Black Hills Annual Report 2022

FY2022 Annual Report · Black Hills

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2022

BLACK HILLS
CORPORATION

2022 Annual Report | Proxy Statement | Form 10-K

B
K
H

BLACK HILLS
CORPORATION

We are a customer focused, growth-
oriented utility company with a tradition
of exemplary service and a vision to be
the energy partner of choice. Based in
Rapid City, South Dakota, the company
serves over 1.3 million electric and natural

gas utility customers in 824 communities
in Arkansas, Colorado, Iowa, Kansas,
Montana, Nebraska, South Dakota and
Wyoming. Employees partner to produce
results that Improve Life with Energy.

Arkansas
183,300 utility customers

Kansas
118,600 utility customers

100 communities served

67 communities served

Colorado
308,600 utility customers

119 communities served
617 megawatts of
owned power
generation capacity

Iowa
162,800 utility customers

133 communities served
87 megawatts of owned

power generation capacity

Montana

44 utility customers

2 communities served

Nebraska
298,800 utility customers

319 communities served

South Dakota
72,500 utility customers

29 communities served
150 megawatts of
owned power
generation capacity

Wyoming
180,700 utility customers

56 communities served
174 million tons of
coal reserves
627 megawatts of
owned power
generation capacity

Electric Utilities

Natural Gas Utilities

Power Generation

Wind Generation

Electric and Natural Gas Utilities

Company Headquarters

Mine

Renewable natural gas interconnection sites

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Dear fellow shareholders,

At Black Hills Corporation, we continue to deliver on our mission of improving life with energy for
our 1.3 million electric and natural gas customers across eight states. Since our founding in 1883 in
Deadwood, South Dakota, our trusted presence has empowered the success of our customers and
communities. We’ve enabled dreams, cultivated opportunities and provided stability to overcome
uncertainty. With a storied history of weathering unique challenges together, we recognize the
tenacity of the people we live and work with across our service territories. We take great pride in
being their valued energy partner and solid foundation for powering a better future.

The resiliency of our team, infrastructure and customer-focused strategy was proven once again
in 2022. It’s during these times of testing that we learn and grow, with results shining light on
strengths and highlighting opportunities. Our success in strategic execution was spotlighted by
our industry-leading reliability while serving growing customer demand. Together, we successfully
managed our business and navigated supply chain, macroeconomic and industry challenges to
deliver solid earnings growth in 2022. These results highlighted our team’s pursuit of customer
solutions, profitable growth, and execution on fair and timely regulatory recovery of our
investments and costs to serve customers.

Social, economic and energy industry trends highlight the essential need for resilient infrastructure
and a robust financial position. We made strong progress advancing our plans to maintain reliable,
safe, cost-effective and clean energy infrastructure. In addition, we took disciplined measures
toward strengthening our balance sheet, which remains a key focus of ours in the coming year.

Resilient foundation

The reliability and safety of electric and natural gas service is more critical than ever with growing
demand, the ongoing clean energy transition and more interconnected global economy and energy
systems. Our dependable energy infrastructure is especially vital to the territories we serve where
reliability goes hand-in-hand with safety and encourages thriving, growing communities.

We proudly delivered another year of industry-leading electric reliability, with all three of our
electric utilities recognized in the top quartile of industry reliability performance. Our high level of
service is especially noteworthy in light of ongoing customer growth. This growth was reflected in
11 new summer and winter electric peak loads in 2022, including a remarkable ninth consecutive
year of new peaks at Wyoming Electric, a 53% increase since 2013. Natural gas demand was also

www.blackhillscorp.com

strong at the gas utilities, where we continued to deploy capital with a focus on safety and system
integrity to maintain resiliency through extreme weather events, such as Winter Storms Uri in 2021
and Elliot in December 2022.

Success in serving the growing needs of our customers requires consistent investment and a
forward-thinking operational team. In 2022, we deployed $598 million of capital primarily for safety
and resiliency and to meet ongoing customer growth. Maintaining that focus, we are forecasting
capital investments of $3.5 billion over the next five years. We are balancing investment needs
against strengthening our balance sheet and customer costs, particularly in the current inflationary
environment. In striking that balance, we are projecting capital investment of approximately
$600 million for 2023, while continuing to focus on financial discipline and placing an intentional
emphasis on fostering our continuous improvement culture.

Powering a better future

Sustainability and the source of our energy matters to our stakeholders and to us. We are
responsibly integrating renewable resources and reducing emissions while preserving reliability,
resiliency and delivering cost-effective energy to our customers. At our electric utilities, we are
targeting a 70% reduction in greenhouse gas emissions intensity by 2040 from a 2005 base. During
2022, we enhanced our gas utilities emissions target to Net Zero by 2035,* and plan to meet this
target through ongoing infrastructure investment, process enhancements, integration of renewable
resources and carbon offset credits.

During 2022, we moved closer to making our electric utility emissions goals a reality through our
electric resource plans. We recently reached a unanimous settlement agreement for our Colorado
Clean Energy Plan filed in May 2022 to achieve the state’s emission reduction target of 80% by
2030. The settlement provides incentives for 50% utility ownership of the estimated 400 megawatts
of renewable and battery clean energy resources we will need to meet our goals. We also moved
forward with our electric resource plan in South Dakota that was filed in 2021, which proposes the
addition of 100 megawatts of renewable resources by 2025 and exploration of battery storage.

Another significant milestone was receiving regulatory approval for the Ready Wyoming project,
our 260-mile transmission expansion initiative in southeastern Wyoming. It will create a robust
and more interconnected transmission and distribution system in eastern Wyoming to enhance the
resiliency of our overall system, expand access to power markets and renewable energy resources,
and create long-term price stability for customers. We are excited about this project and its ability
to support vibrant growth and innovation in Wyoming. Construction is planned to commence in
2023 and the project to be fully in service by the end of 2025.

Underlying all we do is our culture of safety and our mindset of serving our customers better every
day. We are intentional about doing business more effectively and efficiently with our Energy
Forward initiative, which is focused on both big picture and day-to-day process enhancements that
will move us forward as the utility of the future.

* Net Zero goal based on Scope 1 emissions of gas distribution systems, including fugitive emissions from pipeline mains and service lines, meters,
transfer stations, system damages and blow downs.

www.blackhillscorp.com

Growing long-term value

We continued to build on our legacy of long-term growth for our stakeholders in 2022. This growth
is reflected in our dividend, which we have increased for 52 consecutive years, one of the longest
streaks in our industry. Our enduring success begins with executing on our customer-focused capital
investment program, where our long-term, risk-prioritized approach directs investments toward core
system needs.

We delivered full year earnings of $3.97 per share, a 6% increase year-over-year. These results
were achieved through consistent execution of our investment and regulatory plans, operational
excellence in serving strong weather-driven customer demand and ongoing customer growth. We
successfully managed through challenging supply chain and economic environments, including the
impacts of historic inflation and rising interest rates in the last half of 2022.

Successfully executing our regulatory plan to achieve fair and timely recovery of our investments to
serve customers continued to be a core strength and focus in 2022. We filed and settled rate reviews
and rider requests for our Arkansas gas utility and Wyoming electric utility and filed a new rate
review for our intrastate pipeline in Colorado. We also gained the last approval required to recover
the $546 million in incremental fuel costs incurred for customers resulting from Winter Storm Uri,
and we have already recovered more than one-third of those costs.

We continue to be excited about the future. As we step forward through near-term macroeconomic
challenges, our solid financial position prepares us for long-term growth and our dedicated team
continues to serve our customers with excellence, while cultivating profitable growth.

As we close this letter, we recognize our success would not be possible without you, our
shareholders. Thank you for the confidence and trust you have placed in our company.

Sincerely,

Steve Mills,
Chairman, Black Hills Corp. Board of Directors

Linn Evans,
President and CEO, Black Hills Corp.

www.blackhillscorp.com

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PROXYBLACK HILLS CORPORATION

Notice of 2023
Annual Meeting of Shareholders
and Proxy Statement

PROXY(This page has been left blank intentionally.)

PROXYBLACK HILLS CORPORATION

NOTICE OF ANNUAL MEETING OF SHAREHOLDERS

WHEN:

Tuesday, April 25, 2023

9:30 a.m., local time

WHERE:

Horizon Point

Company’s Corporate Headquarters

7001 Mount Rushmore Road

Rapid City, South Dakota 57702

We are pleased to invite you to attend the annual meeting of shareholders of Black Hills Corporation.

In the event it is not possible to attend our annual meeting in person, we encourage you to listen to the meeting by calling in:
605-782-9484, Conference ID: 744 233 731#. The presentation for this meeting can be located at www.blackhillscorp.com by
clicking on "Events and Presentations" in the "Investor Relations" section. The presentation will be posted on the website before
the call. Please note, if you attend by calling in, you will not be able to vote your shares or submit questions. Accordingly, it is
important that you vote your shares as instructed below.

Proposals:

1.
2.
3.
4.
5.

Election of three directors in Class II: Scott M. Prochazka, Rebecca B. Roberts, and Teresa A. Taylor.
Ratification of Deloitte & Touche LLP to serve as our independent registered public accounting firm for 2023.
Advisory vote to approve our executive compensation.
Advisory vote on the frequency of the advisory vote on our executive compensation.
Any other business that properly comes before the annual meeting.

Record Date:

The Board set March 6, 2023 as the record date for the meeting. This means that our shareholders as of the close of business
on that date are entitled to receive this notice of the meeting and vote at the meeting and any adjournments or postponements of
the meeting.

How to Vote:

Your vote is very important. You may vote your shares by telephone, by the Internet or by returning the enclosed proxy. If you
own shares of common stock other than the shares shown on the enclosed proxy, you will receive a proxy in a separate
envelope for each such holding. Please vote each proxy received. To make sure that your vote is counted if voting by mail, you
should allow enough time for the postal service to deliver your proxy before the meeting.

Sincerely,

/s/ AMY K. KOENIG
Amy K. Koenig
Vice President - Governance, Corporate Secretary and Deputy General Counsel

PROXY1

PROXY SUMMARYBLACK HILLS CORPORATION OVERVIEWWe are a customer-focused energy solution provider that invests in our communities’ safety, sustainability and growth with a mission of Improving Life with Energy and a vision to be the Energy Partner of Choice. The Company’s core mission – and our primary focus – is to provide safe, reliable and cost-effective electric and natural gas service to 1.3 million utility customers in over 800 communities in eight states, including Arkansas, Colorado, Iowa, Kansas, Montana, Nebraska, South Dakota and Wyoming.Items of Business to be Considered at the Annual MeetingProposalBoard RecommendationPage1Election of Directors FOReach Director Nominee62Ratification of Deloitte & Touche LLP to Serve as Independent Registered Public Accounting Firm for 2023 FOR213Advisory Vote to Approve Executive Compensation FOR244Advisory Vote on the Frequency of the Advisory Vote on our Executive Compensation 1 YEAR51BOARD OF DIRECTORSDirector NomineesOur Board of Directors ("Board") is committed to oversight that promotes the long-term interests of our shareholders and other stakeholders. We believe this is best achieved with directors who bring a diverse and relevant set of skills, expertise, experiences and perspectives. Our Board is nominating three individuals for election at this annual meeting. The following table provides summary information about the nominees:NameAgeDirector SinceIndependentCommittee MembershipOther Public BoardsScott M. Prochazka572020XCompensationLi-Cycle Holdings Corp. Peridot Acquisition Corp. IIRebecca B. Roberts702011XCompensation Governance (Chair)AbbVie, Inc.MSA Safety, Inc.Teresa A. Taylor592016XCompensation (Chair)GovernanceT-Mobile USA, Inc.Director Skills and Demographics EvansGrangerJensenMcAllisterMillsOttoProchazkaRobertsSchoberTaylorSkills and ExperienceBusiness OperationsXXXXXXXXCustomer ServiceXXXCybersecurity/TechnologyXXESG/SustainabilityXXXFinancial AcumenXXXXXXXXGovernment/RegulatoryXXXXXXHealth and SafetyXXXXXXXHuman Capital Management/CompensationXXXXLegal/Governance/ComplianceXXXXMergers and AcquisitionsXXXXXXRisk ManagementXXXXXXXXXXStrategic PlanningXXXXXXXXXXUtility IndustryXXXBoard TenureYears423311621176AgeYears Old60636058676357706759GenderFemaleXXXMaleXXXXXXXRace/EthnicityAfrican American/BlackXWhite/CaucasianXXXXXXXXXOUR COMMITMENT TO SUSTAINABILITYOur mission of Improving Life with Energy means we must be ready to make tomorrow even better than today. That is why we are committed to creating a cleaner energy future which builds upon our responsibility to provide the safe, reliable and cost-effective energy that improves our customers’ lives. By investing in the success of our employees, continually innovating, thoughtfully utilizing resources and keeping people at the core of our decision-making, we are dedicated to the sustainability of our Company, communities and planet. Environmental, Social and Governance (ESG) Strategy and OversightWe are excited to announce significant advancements in our decarbonization journey. We are building upon our success of delivering cost-effective energy for customers and strong returns for investors by seeking renewable energy growth opportunities, minimizing risk and responding to stakeholders’ evolving expectations. ESG and sustainability are inherently connected throughout our business and our ESG management is structured accordingly. Our Board oversees ESG, with management leadership from our CEO and executive steering committee, our dedicated department and our cross functional sustainability working group. PROXYPROXYPROXY SUMMARY |Responsibly Reducing Greenhouse Gas Emissions

In November 2020, we announced clean energy goals to reduce greenhouse gas (GHG) emissions intensity for our Electric
Utilities of 40% by 2030 and 70% by 2040 and achieve GHG reductions of 50% by 2035 for our Gas Utilities. In August 2022,
we announced a new "Net Zero by 2035" target for our Gas Utilities, which doubles the previous target of a 50% reduction by
2035. Net Zero will be achieved through pipeline material and main replacements, advanced leak detection, third-party
damage reduction, expanding the use of renewable natural gas (RNG) and hydrogen, and utilizing carbon credit offsets.

Electric Utilities Goals(1)(2)
 40% by 2030
 70% by 2040

Natural Gas Utilities
Goals(1)(3)
 Net Zero by 2035

(1)
(2)

(3)

Our goals are compared to a 2005 baseline.
Electric Utilities goals include Scope 1 emissions from electric utility generating units and Scope 3 emissions from purchased
power for sales.
Natural Gas Utilities goals include all Scope 1 sources of methane emissions on our distribution system, including fugitive
emissions from pipeline mains and service lines, meters, transfer stations, system damages and system blow downs.

We are proud of our sustainability efforts and continue to pursue initiatives to enable the transition to a cleaner energy future,
including:

Since 2005, we have reduced GHG emissions intensity from our natural gas distribution system mains and services
by more than 33% and achieved a 33% reduction in electric utility emissions (a nearly 10% reduction since
announcing our goal in 2020 for our electric utilities).
We have advanced our role in RNG. In 2021, we developed a voluntary RNG and carbon offset program to help our
residential and small business natural gas customers offset up to 100% or more of the emissions associated with
their own natural gas usage. We've filed for approval to launch these programs in three of our states, have received
approval in two states, and plan to seek approval to offer to all customers in 2023.
As we look to the future, our more than 520 MW of planned battery storage, renewable generation and additions,
and investments in innovation, such as our hydrogen pilot study, position us to achieve deeper carbon reductions
that also deliver reliable and cost-effective energy to our customers.

We will continue executing our strategy of investing in cost-effective renewables and new technologies to further reduce our
environmental impact across all states in which we operate, while continuing to deliver safe, reliable and cost effective energy
to customers.

For additional information on our commitment to sustainability, you can review the following 2021 ESG reports on our website
at www.blackhillsenergy.com/our-company/commitment-sustainability/sustainability-and-esg-reports:

2021 Corporate Sustainability Report
2021 Edison Electric Institute ESG Disclosure
2021 American Gas Association ESG Disclosure
2021 Natural Gas Sustainability Initiative Disclosure
2021 Sustainability Accounting Standards Board Disclosure
2021 Task Force on Climate Related Financial Disclosure Index

PROXYPROXY| PROXY SUMMARYEXECUTIVE COMPENSATION

We have an Executive Compensation Philosophy that establishes the framework our Compensation Committee applies in
structuring compensation for our executive officers ("Named Executive Officers" or "NEOs"). The components of our executive
pay program consist of a base salary, a short-term incentive plan, and long-term incentives. Our executive pay program aligns
the interest of our Named Executive Officers with our stakeholders by tying incentive pay to achievement of performance
metrics.

Variable

Linked to Share Value

78%

57%

Variable

Linked to Share Value

63%

40%

*Percentages may differ from above due to rounding.

The performance measures for our incentive compensation plans are discussed in greater detail on page 28 of the Proxy
Statement. We also require our executive officers to hold a significant amount of our common stock (between 3 and 6 times
the base salary) to further align their performance with the interest of our stakeholders.

Our compensation practices and policies demonstrate the alignment between executive compensation and the interests of our
stakeholders. Our shareholders share our confidence in our compensation philosophy as reflected by the support of
shareholders owning 95 percent of the shares who voted to approve our 2021 executive compensation at last year's annual
meeting.

The following table summarizes our 2022 performance metrics and results for incentive plans that ended in 2022.

Pay Element

Performance Measure

2022 Results

70 Percent

7.5 Percent

Short-term Incentive: Payout of 71.48% of Target

EPS from ongoing operations, as adjusted, target set at
$4.05; threshold set at $3.77
System Average Interruption Duration Index (SAIDI),
target set at 65.80; threshold set at 74.40
Hits Per Thousand (HPT), target set
at 2.05; threshold set at 2.16
Total Case Incident Rate (TCIR), target set at 1.00;
threshold set at 1.25
Diversity Training

$3.97 per share for
incentive plan purposes

SAIDI:70.14

HPT: 2.26

TCIR: 1.39

Diversity Training: 100% of Target

Long-term Incentive (2020-2022 Plan): Payout of 26.98% of Target

Performance Share
Award

Total Shareholder Return (TSR)
relative to our Performance Peer Group
measured over a three-year period

TSR: 0.14%
26th Percentile Ranking in
Performance Peer Group

PROXYPROXYPROXY SUMMARY |2022 ACCOMPLISHMENTS AND PERFORMANCE

Black Hills Corporation reported excellent operational performance in 2022. Earnings per share for the year increased
6% compared to 2021. Consistent execution of our strategy focusing on our customer's needs, cultivating growth, and
achieving fair and timely regulatory recovery successfully offset the impact of higher interest rates and inflation in 2022.
Significant accomplishments for the year included:



Provided the safe and reliable service our communities and customers depend on and achieved several notable
operations performance metrics:

Achieved top-quartile reliability metrics by our three electric utilities

Achieved a safety performance total case incident rate of 1.39 compared to a 2020 American Gas Association
second quartile reported average of 1.52
Achieved a safety performance preventable motor vehicle incident rate of 1.33 compared to a 2020 American
Gas Association reported top quartile average of 1.56

Served ongoing demand growth through 11 new summer or winter electric demand peaks

* Wyodak received its CORESafety Certification through the National Mining Association

Energy Star Partner of the Year for sustained excellence in Arkansas

Completed financing activity to accomplish our long-term objective of investing to meet the needs of our customers,
including:

Issued 1.3 million shares of new common stock for net proceeds of $90 million under our at-the-market equity
offering program

* Grew our dividend for the 52nd consecutive year with a 5.2 percent increase in calendar year 2022 over 2021
Invested in our utility infrastructure and systems:
Deployed $598 million in capital projects
Secured adequate liquidity to serve customers through compounding impacts of Winter Storm Uri in 2021,
Storm Elliot and high natural gas prices in 2022
Executed a number of regulatory accomplishments:
*

Successfully completed rate review requests for Arkansas Gas and Wyoming Electric
All Winter Storm Uri regulatory recovery plans approved; more than 33% of $546 million of fuel costs
recovered to date
Reached a constructive settlement for Colorado Electric's Clean Energy Plan which, if approved, will result in
nearly 70% of the electricity to meet customers' needs being generated by carbon-free sources by 2030
Received a Certificate of Public Convenience and Necessity for the Ready Wyoming 260-mile multi-phase
transmission expansion project

Continued our focus on sustainability, including:
*

Announced a new commitment to achieve Net Zero emission by 2035 for our natural gas distribution system

Issued an updated sustainability report and EEI, AGA, SASB, and NGSI disclosures, and provided new TCFD
disclosures
Our electric utilities surpassed the one-third reduction of GHG emission mark and achieved a nearly 10%
reduction in emissions intensity since announcing our goals



PROXYPROXY| PROXY SUMMARYBLACK HILLS CORPORATION

7001 Mount Rushmore Road
Rapid City, South Dakota 57702

PROXY STATEMENT



A proxy in the accompanying form is solicited by the Board of Black Hills Corporation, a South Dakota corporation, to
be voted at the annual meeting of our shareholders to be held Tuesday, April 25, 2023, and at any adjournment of the
annual meeting.



