Track market-moving stories before they get noisy

You're likely aware that utility company Constellation Energy is reactivating one of the mothballed nuclear reactors at Three Mile Island in Middletown, Pennsylvania, mostly to serve nearby data centers operated by Microsoft. And Facebook parent Meta Platforms -- along with cloud computing name Amazon -- have both made long-term power purchase agreements with electric utility outfit Vistra. Such high-profile partnerships between corporations and utility companies are quickly becoming the new norm, largely thanks to the rapid proliferation of electricity-hungry artificial intelligence (AI) data centers.

Not all of this dealmaking is being made with familiar names, however. The need is so great that even smaller power providers can now cash in on the insatiable demand for electricity. South Dakota utility outfit Black Hills (BKH +0.51%) is the latest small-cap beneficiary of the movement.

Image source: Getty Images.

Impact of the deal With a market cap of only $6 billion and annual revenue of less than half that amount, Black Hills doesn't turn many heads. Don't be fooled, though. Good things come in small packages, too. This persistently profitable utility player's stock boasts a solid forward-looking dividend yield of 3.6%. And that's based on a quarterly dividend that has not only been paid like clockwork for decades but also been raised every year for the past 56 years.

BKH Black Hills$81.20+$0.41 (+0.51%)

NYSE · As of 10:40 AM ET 10/29/26

Now the underpinnings of that streak are about to get even stronger. Early this month, the company agreed to sell 590 megawatts' worth of electricity to Google parent Alphabet (GOOGL -12.05%) (GOOG -11.94%) to power a nearby data center through 2048. This long-term commitment allows Black Hills to comfortably invest $1.8 billion in 564 megawatts' worth of new natural gas electricity-generation capacity, bringing its total potential output to 2.7 gigawatts. That's enough electricity to power a few million ordinary homes, or a handful of data centers.

Notably, Black Hills says this agreement should produce on the order of $150 million in net income in 2030 alone and $2.4 billion in free cash flow over its lifetime, even after accounting for the $1.8 billion in capital expenditures it will require.

Something to think about This doesn't mean every minor utility company is guaranteed to win these sorts of contracts with major names from the technology sector. In this instance, Alphabet's Google is looking to establish a new data center in Cheyenne, a market that Black Hills Energy already serves. It makes sense that Alphabet would opt to make a proactive, mutually beneficial agreement with it rather than suddenly strain the power provider's current production capacity, which works against Alphabet just as much. Future data centers may or may not be located in a market where a smaller utility player is already up and running.

This development certainly gives investors something to think about, though. They've given plenty of thought to the bigger names in the utility business. But perhaps the overlooked smaller ones are just as much of an opportunity, particularly if they've got a dividend pedigree as impressive as Black Hills' is.

James Brumley has positions in Alphabet. The Motley Fool has positions in and recommends Alphabet, Amazon, Constellation Energy, Meta Platforms, Microsoft, and Vistra. The Motley Fool has a disclosure policy.

Black Hills (BKH -0.73%) is a regulated utility with an impressive 56-year track record of dividend growth. This makes it a Dividend King, or a company that has raised its payout for 50 consecutive years or more.

Regulated utilities have historically been a sleepy part of the stock market because of their low volatility and stable cash flows, but lately they have been making headlines for long-term agreements with major technology companies. On Oct. 6, Black Hills announced multiple agreements with Alphabet's Google to provide energy infrastructure and services for its hyperscale data center campus in Cheyenne, Wyoming. The agreement runs through 2048 and builds on Black Hills' position as the region's top energy provider for hyperscalers.

Here's what investors need to know.

Image source: Getty Images.

Breaking down Black Hills' deal with Google As part of its arrangement with Google, Black Hills will deliver 2.7 gigawatts (GW) of power for Google's data center campus. This includes 590 megawatts (MW) of utility grid-connected service and another 2.1 GW of privately managed, third-party-contracted resources operating as an off-grid microgrid, and boosts Black Hills' position in the region.

Energy services are projected to begin in late 2027 and ramp up to peak operational load by 2030. At that point, Black Hills projects the deal will deliver $150 million in annual net income and $2.4 billion in unlevered free cash flow through 2048.

Under the deal, Black Hills will invest $1.8 billion in capital expenditures to build 564 MW of natural gas power generation between 2027 and 2029. Google provided $399 million in refundable advances for long-lead equipment procurement, which Black Hills plans to reimburse by next year.

BKH Black Hills$75.87-$0.56 (-0.73%)

NYSE · As of 4:00 PM ET 10/15/26

Wyoming is emerging as a data center hub The move helps Black Hills build on its strong regional position. It operates across eight states, including Wyoming, Colorado, Montana, and South Dakota. Cheyenne, Wyoming, has emerged as a data center hub thanks to favorable regulatory policies, a cool climate, and major grid investments.

Wyoming Electric has seen peak electric loads grow over two decades since Black Hills acquired the utility, and its system peak reached a record of 439 MW in July 2026, up 16% from 2025.

Black Hills has partnered with Microsoft in Cheyenne for over a decade and continues to build on that collaboration. In April, Microsoft announced it would acquire 3,200 acres in the area for a new data center capacity under the state's Large Power Contract Service (LPCS) tariff. In addition, Meta Platforms is another hyperscaler building a data center in the region, which is scheduled to open in 2027.

What this means for Black Hills' outlook The influx of hyperscalers into Wyoming is boosting Black Hills, which is evolving from a sleepy, defensive utility to a key energy infrastructure provider for AI data centers in the region. Its baseline forecast (before its Google deal) includes 600 MW of large data center load through 2030, anchored by Microsoft's and Meta's data centers.

