Black Hills (NYSE: BKH) reported strong second-quarter 2026 results, confirming it remains on track to hit its long-term earnings guidance driven by rate recovery, capital investments, and a surge in large-load electricity demand.
Financial Performance and EPS Growth
The utility posted GAAP earnings per share (EPS) of $0.50 for the second quarter, a figure that accounts for $0.04 per share in merger-related costs. When adjusted, earnings reached $0.54 per share, marking a significant increase from the $0.38 reported in the same period of 2025.
For the first half of 2026, adjusted earnings totaled $2.33 per share, up from $2.24 in the prior-year period. CFO Kimberly Nooney noted that $0.21 per share in new rates and rider recovery successfully offset rising depreciation and financing costs. Additionally, the company maintained flat operating expenses by excluding merger costs, while strategic employee-cost reductions bolstered results by $0.04 per share.
Strategic Outlook and 2026 Guidance
Black Hills reaffirmed its adjusted EPS guidance of $4.25 to $4.45 for 2026, projecting a 6% growth at the midpoint. Management expects to operate in the upper half of its 4% to 6% long-term growth target, supported by ongoing rate cases and capital project recovery.
The Data Center Opportunity
CEO Linn Evans highlighted a massive demand shift in Wyoming, where peak system loads have risen for 20 consecutive years. July’s peak load hit 439 megawatts—a 16% increase year-over-year and 183% higher than when the utility was acquired in 2005.
The company is currently tracking a data-center pipeline exceeding 3 gigawatts. Of this, 600 megawatts are already integrated into the financial plan through 2030, largely driven by Microsoft’s growth and Meta’s AI data center in Cheyenne. Operations for Meta are expected to ramp up later this year.
Beyond the current plan, Black Hills is negotiating an additional 2.5 gigawatts of load opportunities. This includes a major 1.8-gigawatt project, for which the company is in advanced talks regarding commercial agreements and refundable customer advances for long-lead generation equipment. Management anticipates finalizing these agreements during the third quarter.
Capital Projects and Regulatory Updates
Black Hills is executing a nearly $1 billion capital plan for 2026. The 99-megawatt Lange II generation project is on schedule for a Q4 launch, with key components already delivered to the site. Meanwhile, the company is actively managing rate reviews across its service territories:
- Colorado: A request for $26.7 million in annual revenue has been filed.
- Kansas: New rates were approved and became effective July 1.
- South Dakota: Interim electric rates are set to take effect on August 18.
- Arkansas: A gas rate-review hearing is scheduled for August 20.
In Wyoming, the company has proposed a new tariff—the Large Customer Transmission Cost Adjustment Mechanism—designed to recover infrastructure costs directly from large-load users, with an expected effective date of January 2027.
Merger Status and Liquidity
The acquisition of NorthWestern Energy is nearing completion, with six of seven regulatory approvals secured. Montana is the final hurdle, with a decision expected between mid-October and mid-November. If approved, the merger remains on track for a second-half 2026 close.
Financially, the company remains stable, ending the quarter with over $650 million in revolving credit availability. Black Hills is currently evaluating refinancing options for $400 million in notes maturing in January 2027.