The enclosed form of proxy, when executed and returned, will be voted as set forth in the proxy. Any shareholder
signing a proxy has the power to revoke the proxy in writing, addressed to our secretary, or in person at the meeting
at any time before the proxy is exercised.

 This proxy statement and the accompanying form of proxy are to be first mailed on or about March 15, 2023. Our

2022 annual report to shareholders is being mailed to shareholders with this proxy statement.

VOTING RIGHTS AND PRINCIPAL HOLDERS



Only our shareholders of record at the close of business on March 6, 2023 are entitled to vote at the meeting. Our
outstanding voting stock as of the record date consisted of 66,277,565 shares of our common stock.

Each outstanding share of our common stock is entitled to one vote. Cumulative voting is permitted in the election
of directors in the same class.

PROXYPROXY STATEMENT |TABLE OF CONTENTS

Commonly Asked Questions and Answers About the Annual Meeting Process

Proposal 1 - Election of Directors

Corporate Governance

Meetings and Committees of the Board

Director Compensation

Security Ownership of Management and Principal Shareholders

Proposal 2 - Ratification of Appointment of Independent Registered Public Accounting Firm

Fees Paid to the Independent Registered Public Accounting Firm

Audit Committee Report

Proposal 3 - Advisory Vote on Our Executive Compensation

Executive Compensation

Compensation Discussion and Analysis

Report of the Compensation Committee

Summary Compensation Table

Grants of Plan Based Awards in 2022

Outstanding Equity Awards at Fiscal Year-End 2022

Option Exercises and Stock Vested During 2022

Pension Benefits for 2022

Nonqualified Deferred Compensation for 2022

Potential Payments Upon Termination or Change in Control

Pay Ratio for 2022

Pay versus Performance

Proposal 4 - Advisory Vote on the Frequency of the Advisory Vote on our Executive Compensation

Transaction of Other Business

Shareholder Proposals for 2024 Annual Meeting

Shared Address Shareholders

Annual Report on Form 10-K

Notice Regarding Availability of Proxy Materials

Page

PROXY| PROXY STATEMENTCOMMONLY ASKED QUESTIONS AND ANSWERS ABOUT THE ANNUAL MEETING PROCESS

Who is soliciting my proxy?

The Board of Directors of Black Hills Corporation is soliciting your proxy.

Where and when is the annual meeting?

The annual meeting is at 9:30 a.m., local time, April 25, 2023 at Horizon Point, the Company’s corporate headquarters, 7001
Mount Rushmore Road, Rapid City, South Dakota.

Who can vote?

Holders of our common stock as of the close of business on the record date, March 6, 2023, can vote at our annual meeting.
Each share of our common stock has one vote for Proposals 2, 3, and 4. Related to Proposal 1, Election of Directors,
cumulative voting is permitted in the election of directors in the same class.

How do I vote?

There are three ways to vote by proxy:

by calling the toll free telephone number on the enclosed proxy;
by going to the website identified on the enclosed proxy; or
by returning the enclosed proxy in the envelope provided.

You may be able to vote by telephone or over the Internet if your shares are held in the name of a bank or broker. If this is the
case, you will need to follow their instructions.

What constitutes a quorum?

Shareholders representing at least 50 percent of our common stock issued and outstanding as of the record date must be
present at the annual meeting, either in person or by proxy, for there to be a quorum. Abstentions and broker non-votes are
counted as present for establishing a quorum. A broker non-vote occurs when a broker or other nominee holding shares for a
beneficial owner does not vote on a particular proposal because the broker or nominee does not have discretionary voting
power and has not received instructions from the beneficial owner.

PROXYPROXY STATEMENT |What am I voting on and what is the required vote for the proposals to be adopted?

The required vote and method of counting votes for the various business matters to be considered at the annual meeting are
described in the table below. If you sign and return your proxy card without indicating your vote, your shares will be voted in
accordance with the Board recommendations as set forth below.

Item of Business

Proposal 1:

Election of Directors

Board
Recommendation

FOR
election of each director
nominee

Voting Approval Standard

The three nominees with the most "FOR" votes
are elected to their respective classes.

If a nominee receives more "WITHHOLD
AUTHORITY" votes than "FOR" votes, the
nominee must submit a resignation for
consideration by the Governance Committee and
final Board decision.

Effect of
Abstention

Effect of Broker
Non-Vote

No effect

Proposal 2:

Ratification of
Appointment of
Independent Registered
Public Accounting Firm

Proposal 3:

Advisory Vote to
Approve Executive
Compensation

Proposal 4:

Advisory Vote on the
Frequency of the
Advisory Vote to
Approve Executive
Compensation

FOR

The votes cast "FOR" must exceed the votes cast
"AGAINST".

No effect

Not applicable; broker
may vote shares
without instruction

FOR

1 YEAR

The votes cast "FOR" must exceed the votes cast
"AGAINST".

This advisory vote is not binding on the Board, but
the Board will consider the vote results when
making future executive compensation decisions.
The frequency receiving the greatest number of
votes will be considered by the advisory vote of
the shareholders.

This advisory vote is not binding on the Board, but
the Board will consider the vote result when
determining the frequency of the say on pay vote.

No effect

Is cumulative voting permitted for the election of directors?

In the election of directors, you may cumulate your vote. Cumulative voting allows you to allocate among the director
nominees in the same class, as you see fit, the total number of votes equal to the number of director positions to be filled
multiplied by the number of shares you hold. For example, if you own 100 shares of stock, and there are three directors to be
elected in a class at the annual meeting, you could allocate 300 “For” votes (three times 100) among as few or as many of the
three nominees to be voted on at the annual meeting as you choose.

If you choose to cumulate your votes, you will need to submit a proxy card or a ballot and make an explicit statement of your
intent to cumulate your votes, either by indicating in writing on the proxy card or by indicating in writing on your ballot when
voting at the annual meeting. If you hold shares beneficially in street name and wish to cumulate votes, you should contact
your broker, trustee or nominee.

PROXY| PROXY STATEMENTHow will my shares be voted if they are held in a broker’s name?

If you hold your shares through an account with a bank or broker, the bank or broker may vote your shares on some matters
even if you do not provide voting instructions. Brokerage firms have the authority under the New York Stock Exchange
("NYSE") rules to vote shares on certain matters (such as the ratification of auditors) when their customers do not provide
voting instructions. However, on most other matters when the brokerage firm has not received voting instructions from its
customers, the brokerage firm cannot vote the shares on that matter and a “broker non-vote” occurs. This means that
brokers may not vote your shares on the election of directors, the “say on pay” advisory vote and the "say on
frequency" advisory vote if you have not given your broker specific instructions as to how to vote. Please be sure to
give specific voting instructions to your broker so that your vote can be counted.

What should I do now?

You should vote your shares by telephone, over the Internet or by returning your signed and dated proxy card in the enclosed
envelope as soon as possible so that your shares will be represented at the annual meeting.

Who will count the vote?

Representatives of our transfer agent, Equiniti Trust Company, will count the votes and serve as judges of the election.

Who conducts the proxy solicitation and how much will it cost?

We are asking for your proxy for the annual meeting and will pay all the costs of asking for shareholder proxies. We have hired
Georgeson LLC to help us send out the proxy materials and ask for proxies. Georgeson LLC’s fee for these services is
anticipated to be $12,250 plus out-of-pocket expenses. We can ask for proxies through the mail, by telephone or in person.
We can use our directors, officers and employees to ask for proxies. These people do not receive additional compensation for
these services. We will reimburse brokers and other custodians, nominees and fiduciaries for their reasonable out-of-pocket
expenses for forwarding solicitation material to the beneficial owners of our common stock.

Can I revoke my proxy?

Yes. You can change your vote in one of four ways at any time before your proxy is used. First, you can enter a new vote by
telephone or Internet. Second, you can revoke your proxy by written notice. Third, you can send a later dated proxy changing
your vote. Fourth, you can attend the meeting and vote in person.

Who should I call with questions?

If you have questions about the annual meeting, you should call Amy K. Koenig, Vice President - Governance, Corporate
Secretary and Deputy General Counsel, at (605) 721-1700.

PROXYPROXY STATEMENT |PROPOSAL 1

ELECTION OF DIRECTORS

Our Board is nominating three individuals for election as directors at this annual meeting. All of the nominees are currently
serving as our directors. In accordance with our Bylaws and Article VI of our Articles of Incorporation, members of our Board
are elected to three classes of staggered terms consisting of three years each, and until their successors are duly elected and
qualified. At this annual meeting, three directors will be elected to Class II for a term of three years until our annual meeting in
2026.

Nominees for director at the annual meeting are Scott M. Prochazka, Rebecca B. Roberts, and Teresa A. Taylor. Our Bylaws
require a minimum of nine directors. Currently, the Board has set the size of the Board at 10 directors.

Pursuant to our Bylaws, directors must resign from the Board at the annual meeting after attaining 72 years of age.
Accordingly, Ms. Roberts, who will turn 72 prior to our 2025 annual meeting, is required to resign effective at our 2025 annual
meeting and therefore will serve only two years of her term.

If, at the time of the annual meeting, any nominees are unable to stand for election, the Board may designate a substitute or
reduce the number of directors to no less than nine. In that case, shares represented by proxies may be voted for a substitute
director nominated by the Board. We do not expect that any nominee will be unavailable or unable to serve.

The Board and the Governance Committee believe that the combination of the various qualifications, skills and experiences of
the directors contribute to an effective and well-functioning Board, and that, individually and as a whole, the directors possess
the necessary qualifications to provide effective oversight of the business and quality advice to the Company’s management.
Included in each director’s biography below is an assessment of the specific qualifications, attributes, skills and experience
that have led to the conclusion that each individual should serve as a director in light of our current business and structure.

The Board recommends a vote FOR the election of the following nominees:

Director Nominee

Scott M. Prochazka

Rebecca B. Roberts

Teresa A. Taylor

Class

Year Term Expiring

2026

PROXY| PROXY STATEMENTDIRECTOR SKILLS AND EXPERIENCE

Linden R. Evans

Outside Directorships:

President and Chief Executive Officer of the
Company

None

Director since: 2018

Director Class: III, term expiring in 2024

Age: 60

Summary:

Mr. Evans has been President and Chief Executive Officer of the Company since January 1, 2019. He previously served as
President and Chief Operating Officer from 2016 to 2018, and President and Chief Operating Officer – Utilities from 2004 to 2015.
He began his career with Black Hills Corporation in 2001 as Corporate Counsel. Prior to joining the Company, Mr. Evans was a
mining engineer and an attorney specializing in environmental and corporate legal matters.

Skills Relevant to BHC:

As CEO of Black Hills Corporation, Mr. Evans brings historic institutional knowledge of the Company and its operations that assist
the Board in its evaluation of the Company’s financial and operational risks and strategy.

Barry M. Granger

Standing Board Committees:

Managing Partner and Co-Founder of Vonbar
Investments LLC

Audit Committee

Director since: 2020

Director Class: III, term expiring in 2024

Outside Directorships:

Age: 63

None

Summary:

Mr. Granger has over 35 years of experience in the chemical, materials and industrial markets. He is the Managing Partner of
Vonbar Investments LLC, a consulting firm he founded in 2018. He held roles as Vice President of Government Marketing and
Government Affairs at DuPont from 2010 to 2017 and Vice President and General Manager, Tyvek® from 2007 to 2010. Early in
his career, he served as the Executive Assistant to the Chairman and CEO of DuPont. He has held a variety of leadership
positions with increasing responsibilities in operations, product management, sales and marketing.

Skills Relevant to BHC:

Mr. Granger’s leadership roles in the areas of governmental affairs and operations offer the Board insight regarding oversight of
operations, regulatory affairs, and safety.

PROXYPROXY STATEMENT |Tony A. Jensen

Standing Board Committees:

Retired Director, President and Chief Executive
Officer of Royal Gold, Inc.

Compensation Committee

Director since: 2019

Director Class: III, term expiring in 2024

Outside Directorships:

Age: 60

None

Summary:

Mr. Jensen has over 35 years of experience in the international mining and mining finance industries. From 2003 until his
retirement in 2019, Mr. Jensen served in several leadership roles at Royal Gold, Inc., a public precious metals company,
including Director, President and Chief Executive Officer from 2006 to 2019, and Chief Operating Officer from 2003 to 2006. Prior
to 2003, he held progressively more responsible roles in engineering, finance, strategic growth, safety, environmental excellence,
and operational efficiency.

Skills Relevant to BHC:

As a former CEO of a publicly traded precious metals stream and royalty company, Mr. Jensen brings business, leadership,
governance, and financial expertise that assists Board in evaluating the Company’s financial risks and strategy and capital
deployment.

Kathleen S. McAllister

Standing Board Committees:

Retired Director, President and Chief Executive
Officer of Transocean Partners LLC

Audit Committee

Director since: 2019

Director Class: I, term expiring in 2025

Outside Directorships:

Age: 58

Summary:

Silverbow Resources, Inc. (since 2023)
TMC The Metals Company Inc. (since
2022)

Ms. McAllister has over 30 years of experience in diverse leadership roles with global, capital intensive companies in the energy
value chain. She served as Director, President and CEO of Transocean Partners LLC, an international provider of offshore
contract drilling services from 2014 to 2016, and as CFO in 2016. She held the roles of Vice President and Treasurer of
Transocean Ltd. from 2011 to 2014. Prior to 2011, she served in roles with increasing responsibility in finance, information
technology, tax and treasury. Ms. McAllister is a National Association of Corporate Directors Board Fellow and a Certified Public
Accountant. She previously served on the board of Maersk Drilling from 2019 to 2021, where she chaired the Audit and Risk
Committee. She is a Board Member of Silverbow Resources, Inc. and TMC The Metals Company Inc., where she chairs the
Audit Committees.

Skills Relevant to BHC:

As a former CEO, CFO and Treasurer of publicly traded companies, Ms. McAllister's broad business perspective, financial
acumen and experience in capital raising and allocation contributes to the Board's oversight of strategy and risk. Her experience
serving as a corporate director and audit and risk committee chair on other public company boards provides a valuable
perspective on the Board's role in management oversight and corporate governance.

PROXY| PROXY STATEMENTSteven R. Mills

Standing Board Committees:

Chairman of the Board
Retired Public Company Financial Executive

Governance Committee

Director since: 2011

Director Class: III, term expiring in 2024

Outside Directorships:

Age: 67

Amyris, Inc. (since 2018)

Summary:

Mr. Mills has more than 40 years of experience in the fields of accounting, corporate finance, strategic planning, risk
management, and mergers and acquisitions. He is a Board Member of Amyris, Inc., a renewable products company, where he
serves as Chair of the Audit Committee and as a member of the Leadership, Development, Inclusion and Compensation
Committee. Mr. Mills is also a consultant and advisor to Arianna S.A., a European-based specialized investment fund. Previously,
Mr. Mills served as Chief Financial Officer of Amyris, Inc. from 2012 to 2013. Prior to joining Amyris, he had a 33-year career at
Archer Daniels Midland Company, one of the world’s largest agricultural processors and food ingredient providers, where he held
various senior executive roles, including Senior Executive Vice President Performance and Growth, Chief Financial Officer,
Controller, and Senior Vice President Strategic Planning.

Skills Relevant to BHC:

Mr. Mills brings to the Board executive leadership and financial experience as a former CFO of publicly traded companies and
strategic planning experience as both a former senior vice president of strategic planning and a senior executive vice president
performance and growth for a publicly traded company. These roles also position Mr. Mills to provide the Board perspectives on
mergers and acquisitions and capital deployment.

Robert P. Otto

Standing Board Committees:

Owner of Bob Otto Consulting LLC

Audit Committee

Director since: 2017

Director Class: I, term expiring in 2025

Outside Directorships:

Age: 63

None

Summary:

Since 2017, Mr. Otto has provided strategic planning and advisory services in cybersecurity and intelligence through his
company, Bob Otto Consulting LLC. With 34 years of U.S. Air Force service, he served as a general officer from 2008 to 2016,
culminating as lieutenant general and the Deputy Chief of Staff for Intelligence, Surveillance and Reconnaissance. He was
directly responsible for intelligence policy, planning, implementation, oversight, and leadership of a 27,000-person workforce.

Skills Relevant to BHC:

Mr. Otto’s experience in cybersecurity and intelligence through his lengthy career with the U.S. Air Force provide the Board
information technology and cybersecurity expertise. His leadership and oversight of a large workforce position him to provide the
Board insights regarding human capital management.

PROXYPROXY STATEMENT |Scott M. Prochazka

Standing Board Committees:

Former Board Member, President and Chief
Executive Officer of CenterPoint Energy

Compensation Committee

Director since: 2020

Director Nominee Class: II, term expiring in
2026

Age: 57

Outside Directorships:

Peridot Acquisition Corp. II
(since 2021)
Li-Cycle Holdings Corp. (since 2021)

Summary:

Mr. Prochazka served as Board Member, President and Chief Executive Officer of CenterPoint Energy, a public energy delivery
company with electric transmission and distribution, power generation and natural gas distribution operations, from 2014 until his
retirement in 2020. Prior to that he was Chief Operating Officer from 2012 to 2013, Senior Vice President of Electric Business
from 2011 to 2012, and Vice President of Gas Business Unit from 2009 to 2011. He held other management positions including
Vice President Customer Care and Support Services and Vice President Texas Gas Region. Before his time at CenterPoint
Energy, Mr. Prochazka held roles of increasing responsibility at Dow Chemical. Mr. Prochazka was a Board Member of Enable
Midstream Partners, LP from 2014 to 2020, and Chairman from 2015 to 2017. Mr. Prochazka was previously a Board Member of
Peridot Acquisition Corporation, from 2020 to 2021, where he served on the Audit and Compensation Committees. He is a Board
Member of Peridot Acquisition Corp. II where he serves on the Audit and Compensation Committees, and Li-Cycle Holdings
Corp. (successor to Peridot Acquisition Corp.) where he chairs the Audit Committee and serves on the Nominating/Governance
Committee and the Compensation Committee.