Its deal with Google builds on its strong position, and the $150 million in added net income is massive for the company, which had $292 million in net income in 2025. The company is also a strong dividend stock, with 56 years of raises and a 3.6% yield.

As Wyoming's data center market grows and energy demand surges, Black Hills stands out as an appealing utility stock to capitalize on this growth.

Artificial intelligence (AI) hyperscaling has hit a physical wall. Tech conglomerates spent the past two years securing semiconductor chips, but powering those processors requires electricity levels the current grid cannot supply.

Black Hills Today

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Alphabet NASDAQ: GOOGL recently signaled a solution, executing a definitive agreement to directly finance a natural gas and microgrid expansion with Black Hills Corp NYSE: BKH in Cheyenne, Wyoming.

Alphabet's decision to directly finance the $1.8 billion, 564-megawatt power facility permanently alters Black Hills' valuation matrix. Black Hills has shifted from a steady-state regional power provider to a high-free-cash-flow, critical-infrastructure play on the AI revolution. Investors tracking AI infrastructure might want to look beyond chips and fiber optics, as utilities are fast becoming premium tech assets.

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Alphabet Bypasses the Grid for Dedicated PowerTech conglomerates are digesting heavy infrastructure bills, with Alphabet recently revising its 2026 capital expenditure guidance upward to about $195 billion to $205 billion. A significant portion of that capital is earmarked for data centers, which require constant, uninterrupted baseload energy. Traditional grid procurement is too slow, heavily regulated, and fragmented to meet AI's aggressive timelines.

To address this bottleneck, Alphabet bypassed standard centralized grid queues and partnered directly with Black Hills to establish a dedicated power ecosystem. The deal commits Black Hills to a $1.8 billion capital expenditure to construct 564 megawatts of company-owned natural gas generation by approximately 2029. Alongside the grid-connected service, Black Hills will manage a 2.1-gigawatt microgrid composed of third-party contracted resources located in Wyoming.

This localized, privately managed microgrid structure allows Alphabet to scale its Cheyenne data center operations rapidly while keeping the energy source geographically ring-fenced. By paying Black Hills a contractually defined microgrid management fee, Alphabet effectively turns the regional utility into a high-margin energy coordinator. For investors, this shift indicates that the real bottleneck for technology growth is no longer software or processing power, but localized energy generation.

Locking in Returns: The Economics of Tech Power DealsThe financial mechanics of the Cheyenne agreement provide Black Hills with decades of revenue visibility, changing how analysts model the utility provider's long-term earnings trajectory. The company is projected to generate about $150 million in net income by 2030. It is expected to deliver approximately $2.4 billion in unlevered free cash flow through the contract's expiration in 2048.

Historically, the market is skeptical of utilities when they undertake billion-dollar capital projects due to debt burdens and execution risks. Alphabet largely neutralized these risks by providing $399 million in refundable advances for long-lead equipment procurement. This upfront capital injection de-risks the early construction phase, lowers near-term financing costs, and helps Black Hills preserve its investment-grade credit rating.

The Generation Facilities Agreement embeds strict regulatory safeguards. A primary fear for utility investors is stranded asset risk: the possibility that a data center project is abandoned, leaving the utility provider with an expensive facility and no buyer for the power.

The contract structure guarantees full recovery of all generation capital investment over the term, placing the stranded asset risk on Alphabet. By passing inflation and interest-rate volatility directly to the technology giant, Black Hills ensures existing retail customers face no cost-shifting while utility shareholders enjoy insulated returns.

Earnings Momentum Meets Multi-Decade Revenue Visibility81st Percentile

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Before the Alphabet deal finalized, Black Hills demonstrated the strength of its fundamentals in its second-quarter report. The company posted earnings per share of 54 cents, beating the 41-cent consensus estimate, along with a 3.1% year-over-year revenue expansion. The new power agreement layers a multi-decade growth catalyst on top of an already stable operational baseline.

Black Hills offers a 3.7% dividend yield. Because the Alphabet contract protects Black Hills from traditional operational cost pressures, this dividend is highly insulated. The yield functions similarly to a secured corporate bond, but it now carries the equity upside of a tech-adjacent growth stock.

Institutional positioning indicates the market is actively repricing Black Hills to reflect this new reality. Before the public announcement, Bank of America raised its price target on Black Hills to $97 from $87. Currently trading at a forward price-to-earnings ratio of about 17.5, Black Hills is absorbing a multiple expansion that bridges the gap between a traditional utility and a critical technology partner.

Re-Rating the Sector: When Utilities Become Tech TargetsThe Black Hills agreement provides a definitive blueprint for how cloud providers will solve localized energy crises moving forward. Cloud backlogs are estimated in the hundreds of billions across the technology sector, and the electricity needed to clear that backlog does not exist on the public grid today. Regulated utilities with excess capacity, or regulatory frameworks that can rapidly approve capacity expansions, operate as high-yield extensions of the data center ecosystem.

This dynamic makes mid-cap regional utilities prime targets for joint ventures, direct financing agreements, or outright acquisitions. Companies situated near major fiber routes and possessing localized natural gas or nuclear assets have newfound pricing power against the world's largest tech conglomerates. Hyperscalers are signaling a willingness to pay premium rates and front capital costs to ensure their facilities can power on.

Investors tracking the data center build-out may want to examine regional utilities using this lens. As technology companies lock in gigawatt-scale power agreements, utilities that can bypass grid congestion to deliver dedicated energy solutions will likely see sustained institutional interest and structural re-ratings.

