Black Hills' Q4 2024 Earnings Call: Unpacking Contradictions in Data Center Growth, CapEx, and EPS Expectations

These are the key contradictions discussed in Black Hills' latest 2024Q4 earnings call, specifically including: Data Center Growth and Contribution to EPS, CapEx Forecast and Allocation, and Data Center Contribution to EPS Timeline:



Strong Financial Performance and Earnings Growth:
- Black Hills Corporation delivered 4.3% EPS growth for 2024, surpassing their 2023 guidance midpoint of $3.75, and expects 5% EPS growth in 2025.
- Growth was driven by achieving key financial objectives, expense management, and strategic investments despite challenges like mild weather and unplanned generation outages.

Capital Investment and Data Center Demand:
- The company increased its 5-year capital investment plan by 10% to $4.7 billion, with a focus on data center growth.
- This increase is due to clarity in project timelines, inflation, and financing costs, with significant growth in data center demand projected to contribute 10% or more of total EPS by 2029.

Operational Excellence and Customer Growth:
- Black Hills Corporation served nearly 2 decades of consecutive annual increases in peak loads for Wyoming Electric and achieved over 1% annual customer growth across service territories.
- This was supported by investments in transmission and generation projects, including the Ready Wyoming Electric Transmission expansion, enhancing customer service reliability and strategic growth.

Regulatory and Rate Review Success:
- The company successfully implemented constructive settlements in rate reviews for Arkansas Gas and Iowa Gas, and obtained final approval for a clean energy plan in Colorado.
- These achievements allowed for the recovery of investments and management of inflationary impacts on costs, supporting customer needs and financial stability.