Skills Relevant to BHC:

Mr. Prochazka’s executive experience as a former CEO of a publicly traded electric and gas utility company, with a market cap
more than four times that of Black Hills Corporation, and leadership experience as COO of both gas and electric utility divisions,
provides a valuable perspective regarding utility business operations, regulatory and governmental affairs, safety, capital
deployment and risk management.

Rebecca B. Roberts

Standing Board Committees:

Retired President of Chevron Pipe Line Company

Compensation Committee
Governance Committee (Chair)

Director since: 2011

Director Nominee Class: II, term expiring in
2026

Outside Directorships:

Age: 70

AbbVie, Inc. (since 2018)
MSA Safety, Inc. (since 2013)

Summary:

Ms. Roberts has over 35 years of experience in the energy industry, including managing pipelines in North America and global
pipeline projects, and managing a portfolio of power plants in the United States, Asia, and the Middle East. From 2006 until her
retirement in 2011, Ms. Roberts served as the President of Chevron Pipe Line Company, a pipeline company transporting crude
oil, refined petroleum products, liquefied petroleum gas, natural gas, and chemicals within the United States. From 2003 until
2006, she was the President of Chevron Global Power Generation. She was previously a Board Member of Enbridge, Inc., from
2015 to 2018. Ms. Roberts is a Board Member of Abbvie, Inc. and MSA Safety, Inc., where she serves as the Chair of the
Compensation Committee.

Skills Relevant to BHC:

Ms. Robert’s executive experience overseeing natural gas pipelines and power generation facilities positions her to assist the
Board as it evaluates the Company’s operational, health and safety risks. Her prior and ongoing experience on other public
company boards provides insight as to the Board’s role in oversight of management as well as corporate governance.

Mark A. Schober

Standing Board Committees:

Retired Senior Vice President and Chief Financial

Officer of ALLETE, Inc.

Audit Committee (Chair)

Governance Committee

Director since: 2015

Director Class: I, term expiring in 2025

Outside Directorships:

Age: 67

None

Mr. Schober has more than 35 years of experience in the utility and energy industry. From 2006 until his retirement in 2014, Mr.

Schober served as the Senior Vice President and Chief Financial Officer of ALLETE, Inc., a public energy company. His

extensive industry experience in the upper Midwest provides expertise in the regulated business model and the unique

challenges of the geographic and regulatory environment in which we operate.

Summary:

Skills Relevant to BHC:

Mr. Schober brings to the Board business and leadership experience as a former executive of a public company, regulated utility

experience as a former executive of a publicly traded Midwest based energy company, and financial expertise having served as a

CFO. He also provides insight to the Company regarding potential exposures and risks in these areas.

Teresa A. Taylor

Standing Board Committees:

Chief Executive Officer of Blue Valley Advisors, LLC

Compensation Committee (Chair)

Governance Committee

Director since: 2016

2026

Age: 59

Director Nominee Class: II, term expiring in

Outside Directorships:

T-Mobile USA, Inc. (since 2013)

Ms. Taylor has over 30 years of experience in the technology, media, and telecom sectors. She has been the Chief Executive

Officer of Blue Valley Advisors, LLC, a consulting firm that she founded, since 2011. She was the Chief Operating Officer of

Qwest Communications, Inc., a telecommunications carrier, from 2009 to 2011, where she led the daily operations and a senior

management team responsible for 30,000 employees in field support, technical development, sales, marketing, customer support

and information technology systems. She is a Board Member of T-Mobile USA, Inc. She was previously a Board Member of First

Interstate BancSystem, Inc. from 2012 to 2020, Columbia Pipeline Group Inc. from 2015 to 2016, and NiSource, a public utility

Summary:

company from 2012 to 2015.

Skills Relevant to BHC:

Ms. Taylor’s broad range of experience over her three decades-long career, including in the fields of human resources, customer

support, information technology systems, and business operations, add breadth and depth to the board. Her experience leading

large employee teams lends toward engagement with the Board in the areas of compensation practices and human capital

management. Ms. Taylor’s experience as a lead independent director of a publicly traded company provides further insight into

Board governance and oversight of management.

PROXY| PROXY STATEMENTMark A. Schober

Standing Board Committees:

Retired Senior Vice President and Chief Financial
Officer of ALLETE, Inc.

Audit Committee (Chair)
Governance Committee

Director since: 2015

Director Class: I, term expiring in 2025

Outside Directorships:

Age: 67

None

Summary:

Mr. Schober has more than 35 years of experience in the utility and energy industry. From 2006 until his retirement in 2014, Mr.
Schober served as the Senior Vice President and Chief Financial Officer of ALLETE, Inc., a public energy company. His
extensive industry experience in the upper Midwest provides expertise in the regulated business model and the unique
challenges of the geographic and regulatory environment in which we operate.

Skills Relevant to BHC:

Mr. Schober brings to the Board business and leadership experience as a former executive of a public company, regulated utility
experience as a former executive of a publicly traded Midwest based energy company, and financial expertise having served as a
CFO. He also provides insight to the Company regarding potential exposures and risks in these areas.

Teresa A. Taylor

Standing Board Committees:

Chief Executive Officer of Blue Valley Advisors, LLC

Compensation Committee (Chair)
Governance Committee

Director since: 2016

Director Nominee Class: II, term expiring in
2026

Outside Directorships:

Age: 59

T-Mobile USA, Inc. (since 2013)

Summary:

Ms. Taylor has over 30 years of experience in the technology, media, and telecom sectors. She has been the Chief Executive
Officer of Blue Valley Advisors, LLC, a consulting firm that she founded, since 2011. She was the Chief Operating Officer of
Qwest Communications, Inc., a telecommunications carrier, from 2009 to 2011, where she led the daily operations and a senior
management team responsible for 30,000 employees in field support, technical development, sales, marketing, customer support
and information technology systems. She is a Board Member of T-Mobile USA, Inc. She was previously a Board Member of First
Interstate BancSystem, Inc. from 2012 to 2020, Columbia Pipeline Group Inc. from 2015 to 2016, and NiSource, a public utility
company from 2012 to 2015.

Skills Relevant to BHC:

Ms. Taylor’s broad range of experience over her three decades-long career, including in the fields of human resources, customer
support, information technology systems, and business operations, add breadth and depth to the board. Her experience leading
large employee teams lends toward engagement with the Board in the areas of compensation practices and human capital
management. Ms. Taylor’s experience as a lead independent director of a publicly traded company provides further insight into
Board governance and oversight of management.

PROXYPROXY STATEMENT |CORPORATE GOVERNANCE

Corporate Governance Guidelines

Our Board has adopted “Corporate Governance Guidelines of the Board,” which guide the operation of our Board and assist
the Board in fulfilling its obligations to shareholders and other constituencies. The guidelines lay the foundation for the Board’s
responsibilities, operations, leadership, organization and committee matters. The Governance Committee reviews the
guidelines annually, and the guidelines may be amended at any time, upon recommendation by the Governance Committee
and approval of the Board. These guidelines can be found in the “Governance” section of our website
(www.blackhillscorp.com/investor-relations/corporate-governance).

Board Leadership Structure

On May 1, 2020, Steven R. Mills, an independent director, was appointed Chairman of the Board. As Chairman, Mr. Mills
leads our Board in the performance of its duties by working with the CEO to establish meeting agendas, facilitating board
meetings and executive sessions, and collaborating with the Board to annually evaluate the performance of the CEO.

As provided in our Corporate Governance Guidelines, the Board does not have a policy on whether or not the roles of
Chairman and CEO should be separate or combined. The Governance Committee annually reviews the appropriate leadership
structure for the Company and recommends a Chairman for Board approval. While our Bylaws and Corporate Governance
Guidelines do not require that our Chairman and CEO positions be held by separate individuals, the Board believes that
having separate positions and having an independent director serve as Chairman is the appropriate leadership structure for
the Company at this time because it allows our CEO to focus on business operations and our Chairman to focus on Board
governance.

Risk Oversight

Our Board oversees an enterprise risk management ("ERM") approach to risk management that supports our operational and
strategic objectives. It fulfills its oversight responsibilities through receipt of quarterly reports from management regarding
material risks involving strategic planning and execution, operations, physical and cybersecurity, environmental, social and
governance ("ESG"), financial, legal, safety, regulatory, and human resources risks. While our full Board retains responsibility
for risk oversight, it delegates oversight of certain risk considerations to its committees within each of their respective areas of
responsibility as defined in the charter for each committee.

Our management is responsible for day-to-day risk management and operates under our ERM program that addresses
enterprise risks. The ERM program includes practices to identify risks, assess the impact and likelihood of occurrence, and
develop action plans to prevent the occurrence or mitigate the impact of the risk. The ERM program includes regular reporting
to our senior management team, quarterly reporting to our Board, and monitoring and testing by the Risk Management,
Compliance and Internal Audit groups.

Sustainability Oversight

We are committed to creating a cleaner energy future that builds upon our responsibility to provide the safe, reliable and
economic energy that improves our customers' lives. The Board oversees management's execution of our sustainability
objectives and receives quarterly updates from management regarding sustainability matters. Under the oversight of the
Board, we published our 2021 Corporate Sustainability Report in the third quarter of 2022. In addition to announcing significant
advancements in our decarbonization journey, the Report announced a goal for our natural gas distribution system to achieve
net zero emissions by 2035 and shared our progress towards our goal to reduce electric utility emission intensity 40 percent by
2030 and 70 percent by 2040. Also in the third quarter of 2022, we issued updated Edison Electric Institute and American Gas
Association ESG disclosures, Natural Gas Sustainability Initiative (NGSI) disclosures, Sustainability Accounting Standards
Board (SASB) disclosures, and new disclosures under the Task Force on Climate Related Financial Disclosure Index.

Cyber and Physical Security Oversight

Our Board retains oversight of cyber and physical security. Our Chief Information Officer provides the Board quarterly reports
that summarize material security risks and the measures that have been put in place to mitigate the associated risks. These
reports address a variety of topics including updates on strategic initiatives, industry trends, threat vulnerability assessments,
and efforts to prevent, detect and respond to internal and external critical threats.

PROXY| PROXY STATEMENTHuman Capital Management Oversight

Primary responsibility for oversight of human capital management rests with our Compensation Committee. As part of its
oversight, the Committee reviews regular reports from management regarding diversity and inclusion, pay equity, strategic
workforce planning, talent retention, employee benefits programs, employee engagement, human rights, and company culture.

Succession Planning Oversight

Our Board is actively engaged in succession planning for our key executive positions to ensure a strong bench of future
leaders. To assist the Board, our CEO and our Senior Vice President - Chief Human Resources Officer perform talent reviews
and discuss succession planning and leadership development. Semi-annually, their assessment of senior executive talent,
including potential of such talent to succeed our CEO or other executive officers, readiness for succession and development
opportunities are presented to our Board.

Director Nominees

The Governance Committee uses a variety of methods for identifying and evaluating nominees for director. The Governance
Committee regularly assesses the appropriate size of the Board and whether any vacancies on the Board are expected due to
retirement or otherwise. In the event vacancies are anticipated, or otherwise arise, the Governance Committee considers
various potential candidates for director. Board candidates are considered based upon various criteria, including diversity of
gender, race and ethnicity; business, administrative and professional skills or experiences; an understanding of relevant
industries, technologies and markets; financial literacy; independence status; the ability and willingness to contribute time and
special competence to Board activities; personal integrity and independent judgment; and a commitment to enhancing
shareholder value. The Governance Committee considers these and other factors as it deems appropriate, given the needs of
the Board. Our goal is a diverse, talented, and highly engaged Board, with members whose skills, background and experience
are complementary and, together, cover the spectrum of areas that impact our business currently and in the future. The
Governance Committee considers candidates for Board membership suggested by a variety of sources, including current or
past Board members, the use of third-party executive search firms, members of management, and shareholders. Any
shareholder may make recommendations for consideration by the Governance Committee for membership on the Board by
sending a written statement of the qualifications of the recommended individual to the Corporate Secretary. The Committee
evaluates all director candidates in the same manner using the same criteria regardless of who recommends them.

Shareholders who intend to nominate persons for election to the Board must provide timely written notice of the nomination in
accordance with Article I, Section 9 of our Bylaws. Generally, our Corporate Secretary must receive the written notice at our
executive offices at 7001 Mount Rushmore Road, P.O. Box 1400, Rapid City, South Dakota 57709, not less than 90 days nor
more than 120 days prior to the anniversary date of the immediately preceding annual meeting of shareholders. For the 2024
shareholder meeting, those dates are January 26, 2024 and December 27, 2023. The notice must include at a minimum the
information set forth in Article I, Section 9 of our Bylaws, including the shareholder’s identity, contingent ownership interests,
description of any agreement made with others acting in concert with respect to the nomination, specific information about the
nominee and certain representations by the nominee to us.

Board Independence

In accordance with NYSE rules, the Board through its Governance Committee, affirmatively determines the independence of
each director and director nominee in accordance with guidelines it has adopted, which include all elements of independence
set forth in the NYSE listing standards. These guidelines are contained in our Policy for Director Independence, which can be
found in the "Governance" section of our website (www.blackhillscorp.com/investor-relations/corporate-governance). Based on
these standards, the Governance Committee determined that each of the following non-employee directors is independent and
has no relationship with us, except as a director and shareholder: Barry M. Granger, Tony A. Jensen, Kathleen S. McAllister,
Steven R. Mills, Robert P. Otto, Scott M. Prochazka, Rebecca B. Roberts, Mark A. Schober, and Teresa A. Taylor. In addition,
based upon these standards, the Governance Committee determined that Mr. Evans is not independent because he is an
officer of the Company.

Director Resignation Policies

The Corporate Governance Guidelines require members of the Board to submit a letter of resignation for consideration by the
Board in certain circumstances. The Corporate Governance Guidelines include a plurality plus voting policy. Pursuant to the
policy, any nominee for election as a director in an uncontested election who receives a greater number of votes “Withheld”
from his or her election than votes “For” his or her election will promptly tender his or her resignation as a director to the
Chairman of the Board following certification of the election results. Broker non-votes will not be deemed to be votes “For” or
“Withheld” from a director’s election for purposes of the policy. The Governance Committee (without the participation of the
affected director) will consider each resignation tendered under the policy and recommend to the Board whether to accept or
reject it. The Board will then take the appropriate action on each tendered resignation, taking into account the Governance
Committee’s recommendation. The Governance Committee in making its recommendation, and the Board in making its
decision, may consider any factors or other information that it considers appropriate, including the reasons why the

PROXYPROXY STATEMENT |Governance Committee believes shareholders “Withheld” votes for election from such director and any other circumstances
surrounding the “Withheld” votes, any alternatives for curing the underlying cause of the “Withheld” votes, the qualifications of
the tendering director, his or her past and expected future contributions to us and the Board, and the overall composition of the
Board, including whether accepting the resignation would cause us to fail to meet any applicable SEC or NYSE requirements.
The Board will publicly disclose its decision and rationale by filing a Form 8-K with the SEC within 90 days after receipt of the
tendered resignation.

The Corporate Governance Guidelines also require members of the Board to tender a letter of resignation in the event of a
change in professional responsibilities that may directly or indirectly impact that Board member’s ability to fulfill directorship
obligations. The Board is not obligated to accept that resignation. The Governance Committee will review the affected
member’s service and qualifications and recommend to the Board the continued appropriateness of Board membership under
the circumstances.

Codes of Business Conduct and Ethics

The Code of Business Conduct and the Code of Ethics that apply to our Chief Executive Officer and Senior Financial Officers
can be found in the “Corporate Governance” section of our website (www.blackhillscorp.com/investor-relations/corporate-
governance). We intend to disclose any amendments to, or waivers of, the Code of Ethics on our website. Please note that
none of the information contained on our website is incorporated by reference in this proxy statement.

Certain Relationships and Related Party Transactions

We recognize related party transactions can present potential or actual conflicts of interest and create the appearance that
decisions are based on considerations other than the best interests of us and our shareholders. Accordingly, as a general
matter, it is our preference to avoid related party transactions. Nevertheless, we recognize that there are situations where
related party transactions may be in, or may not be inconsistent with, the best interests of us and our shareholders, including
but not limited to situations where we may obtain products or services of a nature, quantity or quality, or on other terms, that
are not readily available from alternative sources or when we provide products or services to related parties on an arm’s length
basis on terms comparable to those provided to unrelated third parties or on terms comparable to those provided to
employees generally.

Therefore, our Board has adopted a policy for the review of related party transactions. This policy requires directors and
officers to promptly report to our Vice President - Governance all proposed or existing transactions in which the Company and
they, or persons related to them, are parties or participants. Our Vice President - Governance presents those transactions to
our Governance Committee. Our Governance Committee reviews the material facts presented and either approves or
disapproves entry into the transaction. In reviewing the transaction, the Governance Committee considers the following
factors, among other factors it deems appropriate: (i) whether the transaction is on terms no less favorable than terms
generally available to an unaffiliated third party under the same or similar circumstances; (ii) the extent of the related party’s
interest in the transaction; and (iii) the impact on a director’s independence in the event the related party is a director, an
immediate family member of a director or an entity in which a director is a partner, shareholder or executive officer. There were
no reportable related party transactions in 2022.

Communications with the Board

We value the views and input of our shareholders and believe that fostering productive dialogue with our shareholders
contributes to our long-term success. Shareholders and others interested in communicating directly with the Chairman, with
the independent directors as a group, or the Board may do so in writing to the Chairman, Black Hills Corporation, 7001 Mount
Rushmore Road, P.O. Box 1400, Rapid City, South Dakota 57709.

PROXY| PROXY STATEMENTMEETINGS AND COMMITTEES OF THE BOARD

THE BOARD

Our Board held nine meetings during 2022. Each regularly scheduled meeting of the Board includes an executive session of
only independent directors. We encourage our directors to attend the annual shareholders’ meeting. During 2022, each current
director attended at least 75 percent of the combined total of Board meetings and Committee meetings on which the director
served. In addition, all directors attended the 2022 annual meeting of shareholders either in person or virtually.

COMMITTEES OF THE BOARD

Our Board has three standing committees to facilitate and assist the Board in the execution of its responsibilities. Those
standing committees are the Audit Committee, the Compensation Committee and the Governance Committee. Each
committee operates under a charter, which is available on our website at www.blackhillscorp.com/investor-relations/corporate-
governance and is also available in print to any shareholder who requests it. In addition, our Board creates special committees
from time to time for specific purposes. Members of the committees are designated by our Board upon recommendation of the
Governance Committee.