Should You Invest $1,000 in Black Hills Right Now?Before you consider Black Hills, you'll want to hear this.

MarketBeat keeps track of Wall Street's top-rated and best performing research analysts and the stocks they recommend to their clients on a daily basis. MarketBeat has identified the five stocks that top analysts are quietly whispering to their clients to buy now before the broader market catches on... and Black Hills wasn't on the list.

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There's often a catch with "high-yield" dividend stocks: a payout that looks tempting, yet is unsustainable. Case in point: The highest-yielding dividend stock right now is Gmex Robotics Corporation, with a forward yield of 9,514.19%. But yield alone doesn't make a stock worth owning.

Now contrast that with Black Hills Corp. (BKH -0.84%). Investors looking for a company with a long history of dividend growth can still find its yield meaningfully attractive, especially if they're prioritizing safety along with income.

Image source: Getty Images.

This unassuming utility provider operates in the Great Plains and Mountain West regions. It sits right in the middle of the biggest market boom in 50 years, delivering impressive returns while paying attractive yields. It's also the highest-yielding dividend stock with a consensus "Strong Buy" rating from Wall Street analysts.

But that begs the question: Is this stock worth owning?

Black Hills' Q2 2026 earnings show steady growth and improving efficiency Like any good stock story, it starts with the numbers.

In second-quarter fiscal year 2026, revenue rose 3% to $452.8 million. That's modest by most accounts, but considering that GAAP diluted earnings per share jumped from $0.38 a year earlier to $0.50 (+31%), the picture becomes more interesting. It suggests that Black Hills grew earnings far faster than revenue, indicating the company became more efficient and squeezed more profit out of each dollar of sales.

Does the company still have headroom to grow revenue even further? Apparently, yes.

Wyoming's data center demand could extend Black Hills' growth runway Management has flagged Wyoming as an area of interest because of data center demand. In fact, the state has projected 3 gigawatts of demand, with 600 megawatts already in the company's plans through 2030.

Who's driving that 600-megawatt demand? Microsoft and Meta Platforms, two of the world's biggest artificial intelligence hyperscalers.

That's not to say that all the benefits from Wyoming's demand will happen sometime in the future. According to Black Hills President and CEO Linden R. Evans, the company has "recorded and reliably served 20 consecutive years of increasing peak system loads [in the state], a remarkable 183% increase since we acquired the utility in 2005."

In other words, Black Hills already has a strong foundation for rising electricity demand, and data centers could drive it even higher. That growth has already shown up in the price, which is up 25% in the last year.

At around $72, the stock is trading just 9% below its 52-week high and only 18% below its all-time high, set in 2020.

What Wall Street sees in Black Hills' valuation

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Those kinds of numbers tend to spook more conservative investors, but that doesn't seem to be the case here. Right now, Black Hills is trading at a P/E around 18x, compared to the sector median of 19x. P/E, or price-to-earnings, is a valuation metric that compares the stock price to the company's earnings per share. The lower the number, the better. That means Black Hills is a little cheaper than many of its peers in the Utility sector.

Furthermore, Wall Street is rather optimistic about the company, with its rating jumping from Moderate to Strong Buy in the last three months, and the high target price suggests a 21% potential upside in the next 12 months.

Together, we have a strong picture of Black Hills being a good growth investment. But that doesn't necessarily make it a good dividend stock.

The dividend looks attractive, and the payout metrics look manageable What makes Black Hills a dividend stock worth considering is its 3.8% forward yield and its "Dividend King" status, with more than 50 consecutive years of dividend increases. It also has a reasonable 66% dividend payout ratio, meaning the company pays just over half of its earnings back to shareholders. Those two numbers tell me Black Hills is quite generous, but not so much that it deprives itself of cash to reinvest in the business.

Final take: A safer high-yield dividend stock with a growth narrative Black Hills Corp shows that safe, high-yield dividend stocks don't always have to be household names to deliver. In this case, earnings are growing faster than revenue, and data centers driving up demand in their key areas point to a long runway ahead.

Sure, the stock price has gone up significantly for a utility company, but it still trades cheaper than its peers, and Wall Street's improving rating is just another sign that the market's starting to take notice.

Reaffirms 2026 adjusted earnings guidance in the range of $4.25 to $4.45 per share, excluding merger-related costsServed new all-time peak load at Wyoming Electric driven primarily by growing large-load demandProgressing toward completion of multiple definitive agreements for a 1.8 GW data center project in WyomingCompleted regulatory requirements to receive new wildfire liability protections in South Dakota and WyomingOn track to close merger with NorthWestern Energy pending approval from Montana as the final condition for closing
RAPID CITY, S.D., Aug. 05, 2026 (GLOBE NEWSWIRE) -- Black Hills Corp. (NYSE: BKH) today announced financial results for the second quarter ended June 30, 2026. Net income available for common stock and earnings per share, diluted (EPS) for the three and six months ended June 30, 2026, compared to the three and six months ended June 30, 2025, were:

 Three Months Ended June 30, Six Months Ended June 30, 2026 2025 2026 2025 (in millions, except per share amounts)GAAP:       Net income available for common stock$38.2 $27.5 $169.2 $161.7Earnings per share, Diluted$0.50 $0.38 $2.23 $2.24        Non-GAAP (a):       Adjusted earnings$41.5 $27.5 $176.6 $161.7Adjusted EPS$0.54 $0.38 $2.33 $2.24 ________________________

(a)During the three and six months ended June 30, 2026, Black Hills incurred costs of $0.04 and $0.10 per share, respectively, related to the pending merger with NorthWestern Energy. See additional details in the GAAP-to-Non-GAAP reconciliation table in the Use of Non-GAAP Financial Measures section below. Minor differences may result due to rounding.   Second-quarter GAAP EPS was $0.50 compared to $0.38 in the same period in 2025. Second-quarter adjusted EPS was $0.54, excluding $0.04 of after-tax merger-related costs, compared to $0.38 in the same period in 2025. Financial results benefited from new rates and rider recovery, which more than offset higher financing and depreciation costs driven by capital investment and new assets in service.

