Ninth Street Rapid City, South Dakota 57709 Registrant's telephone number (605) 348-1700 Item 5. Other Events BLACK HILLS CORPORATION'S ELECTRIC UTILITY OPERATIONS AGREE TO RATE FREEZE Black Hills Corporation's electric utility operations, Black Hills Power and Light Company (Company) has agreed to extend its rate freeze for South Dakota retail customers until January 1, 2005, barring extraordinary circumstances. The Company froze electric rates in 1995 when the Company's new power plant, Neil Simpson Unit #2, was placed in service: the current rate freeze ends January 1, 2000. The extension of the rate freeze was approved by the South Dakota Public Utilities Commission on June 22, 1999. The rate freeze is subject to the following terms and conditions: 1. The Company will not file any additional applications with the Commission, which would result in an increase in revenues for the period between January 1, 2000 through December 31, 2004 ("Rate Freeze Period"); provided, however, that the Rate Freeze Period does not prevent the Company for filing for a rate increase subsequent to January 1, 2005, or from filing for a rate increase if the Company's cost of service is expected to increase as a result of an "Extraordinary Event" as defined below, nor is the Rate Freeze Period intended to prohibit the Company from filing a rate application that requests changes in rates for reasons other than to obtain a general rate increase. An Extraordinary Event is defined as the occurrence of one of the following: (a) New federal, state or local governmental requirements or governmental charges, including, but not limited to, income taxes, taxes or charges imposed on energy, emissions, environmental externalities or reclamation obligations, imposed after January 1, 2000, upon the Company or its subsidiary, Wyodak Resources Development Corp. that project to cause the Company's cost of service to South Dakota customers to increase in an material amount. Increases in the cost of service of less than $2,000,000 will be presumed not to be material for the purposes of this paragraph. (b) Forced outages, caused by an act of nature or criminal activity or resulting from fire or explosion from any cause, occurring to both the Wyodak Plant and Neil Simpson Unit #2 which are projected to continue simultaneously over a period exceeding 60 days. (c) Forced outage occurring to either the Wyodak Plant or Neil Simpson Unit #2 which has continued for a period of three months and is projected to be nine months or more. (d) The Consumers Price Index, All Urban, as compiled by the United States Department of Labor increases to a monthly rate for six consecutive months which if continuing for the following six months would result in a 10 percent or more annual inflation rate. (e) The loss of a South Dakota customer or revenue from an existing South Dakota customer that, if projected, would result in a loss of revenue to the Company of $2,000,000 or more during any 12-month period. (f) The cost of coal to the Company's South Dakota customers increases and is projected to increase by more than $2,000,000 over the cost of the most recent calendar year. (g) Electric deregulation as a result of either federal or state mandate which allows any customer of the Company to choose its provider of electricity at any time during the Rate Freeze Period. 2. The Company shall not include a fuel and purchased power adjustment tariff, nor make any application to reinstate a fuel and purchased power adjustment tariff to take effect prior to January 1, 2005, except if any Extraordinary Event occurs. 3. The Company shall continue to retain without adjustment to rates charged its South Dakota customers all revenues and benefits realized from the sale of wholesale capacity and energy. 4. The Company may effect a transfer and/or assignment of any right it has in any sale of wholesale capacity and energy without review of the consideration, subject to the Commission reviewing the reasonableness and prudency of such actions in any subsequent general rate proceeding which is initiated with the intent to raise or reduce rates. 5. The Company may enter into power purchase transactions or power resource transfers with its affiliated exempt wholesale generator, subject to the Commission's review for reasonableness and prudency in any subsequent general rate proceeding which is initiated with the intent to raise or reduce rates. 6. The Commission shall have the right in its discretion to adjust rates if there is any material reduction in federal, state, or local taxes occur which is projected to be material to the Company's cost of service for its South Dakota customers. Decreases in the cost of service of less than $1,000,000 are deemed to be not material for this purpose. Item 7c. Exhibits Exhibit 99 Black Hills Corporations News Release announcing its agreement to a five-year rate freeze. Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. BLACK HILLS CORPORATION By /s/ Roxann R. Basham Roxann R. Basham, Vice President - Finance and Principal Financial Officer Dated June 23, 1999 EX-99 2 FIVE-YEAR RATE FREEZE NEWS RELEASE RELEASE DATE NEWS RELEASE June 22, 1999 FOR INFORMATION CONTACT: Barbara Thirstrup, Manager Governmental & Public Affairs (605)348-1700 bbthirst@bh-corp.com Black Hills Corporation Agrees to Five-Year Electric Rate Freeze Rapid City, SD--Black Hills Power and Light, the electric utility operations company of Black Hills Corporation, agreed today at a South Dakota Public Utilities Commission hearing to freeze electric rates until January 1, 2005, barring extraordinary circumstances. Black Hills Power had frozen electric rates in 1995 when the company's new power plant, Neil Simpson II, was placed into service; and that rate freeze is scheduled to end January 1, 2000. "The additional five-year rate freeze for Black Hills Power `s electric customers confirms Black Hills Corporation's commitment to customers in the Black Hills region--just as our bringing state-of-the art telecommunications through Black Hills FiberCom," said Dan Landguth, President and Chief Executive Officer of Black Hills Corporation. "We live and work with our customers, and we want to do what we can to provide reliable electric service and competitive telecommunications infrastructure in the Black Hills area." "Our electric rates are below the national average, and, for most customers, the lowest in the Black Hills region," said Everett Hoyt, President and Chief Operating Officer of Black Hills Power. "We're proud of our performance in bringing low-cost electricity to our customers. Because BHP's electric rates will be frozen over a ten-year period while the costs of most other goods and services will have increased due to inflation, BHP's customers will actually experience an inflation-adjusted decline of about 30 percent in the cost of their electricity over this period. We'll continue to explore new ways to operate more efficiently, while providing excellent local customer service." "We recognize that as a result of electricity deregulation and retail competition in California and the Southwest, wholesale electricity prices are increasing," said Hoyt. "Black Hills Corporation has already formed a separate subsidiary to construct and acquire power supply resources to sell in those wholesale markets. A number of recent studies have shown that electric costs are likely to increase in low-cost, rural regions such as South Dakota and Wyoming if retail competition is introduced in those states, because low-cost power supply resources presently used to serve those customers will be placed for auction to bidders in other regions who are willing to pay higher prices." "As we position Black Hills Corporation to compete in those higher-priced wholesale electric markets, we want to make a public commitment to Black Hills Power's electric customers that we will maintain our low-cost power resources for their benefit, ensuring that their electric rates will remain stable for the next five years while the electric industry sorts through the retail competition pricing puzzle," said Hoyt. During the freeze period, the Company is undertaking some risks of generating plant outages, customer load loss, increased fuel and purchased power costs, inflation, and other unexpected events; however, the rate freeze may be lifted if certain significant extraordinary events occur. Black Hills Power and Light (http://www.blackhillspower.com) is the electric utility of Black Hills Corporation, an energy and communications company headquartered in Rapid City. Black Hills Corporation supplies electric utility service to over 56,000 customers in western South Dakota, northeastern Wyoming, and southeastern Montana through Black Hills Power and Light; markets communications services in Rapid City and the Northern Black Hills through Black Hills FiberCom; engages in the mining and sale of coal from its mine located near Gillette, Wyoming through Wyodak Resources Development Corp.; produces, explores, and operates oil and gas interests located in the Rocky Mountain region, Texas, Louisiana, Oklahoma and California through Black Hills Exploration and Production; markets natural gas, oil, coal and related services to customers in the Rocky Mountain region, Northwest region, Midwest, and East Coast markets through its energy marketing companies; and develops and markets internally-generated computer software through DAKSOFT. -30- Note: The above information includes forward-looking statements that are subject to certain risks, uncertainties, and assumptions. Although management believes that its expectations are based on reasonable assumptions, it can give no assurances that its goals will be achieved. -----END PRIVACY-ENHANCED MESSAGE-----