Audit Committee
9 Meetings in 2022

Members:

Mark A. Schober (Chair)
Barry M. Granger
Kathleen S. McAllister
Robert P. Otto

Independence:
100%

Primary Responsibilities

 Assist the Board in fulfilling its oversight responsibility to our shareholders relating to the
quality and integrity of our accounting, auditing and financial reporting processes;
 Oversee the integrity of our financial statements, financial reporting systems of internal
controls and disclosure controls regarding finance, accounting and legal compliance;
 Review areas of potential significant financial risk to us;
 Review consolidated financial statements and disclosures;
 Appoint an independent registered public accounting firm for ratification by our
shareholders;
 Monitor the independence and performance of our independent registered public
accountants and internal auditing department;
 Pre-approve all audit and non-audit services provided by our independent registered
public accountants;
 Review the scope and results of the annual audit, including reports and recommendations
of our independent registered public accountants;
 Review the internal audit plan results of internal audit work and our process for monitoring
compliance with our Code of Business Conduct and other policies and practices established to
ensure compliance with legal and regulatory requirements; and
 Periodically meet, in private sessions, with our VP - Internal Audit, Chief Financial Officer,
Chief Compliance Officer, other management, and our independent registered public
accounting firm.

Committee Report:
Page 23 of this
Proxy Statement

In accordance with the rules of the NYSE, all of the members of the Audit Committee are
financially literate. In addition, the Board determined that Ms. McAllister and Mr. Schober have
the requisite attributes of an “audit committee financial expert” as provided in regulations
promulgated by the SEC, and that such attributes were acquired through relevant education
and/or experience.

PROXYPROXY STATEMENT |Compensation Committee
5 Meetings in 2022

Members:

Teresa A. Taylor (Chair)
Tony A. Jensen
Scott M. Prochazka
Rebecca B. Roberts

Independence:
100%

Committee Report:
Page 36 of this
Proxy Statement

Primary Responsibilities

 Discharge the Board's responsibilities related to executive and director compensation
philosophy, policies and programs;

 Perform functions required of directors in the administration of all federal and state laws
and regulations pertaining to executive employment and compensation;

 Consider and recommend for approval by the Board all executive compensation programs
including executive benefit programs and stock ownership plans;

 Promote an executive compensation program that supports the overall objective of
enhancing shareholder value; and

 Provide oversight of Company culture, diversity and inclusion, human rights, pay equity,
and employee engagement.

The Compensation Committee has authority under its charter to retain compensation
consultants and other advisors as the Committee may deem appropriate in its sole discretion.
The Committee engaged Meridian Compensation Partners, LLC (Meridian), an independent
consulting firm, to conduct an annual review of our 2022 total compensation program for
executive officers. The Committee reviewed the independence of Meridian and the individual
representatives of Meridian who served as consultants to the Committee, in accordance with
the SEC and NYSE requirements. The Compensation Committee concluded that Meridian was
independent and Meridian’s performance of services raised no conflict of interest. The
Committee’s conclusions were based in part on a report that Meridian provided to the
Committee intended to reveal any potential conflicts of interest and a schedule of the type and
amount of non-executive compensation services provided by Meridian to the Company. During
2022, the cost of these non-executive compensation services was less than $25,000.

Compensation Committee Interlocks. None of our executive officers serve as a member of a board of directors or
compensation committee of any entity that has one or more executive officers who serve on our Board or on our
Compensation Committee.

Governance Committee
3 Meetings in 2022

 Assess the size of the Board and qualifications for Board membership;

 Identify and recommend prospective directors to the Board to fill vacancies;

Primary Responsibilities

Members:

Rebecca B. Roberts
(Chair)
Steven R. Mills
Teresa A. Taylor
Mark A. Schober

 Review and evaluate director nominations submitted by shareholders, including reviewing
the qualifications and independence of shareholder nominees;

 Consider and recommend existing Board members to be renominated at our annual
meeting of shareholders;

 Consider the resignation of an incumbent director who makes a principal occupation
change (including retirement) or who receives a greater number of votes "Withheld" than votes
"For" in an uncontested election of directors and recommend to the Board whether to accept or
reject the resignation;

 Establish and review guidelines for corporate governance;

 Recommend to the Board for approval committee membership and chairs of the
committees;

Independence:
100%

 Recommend to the Board for approval a Chairman or an independent director to serve as
a Lead Director;

 Review the independence of each director and director nominee;

 Administer an annual evaluation of the performance of the Board and each Committee
and a biennial evaluation of each individual director;

 Ensure that the Board oversees the evaluation and succession planning of management;

 Oversee the reporting framework the Company utilizes to track and monitor progress
associated with ESG activities; and

 Oversee company political engagement.

PROXY| PROXY STATEMENTDIRECTOR COMPENSATION

DIRECTOR FEES

Compensation to our non-employee directors consists of cash retainers for Board members, Committee members, the Board
Chairman and Committee Chairs. Prior to January 1, 2022, the Board members received their equity compensation in the form
of common stock equivalents that are deferred until after they leave the Board. Effective January 1, 2022, the Board adopted a
new Non-Employee Director Equity Compensation Plan that provides equity compensation to our Board members in the form
of restricted stock units and changed the date of the annual equity grant to May to better align with the timing of director
elections. For the period of January 1, 2022 through April 30, 2022, the Board members received a pro rata amount of equity
compensation in the form of restricted stock units. On May 1, 2022, Board members received an annual equity award of
restricted stock units that will vest at the 2023 annual meeting. Dividend equivalents accrue on the common stock equivalents
and restricted stock units. We do not pay meeting fees.

In setting non-employee director compensation, the Compensation Committee recommends the form and amount of
compensation to the Board, which makes the final determination. In considering and recommending the compensation of non-
employee directors, the Compensation Committee considers such factors as it deems appropriate, including historical
compensation information, level of compensation necessary to attract and retain non-employee directors meeting our desired
qualifications and market data. In the review of director compensation in 2022, Meridian completed a market compensation
review of our peer companies' director fees. Based on this review, the cash retainer and equity pay were increased effective
May 1, 2022, to more closely align with the median director compensation for our peer utility companies. The fee structure for
director fees in 2022 is as follows:

Board Retainer
Board Chairman
Committee Chair Retainer

Audit Committee
Compensation Committee
Governance Committee
Committee Member Retainer

Audit Committee
Compensation Committee
Governance Committee

Fees Effective
January 1, 2022

Fees Effective
May 1, 2022

Restricted
Stock Units
120,000
$

Restricted
Stock Units
105,000
$

Cash

85,000
100,000

15,000
12,500
10,000

10,000
7,500
7,500

$
$

$
$
$

Cash

95,000
100,000

15,000
12,500
10,000

10,000
7,500
7,500

$
$

$
$
$

The Committee did not recommend a change to director compensation for 2023.

PROXYPROXY STATEMENT |DIRECTOR COMPENSATION FOR 2022 AND COMMON STOCK EQUIVALENTS OUTSTANDING AS OF DECEMBER 31,
2022(1)

Name(2)
Barry M. Granger
Tony A. Jensen
Kathleen A. McAllister
Steven R. Mills
Robert P. Otto
Scott M. Prochazka
Rebecca B. Roberts
Mark A. Schober
Teresa A. Taylor
John B. Vering(5)

Fees Earned or Paid in
Cash

$101,667
$99,167
$101,667
$199,167
$101,667
$99,167
$116,667
$121,667
$119,167
$34,167

Stock Awards(3)
$146,250
$146,250
$146,250
$146,250
$146,250
$146,250
$146,250
$146,250
$146,250
$26,250

Total

$247,917
$245,417
$247,917
$345,417
$247,917
$245,417
$262,917
$267,917
$265,417
$60,417

Number of Common Stock
Equivalents Outstanding at
December 31, 2022(4)

4,410
12,392
10,780
39,515
13,710
4,410
26,904
18,375
13,548
—

(1) Our directors did not receive any stock option awards, non-equity incentive plan compensation, pension benefits or perquisites in 2022

and did not have any stock options outstanding at December 31, 2022.

(2) Mr. Evans, our President and CEO, is not included in this table because he is our employee and thus receives no compensation for his
services as director. Mr. Evans’ compensation received as an employee is shown in the Summary Compensation Table for our Named
Executive Officers.

(3) Each non-employee director received a pro-rata amount of the annual equity compensation at the beginning of 2022 in the form of
restricted stock units for the period of January 1, 2022 through April 30, 2022. Effective May 1, 2022, each non-employee director
received an annual equity award of restricted stock units equivalent to $120,000 that will vest at our 2023 annual meeting. The grant date
fair value of a restricted stock unit is the closing price of a share of our common stock on the grant date.

(4) The common stock equivalents are fully vested in that they are not subject to forfeiture; however, the shares are not issued until after the

director ends his or her service on the Board. The common stock equivalents are payable in stock or cash or can be deferred further at
the election of the director.

(5) Mr. Vering's retirement from our Board was effective at our 2022 Annual Meeting.

DIRECTOR STOCK OWNERSHIP GUIDELINES

Each member of our Board is required to hold shares of common stock, common stock equivalents, or restricted stock units
equal to five times the annual cash Board retainer. Currently, all of our directors have met the stock ownership guideline
except for Messrs. Granger and Prochazka, who have been on the Board for less than three years.

PROXY| PROXY STATEMENTSECURITY OWNERSHIP OF MANAGEMENT AND PRINCIPAL SHAREHOLDERS

The following table sets forth the beneficial ownership of our common stock as of February 24, 2023 for each director, each
executive officer named in the Summary Compensation Table, all of our directors and executive officers as a group and each
person known by us to beneficially own more than five percent of our outstanding shares of common stock. Beneficial
ownership includes shares a director or executive officer has or shares the power to vote or transfer. There were no stock
options outstanding for any of our directors or executive officers as of February 24, 2023.

Except as otherwise indicated by footnote below, we believe that each individual named has sole investment and voting power
with respect to the shares of common stock indicated as beneficially owned by that individual.

Name of Beneficial Owner (1)
Outside Directors
Barry M. Granger
Tony A. Jensen
Kathleen S. McAllister
Steven R. Mills
Robert P. Otto
Scott M. Prochazka
Rebecca B. Roberts
Mark A. Schober
Teresa A. Taylor

Named Executive Officers
Linden R. Evans
Brian G. Iverson
Erik D. Keller
Richard W. Kinzley
Jennifer C. Landis
All directors and executive officers as a group (14 persons)

* Represents less than one percent of the common stock outstanding.

Shares of
Common
Stock
Beneficially
Owned (2)

Directors
Common
Stock
Equivalents (3)

Total

Percentage

2,382
8,700
7,089
20,318
5,230
2,382
6,546
7,499
4,529

141,373
39,704
8,083
51,828
20,237
325,899

2,028
3,692
3,692
19,197
8,480
2,028
20,358
10,877
9,019

-
-
-
-
-
79,371

4,410
12,392
10,781
39,515
13,710
4,410
26,904
18,375
13,548

141,373
39,704
8,083
51,828
20,237
405,270

*
*
*
*
*
*
*
*
*

*
*
*
*
*
*

(1) Beneficial ownership means the sole or shared power to vote, or to direct the voting of, a security or investment power with respect to a

(2)

security.
Includes restricted stock held by the following executive officers for which they have voting power but not investment power: Mr. Evans -
26,546 shares; Mr. Iverson - 6,288 shares; Mr. Keller - 6,688 shares; Mr. Kinzley - 4,230; Ms. Landis - 3,433 shares and all directors and
executive officers as a group 62,288 shares. Includes 1,678 restricted stock units held by each director.

(3) Represents common stock equivalents allocated to the directors’ accounts prior to January 1, 2022 under our former directors’ stock-

based compensation plan, of which there are no voting rights.

PROXYPROXY STATEMENT |PRINCIPAL SHAREHOLDERS

Set forth in the table below is information about the number of shares held by persons we know to be the beneficial owners of
more than 5% of the issued and outstanding Common Stock:

Name and Address

BlackRock, Inc.(1)

55 East 52nd Street
New York, NY 10055

State Street Corporation(2)

State Street Financial Center
One Lincoln Street
Boston, MA 02111

The Vanguard Group Inc.(3)

100 Vanguard Blvd.
Malvern, PA 19355

Shares of
Common Stock
Beneficially
Owned

Percentage

10,877,391

16.7%

7,517,054

11.6%

6,969,311

10.9%

(1)

(2)

(3)

Information is as of December 31, 2022, and is based on a Schedule 13G/A filed on January 26, 2023. BlackRock, Inc.
has sole voting power with respect to 10,652,532 shares and sole investment power with respect to 10,877,391 shares.
Information is as of December 31, 2022, and is based on a Schedule 13G filed on February 9, 2023. State Street
Corporation has shared voting power with respect to 7,172,710 shares and shared investment power with respect to
7,517,054 shares.
Information is as of December 31, 2022, and is based on a Schedule 13G/A filed on February 9, 2023. The Vanguard
Group Inc. has shared voting power with respect to 76,566 shares and sole investment power with respect to 6,969,311
shares.

PROXY| PROXY STATEMENT21

PROPOSAL 2 RATIFICATION OF APPOINTMENT OF INDEPENDENT REGISTERED PUBLICACCOUNTING FIRMThe firm of Deloitte & Touche LLP, independent registered public accountants, conducted the audit of Black Hills Corporation and its subsidiaries for 2022. Representatives of Deloitte & Touche LLP will be present at our annual meeting and will have the opportunity to make a statement, if they desire to do so, and to respond to appropriate questions.Our Audit Committee has appointed Deloitte & Touche LLP to perform an audit of our consolidated financial statements and those of our subsidiaries for 2023 and to render their reports. In determining whether to recommend to the full Board the reappointment of Deloitte & Touche LLP as our independent auditor, the Audit Committee considered the following:•Technical expertise and knowledge of the Company’s business and industry•The quality and candor of communications with the Audit Committee•Deloitte & Touche LLP’s independence•Public Company Accounting Oversight Board inspection reports on the firm•Input from management on Deloitte & Touche LLP’s performance, objectivity and professional judgment•The appropriateness of fees for audit and non-audit servicesThe Board recommends ratification of the Audit Committee’s appointment of Deloitte & Touche LLP. The appointment of Deloitte & Touche LLP as our independent registered public accounting firm for 2023 will be ratified if the votes cast “For” exceed the votes cast “Against.” Abstentions will have no effect on such vote. If shareholder approval for the appointment of Deloitte & Touche LLP is not obtained, the Audit Committee will reconsider the appointment.The Board recommends a vote FOR ratification of the appointment of Deloitte & Touche LLPto serve as our independent registered public accounting firm for 2023.PROXYPROXY STATEMENT |FEES PAID TO THE INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

The following charts set forth the aggregate fees for services provided to us for the years ended December 31, 2022 and 2021
by our independent registered public accounting firm, Deloitte & Touche, the member firms of Deloitte & Touche and their
respective affiliates:

Audit Fees

Fees for professional services rendered for the audits of our financial statements, review of the interim financial statements
included in quarterly reports, opinions on the effectiveness of our internal control over financial reporting, and services that
generally only the independent auditor can reasonably provide, such as comfort letters, statutory audits, consents and
assistance with and review of documents filed with the SEC.

Audit-Related Fees

Fees for assurance and related services that are reasonably related to the performance of the audit or review of our financial
statements and are not reported under “Audit Fees.” These services include employee benefit plan audits.

Tax Compliance Fees

Fees for services related to federal and state tax compliance.

Tax Planning and Advisory Fees

Fees for planning and advisory services.

The services performed by D&T were pre-approved in accordance with the Audit Committee’s pre-approval policy whereby the
Audit Committee pre-approves all audit and permissible non-audit services provided by the independent registered public
accountants. The Audit Committee will generally pre-approve a list of specific services and categories of services, including
audit, audit-related, tax and other services, for the upcoming or current year, subject to a specified cost level. Any service that
is not included in the approved list of services must be separately pre-approved by the Audit Committee.

PROXY| PROXY STATEMENTAUDIT COMMITTEE REPORT

The Audit Committee assists the Board in fulfilling its oversight responsibilities to shareholders relating to the integrity of the
Company’s financial statements, the Company’s compliance with legal and regulatory requirements regarding financial reporting, the
independent auditors’ qualifications and independence, and the performance of the Company’s internal and independent auditors.

Management has the primary responsibility for the completeness and accuracy of the Company’s financial statements and
disclosures, the financial reporting process, and the effectiveness of the Company’s internal control over financial reporting.

Our independent auditors, Deloitte & Touche LLP, are responsible for auditing the Company’s consolidated financial statements and
expressing an opinion as to whether they are presented fairly, in all material respects, in conformity with accounting principles
generally accepted in the United States.

In fulfilling its oversight responsibilities for 2022, the Audit Committee, among other things:

•

•
•

•

Reviewed and discussed the audited financial information contained in the Annual Report on Form 10-K with management
and our independent auditors prior to public release.
Reviewed and discussed with our independent auditors their judgments as to the quality, not just the acceptability, of our
critical accounting principles and estimates and all other communications required to be discussed with the Audit
Committee under generally accepted auditing standards, including the matters required to be discussed by the applicable
requirements of the Public Company Accounting Oversight Board and the SEC.
Reviewed and discussed with management, our internal auditors and our independent auditors management’s report on
internal control over financial reporting, including the significance and status of control deficiencies identified by
management and the results of remediation efforts undertaken, to determine the effectiveness of internal control over
financial reporting at December 31, 2022.
Reviewed with our independent auditors their report on the Company’s internal control over financial reporting at
December 31, 2022, including the basis for their conclusions.
Reviewed and pre-approved all audit and non-audit services and fees provided to the Company by our independent
auditors and considered whether the provision of such non-audit services by our independent auditors is compatible with
maintaining their independence.
Discussed with our internal and independent auditors their audit plans, audit scope and identification of audit risks and
reviewed the results of internal audit examinations.
Reviewed and discussed the interim financial information contained in each quarterly earnings announcement and
Quarterly Report on Form 10-Q with management and our independent auditors prior to public release.
Received and reviewed periodic corporate compliance and financial risk reports, including credit and hedging activity.
Held private sessions with our independent auditors, Vice President - Internal Audit, Chief Financial Officer and Controller,
and Chief Compliance Officer.
Received the written disclosures and the letter from our independent auditors required by the applicable requirements of
the Public Company Accounting Oversight Board regarding the independent auditors’ communications with the Committee
concerning independence and discussed the independence of Deloitte & Touche LLP with them.
Concluded Deloitte & Touche LLP is independent based upon the above considerations.

Based upon the reviews and discussions referred to above, the Audit Committee recommended to the Board that our audited
consolidated financial statements be included in our Annual Report on Form 10-K for the year ended December 31, 2022 filed with the
SEC. The Audit Committee also recommended and the Board reappointed Deloitte & Touche LLP as our independent registered
public accounting firm for 2023. Shareholders are being asked to ratify that selection at the 2023 Annual Meeting.

THE AUDIT COMMITTEE

Mark A. Schober, Chair
Barry M. Granger
Kathleen S. McAllister
Robert P. Otto

PROXYPROXY STATEMENT |
PROPOSAL 3 ADVISORY VOTE ON OUR EXECUTIVE COMPENSATION

We are providing shareholders with an annual advisory, non-binding vote on the executive compensation of our Named
Executive Officers (commonly referred to as “say on pay”). Accordingly, shareholders will vote on approval of the following
resolution:

RESOLVED, that the shareholders approve, on an advisory basis, the compensation of our Named

Executive Officers as disclosed in the Compensation Discussion and Analysis section, the accompanying
compensation tables and the related narrative disclosure in this proxy statement.