Year-to-date GAAP EPS was $2.23 compared to $2.24 in the same period in 2025. Year-to-date adjusted EPS was $2.33, excluding $0.10 of after-tax merger-related costs, compared to $2.24 in the same period in 2025. Financial results benefited from new rates and rider recovery and cost management activities. These benefits more than offset $0.18 per share of impacts from mild weather and the impacts of higher financing and depreciation costs driven by capital investment and new assets in service.

“I’m extremely proud of our team and all we’ve accomplished in the first half of the year, delivering strong financial results and meaningful progress on our strategic initiatives,” said Linn Evans, president and CEO of Black Hills Corp. “We continued to advance our regulatory requests and execute our customer-focused capital plan, which includes our new 99-MW Lange II generation facility in South Dakota to be in service by year-end.

“We are also focused on serving our large-load demand pipeline of more than 3 GW in Wyoming. Our current financial plan includes 600 MW by 2030 driven by Microsoft’s expansion of existing operations and Meta’s new AI data center. We continue to make progress toward definitive agreements to serve a 1.8 GW data center project in Cheyenne, and other large-load customers, which would be additive to our plan.

“These significant large-load opportunities and the solid performance of our core businesses provide confidence in our ability to deliver in the upper half of our 4% to 6% long-term EPS growth target, and create compelling upside potential. We also look forward to a brighter energy future for all our stakeholders through our merger with NorthWestern Energy with only one regulatory approval remaining,” concluded Evans.

Merger with NorthWestern Energy Group, Inc.

On Aug. 19, 2025, Black Hills Corp. and NorthWestern Energy announced a tax-free, all-stock merger. The transaction is expected to close by year-end 2026, subject to the satisfaction of certain closing conditions and remaining regulatory approval from the Montana Public Service Commission. All other remaining approvals and conditions for closing were received or satisfied, including approvals by shareholders of both companies, the completion of the waiting period on the Hart-Scott-Rodino Act, and approvals by the Federal Energy Regulatory Commission and regulatory commissions in Nebraska and South Dakota.
SECOND-QUARTER 2026 HIGHLIGHTS AND RECENT UPDATES

Electric Utilities

On Aug. 4, South Dakota Electric filed a request with the South Dakota Public Utilities Commission (SDPUC) for recovery of costs related to its 99 MW, $320 million Lange II gas-fired generation project through a rider mechanism available under state law. The new facility under construction in Rapid City, South Dakota, is expected to be completed and in service during the fourth quarter of 2026 to replace generation resources planned for retirement and support updated reserve margin requirements.Year to date, Wyoming Electric recorded four new all-time customer load peaks driven primarily by growth in large-load data center demand. The new peaks advance a track record of 20 consecutive years of increasing electric demand in the Cheyenne, Wyoming region. The most recent peak of 439 MW on July 20, 2026, represents an increase of 16% over the peak of 379 MW on June 20, 2025. In July, South Dakota Electric and Wyoming Electric completed regulatory requirements for wildfire liability protections outlined in legislation enacted in 2025 and early 2026. On July 9, 2026, Wyoming Electric received approval from the Wyoming Public Service Commission (WPSC) of the company’s Wildfire Mitigation Plan. On July 2, 2026, South Dakota Electric submitted the company’s plan to the SDPUC in accordance with the legislation requirements.On June 30, Wyoming Electric submitted its 2026 Integrated Resource Plan to the WPSC based on a 20-year planning period, including a near-term period through 2033, which identified a near-term capacity shortfall of 95 MW beginning in 2027. Based on its forecasts and analysis, Wyoming Electric recommends the addition of 36 MW of new natural gas-fired reciprocating internal combustion engines (RICE), 50 MW of battery storage, and energy market purchases to meet the identified resource need. Wyoming Electric's IRP does not address Large Power Contract Service (LPCS) tariff capacity needs, which are handled separately under customer-specific agreements.On June 19, Wyoming Electric filed a request with the WPSC to establish a new Large Customer Transmission Cost Adjustment Mechanism (LCTCAM) tariff. The LCTCAM provides a framework to directly recover transmission investment costs from LPCS customers who are served by, and benefit from, the transmission facility. The proposed mechanism is designed to ensure that customers not directly served by those facilities are protected from bearing those costs. The filing requests WPSC approval of the tariff by Sept. 1, 2026, with an effective date of Jan. 1, 2027.On June 12, Colorado Electric filed a rate review request with the Colorado Public Utilities Commission seeking approval to recover approximately $184 million of critical investments since its last rate review in 2024. The rate review requested $27 million of new annual revenue based on a capital structure of 51% equity and 49% debt and a return on equity of 10.5%. The company is seeking new rates in the first quarter of 2027.On April 22, Wyoming Electric entered into an agreement to procure long lead-time generation equipment with a prospective data center customer seeking to construct a 1.8 GW data center to be served under Wyoming Electric’s LPCS tariff. The customer provided $285 million in refundable advances through June 30, 2026, in support of milestone payments to secure generation equipment. In July, the parties amended this generation reservation agreement to increase the total refundable advances to $377 million with a new maturity date of Aug. 31, 2026. Wyoming Electric continues to negotiate definitive agreements with the prospective customer.On March 18, South Dakota Electric filed a rate review request with the WPSC seeking approval to recover critical investments since its last rate review in 2014. The rate review requested $5 million of new annual revenue based on a capital structure of 53% equity and 47% debt and a return on equity of 10.5%. The company is seeking new rates in the first quarter of 2027.On Feb. 19, South Dakota Electric filed a rate review request with the SDPUC seeking approval to recover critical investments since its last rate review in 2014. The rate review requested $51 million of new annual revenue based on a capital structure of 53% equity and 47% debt and a return on equity of 10.5%. The company is seeking interim rates to be effective 180 days after filing, with new rates to be finalized in the first quarter of 2027.
Gas Utilities

