Black Hills (US:BKH)2023-11-02 21:39Financial Data and Key Metrics Changes - The company reported earnings per share (EPS) of $0.67 for Q3 2023, up from $0.54 in the same period last year, driven by new rates, solid expense management, and higher-than-planned interest income [17][18] - The net debt to total capitalization improved by 300 basis points from 60.8% at year-end 2022 to 57.8% as of September 30, 2023 [22] - The company expects to deliver results at the top end of its 2023 earnings guidance range, with a long-term EPS growth target of 4% to 6% [14][54] Business Line Data and Key Metrics Changes - Electric utility margins improved primarily due to $0.18 per share from new rates and rider recovery, and $0.09 from transmission services and off-system energy sales [27] - Gas utilities benefited from $0.12 of new rates and rider recovery margin, and $0.04 from residential growth and usage, but faced challenges from weather impacts and changes in natural gas commodity contracts [20][21] Market Data and Key Metrics Changes - The company experienced a 10th consecutive year of new peak customer loads for its Wyoming Electric system, with a peak of 312 megawatts, reflecting a nearly 70% increase over the last decade [11] - The company is optimistic about growth in the Cheyenne region, particularly in data centers and blockchain industries [12][51] Company Strategy and Development Direction - The company is focused on three key objectives: delivering earnings in line with guidance, strengthening the balance sheet, and advancing regulatory plans and growth initiatives [9][10] - A five-year capital plan totaling $3.5 billion has been established, with ongoing updates expected in the Q4 earnings call [15][48] - The company is pursuing a strategic initiative to add 500 megawatts of renewable resources to its systems by 2030 [33] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving the top end of the earnings guidance for 2023, citing strong operational performance and effective cost management [54] - The company is aware of macroeconomic challenges, including rising interest rates and inflation, and has incorporated these factors into its growth projections [60][61] Other Important Information - The company has been recognized for its reliability, with all three electric utilities acknowledged as among the most reliable in the country [9] - Wildfire mitigation efforts are a priority, with a comprehensive approach to managing risks and ensuring system reliability [37][39] Q&A Session Summary Question: Can you discuss the 2024 outlook and confidence in growth? - Management reaffirmed a growth target of 4% to 6% based on 2023 guidance, considering macroeconomic challenges and capital growth opportunities [57][60] Question: What updates can be expected in Q4 regarding projects? - Management indicated that updates on various long-term initiatives, including the Clean Energy Plan and resource additions, will be provided in Q4 [63][66] Question: Are there any other rate cases planned for 2024? - Management confirmed ongoing rate reviews in Wyoming, Colorado, and Arkansas, with an expectation of filing about three rate reviews per year [79][81]