This vote is non-binding. The Board and the Compensation Committee expect to consider the outcome of the vote when
considering future executive compensation decisions to the extent they can determine the cause or causes of any significant
negative voting results. At our 2022 annual meeting, shareholders owning 95 percent of the shares that were voted in this
matter approved our executive compensation.

As described at length in the Compensation Discussion and Analysis section of this proxy statement, we believe our executive
compensation program is reasonable, competitive and strongly focused on pay for performance. The compensation of our
Named Executive Officers varies depending upon the achievement of pre-established performance goals, both individual and
corporate. Our short-term incentive is tied to earnings per share, safety performance targets, and diversity training participation
targets that reward our executives when they deliver targeted results. Our long-term incentive performance shares or units
vest based upon the level of achievement of certain pre-established performance goals over a three-year performance period
as described in the Compensation Discussion and Analysis. Through stock ownership guidelines, equity incentives and
clawback provisions, we align the interests of our executives with those of our shareholders and our long-term interests. Our
executive compensation policies have enabled us to attract and retain talented and experienced senior executives who can
drive financial and strategic growth objectives that are intended to enhance shareholder value. We believe that the 2022
compensation of our Named Executive Officers was appropriate and aligned with our 2022 results and positions us for long-
term growth.

Shareholders are encouraged to read the Compensation Discussion and Analysis, the accompanying compensation tables,
and the related narrative disclosures to better understand the compensation of our Named Executive Officers.

The advisory resolution to approve executive compensation is non-binding. However, our Board will consider shareholders to
have approved our executive compensation if the number of votes cast “For” the proposal exceeds the number of votes cast
“Against” the proposal. Abstentions and broker non-votes will have no effect on such vote.

The Board recommends a vote FOR the advisory vote on executive compensation.

PROXY| PROXY STATEMENT25

EXECUTIVE COMPENSATIONCOMPENSATION DISCUSSION AND ANALYSISINTRODUCTIONThis Compensation Discussion and Analysis describes our overall executive compensation policies and practices and specifically explains the compensation-related actions taken with respect to 2022 compensation for our Named Executive Officers included in the Summary Compensation Table. The Compensation Committee of the Board (the "Committee" for purposes of this Compensation Discussion and Analysis), is composed entirely of independent directors and is responsible for approving and overseeing our executive compensation philosophy, policies and programs.Our Named Executive Officers, based on 2022 positions and compensation levels, are:Named Executive OfficersTitleReferenceLinden R. EvansPresident and Chief Executive OfficerEvans, CEORichard W. KinzleySr. Vice President and Chief Financial OfficerKinzley, CFOBrian G. IversonSr. Vice President, General Counsel and Chief Compliance OfficerIverson, GCErik D. KellerSr. Vice President - Chief Information OfficerKeller, CIOJennifer C. LandisSr. Vice President - Chief Human Resources OfficerLandis, CHROKEY EXECUTIVE COMPENSATION OBJECTIVES Overall, our goal is to target total direct compensation (the sum of base salary, short-term incentive at target and long-term incentive at target) to be around the median of the appropriate market. Our executive compensation is designed to maintain an appropriate and competitive balance between fixed and variable compensation components including short-and long-term compensation, and cash and stock-based compensation. We believe that the performance basis for determining compensation should differ by each reward component – base salary, short-term incentive and long-term incentive. Incentive measures (short-term and long-term) should emphasize objective, quantitative operating measures. The performance measures for our incentive compensation plans are discussed below.BEST PRACTICES IN EXECUTIVE COMPENSATIONOur executive compensation program reflects the following best practices, which ensure effective compensation governance and align the interests of our shareholders and executives.What we do:What we do not do:A significant portion of executive pay is at risk by granting incentive awards that are based on continuing annual and long-term metrics tied to performance.XNo employment agreements with executives.Short-Term incentive plan awards are capped at 200% of target number of shares granted.XNo change in control cash severance payments that exceed three times base salary and target bonus.Long-Term incentive plan awards are capped at 200% of target.XNo excise tax gross-ups for executives.Beginning with 2023 grants, non-vested equity awards are not accelerated after a change in control unless the executive is: (1) terminated without cause or good reason; or (2) the award is not assumed or substituted by the successor company XNo hedging or pledging of Company stock.Executives and directors are subject to stock ownership guidelines and retentional requirements.XNo excessive perquisites for executives.PROXYPROXY STATEMENT |26

2022 COMPENSATION PRACTICE CHANGESOur corporate financial, safety and diversity goals are used as measures to determine awards under our variable pay programs. The Compensation Committee engaged Meridian Compensation Partners, LLC (Meridian) to review our executive compensation plans and practices. Based on this review and recommendations from Meridian, the Compensation Committee made the following changes to our executive compensation practices for 2022:Prior Executive Compensation PracticeRevised Executive Compensation PracticeRationale for ChangeShort-Term IncentiveFour performance measures including:70% EPS from ongoing operations, as adjusted10% Total Case Incident Rate (TCIR)10% Preventable Motor Vehicle Incident (PMVI)10% Employee Safety & Wellness EngagementFive performance measures including:70% EPS from ongoing operations, as adjusted7.5% System Average Interruption Duration Index (SAIDI)7.5% Hits Per Thousand (HPT)7.5% Total Case Incident Rate (TCIR)7.5% Diversity TrainingA diversity metric was added to demonstrate our commitment to building a diverse and well-rounded employee team. The addition of the diversity goal resulted in a change to the weight of all non-financial goals.HPT was added to measure our progress in reducing stray emissions and improving pipeline safety through a reduction in the number of gas line hits.SAIDI was added as a measure of the reliability of our electric delivery to customers.Long-Term Incentive50% Performance Share Units and 50% Restricted Stock Awards60% Performance Share Awards and 40% Restricted Stock AwardsA higher performance based percentage of the long-term incentive drives long-term focus/behaviors/actions on the performance measures.*Beginning with our 2021-2023 Performance Share PlanSETTING EXECUTIVE COMPENSATIONBased upon our compensation philosophy, the Committee structures executive compensation to motivate our executives to achieve specified business goals and to reward them for achieving such goals. The key steps the Committee follows in setting executive compensation are to:Analyze executive compensation market data to ensure market competitivenessReview the components of executive compensation, including base salary, short-term incentive, long-term incentive, retirement, and other benefitsReview total compensation and structureReview executive officer performance, responsibilities, experience, and other factors cited above to determine individual compensation levelsPROXY| PROXY STATEMENTEXECUTIVE COMPENSATION PROGRAM DESIGN OBJECTIVES

Attract, retain, motivate,
and encourage the
development of highly
qualified executives

Provide competitive
compensation

Promote the
relationship between
pay and performance

Promote corporate
performance that is
linked to our
shareholders’ interests

Recognize and reward
individual performance

Market Compensation Analysis

The market for our executive talent is national in scope and is not focused on any one geographic location, area or region of
the country. As such, our executive compensation should be competitive with the national market for executives. It should also
reflect the executive’s responsibilities and duties and align with the compensation of executives at companies or business
units of comparable size and complexity. The Committee gathers market information for our executives from the electric and
gas utility industry and general industry.

The Committee selects and retains the services of an independent consulting firm to periodically:

 Provide information regarding practices and trends in compensation programs

 Review and evaluate our compensation program as compared to compensation practices of other companies with

similar characteristics, including size, complexity, and type of business

 Review and assist with the establishment of a peer group of companies

 Provide a compensation analysis of the executive positions

The Committee used the services of Meridian to evaluate 2022 compensation. It gathered data from nationally recognized
survey providers, as well as specific peer companies through public filings, which included:

i.
ii.

Willis Towers Watson’s Compensation Data Bank (energy services and general industry); and
20 peer companies representing the utility and energy industry.

The 20 peer companies ranged in annual revenue size from approximately $567 million to $7.3 billion, with the median at $2.2
billion. The Company’s 2022 revenue was $2.6 billion. The survey data was adjusted for our relative revenue size using
regression analysis. Our compensation peer companies included in the analysis for 2022 compensation decisions were:

ALLETE Inc.

Alliant Energy Corporation

Ameren Corporation

Atmos Energy Corp.

IDACORP Inc.

MGE Energy Inc.

ONE Gas, Inc.

Pinnacle West Capital Corp.

New Jersey Resources Corp.

PNM Resources, Inc.

NiSource, Inc.

Portland General Electric Co.

Avista Corp.

Northwest Natural Holding Co.

South Jersey Industries, Inc.

CMS Energy Corp.

Hawaiian Electric Ind., Inc.

NorthWestern Corp.

OGE Energy Corp.

Spire, Inc.

Meridian validated that the above Compensation Peer Group remains credible, includes size-appropriate peers, and reflects
the Company's industry, complexity and market for executive talent.

The salary surveys are one of several factors the Committee uses in setting appropriate compensation levels. Other factors
include Company performance, individual performance and experience, the level and nature of the executive’s responsibilities,
internal equity considerations and discussions with the CEO related to the other senior executive officers' performance and
contributions.

PROXYPROXY STATEMENT |Components of Executive Compensation

The primary components of our executive compensation program consist of a base salary, a short-term incentive plan, and
long-term incentives. In addition, we provide retirement and other benefits. The Committee reviews all components of each
executive officer's compensation, including salary, short-term incentive, equity and other long-term incentive compensation
values granted, and the current and potential value of the executive officer's total Black Hills Corporation equity holdings.

The majority of the executives’ total compensation is granted as incentive compensation. Incentive compensation is intended
to motivate and encourage our executives to drive performance and achieve superior results for our shareholders and align
realized pay with stock performance. The Committee periodically reviews information provided by its compensation consultant
to inform its determination of the appropriate level and mix of total compensation. The Committee believes that a significant
portion of total target compensation should be comprised of variable compensation. In order to reward long-term growth while
still encouraging focus on short-term results, the Committee establishes incentive targets that emphasize long-term
compensation at a greater level than short-term compensation.

Base Salary. Base salaries for all executives are reviewed annually. The base salary of our executives is also adjusted at the
time of a promotion or material change in job responsibility, as appropriate. Evaluation of 2022 base salary adjustments
occurred in January 2022. The base salary component of each position was compared to the median of the market data
provided by the compensation consultant. The actual base salary of each officer was determined by the executive’s
performance, the experience level of the officer, the current position in a market-based salary range, and internal pay
relationships.

Evans, CEO
Kinzley, CFO
Iverson, GC
Keller, CIO
Landis, CHRO

Base Salary

2021

2022

825,000 $
454,000 $
400,000 $
340,000 $
316,000 $

860,000
472,000
416,000
354,000
348,000

$
$
$
$
$

Short-Term Incentive. Our Short-Term Incentive Plan is designed to recognize and reward the contributions of individual
executives as well as the contributions that group performance makes to overall corporate success. The 2022 short-term
incentive was based on the following metrics:

2022 Short-Term Incentive Metrics

Rationale

EPS As-adjusted is a prevalent growth metric that aligns with
shareholder interests and is well understood by the executive
team.

TCIR measures occupational health and safety performance
over a period of time and reinforces BHC's commitment to
sending our workforce home safely every day.
SAIDI measures average annual outage time of our electric
utility segment and demonstrates our commitment to
providing safe, reliable electricity to our customers.
HPT provides a customer-focused metric for our gas utilities
and is measured by gas line hits per 1,000 line locates
performed. HPT is aligned with our system safety efforts and
supports our environmental goals and climate strategy of
achieving net-zero natural gas emissions by 2035.

Diversity training contributes to our culture of inclusion
through education, awareness, and fostering meaningful
connections.

Metric

Weighting

70%

Definition
GAAP earnings per share adjusted for unique one-time non-
budgeted events (similar to those items adjusted for when
reporting non-GAAP earnings for external purposes),
including external acquisition costs, impairments, transaction
financing costs, unique tax transactions, and other items the
Committee deems not reflective of ongoing operations and
the value created for shareholders

7.5%

Injuries per 200,000 hours worked

7.5%

System average interruption duration index

7.5%

Hits per thousand

EPS from
ongoing
operations, as
adjusted

Total Case
Incident Rate
(TCIR)

Electric Reliability
(SAIDI)

Gas Distribution
Damage
Prevention (HPT)

Diversity Training
Participation

7.5%

95% manager level and above completion of worldview
training and 100% senior management team participation in a
reverse mentorship program or Employee Resource Group
sponsorship

EPS from ongoing operations, as adjusted

Total Case Incident Rate (TCIR)

Electric Reliability (SAIDI)

Gas Distribution Damage (HPT)

Diversity Training Participation

Payout percentage of target for each metric

2022 Short-Term Incentive Goals

Incentive

Threshold

Maximum

$3.77

1.25

74.40

2.16

50%

Goals

Target

$4.05

1.00

65.80

2.05

100%

$4.33

0.85

54.20

1.94

200%

The Committee believes that these performance measures meet the objectives of the plan, including:

 Align the interests of the plan participants and the shareholders

 Motivate employees to strive to achieve superior operating results

 Provide an incentive reflective of core operating performance

 Ensure “buy-in” from participants with easily understood metrics

 Meet the performance objectives of the plan to achieve over time an average payout equal to market competitive

levels

The short-term incentive, after applicable tax withholding, is distributed to the officer in the form of cash. Target award levels

are established as a percentage of each participant’s base salary. A target award is typically set around the benchmark 50th

percentile short-term incentive target award for comparable positions. The actual payout, if any, will vary, based on attainment

of pre-established performance goals, between 0 and 200 percent of the individual executive’s short-term incentive target

award level.

The Committee approves the target level for each officer in January, which applies to performance in the upcoming plan year.

Target levels are derived in part from market data provided by the compensation consultant and in part by the Committee’s

judgment regarding internal equity, retention and an individual executive’s expected contribution to the achievement of our

strategic objectives. The target levels for our Named Executive Officers are shown below:

Evans, CEO

Kinzley, CFO

Iverson, GC

Keller, CIO

Landis, CHRO

Short-Term Incentive Target

2021

% of Base

Salary

$ Amount

100% $

70% $

60% $

50% $

825,000

317,800

240,000

170,000

158,000

2022

% of Base

Salary

$ Amount

100% $

70% $

60% $

50% $

60% $

860,000

330,400

249,600

177,000

208,800

The threshold, target and maximum payout levels for our Named Executive Officers under the 2022 Short-Term Incentive Plan

are shown in the Grants of Plan-Based Awards in 2022 table on page 38, under the heading “Estimated Future Payouts Under

Non-Equity Incentive Plan Awards.”

Early in the first quarter, the Committee evaluates actual performance in relation to the prior year’s targets and approves the

actual payment of awards related to the prior plan year. The Committee reserves the discretion to adjust any award, and will

review and take into account individual performance, level of contribution, and the accomplishment of specific project goals

that were initiated throughout the plan year. The Committee also reserves discretion with respect to any payout related to

safety goals if we experience an employee or contractor fatality during the plan period. Discretion was not exercised to adjust

awards for 2022.

PROXY| PROXY STATEMENTComponents of Executive Compensation

The primary components of our executive compensation program consist of a base salary, a short-term incentive plan, and

long-term incentives. In addition, we provide retirement and other benefits. The Committee reviews all components of each

executive officer's compensation, including salary, short-term incentive, equity and other long-term incentive compensation

values granted, and the current and potential value of the executive officer's total Black Hills Corporation equity holdings.

The majority of the executives’ total compensation is granted as incentive compensation. Incentive compensation is intended

to motivate and encourage our executives to drive performance and achieve superior results for our shareholders and align

realized pay with stock performance. The Committee periodically reviews information provided by its compensation consultant

to inform its determination of the appropriate level and mix of total compensation. The Committee believes that a significant

portion of total target compensation should be comprised of variable compensation. In order to reward long-term growth while

still encouraging focus on short-term results, the Committee establishes incentive targets that emphasize long-term

compensation at a greater level than short-term compensation.

Base Salary. Base salaries for all executives are reviewed annually. The base salary of our executives is also adjusted at the

time of a promotion or material change in job responsibility, as appropriate. Evaluation of 2022 base salary adjustments

occurred in January 2022. The base salary component of each position was compared to the median of the market data

provided by the compensation consultant. The actual base salary of each officer was determined by the executive’s

performance, the experience level of the officer, the current position in a market-based salary range, and internal pay

relationships.

Evans, CEO

Kinzley, CFO

Iverson, GC

Keller, CIO

Landis, CHRO

Base Salary

2021

2022

825,000 $

454,000 $

400,000 $

340,000 $

316,000 $

860,000

472,000

416,000

354,000

348,000

Short-Term Incentive. Our Short-Term Incentive Plan is designed to recognize and reward the contributions of individual

executives as well as the contributions that group performance makes to overall corporate success. The 2022 short-term

incentive was based on the following metrics:

2022 Short-Term Incentive Metrics

Metric

Weighting

Definition

Rationale

GAAP earnings per share adjusted for unique one-time non-

budgeted events (similar to those items adjusted for when

reporting non-GAAP earnings for external purposes),

EPS As-adjusted is a prevalent growth metric that aligns with

70%

including external acquisition costs, impairments, transaction

shareholder interests and is well understood by the executive

financing costs, unique tax transactions, and other items the

team.

Committee deems not reflective of ongoing operations and

the value created for shareholders

EPS from

ongoing

operations, as

adjusted

Total Case

Incident Rate

(TCIR)

Electric Reliability

(SAIDI)

Gas Distribution

Damage

Prevention (HPT)

7.5%

Injuries per 200,000 hours worked

7.5%

System average interruption duration index

7.5%

Hits per thousand

TCIR measures occupational health and safety performance

over a period of time and reinforces BHC's commitment to

sending our workforce home safely every day.

SAIDI measures average annual outage time of our electric

utility segment and demonstrates our commitment to

providing safe, reliable electricity to our customers.

HPT provides a customer-focused metric for our gas utilities

and is measured by gas line hits per 1,000 line locates

performed. HPT is aligned with our system safety efforts and

supports our environmental goals and climate strategy of

achieving net-zero natural gas emissions by 2035.

Diversity training contributes to our culture of inclusion

through education, awareness, and fostering meaningful

connections.

Diversity Training

Participation

7.5%

95% manager level and above completion of worldview

training and 100% senior management team participation in a

reverse mentorship program or Employee Resource Group

sponsorship

Incentive
EPS from ongoing operations, as adjusted
Total Case Incident Rate (TCIR)
Electric Reliability (SAIDI)
Gas Distribution Damage (HPT)
Diversity Training Participation
Payout percentage of target for each metric

2022 Short-Term Incentive Goals

Threshold
$3.77
1.25
74.40
2.16

50%

Goals
Target
$4.05
1.00
65.80
2.05

100%

Maximum
$4.33
0.85
54.20
1.94

200%

The Committee believes that these performance measures meet the objectives of the plan, including:

 Align the interests of the plan participants and the shareholders
 Motivate employees to strive to achieve superior operating results
 Provide an incentive reflective of core operating performance
 Ensure “buy-in” from participants with easily understood metrics
 Meet the performance objectives of the plan to achieve over time an average payout equal to market competitive

levels

The short-term incentive, after applicable tax withholding, is distributed to the officer in the form of cash. Target award levels
are established as a percentage of each participant’s base salary. A target award is typically set around the benchmark 50th
percentile short-term incentive target award for comparable positions. The actual payout, if any, will vary, based on attainment
of pre-established performance goals, between 0 and 200 percent of the individual executive’s short-term incentive target
award level.