On June 25, Kansas Gas received approval from the Kansas Corporation Commission of an abbreviated rate review request seeking $2.4 million in new annual revenue for capital placed in service through Dec. 31, 2025, based on authorized returns and capital structure under a black box settlement agreement for the July 2025 rate review. New rates were effective July 1.On Dec. 5, 2025, Arkansas Gas filed a rate review request with the Arkansas Public Service Commission seeking approval to recover approximately $147 million of system investments for its natural gas pipeline infrastructure since its last general rate filing in 2023. The rate review requested $29 million of new annual revenue based on a capital structure of 50% equity and 50% debt and a return on equity of 10.5%. The company is seeking final rates in the second half of 2026.
Corporate and Other

On July 28, Black Hills’ board of directors approved a quarterly dividend of $0.703 per share payable on Sept. 1, 2026, to common shareholders of record at the close of business on Aug. 17, 2026. On an annualized basis, the dividend represents 56 consecutive years of increases, the second-longest track record in the electric and natural gas industry.During the second quarter, the company issued a total of 0.1 million shares of new common stock for net proceeds of $9 million. Year to date, the company issued a total of 0.7 million shares of new common stock under its at-the-market equity offering program for net proceeds of $50 million.During the second quarter, Black Hills published its 2025 Corporate Sustainability Report, highlighting the company's continued progress toward emission reduction goals, strategic infrastructure investments and innovative solutions to deliver safe, reliable and cost-effective energy across the communities it serves. The company’s electric utilities achieved a 43% reduction in emissions intensity compared to 2005, continuing on pace to achieve its 70% by 2040 target. The natural gas utility reduced emissions by 25% since 2022, reflecting strong progress toward its net-zero by 2035 goal.
2026 ADJUSTED EARNINGS GUIDANCE REAFFIRMED

Black Hills reaffirms its guidance for 2026 adjusted EPS* to be in the range of $4.25 to $4.45, based on the following assumptions:

Normal weather conditions within our utility service territories;Constructive and timely outcomes of utility regulatory dockets;Excludes merger-related costs;Excludes mark-to-market adjustments;Increase in operations and maintenance expense (excludes merger-related costs, depreciation and amortization, and taxes other than income taxes) of approximately 3.5% off 2025 of $580 million;Equity issuance between $50 million and $70 million; andAn effective tax rate of approximately 14% for the full year.
This guidance excludes the expected merger with NorthWestern Energy, which is expected to close in the second half of 2026.

* The 2026 Adjusted EPS guidance shown above is a forward-looking, non-GAAP financial measure. The company is not able to provide comparable GAAP EPS guidance due to items that are not considered representative of the company's underlying operating performance that cannot be reasonably quantified for the full-year period. These items include merger-related costs the company expects to incur in 2026, in addition to any other unplanned items that may affect GAAP results in 2026.

USE OF NON-GAAP FINANCIAL MEASURES

As noted in this earnings release, in addition to presenting its earnings information in conformity with Generally Accepted Accounting Principles (GAAP), the company has presented non-GAAP Adjusted earnings and Adjusted EPS, which reflect adjustments for expenses, gains and losses that the company believes do not reflect ongoing core operating performance, such as costs related to the pending merger with NorthWestern. The company’s management uses non-GAAP measures for financial planning and analysis, for reporting of results to the Board of Directors, in determining performance-based compensation and communicating its earnings outlook to analysts and investors. Non-GAAP financial measures are intended to supplement investors’ understanding of our performance and should not be considered alternatives for financial measures presented in accordance with GAAP. Our non-GAAP measures may not be comparable to those of other companies.

Reconciliation of non-GAAP financial measures to the most directly comparable GAAP financial measures are included below.

 Three Months Ended June 30, Six Months Ended June 30, 2026  2025 2026  2025 (in millions, except per share amounts)Net income available for common stock (GAAP)$38.2  $27.5 $169.2  $161.7Adjustment:         Merger-related costs 4.1   -  8.6   -Less: tax effect of adjustment (0.7)  -  (1.1)  -Adjustment, net of tax 3.3   -  7.5   -Rounding -   -  (0.1)  -Adjusted earnings (non-GAAP)$41.5  $27.5 $176.6  $161.7          Weighted average shares, diluted 76.1   72.4  75.9   72.1          Earnings per share, diluted (GAAP)$0.50  $0.38 $2.23  $2.24Adjustment:         Merger-related costs 0.05   -  0.11   -Less: tax effect of adjustment (0.01)  -  (0.02)  -Adjustment, net of tax 0.04   -  0.10   -Adjusted EPS (non-GAAP)$0.54  $0.38 $2.33  $2.24               BLACK HILLS CORPORATION
CONSOLIDATED FINANCIAL RESULTS