The Committee approves the target level for each officer in January, which applies to performance in the upcoming plan year.
Target levels are derived in part from market data provided by the compensation consultant and in part by the Committee’s
judgment regarding internal equity, retention and an individual executive’s expected contribution to the achievement of our
strategic objectives. The target levels for our Named Executive Officers are shown below:

Evans, CEO
Kinzley, CFO
Iverson, GC
Keller, CIO
Landis, CHRO

Short-Term Incentive Target
2021

2022

% of Base
Salary

$ Amount

% of Base
Salary

$ Amount

100% $
70% $
60% $
50% $
50% $

825,000
317,800
240,000
170,000
158,000

100% $
70% $
60% $
50% $
60% $

860,000
330,400
249,600
177,000
208,800

The threshold, target and maximum payout levels for our Named Executive Officers under the 2022 Short-Term Incentive Plan
are shown in the Grants of Plan-Based Awards in 2022 table on page 38, under the heading “Estimated Future Payouts Under
Non-Equity Incentive Plan Awards.”

Early in the first quarter, the Committee evaluates actual performance in relation to the prior year’s targets and approves the
actual payment of awards related to the prior plan year. The Committee reserves the discretion to adjust any award, and will
review and take into account individual performance, level of contribution, and the accomplishment of specific project goals
that were initiated throughout the plan year. The Committee also reserves discretion with respect to any payout related to
safety goals if we experience an employee or contractor fatality during the plan period. Discretion was not exercised to adjust
awards for 2022.

PROXYPROXY STATEMENT |30

On January 24, 2023, the Committee approved a payout of 71.48% percent of target under the 2022 Short-Term Incentive Plan. The incentive plan payout was based on attainment of the following: Incentive2022 ResultsGoal Payout% of AwardPayoutEPS from ongoing operations, as adjusted$3.9786.44%70%60.51%Total Case Incident Rate (TCIR)1.390%7.5%0.00%Electric Reliability (SAIDI)70.1474.77%7.5%5.61%Gas Distribution Damage (HPT)2.260%7.5%0.00%Diversity Training ParticipationSatisfied71%7.5%5.36%Total Payout100%71.48%Earnings per share from ongoing operations, as adjusted, for incentive plan purposes were the same as earnings per share from continuing operations, as adjusted, reported externally to our investors (and reconciled to GAAP earnings per share in Appendix A). For 2022, no adjustments were made to our earnings per share from ongoing operations.Payouts under the Short-Term Incentive Plan have varied over the last 10 years as shown in the graph below.Actual awards made to each of our Named Executive Officers under the Short-Term Incentive Plan for 2022 are included in the Non-Equity Incentive Plan Compensation column of the Summary Compensation Table on page 37.For the 2023 Short-Term Incentive Plan, we are maintaining our commitment to financial performance with EPS As Adjusted, are expanding our safety metric to include a slate of proactive metrics (timeliness of incident reporting and safety event reporting) and outcome-based metrics (TCIR and PMVI), adding a slate of customer experience metrics including customer perception (JD Power for Natural Gas and Electric) and customer interaction (Customer Effort and Net Promoter Score), deepening our commitment to diversity by adding metrics for diverse candidate pools and diverse interview panels, and including system reliability metrics (SAIDI) and safety metrics (Gas Pipeline Hits per Thousand) which support of our natural gas emissions reduction goal of net zero by 2035. The addition and expansion of our metrics for customer experience, diversity, and system safety and reliability to our 2023 Short-Term Incentive goals demonstrate our ongoing focus to improve our social and environmental ESG performance.Long-Term Incentive. Our Long-Term Incentive Plan is designed to focus executive performance on sustained long-term results that drive or are based on shareholder value creation. Long-term incentive compensation is intended to:Promote achievement of corporate goals by linking the interests of participants to those of our shareholdersProvide participants with an incentive for excellence in individual performancePromote teamwork among participantsMotivate, retain, and attract the services of participants who make significant contributions to our success by allowing participants to share in such successMeet the performance objectives of the plan to achieve an average payout equal to market competitive levels over timePROXY| PROXY STATEMENTThe Committee approved the metrics for our Long-term incentive plans as follows:

Long-Term Incentive Plan Metrics

Plan

Metrics

Definition

2020-2022 Plan

TSR

Total shareholder return

60% TSR

Total shareholder return

2021-2023 Plan and 2022-
2024 Plan

20% EPS

20% Average
Cost to Serve

Diluted earnings per share calculated in accordance
with GAAP, adjusted for material, non-recurring events
that are approved by the Company's Audit Committee
(such as impairment charges, one-time tax events,
changes to accounting rules, etc.)
Non-fuel operations and maintenance (O&M) expense
divided by gross margin calculated in accordance with
GAAP, adjusted for material, non-recurring events that
are approved by the Company's Audit Committee (such
as impairment charges, one-time tax events, changes
to accounting rules, etc.)

Rationale

Executive pay under a long-term,
capital accumulation program should
mirror performance in shareholder
return
Executive pay under a long-term,
capital accumulation program should
mirror performance in shareholder
return

Aligns with long-term performance
growth

Drives growth goals while balancing
capital deployment with increasing
customer rates

The long-term incentive compensation component is composed of performance share units and restricted stock that vests
ratably over three years. The Committee chose these components because linking executive compensation to stock price
appreciation and total shareholder return is an effective way to align the interests of management with those of our
shareholders. The split between performance shares and restricted stock for each plan period is illustrated below:

The value of long-term incentives awarded is based primarily on competitive market-based data presented by the
compensation consultant to the Committee, the impact each position has on our shareholder return, executive performance,
and internal pay relationships. The actual amount realized will vary from the target award amounts. The Committee approved
the target long-term incentive compensation level for each officer in January 2022. The 2022 long-term incentive was adjusted
from 2021 levels for some of the Named Executive Officers to align more closely with market medians.

NEO Long-Term Incentive Target Compensation

Evans, CEO
Kinzley, CFO
Iverson, GC
Keller, CIO
Landis, CHRO

2021

2022

$
$
$
$
$

2,150,000 $
625,000 $
490,000 $
250,000 $
275,000 $

2,300,000
625,000
600,000
300,000
325,000

PROXYPROXY STATEMENT |
32

Performance Share Units. Participants are awarded a target number of performance shares units. The target number of performance share units is determined by dividing the Committee approved target performance value for the participant by the average closing price for the established number of trading days at the beginning of the performance period. Vesting of performance share units associated with TSR is based on our total shareholder return over designated performance periods as measured against our Performance Peer Group. The Committee, with the guidance of its independent compensation consultant, periodically conducts a review of our Performance Peer Group to which our performance should be compared. Due to the extensive merger and acquisition activity in the industry and its contribution to relative performance volatility, the Committee chose to use the companies in the EEI Index as the Performance Peer Group. A summary of the TSR performance criteria for each three-year plan period is summarized in the table below:Performance Share PlansPercentile Ranking for Threshold Payout of 25% of Target SharesPercentile Ranking for Target Payout of 100% of Target SharesPercentile Ranking for Maximum Payout LevelPossible Payout Range of Target25th percentile50th percentile90th percentile0-200%Our plans provide: (i) a threshold payout if relative TSR performance is below threshold but our TSR is at least 35 percent for the performance period; and (ii) the performance share plan payout is capped at 100 percent of target if TSR is negative. The additional provisions are intended to reduce the impact of one peer company’s performance on the relative TSR, and also increase accountability and expectations related to the Company’s performance. Vesting of shares associated with Earnings Per Share and Average Cost to Serve performance is determined based upon the Company's performance against established performance goals. The final value of the performance shares is based upon the number of shares of common stock that are ultimately earned, based upon our performance in relation to the performance criteria.Threshold performance under the plan results in a payout of 25 percent of the target share award. Target performance results in a payout of the target share award. Maximum performance results in a payout of 200 percent of the target share award.The performance awards and dividend equivalents, if earned, are paid 50 percent in cash and 50 percent in common stock. All payroll deductions and applicable tax withholding related to the award are withheld from the cash portion. Performance awards are pro-rated for the period of service in the events of retirement, death or disability. Performance awards vest in full under certain circumstances following a change in control. Performance awards are forfeited if an officer's employment is terminated for any reason other than those previously stated.Restricted Stock. Restricted stock awarded as long-term incentives vests one-third each year over a three-year period, and automatically vests in its entirety upon death, disability or under certain termination circumstances following a change in control. Dividends are paid on the restricted stock. Unvested restricted stock is forfeited if an officer’s employment is terminated for any reason other than those previously stated.Payouts under the Performance Share Plan have varied significantly over the last 10 years, as shown in the graph below. Each performance period extends for three years. For the recently completed performance period, January 1, 2020 to December 31, 2022, our total shareholder return was 0.14 percent, which ranked at the 26th percentile of our Performance Peer Group, resulting in a payout at 26.98 percent of target. PROXY| PROXY STATEMENT33

The performance share units and restricted stock granted in 2022 are reflected in the tables in the Performance Share Units and Restricted Stock sections that follow.The 2023 Long-Term Incentive plan retains our current three metrics and adds a new environmental metric measuring our progress in replacing high emitting pipeline to reduce fugitive emissions in support of our 2035 net zero natural gas emissions goal.Board and Management Roles in Compensation DecisionsRole of Executive Officers in Compensation Decisions. In 2022, the Senior Vice President - Chief Human Resources Officer, with the support of an external compensation consultant, reviewed all compensation programs to ensure that the programs do not encourage unnecessary risk-taking and instead encourage behaviors that support the values and operations of the Company. This review determined that the compensation programs of the Company do not encourage excessive risk-taking or have an adverse effect on the Company. The CEO annually reviews the performance of each of our senior executive officers. Based upon these performance reviews, market analysis conducted by compensation consultants and discussions with our Senior Vice President - Chief Human Resources Officer, the CEO recommends the compensation for this group of officers to the Committee.Role of the Committee and Board in Setting Executive Compensation. The Committee reviews and establishes the Company’s financial targets and the CEO’s goals and objectives for the year. After the end of each year, the Committee evaluates the CEO’s performance in light of established goals and objectives, with input from the other independent directors. Based upon the Committee’s evaluation and recommendation, the independent directors of the Board set the CEO’s annual compensation, including salary, short-term incentive, and long-term incentive compensation.The Committee reviews the CEO’s recommended compensation for our senior executive officers. The Committee may approve the CEO’s compensation recommendations for this group of officers or exercise its discretion by modifying any of the recommended compensation and award levels in its review and approval process. The Committee is required to approve all decisions regarding equity awards to our officers.SummaryIn total, the Committee believes that the 2022 compensation actions, decisions and outcomes strongly reflect and reinforce our compensation philosophy and, in particular, emphasize the alignment between compensation and both performance and shareholder interests. At our 2022 annual meeting, shareholders owning 95 percent of the shares that were voted on this matter approved our executive compensation for 2021, which we consider highly supportive of our current compensation philosophy. In connection with establishing the 2022 executive compensation program, the Board reviewed the results of the say on pay vote, as well as market data and performance indicators.PROXYPROXY STATEMENT |Governance Best Practices

We have several governance programs in place to align our executive compensation with shareholder interests and to mitigate
risks in our plans. These programs include stock ownership guidelines, clawback provisions in our short-term and long-term
incentive award agreements, and the prohibition of hedging or pledging of Company stock.

STOCK OWNERSHIP GUIDELINES

The Committee has implemented stock ownership guidelines that apply to all officers based upon their level of responsibility.
We believe it is important for our officers to hold a significant amount of our common stock to further align their interests with
the interests of our shareholders. A “retention ratio” approach to stock ownership is incorporated into the guidelines. Officers
are required to retain 100 percent of all shares owned, including shares awarded through our incentive plans (net of share
withholding for taxes and, in the case of cashless stock option exercises, net of the exercise price and withholding for taxes)
until specific ownership goals are achieved.

The guidelines are shown below.

Position
CEO
CFO
Other Senior Officers

Stock Ownership Value as
Multiple of Base Salary
6X
4X
3X

At least annually, the Compensation Committee reviews common stock ownership to confirm the officers have met or are
progressing toward their stock ownership guidelines. Generally, an officer may not sell common stock unless he or she owns
common stock in excess of 110 percent of the applicable stock ownership guideline. With the exception of Mr. Keller, who has
been in his role less than three years, all of our Named Executive Officers have exceeded their stock ownership guidelines.

CLAWBACK OF EXECUTIVE COMPENSATION

Our incentive compensation award agreements for restricted stock and performance shares include clawback provisions
whereby the participant may be required to repay all income or gains previously realized in respect of such awards if his or
her: (1) employment is terminated for cause; (2) if within one year following termination of employment, the Board determines
that the participant engaged in conduct prior to his or her termination that would have constituted the basis for a termination of
employment for cause; (3) if the participant makes a public statement that is materially detrimental to the interests or
reputation of the Company; (4) if the employee violates in any material respect any policy or any code of ethics; or (5) if the
participant engages in any fraudulent, illegal or other misconduct.

Additionally, our 2015 Amended and Restated Omnibus Incentive Plan states that clawback of compensation is subject to any
policy adopted by the Board, including in response to the requirements of Section 10D of the Exchange Act, the SEC final
rules thereunder, or any listing rules. We expect to amend our clawback policy and provisions in 2023 to align with the final
rules adopted by the SEC and NYSE.

HEDGING POLICY

Our directors, executive officers, and employees are prohibited from engaging in hedging transactions involving, and from
pledging, Company stock, including holding our stock in a margin account. This prohibition extends to all hedging transactions,
including zero cost collars and forward sale contracts.

2022 BENEFITS

Retirement Benefits. We maintain a variety of employee benefit plans and programs in which our executive officers may
participate. We believe it is important to provide post-employment benefits to our executive officers and the benefits we
provide approximate retirement benefits paid by other employers to executives in similar positions. The Committee periodically
reviews the benefits provided, with assistance from its compensation consultant, to maintain a market-based benefits package.
None of our Named Executive Officers received any pension benefit payments in 2022.

Several years ago, we adopted a defined contribution plan design as our primary retirement plan and amended our Defined
Benefit Pension Plan (“Pension Plan”) for all eligible employees to incorporate a partial freeze in which the accrual of benefits
ceased for certain participants while other participants were allowed an election to continue to accrue benefits. None of our
Named Executive Officers met the age and service requirements to allow them to continue to accrue benefits under the
Pension Plan. Employees who no longer accrue benefits under the Pension Plan now receive Company Retirement

PROXY| PROXY STATEMENTContributions (“Retirement Contributions”) in the Retirement Savings Plan. The Retirement Contributions are an age and
service points-based calculation.

The 401(k) Retirement Savings Plan is offered to all our eligible employees and we provide matching contributions for certain
eligible participants. All of our Named Executive Officers are participants in the 401(k) Retirement Savings Plan and received
matching contributions in 2022. The matching contributions and the Retirement Contributions are included as “All Other
Compensation” in the Summary Compensation Table on page 37.

We also provide nonqualified plans to certain executives as approved by the Compensation Committee. The level of
retirement benefits provided by the Pension Plan and Nonqualified Plans for each of our Named Executive Officers is reflected
in the Pension Benefits for 2022 table on page 40. Our contributions to the Nonqualified Deferred Compensation Plan are
included in the All Other Compensation column of the Summary Compensation Table on page 37 and the aggregate
Nonqualified Deferred Compensation balance at December 31, 2022 is reported in the Nonqualified Deferred Compensation
for 2022 table on page 42. These retirement benefits are explained in more detail in the accompanying narrative to the tables.

Other Personal Benefits. We provide the personal use of a Company vehicle, executive health services, and limited
reimbursement of financial planning services as benefits to our executive officers. The specific amount attributable to these
benefits in 2022 is disclosed in the Summary Compensation Table on page 37. The Committee periodically reviews the other
personal benefits provided to our executive officers and believes the current benefits are reasonable and consistent with our
overall compensation program.

CHANGE IN CONTROL PAYMENTS

Our Named Executive Officers may also receive severance benefits in the event of a change in control. We have no
employment agreements with our Named Executive Officers. However, change in control agreements are common among our
Compensation Peer Group and the Committee and our Board believes providing these agreements to our corporate and select
subsidiary officers protects our shareholder interests in the event of a change in control by helping assure management focus
and continuity.

In 2022, our Compensation Committee approved revised form of incentive award agreements that require a "double trigger"
before accelerated equity compensation will be paid to our Named Executive Officers. The double trigger provides benefits in
association with:

(1)

(2)

a change in control, and

(i)

(ii)

a termination of employment other than by death, disability or by us for cause, or

a termination by the employee for good reason.

Our change in control agreements have expiration dates and our Board conducts a thorough review of the change in control
agreements at each renewal period. Our current change in control agreements expire November 15, 2025. In general, our
change in control agreements provide a severance payment of up to 2.99 times average compensation for Mr. Evans, and up
to two times average compensation for the other Named Executive Officers. The change in control agreements do not provide
for excise tax gross-ups.

See the Potential Payments upon Termination or Change in Control table on page 43 and the accompanying narrative for
more information regarding our change in control agreements and estimated payments associated with a change in control.

TAX AND ACCOUNTING IMPLICATIONS

Section 162(m) of the U.S. Internal Revenue Code of 1986, as amended, places a limit of $1 million in compensation per year
on the amount public companies may deduct with respect to certain executive officers. The Committee continues to believe
that shareholder interests are best served if its discretion and flexibility in structuring and awarding compensation is not
restricted, even though some past and/or future compensation awards result in non-deductible compensation expenses to the
Company. The Committee's ability to continue to provide a competitive compensation package to attract, motivate and retain
the Company's most senior executives is considered critical to the Company's success and to advancing the interests of its
shareholders.

PROXYPROXY STATEMENT |REPORT OF THE COMPENSATION COMMITTEE

The Compensation Committee has reviewed and discussed the Compensation Discussion and Analysis required by Item
402(b) of Regulation S-K with management and, based on such review and discussions, the Compensation Committee
recommended to our Board that the Compensation Discussion and Analysis be included in this proxy statement.