(Minor differences may result due to rounding)

 Three Months Ended June 30,  Six Months Ended June 30,  2026  2025  2026  2025  (in millions, except per share amount) Revenue$452.8  $439.0  $1,233.5  $1,244.2             Operating expenses:           Fuel, purchased power and cost of natural gas sold 113.5   124.0   451.3   483.8 Operations and maintenance 150.5   147.6   298.6   301.3 Depreciation and amortization 75.3   69.8   150.1   139.0 Taxes other than income taxes 16.5   15.1   34.5   32.7 Total operating expenses 355.8   356.5   934.5   956.8             Operating income 97.0   82.5   299.0   287.4             Interest expense, net (51.6)  (48.9)  (103.5)  (100.3)Other income (expense), net 0.2   (0.4)  0.8   0.6 Income tax benefit (expense) (5.2)  (4.4)  (22.8)  (22.5)Net income 40.4   28.8   173.5   165.2 Net income attributable to non-controlling interest (2.2)  (1.3)  (4.3)  (3.5)Net income available for common stock$38.2  $27.5  $169.2  $161.7             Weighted average common shares outstanding:       Basic 75.9   72.4   75.7   72.0 Diluted 76.1   72.4   75.9   72.1             Earnings per share:           Earnings per share, Basic$0.50  $0.38  $2.24  $2.25 Earnings per share, Diluted$0.50  $0.38  $2.23  $2.24                  CONSOLIDATING INCOME STATEMENTS

(Minor differences may result due to rounding)

 Consolidating Income Statement Three Months Ended June 30, 2026Electric Utilities Gas Utilities Corporate and Other  Total  (in millions) Revenue$226.3 $230.5 $(4.0) $452.8           Fuel, purchased power and cost of natural gas sold 49.7  63.9  (0.1)  113.5 Operations and maintenance 65.5  81.7  3.3   150.5 Depreciation and amortization 40.9  34.4  -   75.3 Taxes other than income taxes 9.1  7.4  -   16.5 Operating income$61.1 $43.1 $(7.2) $97.0           Interest expense, net        (51.6)Other income (expense), net        0.2 Income tax benefit (expense)        (5.2)Net income        40.4 Net income attributable to non-controlling interest        (2.2)Net income available for common stock       $38.2              Consolidating Income Statement Three Months Ended June 30, 2025Electric Utilities Gas Utilities Corporate and Other  Total  (in millions) Revenue$219.9 $223.0 $(3.9) $439.0           Fuel, purchased power and cost of natural gas sold 55.3  68.9  (0.2)  124.0 Operations and maintenance 69.2  80.1  (1.7)  147.6 Depreciation and amortization 37.5  32.3  -   69.8 Taxes other than income taxes 8.9  6.2  -   15.1 Operating income$49.0 $35.5 $(2.0) $82.5           Interest expense, net        (48.9)Other income (expense), net        (0.4)Income tax benefit (expense)        (4.4)Net income        28.8 Net income attributable to non-controlling interest        (1.3)Net income available for common stock       $27.5             Three Months Ended June 30, 2026 Compared to the Three Months Ended June 30, 2025

Electric Utilities’ operating income increased $12.1 million primarily due to new rates and rider recovery driven by the Wyoming Electric's recently completed Ready Wyoming project;Gas Utilities’ operating income increased $7.6 million primarily due to new rates and rider recovery driven by the Nebraska Gas and Kansas Gas rate reviews partially offset by higher operating expenses;Corporate and Other operating loss increased $5.2 million primarily due to costs related to the pending merger with NorthWestern; andNet interest expense increased $2.7 million primarily due to higher rates on increased debt.  Consolidating Income Statement Six Months Ended June 30, 2026Electric Utilities Gas Utilities Corporate and Other  Total  (in millions) Revenue$467.9 $773.6 $(8.0) $1,233.5           Fuel, purchased power and cost of natural gas sold 116.5  335.1  (0.3)  451.3 Operations and maintenance 131.5  165.6  1.5   298.6 Depreciation and amortization 81.4  68.7  -   150.1 Taxes other than income taxes 18.3  16.2  -   34.5 Operating income$120.2 $188.0 $(9.2) $299.0           Interest expense, net        (103.5)Other income (expense), net        0.8 Income tax benefit (expense)        (22.8)Net income        173.5 Net income attributable to non-controlling interest        (4.3)Net income available for common stock       $169.2              Consolidating Income Statement Six Months Ended June 30, 2025Electric Utilities Gas Utilities Corporate and Other  Total  (in millions) Revenue$456.6 $795.4 $(7.8) $1,244.2           Fuel, purchased power and cost of natural gas sold 122.5  361.4  (0.1)  483.8 Operations and maintenance 138.0  168.1  (4.8)  301.3 Depreciation and amortization 74.6  64.4  -   139.0 Taxes other than income taxes 18.2  14.5  -   32.7 Operating income$103.3 $187.0 $(2.9) $287.4           Interest expense, net        (100.3)Other income (expense), net        0.6 Income tax benefit (expense)        (22.5)Net income        165.2 Net income attributable to non-controlling interest        (3.5)Net income available for common stock       $161.7             Six Months Ended June 30, 2026, Compared to the Six Months Ended June 30, 2025