THE COMPENSATION COMMITTEE

Teresa A. Taylor, Chair
Tony A. Jensen
Scott M. Prochazka
Rebecca B. Roberts

PROXY| PROXY STATEMENTSUMMARY COMPENSATION TABLE

The following table sets forth the total compensation paid or earned by each of our Named Executive Officers for the years
ended December 31, 2022, 2021 and 2020. We have no employment agreements with our Named Executive Officers:

Name and
Principal Position
Linden R. Evans
President and Chief
Executive Officer
Richard W. Kinzley
Sr. Vice President and
Chief Financial Officer
Brian G. Iverson
Sr. Vice President, General Counsel and
Chief Compliance Officer
Erik D. Keller (5)
Sr. Vice President - Chief Information Officer
Jennifer C. Landis (6)
Sr. Vice President - Chief Human Resources Officer

Year
2022
2021
2020
2022
2021
2020
2022
2021
2020
2022
2021
2022

Stock Awards(1)
$2,394,776
$2,238,529
$1,820,599
$650,723
$650,687
$538,547
$624,682
$510,213
$425,583
$312,337
$260,251
$338,378

Non-Equity
Incentive Plan
Compensation(2)
$610,559
$708,252
$936,632
$234,669
$274,770
$348,447
$177,270
$206,294
$275,609
$125,686
$146,261
$146,963

Salary

$854,167
$819,167
$783,333
$469,000
$454,000
$448,333
$413,333
$397,667
$384,167
$351,667
$338,333
$342,667

Changes in
Pension Value
and Nonqualified
Deferred
Compensation
Earnings (3)

$—
$—
$79,100
$—
$—
$51,945
$—
$—
$23,339
$—
$—
$—

All
Other
Compensation(4)
$627,046
$674,960
$601,450
$268,377
$282,323
$263,528
$164,183
$170,934
$157,216
$109,753
$146,667
$104,278

Total
$4,486,548
$4,440,908
$4,221,114
$1,622,769
$1,661,780
$1,650,800
$1,379,468
$1,285,108
$1,265,914
$899,443
$891,512
$932,286

(1)

(2)

(3)

Stock Awards represent the grant date fair value related to restricted stock, performance shares and performance share units that have
been granted as a component of long-term incentive compensation. The grant date fair value is computed in accordance with the
provisions of accounting standards for stock compensation. Assumptions used in the calculation of these amounts are included in Note
14 of the Notes to the Consolidated Financial Statements in our Annual Report on Form 10-K for the year ended December 31, 2022.
The amounts shown for the performance shares and performance share units represent the values that are based on the achievement
of 100% of the target performance. Assuming achievement of the maximum 200% of target performance, the value of the performance
share units would be: $2,949,601 for Mr. Evans, $801,496 for Mr. Kinzley, $769,413 for Mr. Iverson, $384,699 for Mr. Keller, and
$416,782 for Ms. Landis.
Non-Equity Incentive Plan Compensation represents amounts earned under the Short-Term Incentive Plan. The Compensation
Committee approved the payout of the 2022 awards on January 24, 2023 and the awards were paid on March 3, 2023.
Change in Pension Value and Nonqualified Deferred Compensation Earnings represents the net positive increase in actuarial value of
the Pension Plan and Pension Restoration Benefit (“PRB”) for the respective years. These benefits have been valued using the
assumptions disclosed in Note 13 of the Notes to the Consolidated Financial Statements in our Annual Report on Form 10-K for the
year ended December 31, 2022. Because these assumptions sometimes change between measurement dates, the change in value
reflects not only the change in value due to additional benefits earned during the period and the passage of time but also reflects the
change in value caused by changes in the underlying actuarial assumptions. This has created significant volatility in the last three years
with the change in discount rates used to calculate the present value of these benefits contributing significantly to the decreases in
2021, 2022, and the increase in 2020.

The Pension Plan and PRB were frozen effective January 1, 2010 for participants who did not satisfy the age 45 and 10 years of
service eligibility. Messrs. Evans, Kinzley and Iverson and Ms. Landis did not meet the eligibility choice criteria and their benefits were
frozen.

Our Named Executive Officers receive employer contributions into a Nonqualified Deferred Compensation Plan (“NQDC”). The NQDC
employer contributions are reported in the All Other Compensation column. No Named Executive Officer received preferential or above-
market earnings on nonqualified deferred compensation. The change in value attributed to each Named Executive Officer from each
plan is shown in the table below:

Linden R. Evans

Richard W. Kinzley

Brian G. Iverson

Erik D. Keller

Jennifer C. Landis

Year
2022
2021
2020
2022
2021
2020
2022
2021
2020
2022
2021
2022

$
$
$
$
$
$
$
$
$
$
$
$

Defined
Benefit Plan

PRB

(76,130)
(7,574)
43,576
(91,619)
(11,125)
48,872
(40,857)
(4,089)
23,339
-
-
(22,421)

$
$
$
$
$
$
$
$
$
$
$
$

(63,285)
(7,745)
35,524
(5,842)
(833)
3,073
-
-
-
-
-
-

Total Change
in
Pension Value
$
$
$
$
$
$
$
$
$
$
$
$

(139,415)
(15,319)
79,100
(97,461)
(11,958)
51,945
(40,857)
(4,089)
23,339
-
-
(22,421)

PROXYPROXY STATEMENT |(4)

All Other Compensation includes amounts allocated under the 401(k) match, defined contributions, Company contributions to defined
benefit and deferred compensation plans, dividends received on restricted stock and unvested restricted stock units and other personal
benefits. The Other Personal Benefits column reflects the personal use of a Company vehicle, executive health, and financial planning
services for each NEO.

Linden R. Evans
Richard W. Kinzley
Brian G. Iverson
Erik D. Keller
Jennifer C. Landis

Year
2022
2022
2022
2022
2022

401(k)
Match

15,894
18,300
16,982
18,300
15,601

$
$
$
$
$

Defined
Contributions
24,400
$
22,200
$
23,518
$
12,437
$
18,300
$

NQDC
Contributions
494,238
$
191,442
$
93,487
$
45,176
$
48,353
$

Dividends on
Restricted
Stock

Other
Personal
Benefits

$
$
$
$
$

70,379
19,870
17,186
16,181
9,153

$
$
$
$
$

22,135
16,565
13,010
17,659
12,871

Total Other
Compensation
627,046
$
268,377
$
164,183
$
109,753
$
104,278
$

(5)
(6)

Mr. Keller became an NEO in 2021.
Ms. Landis became an NEO in 2022, and her employment with the Company will terminate on April 1,2023 as described below.

GRANTS OF PLAN BASED AWARDS IN 2022(1)

Estimated Future Payouts
Under Non-Equity Incentive Plan
Awards (2)

Estimated Future Payouts
Under Equity Incentive Plan
Awards (3)

Name

Linden R. Evans

Richard W. Kinzley

Brian G. Iverson

Erik D. Keller

Jennifer C. Landis

Date of
Compensation
Committee
Action

1/25/22
1/25/22

Grant
Date

1/25/22
2/11/22

Threshold
($)
$ 430,000

Target
($)
$ 860,000

Maximum
($)
$ 1,720,000

Threshold
(#)

Target
(#)

Maximum
(#)

5,057

20,226

40,452

$ 165,200

$ 330,400

$ 660,800

$ 124,800

$ 249,600

$ 499,200

88,500

$ 177,000

$ 354,000

$ 104,400

$ 208,800

$ 417,600

1,374

5,496

10,992

1,319

5,276

10,552

660

715

2,638

5,276

2,858

5,716

Maximum
($)
All Other
Stock
Awards:
Number of
Shares of
Stock or
Units(4)
(#)

Threshold
(#)

Grant Date
Fair Value
of
Stock
Awards(5)
($)

13,801

$ 1,474,801
919,975
$

3,750

3,600

1,800

1,950

$
$

400,748
249,975

384,706
239,976

192,349
119,988

208,391
129,987

(1)
(2)

(3)

(4)

(5)

No stock options were granted to our Named Executive Officers in 2022.
The columns under “Estimated Future Payouts Under Non-Equity Incentive Plan Awards” show the range of payouts for 2022
performance under our Short-Term Incentive Plan as described in the Compensation Discussion and Analysis under the section titled
“Short-Term Incentive” on page 28. If the performance criteria are met, payouts can range from 50 percent of target at the threshold
level to 200 percent of target at the maximum level. The non-equity incentive payment for 2022 performance, paid in 2023, has been
made based on achieving the criteria described in the Compensation Discussion and Analysis, at 71.48 percent of target, and is shown
in the Summary Compensation Table on page 37 in the column titled “Non-Equity Incentive Plan Compensation.”
The columns under “Estimated Future Payouts Under Equity Incentive Plan Awards” show the range of payouts (in shares of stock) for
the January 1, 2022 to December 31, 2024 performance period as described in the Compensation Discussion and Analysis under the
section titled “Long-Term Incentive” on page 30. If the performance criteria are met, payouts can range from 25 percent of target to 200
percent of target. If a participant retires, suffers a disability or dies during the performance period, the participant or the participant’s
estate is entitled to that portion of the number of performance shares as such participant would have been entitled to had he or she
remained employed through the end of the performance period, prorated for the number of months served. With the exception of
certain terminations following a change in control, performance shares and performance share units are forfeited if employment is
terminated for any other reason. During the performance period, dividends and other distributions paid with respect to the shares of
common stock accrue for the benefit of the participant and are paid out at the end of the performance period.
The column “All Other Stock Awards” reflects the number of shares of restricted stock granted on February 11, 2022 under our
Amended and Restated 2015 Omnibus Incentive Plan. The restricted stock vests one-third each year over a three-year period, and
automatically vests upon death or disability, with the exception of certain terminations following a change in control. Unvested restricted
stock is forfeited if employment is terminated for any other reason. Dividends are paid on the restricted stock and the dividends that
were paid in 2022 are included in the column titled “All Other Compensation” in the Summary Compensation Table on page 37.
The column “Grant Date Fair Value of Stock Awards” reflects the grant date fair value of each equity award computed in accordance
with the provisions of accounting standards for stock compensation. The grant date fair value for the performance share units was
$72.92 per share and was calculated on a weighted average basis considering the results of a Monte Carlo simulation model and the
market value of our common stock as of the beginning of the performance period. Assumptions used in the calculation are included in
Note 14 of the Notes to the Consolidated Financial Statements in our Annual Report on Form 10-K for the year ended December 31,
2022. The grant date fair value for the restricted stock was $66.66 per share for the February 11, 2022 grant, which was the market
value of our common stock on the date of grant as reported on the NYSE.

PROXY| PROXY STATEMENT

OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END 2022(1)

Stock Awards

Number of Shares
or Units of Stock
That Have Not
Vested(2)
(#)

Market Value
of Shares or Units
of Stock
That Have Not
Vested
($)

29,203
8,245
7,131
6,714
3,798

2,054,139
579,953
501,595
472,263
267,151

Equity Incentive
Plan Awards:
Number of
Unearned Shares,
Units or Other
Rights
That Have Not
Vested(2)
(#)

Equity Incentive
Plan Awards:
Market or Payout
Value of Unearned
Shares, Units or
Other Rights
That Have Not
Vested
($)

59,318
16,876
14,206
6,788
7,740

4,171,104
1,186,706
998,932
477,468
544,280

Name
Linden R. Evans
Richard W. Kinzley
Brian G. Iverson
Erik D. Keller
Jennifer C. Landis

(1)
(2)

There were no stock options outstanding at December 31, 2022 for our Named Executive Officers.
Vesting dates for restricted stock, performance shares, and performance share units are shown in the table below. The performance
shares shown with a vesting date of December 31, 2022, are the actual equivalent shares, including dividend equivalents, earned for
the performance period ended December 31, 2022. On January 24, 2023, the Compensation Committee confirmed that the
performance criteria were met and there would be a payout of 26.98 percent of target. The performance shares with a vesting date of
December 31, 2023 and the performance share units with a vesting date of December 31, 2024 are shown at the threshold and target
payout levels, respectively, based upon performance as of December 31, 2022.

Name

Linden R. Evans

Richard W. Kinzley

Brian G. Iverson

Erik D. Keller

Jennifer C. Landis

Unvested Restricted Stock
# of Shares

3,503
5,949
4,600
5,950
4,600
4,601
1,036
1,729
1,250
1,730
1,250
1,250
819
1,356
1,200
1,356
1,200
1,200
692
600
3,530
692
600
600
326
761
650
761
650
650

Vesting Date
02/10/23
02/11/23
02/11/23
02/11/24
02/11/24
02/11/25
02/10/23
02/11/23
02/11/23
02/11/24
02/11/24
02/11/25
02/10/23
02/11/23
02/11/23
02/11/24
02/11/23
02/11/25
02/11/23
02/11/23
08/05/23
02/11/24
02/11/24
02/11/25
02/10/23
02/11/23
02/11/23
02/11/24
02/11/24
02/11/25

Unvested and Unearned
Performance Shares

# of Shares
3,396
35,696
20,226

Vesting Date
12/31/22
12/31/23
12/31/24

1,004
10,376
5,496

12/31/22
12/31/23
12/31/24

794
8,136
5,276

12/31/22
12/31/23
12/31/24

4,150
2,638

12/31/23
12/31/24

316
4,566
2,858

12/31/22
12/31/23
12/31/24

PROXYPROXY STATEMENT |OPTION EXERCISES AND STOCK VESTED DURING 2022(1)

Stock Awards(2)

Number of Shares
Acquired on
Vesting
(#)

Value Realized
on Vesting
($)

18,076
5,697
4,418
691
2,036

$
$
$
$
$

1,214,575
383,045
296,986
46,062
136,756

There were no stock options exercised during 2022.
Reflects restricted stock that vested in 2022 and performance shares earned for the January 1, 2019 to December 31, 2021
performance period. The performance share payout was approved by the Compensation Committee on January 24, 2022 and paid out
on February 5, 2022.

Name
Linden R. Evans
Richard W. Kinzley
Brian G. Iverson
Erik D. Keller
Jennifer C. Landis
_______________
(1)
(2)

PENSION BENEFITS FOR 2022

Several years ago, we adopted a defined contribution plan design as our primary retirement plan and amended our Pension
Plan and Nonqualified Pension Plans for all eligible employees to incorporate a partial freeze in which the accrual of benefits
ceased for certain participants while other participants were allowed an election to continue to accrue benefits. Employees
eligible to elect continued participation were those employees who were at least 45 years old and had at least 10 years of
eligible service with us as of January 1, 2010. None of our Named Executive Officers met the age and service requirement
necessary to continue to accrue benefits under the Pension Plan. Rather, benefits under the Pension Plan were frozen for
Messrs. Evans, Kinzley and Iverson and Ms. Landis. Mr. Keller joined the Company after the plans were frozen and therefore
does not participate in the plans. None of our Named Executive Officers received any pension benefit payments during the
fiscal year ended December 31, 2022.

The present value accumulated by each Named Executive Officer from each plan is shown in the table below:

Name
Linden R. Evans

Richard W. Kinzley

Brian G. Iverson

Erik D. Keller

Jennifer C. Landis

Plan Name
Pension Plan
Pension Restoration Benefit
Pension Plan
Pension Restoration Benefit
Pension Plan
Pension Restoration Plan
Pension Plan
Pension Restoration Plan
Pension Plan
Pension Restoration Plan

Number of Years of
Credited Service(1)
(#)

Present Value of
Accumulated Benefit(2)
($)

8.58
8.58
10.50
10.50
5.83
N/A
N/A
N/A
7.00
N/A

275,496
219,813
236,011
14,461
146,630
-
-
-
33,141
-

(1)
(2)

The number of years of credited service represents the number of years used in determining the benefit for each plan.
The present value of accumulated benefits was calculated assuming the participants will work until retirement, benefits commence at
age 62 and using the discount rate, mortality rate and assumed payment form assumptions consistent with those disclosed in Note 13
of the Notes to the Consolidated Financial Statements in our Annual Report on Form 10-K for the year ended December 31, 2022.

PROXY| PROXY STATEMENTDEFINED BENEFIT PENSION PLAN

Our Pension Plan is a qualified pension plan. As discussed above, several years ago we amended our Pension Plan to
incorporate a partial freeze in which the accrual of benefits ceased for certain participants while other participants were
allowed an election to continue to accrue benefits.

The Pension Plan provides benefits at retirement based on length of employment service and average compensation levels
during the highest five consecutive years of the last ten years of service. For purposes of the benefit calculation, earnings
include wages and other cash compensation received from us, including any bonus, commission, unused paid time off or
incentive compensation. It also includes any elective before-tax contributions made by the employee to a Company-sponsored
cafeteria plan or 401(k) plan. However, it does not include any expense reimbursements, taxable fringe benefits, moving
expenses or moving/relocation allowances, nonqualified deferred compensation, non-cash incentives, stock options and any
payments of long-term incentive compensation such as restricted stock or payments under performance share plans. The
Internal Revenue Code places maximum limitations on the amount of compensation that may be recognized when determining
benefits of qualified pension plans. In 2022, the maximum amount of compensation that could be recognized when
determining compensation was $305,000 (called “covered compensation”). Our employees do not contribute to the plan. The
amount of the annual contribution by us to the plan is based on an actuarial determination.

The benefit formula for the Named Executive Officers in the plan is the sum of (a) and (b) below:

(a) Credited Service after January 31, 2000

0.9% of average earnings (up to covered
compensation), multiplied by credited service
after January 31, 2000 minus the number of
years of credited service before January 31,
2000

Plus

1.3% of average earnings in excess of covered
compensation, multiplied by credited service after
January 31, 2000 minus the number of years of
credited service before January 31, 2000

Plus

(b) Credited Service before January 31, 2000

1.2% of average earnings (up to covered
compensation), multiplied by credited service
before January 31, 2000

Plus

1.6% of average earnings in excess of covered
compensation, multiplied by credited service
before January 31, 2000

Pension benefits are not reduced for social security benefits. The Internal Revenue Code places maximum limitations on
annual benefit amounts that can be paid under qualified pension plans. In 2022, the maximum benefit payable under qualified
pension plans was $245,000. Accrued benefits become 100 percent vested after an employee completes five years of service.

Normal retirement is defined as age 65 under the plan. However, a participant may retire and begin taking unreduced benefits
at age 62 with five years of service. Participants who have completed at least five years of credited service can retire and
receive defined benefit pension benefits as early as age 55. However, the retirement benefit will be reduced by five percent for
each year of retirement before age 62. All our Named Executive Officers who are eligible for pension benefits, with the
exception of Ms. Landis, are currently age 55 or older and are entitled to early retirement benefits under this provision.

PENSION RESTORATION BENEFIT

We also have a Pension Restoration Benefit. This is a nonqualified supplemental plan, in which benefits are not tax deductible
until paid. The plan is designed to provide the higher paid executive employee a retirement benefit which, when added to
social security benefits and the pension to be received under the Pension Plan, will approximate retirement benefits being paid
by other employers to their employees in similar executive positions. The employee’s pension from the qualified Pension Plan
is limited by the Internal Revenue Code. The 2022 pension limit was set at $245,000 annually and the compensation taken
into account in determining contributions and benefits could not exceed $305,000 and could not include nonqualified deferred
compensation. The amount of deferred compensation paid under nonqualified plans is not subject to these limits.

As a result of the change in the Pension Plan discussed above, the benefits for certain officers (including Messrs. Evans and
Kinzley) under the Nonqualified Pension Plans were significantly reduced because the nonqualified benefit calculations were
linked to the benefits earned in the Pension Plan. The Compensation Committee amended the Nonqualified Deferred
Compensation Plan to provide non-elective nonqualified restoration benefits to those affected officers who were not eligible to
continue accruing benefits under the Pension Plan and Nonqualified Pension Plans.

PROXYPROXY STATEMENT |Pension Restoration Benefit. In the event that at the time of a participant’s retirement, the participant’s salary level exceeds
the qualified Pension Plan annual compensation limitation ($305,000 in 2022) or includes nonqualified deferred compensation,
then the participant will receive an additional benefit, called a “Pension Restoration Benefit,” which is measured by the
difference between (i) the monthly benefit that would have been provided to the participant under the Pension Plan as if there
were no annual compensation limitation and no exclusion on nonqualified deferred compensation, and (ii) the monthly benefit
to be provided to the participant under the Pension Plan. The Pension Restoration Benefit applies to Messrs. Evans and
Kinzley.