Electric Utilities’ operating income increased $16.9 million primarily due to new rates and rider recovery driven by the Colorado Electric rate review and Wyoming Electric's recently completed Ready Wyoming project partially offset by lower retail customer usage and unfavorable weather;Gas Utilities’ operating income increased $1.0 million primarily due to new rates and rider recovery driven by the Nebraska Gas, Kansas Gas, and Arkansas Gas rate reviews mostly offset by unfavorable weather and higher operating expenses;Corporate and Other operating loss increased $6.3 million primarily due to costs related to the pending merger with NorthWestern; andNet interest expense increased $3.2 million primarily due to higher rates on increased debt partially offset by higher AFUDC debt. OPERATING STATISTICS

Electric Utilities

 Revenue Quantities Sold Three Months
Ended June 30, Six Months
Ended June 30, Three Months
Ended June 30, Six Months
Ended June 30,By Customer Class2026  2025 2026 2025 2026 2025 2026 2025 (in millions) (in GWh)Retail Revenue -                Residential$56.0  $54.1 $119.1 $120.5  327.0  321.0 685.9 727.4Commercial 67.4   66.9  137.4  135.7  499.6  499.7 991.8 1,016.9Industrial (a) 58.2   49.3  114.5  97.5  784.0  663.9 1,491.4 1,273.7Municipal 4.4   4.3  8.7  8.8  35.8  34.1 66.8 68.7Other Retail (1.6)  3.5  1.7  6.9  —  — — —Subtotal Retail Revenue - Electric 184.4   178.1  381.4  369.4  1,646.4  1,518.7 3,235.9 3,086.7Wholesale 5.3   4.2  11.3  11.3  123.5  108.4 263.6 256.2Market - off-system sales 2.5   10.7  13.4  22.0  90.4  220.0 288.7 393.6Transmission 17.5   10.1  29.6  22.2  —  — — —Other (b) 16.6   16.8  32.2  31.7  —  — — —Total Revenue and Quantities Sold$226.3  $219.9 $467.9 $456.6 $1,860.3 $1,847.1 3,788.2 3,736.5Other Uses, Losses, or Generation, net (c)         142.3  125.4 245.5 219.5Total Energy          2,002.6  1,972.5 4,033.7 3,956.0 ________________________

(a)The increase in industrial quantities sold for the three and six months ended June 30, 2026, compared to the same periods in 2025, was primarily driven by Wyoming Electric's large-load customers under the LPSC and BCIS Tariffs.(b)Includes Integrated Generation, inter-segment rent, and non-regulated services to our retail customers under the Service Guard Comfort Plan and Tech Services.(c)Includes company uses and line losses.    Revenue Quantities Sold Three Months
Ended June 30, Six Months
Ended June 30, Three Months
Ended June 30, Six Months
Ended June 30,By Business Unit2026 2025 2026 2025 2026 2025 2026 2025 (in millions) (in GWh)Colorado Electric$64.7 $66.3 $134.0 $138.7 534.9 524.1 1,030.8 1,056.4South Dakota Electric 76.1  78.0  162.8  164.9 527.0 638.9 1,206.7 1,320.9Wyoming Electric 75.5  64.8  150.2  131.4 777.1 665.2 1,503.6 1,311.0Integrated Generation 10.0  10.8  20.9  21.6 21.3 18.9 47.1 48.2Total Revenue and Quantities Sold$226.3 $219.9 $467.9 $456.6 1,860.3 1,847.1 3,788.2 3,736.5                      Three Months Ended June 30,Six Months Ended June 30, 2026202520262025Degree DaysActualVariance from NormalActualVariance from NormalActualVariance from NormalActualVariance from NormalHeating Degree Days:        Colorado Electric539(8)%6235%2,540(18)%3,3568%South Dakota Electric980(4)%908(12)%3,547(18)%4,3461%Wyoming Electric974(14)%1,085(5)%3,299(21)%4,2252%Combined (a)781(8)%815(5)%3,044(19)%3,8754%         Cooling Degree Days:        Colorado Electric34723%235(16)%35827%235(16)%South Dakota Electric102(17)%16241%102(17)%16241%Wyoming Electric47(41)%60(24)%47(41)%60(24)%Combined (a)2019%174(4)%20611%174(4)% ________________________

(a)Degree days are calculated based on a weighted average of total customers by state.   OPERATING STATISTICS (continued)

Gas Utilities

 Revenue Quantities Sold and Transported Three Months
Ended June 30, Six Months
Ended June 30, Three Months
Ended June 30, Six Months
Ended June 30,By Customer Class2026 2025 2026 2025 2026 2025 2026 2025 (in millions) (Dth in millions)Retail Revenue -               Residential$111.6 $113.3 $423.3 $457.4 6.7 7.2 31.9 37.9Commercial 39.8  42.0  165.3  176.3 3.8 4.0 15.9 18.0Industrial 6.9  6.4  13.8  13.0 1.7 1.4 2.7 2.4Other Retail (a) 6.7  6.9  21.4  21.6 — — — —Subtotal Retail Revenue - Gas 165.0  168.6  623.8  668.3 12.2 12.6 50.5 58.3Transportation 44.8  42.1  99.3  99.8 37.9 36.2 84.1 86.7Other (b) 20.7  12.3  50.5  27.3 — — — —Total Revenue and Quantities Sold$230.5 $223.0 $773.6 $795.4 50.1 48.8 134.6 145.0 ________________________

(a)Includes Black Hills Energy Services revenue under the Choice Gas Program.(b)Includes inter-segment rent and non-regulated services under the Service Guard Comfort Plan, Tech Services, and HomeServe.    Revenue Quantities Sold and Transported Three Months
Ended June 30, Six Months
Ended June 30, Three Months
Ended June 30, Six Months
Ended June 30,By Business Unit2026 2025 2026 2025 2026 2025 2026 2025 (in millions) (Dth in millions)Arkansas Gas$41.5 $40.7 $163.6 $165.5 5.6 5.3 17.1 18.5Colorado Gas 36.8  39.0  127.0  154.8 4.9 5.2 15.7 18.4Iowa Gas 33.0  30.1  126.9  116.9 7.1 6.9 21.2 22.1Kansas Gas 25.7  25.1  86.3  91.2 8.9 7.6 19.0 19.3Nebraska Gas 63.6  57.9  194.4  188.1 16.2 16.4 42.5 46.1Wyoming Gas 29.9  30.2  75.4  78.9 7.4 7.4 19.1 20.6Total Revenue and Quantities Sold$230.5 $223.0 $773.6 $795.4 50.1 48.8 134.6 145.0                      Three Months Ended June 30,Six Months Ended June 30, 2026202520262025Heating Degree DaysActualVariance from NormalActualVariance from NormalActualVariance from NormalActualVariance from NormalArkansas Gas (a)155(45)%193(33)%1,727(20)%2,150(2)%Colorado Gas716(16)%822(5)%2,775(24)%3,659---Iowa Gas597(12)%640(5)%3,591(9)%3.928(1)%Kansas Gas (a)274(33)%367(9)%2,308(18)%2.9837%Nebraska Gas (a)532(12)%553(9)%3,077(14)%3.592---Wyoming Gas1,061(10)%1,110(7)%3,525(21)%4.4331%Combined (b)657(31)%658(8)%3,170(21)%3,740--- ________________________

(a)Arkansas Gas and Kansas Gas have weather normalization mechanisms that mitigate the weather impact on Gas Utility margins. Nebraska Gas received NPSC approval to develop a two-year pilot program for a weather normalization mechanism which was effective in August 2025.(b)Heating degree days are calculated based on a weighted average of total customers by state excluding Kansas Gas and Nebraska Gas (effective in August 2025) due to their weather normalization mechanisms. Arkansas Gas is partially excluded based on the weather normalization mechanism in effect from November through April.   CONFERENCE CALL AND WEBCAST

Black Hills will host a live conference call and webcast at 11 a.m. EDT on Thursday, Aug. 6, 2026, to discuss the company's financial results.

To participate by phone and ask a question during the live broadcast, participants can access the event directly at Black Hills Corp. Conference Call. Please allow at least five minutes to register. Upon registration, dial-in information will be provided, including a personal identification number.

To access a listen-only webcast and view presentation slides, please register at Black Hills Corp. Webcast. At the conclusion of the call, a replay of the broadcast will be available at this link and at Black Hills’ investor relations website for up to one year.

ABOUT BLACK HILLS CORP.

Black Hills Corp. (NYSE: BKH) is a customer-focused, growth-oriented utility company with a tradition of improving life with energy and a vision to be the energy partner of choice. Based in Rapid City, South Dakota, the company serves more than 1.37 million natural gas and electric utility customers in eight states: Arkansas, Colorado, Iowa, Kansas, Montana, Nebraska, South Dakota and Wyoming. More information is available at www.blackhillscorp.com.

CAUTION REGARDING FORWARD-LOOKING STATEMENTS

This press release includes “forward-looking statements” as defined by the Securities and Exchange Commission. We make these forward-looking statements in reliance on the safe harbor protections provided under the Private Securities Litigation Reform Act of 1995. All statements, other than statements of historical facts, included in this press release that address activities, events or developments that we expect, believe or anticipate will or may occur in the future are forward-looking statements. This includes, without limitations, our 2026 earnings guidance, long-term growth target and our expectations for regulatory approvals for and the closing of the merger with NorthWestern Energy. These forward-looking statements are based on assumptions which we believe are reasonable based on current expectations and projections about future events and industry conditions and trends affecting our business. However, whether actual results and developments will conform to our expectations and predictions is subject to a number of risks and uncertainties that, among other things, could cause actual results to differ materially from those contained in the forward-looking statements, including without limitation, the risk factors described in Item 1A of Part I of our 2025 Annual Report on Form 10-K and other reports that we file with the SEC from time to time, and the following:

The accuracy of our assumptions on which our earnings guidance and long-term growth target is based;Our ability to obtain timely and adequate regulatory approvals and cost recovery;Our ability to execute our capital investment program and strategic initiatives;Our ability to access capital markets and successfully execute financing plans;The effects of inflation, interest rates, commodity prices, supply chain constraints and labor availability;Severe weather, wildfire, cybersecurity incidents (including risks associated with the use of artificial intelligence and evolving cyber threats), operational and other business risks;Our ability to serve customer growth opportunities, including large-load customers;Changes in laws, regulations and governmental policies; andThe expected timing and likelihood of completion and our ability to realize the anticipated benefits of the proposed merger with NorthWestern, including the timing, receipt and terms and conditions of any required governmental and regulatory approvals of the proposed acquisition that could reduce anticipated benefits or give rise to the termination of the merger.
New factors that could cause actual results to differ materially from those described in forward-looking statements emerge from time-to-time, and it is not possible for us to predict all such factors, or the extent to which any such factor or combination of factors may cause actual results to differ from those contained in any forward-looking statement. We assume no obligation to update publicly any such forward-looking statements, whether as a result of new information, future events or otherwise.

Investor Relations: Sal Diaz [email protected]   Media Contact: 24-hour Media Assistance888-242-3969