NONQUALIFIED DEFERRED COMPENSATION FOR 2022

We have a Nonqualified Deferred Compensation Plan for a select group of management or highly compensated employees.
Eligibility to participate in the plan is determined by the Compensation Committee and includes our Named Executive Officers.

A summary of the activity in the plan and the aggregate balance as of December 31, 2022 for our Named Executive Officers is
shown in the following table. Our Named Executive Officers received no withdrawals or distributions from the plan in 2022.

Name
Linden R. Evans
Richard W. Kinzley
Brian G. Iverson
Erik D. Keller
Jennifer C. Landis
_______________
(1)

Executive
Contributions
$
$
$
$
$

— $
— $
— $
88,580 $
51,277 $

Company
Contributions
in Last
Fiscal Year(1)

Aggregate
Earnings in
Last Fiscal
Year(2)
(1,066,930) $
(339,072) $
(257,377) $
(18,005) $
(109,501) $

Aggregate Balance
at Last Fiscal
Year End(3)

5,032,553
2,471,582
990,144
195,762
578,513

494,238
191,442
93,487
45,176
48,353

$
$
$
$
$

Our contributions represent non-elective Supplemental Matching and Retirement Contributions and Supplemental Target Contributions
(defined in the paragraph below) and are included in the All Other Compensation column of the Summary Compensation Table. The
value attributed from each contribution type to each Named Executive Officer in 2022 is shown in the table below:

Name
Linden R. Evans
Richard W. Kinzley
Brian G. Iverson
Erik D. Keller
Jennifer C. Landis

Supplemental
Matching
Contribution

Supplemental
Retirement
Contribution

Supplemental
Target
Contribution

Total
Company
Contributions

$
$
$
$
$

75,345 $
26,298 $
18,842 $
6,233 $
7,186 $

106,744
35,065
25,122
6,233
7,186

$
$
$
$
$

312,149
130,079
49,522
32,710
33,981

$
$
$
$
$

494,238
191,442
93,487
45,176
48,353

(2)

(3)

(4)

Because amounts included in this column do not include above-market or preferential earnings, none of these amounts are included in
the “Change in Pension Value and Nonqualified Deferred Compensation Earnings” column of the Summary Compensation Table.
Messrs. Evans’, Kinzley’s, Iverson’s, Keller's and Ms. Landis' aggregate balances at December 31, 2022 include $1,548,082, $596,215,
$298,260, $84,603, and $48,353, respectively, which are included in the Summary Compensation Table as 2022, 2021 and 2020
compensation.
In April of 2022, the Compensation Committee eliminated the supplemental target contribution for all future participants in the plan. All
our Named Executive Officers were participants prior to this elimination and maintain entitlement to supplemental target contributions.

Eligible employees may elect to defer up to 50 percent of their base salary, up to 100 percent of their Short-Term Incentive
Plan award, and up to 100 percent of the cash portion of their Performance Share Plan award. In addition, the Nonqualified
Deferred Compensation Plan was amended to provide certain officers whose Pension Plan benefit and Nonqualified Pension
Plan benefits were frozen with non-elective supplemental matching contributions equal to 6 percent of eligible compensation in
excess of the Internal Revenue Code limit plus matching contributions, if any, lost under the 401(k) Retirement Savings Plan
due to nondiscrimination test results and provides non-elective supplemental age and service points-based contributions that
cannot be made to the 401(k) Retirement Savings Plan due to the Internal Revenue Code limit (“Supplemental Matching and
Retirement Contributions”). It also provides supplemental target contributions equal to a percentage of compensation that may
differ by executive, based on the executive’s current age and length of service with us, as determined by the plans’ actuary
(“Supplemental Target Contributions”). Messrs. Evans, Kinzley, Iverson, and Keller and Ms. Landis received Supplemental
Target Contributions of 20 percent, 17.5 percent, 8 percent, 8 percent, and 8 percent respectively.

PROXY| PROXY STATEMENTThe deferrals are deposited into hypothetical investment accounts where the participants may direct the investment of the
deferrals as allowed by the plan. The investment options are the same as those offered to all employees in the 401(k)
Retirement Savings Plan except for a fixed rate option, which was set at 2.26 percent in 2022. Investment earnings are
credited to the participants’ accounts. Upon retirement, we will distribute the account balance to the participant according to
the participant's distribution election. The participants may elect either a lump sum payment or annual or monthly installments
over a period of years designated by the participant, but not to exceed 10 years. As of January 1, 2023, Messrs. Evans,
Kinzley, and Iverson and Ms. Landis are 100 percent vested in the plan.

POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE IN CONTROL

The following table describes the potential payments and benefits under our compensation and benefit plans and
arrangements to which our Named Executive Officers would be entitled upon termination of employment. Except for (i) certain
terminations following a change in control (“CIC”), as described below, (ii) pro-rata payout of incentive compensation and the
acceleration of vesting of equity awards upon retirement, death or disability, and (iii) certain pension and nonqualified deferred
compensation arrangements described under Pension Benefits for 2022 and Nonqualified Deferred Compensation for 2022
above, there are no agreements, arrangements or plans that entitle the Named Executive Officers to severance, perquisites,
or other enhanced benefits upon termination of their employment. Any agreements to provide other payments or benefits to a
terminating executive officer would be in the discretion of the Compensation Committee.

The amounts shown below assume that such termination was effective as of December 31, 2022, and thus includes estimates
of the amounts that would be paid out to our Named Executive Officers upon their termination. The table does not include
amounts such as base salary, short-term incentives and stock awards that the Named Executive Officers earned due to
employment through December 31, 2022 and distributions of vested benefits such as those described under Pension Benefits
for 2022 and Nonqualified Deferred Compensation for 2022. The table also does not include a value for outplacement services
because this would be a de minimis amount. The actual amounts to be paid can only be determined at the time of such
Named Executive Officer’s separation from us.

Incremental
Retirement
Benefit
(present
value)(4)

Continuation
of Medical/
Welfare
Benefits
(present
value)(5)

Cash
Severance
Payment

Acceleration
of
Equity
Awards(6)

Total
Benefits

Linden R. Evans
Retirement
Death or disability
Involuntary termination
CIC (1)
Involuntary or good reason termination after CIC(2)

Richard W. Kinzley

Retirement
Death or disability
Involuntary termination
CIC (1)
Involuntary or good reason termination after CIC(2)

Brian G. Iverson
Retirement
Death or disability
Involuntary termination
CIC (1)
Involuntary or good reason termination after CIC(2)

Erik D. Keller
Retirement
Death or disability
Involuntary termination
CIC (1)
Involuntary or good reason termination after CIC(2)

Jennifer C. Landis
Retirement
Death or disability
Involuntary termination (3)
CIC (1)
Involuntary or good reason termination after CIC(2)

$
$
$
$
$

— $
— $
— $
— $
$

5,107,919

— $
— $
— $
— $
$

1,806,000

— $
— $
— $
— $
$

1,594,600

— $
— $
— $
— $
$

1,322,666

— $
— $
— $
— $
$

1,055,001

438,600

— $
— $
$
— $
— $

— $
— $
— $
— $
$

521,560

— $
— $
— $
— $
$

292,864

— $
— $
— $
— $
$

112,158

— $
— $
— $
— $
— $

— $
— $
— $
— $
$

79,800

— $
— $
— $
— $
$

34,600

— $
— $
— $
— $
$

31,400

— $
— $
— $
— $
$

56,300

27,000

— $
— $
$
— $
— $

1,648,704
3,702,843

$
$
— $
— $

1,648,704
3,702,843
—
—
$ 10,122,680

3,128,961

469,737
1,049,691

882,870

392,295
893,889

763,080

198,783
671,045

604,326

$
$
— $
— $
$

— $
— $
— $
— $
— $

469,737
1,049,691
—
—
3,033,630

392,295
893,889
—
—
2,410,010

198,783
671,045
—
—
1,827,785

—
—
480,600
—
—

(1)

(2)

(3)

The amounts reflected for after a change in control (with no involuntary or good reason termination) contemplate the assumption or
replacement of the equity awards by the successor entity.
The amounts reflected for involuntary or good reason termination after a change in control include the benefits a Named Executive
Officer would receive in the event of a change followed by an involuntary or good reason termination.
Ms. Landis’ employment with the Company will terminate effective April 1, 2023. The amounts reported reflect the amounts Ms. Landis
is entitled to receive pursuant to a separation agreement we entered into with Ms. Landis in connection with her involuntary termination
without cause, as described below.

PROXYPROXY STATEMENT |
(4)

Assumes that in the event of a change in control, Mr. Evans will receive an additional three years of credited and vesting service and
the other Named Executive Officers will receive an additional two years of credited and vesting service towards the benefit accrual
under their applicable retirement plans. For Messrs. Evans, Kinzley, and Iverson this would be the Retirement Contributions and
Nonqualified Deferred Compensation contributions. The benefits will immediately vest and payments will commence at the earliest
eligible date unless the executive has elected a later date for the nonqualified plans. With the exception of Ms. Landis, our Named
Executive Officers are age 55 or older and are already retiree eligible.

(6)

(5) Welfare benefits include medical coverage, dental coverage, life insurance, short-term disability coverage and long-term disability
coverage. The calculation assumes that the Named Executive Officer does not take employment with another employer following
termination, elects continued welfare benefits until age 55 or, if later, the end of the two year benefit continuation period (three years for
Mr. Evans) and elects retiree medical benefits thereafter. Retirement is assumed to occur at the earliest eligible date.
In the event of death or disability, the acceleration of equity awards represents the acceleration of unvested restricted stock and the
assumed payout of the pro-rata share of the performance shares for the January 1, 2021 to December 31, 2023 and January 1, 2022 to
December 31, 2024 performance periods. In the event of retirement, all unvested restricted stock is forfeited and the acceleration of
equity awards represents only the pro-rata share of the performance shares and performance share units. We assumed a 129 percent
payout of the performance shares for the January 1, 2021 to December 31, 2023 performance period and a 103 percent payout of
target for the January 1, 2022 to December 31, 2024 performance period based on assumed target achievement of performance
metrics for EPS and average cost to serve and, for relative total shareholder return, our Monte Carlo valuations at December 31, 2022.

In the event of a change in control without an involuntary or good reason termination after a change in control, the acceleration of equity
awards only occurs if the awards are not assumed or replaced by the successor entity.

In the event of a change in control or an involuntary or good reason termination after a change in control, the acceleration of equity
awards represents the acceleration of unvested restricted stock and performance share units calculated as if the performance period
ended on December 31, 2022 for the January 1, 2021 to December 31, 2023, and January 1, 2022 to December 31, 2024 performance
periods.

The valuation of the restricted stock was based upon the closing price of our common stock on December 31, 2022, and the valuation
of the performance share units was based on the average closing price of our common stock for the last 10 trading days of 2022.
Actual amounts to be paid out at the time of separation from us may vary significantly based upon the market value of our common
stock at that time.

Payments Made Upon Termination. Regardless of the manner in which a Named Executive Officer’s employment
terminates, the Named Executive Officer or his/her beneficiaries may be entitled to receive amounts earned during his/her
term of employment. These include:

accrued salary and unused vacation pay;
amounts vested under the Pension Plan and Nonqualified Pension Plans;
amounts vested under the Nonqualified Deferred Compensation Plan; and
amounts vested under the 401(k) Retirement Savings Plan.

Payments Made Upon Retirement. In the event of retirement of a Named Executive Officer, in addition to the items identified
above, he/she will also receive the benefit of the following:

a pro-rata share of the performance shares for each outstanding performance period upon completion of the
performance period; and
a pro-rata share of the actual payout under the Short-Term Incentive Plan upon completion of the incentive period.

Payments Made Upon Death or Disability. In the event of death or disability of a Named Executive Officer, in addition to the
items identified above for payments made upon termination, he/she will also receive the benefit of the following:

accelerated vesting of restricted stock and restricted stock units;
a pro-rata share of the performance shares for each outstanding performance period upon completion of the
performance period; and
a pro-rata share of the actual payout under the Short-Term Incentive Plan upon completion of the incentive period.

Payments Made Upon Involuntary Termination without Cause. We do not have a general severance policy applicable to
executive officers, and any severance for an executive officer in connection with an involuntary termination of employment
without cause requires approval by our Compensation Committee. In connection with the involuntary termination of Ms.
Landis’ employment without cause, the Compensation Committee approved the terms of a separation arrangement pursuant
to which we agreed to pay Ms. Landis cash severance equal to $438,600, to be paid in equal installments over a period of one
year following her termination of employment, which amount approximates one year of her base salary and her 2023 target
short-term incentive award prorated for the three months of 2023 when she was employed, plus $38,400. We will pay Ms.
Landis $1,500 per month for 18 months (for a total of $27,000) to cover continued health care benefits and provide
outplacement benefits through 2023 of up to $15,000 (which amount is included in Ms. Landis’ Total Benefits in the table
above). Ms. Landis has agreed to be available for a period of one year following termination of her employment to provide
information to assist in the transition of her responsibilities. In addition, all of the payments and benefits are subject to Ms.
Landis’ execution of a general release and her compliance with certain post-termination restrictive covenants.

PROXY| PROXY STATEMENTPayments Made Upon a Change in Control. Our Named Executive Officers have change in control agreements that
terminate November 15, 2025. The renewal of the change in control agreements is at the discretion of the Compensation
Committee and the Board. The change in control agreements provide for certain payments and other benefits to be payable
upon a change in control and a subsequent termination of employment, either involuntary or for a good reason. In order to
receive any payments under the agreements, the Named Executive Officer must sign a waiver and release of claims that
includes a one-year non-competition clause and two-year non-solicitation and non-disparagement clauses.

A change in control is defined in the agreements as:

an acquisition of 30 percent or more of our common stock, except for certain defined acquisitions, such as acquisition by
employee benefit plans, us, any of our subsidiaries, or acquisition by an underwriter holding the securities in connection
with a public offering thereof; or
members of our incumbent Board cease to constitute at least a majority of the members of the Board, with the
incumbent Board being defined as those individuals consisting of the Board on October 1, 2022 and any other directors
elected subsequently whose election was approved by the incumbent Board; or
approval by our shareholders of:
-
-
-

a merger, consolidation, or reorganization;
liquidation or dissolution; or
an agreement for sale or other disposition of all or substantially all of our assets, with exceptions for
transactions which do not involve an effective change in control of voting securities or Board membership, and
transfers to subsidiaries or sale of subsidiaries; and

all regulatory approvals required to effect a change in control have been obtained and the transaction constituting the
change in control has been consummated.

In the change in control agreements, a good reason for termination that triggers payment of benefits includes:

a material reduction of the executive’s authority, duties or responsibilities;
a material reduction in the executive’s base salary or annual incentive target opportunity;
any material breach by us of any provisions of the change in control agreement;
requiring the executive to be based outside a 50-mile radius from his or her usual and normal place of work; or
our failure to obtain an agreement, satisfactory to the executive, from any successor company to assume and agree to
perform under the change in control agreement.

Upon a change in control, an employment contract with Mr. Evans will become effective for a three-year period and for a two-
year period for the other Named Executive Officers. During this time, the executive will receive annual compensation at least
equal to the highest rate in effect at any time during the one-year period preceding the change in control and will also receive
employment welfare benefits, pension benefits and supplemental retirement benefits on a basis no less favorable than those
received prior to the change in control. Annual compensation is defined to include amounts which are includable in the gross
income of the executive for federal income tax purposes, including base salary, targeted short-term incentive, targeted long-
term incentive grants and awards, and matching contributions or other benefits payable under the 401(k) Retirement Savings
Plan, but exclude restricted stock awards, performance units or stock options that become vested or exercisable pursuant to a
change in control.

If a Named Executive Officer’s employment is terminated prior to the end of the covered time by us for cause or disability, by
reason of the Named Executive Officer’s death, or by the Named Executive Officer without good reason, the Named Executive
Officer will receive all amounts of compensation earned or accrued through the termination date. If the Named Executive
Officer’s employment is terminated because of death or disability, the Named Executive Officer or their beneficiaries will also
receive a pro rata bonus equal to 100 percent of the target incentive for the portion of the year served.

PROXYPROXY STATEMENT |If Mr. Evans’ employment is terminated during the employment term (other than by reason of death) (i) by us other than for
cause or disability, or (ii) by Mr. Evans for a good reason, then Mr. Evans is entitled to the following benefits:

all accrued compensation, a pro-rata short-term incentive bonus and accelerated vesting of restricted stock and
performance units valued at target as of the date of the change in control;
severance pay equal to 2.99 times Mr. Evans’ severance compensation defined as his base salary and short-term
incentive target on the date of the change in control;
continuation of employee welfare benefits for eighteen months following the termination date unless Mr. Evans becomes
covered under the health insurance coverage of a subsequent employer which does not contain any exclusion or
limitation with respect to any preexisting condition of Mr. Evans or his eligible dependents;
following the three-year period, Mr. Evans may elect to receive coverage under the employee welfare plans of the
successor entity at his then-current level of benefits (or reduced coverage at his election) by paying the premiums
charged to regular full-time employees for such coverage, and is eligible to continue receiving such coverage through
the date of his retirement;
three additional years of service and age will be credited to Mr. Evans’ retiree medical savings account and the account
balance will become fully vested and he is eligible to use the account balance to offset retiree medical premiums at the
later of age 55 or the end of the three year continuation period;
three years of additional credited service under the Pension Restoration Plan and Pension Plan; and
outplacement assistance services for up to six months.

If any other NEO’s employment is terminated during the employment term (other than by death) (i) by us other than for cause
or disability, or (ii) by the NEO for a good reason, then the NEO is entitled to the following benefits:

all accrued compensation, a pro-rata short-term incentive bonus and accelerated vesting of restricted stock and
performance units valued at target as of the date of the change in control;
severance pay equal to two times the NEO’s severance compensation defined as the NEO’s base salary and short-term
incentive target on the date of the change in control;
continuation of employee welfare benefits for eighteen months following the termination date unless the NEO becomes
covered under the health insurance coverage of a subsequent employer which does not contain any exclusion or
limitation with respect to any preexisting condition of the NEO or the NEO’s eligible dependents;
following the two-year period, the NEO may elect to receive coverage under the employee welfare plans of the
successor entity at their then-current level of benefits (or reduced coverage at the NEO’s election) by paying the
premiums charged to regular full-time employees for such coverage, and is eligible to continue receiving such coverage
through the date of their retirement;
two additional years of service and age will be credited to the NEO’s retiree medical savings account and the account
balance will become fully vested and the NEO is eligible to use the account balance to offset retiree medical premiums
at the later of age 55 or the end of the two year continuation period;
two years of additional credited service under the executives’ applicable retirement plans; and
outplacement assistance services for up to six months.

The change in control agreements do not contain a benefit to cover any excise tax imposed by Section 4999 of the Internal
Revenue Code of 1986.

PROXY| PROXY STATEMENTPAY RATIO FOR 2022

We are providing the following information about the relationship of the annual total compensation of our employees and the
annual total compensation of Mr. Evans, our Chief Executive Officer, in 2022.

Based on the information below for the fiscal year 2022 and calculated in a manner consistent with Item 402(u) of Regulation
S-K, we reasonably estimate that the ratio of our CEO’s annual total compensation to the annual total compensation of our
median employee was 39:1.

Name

Linden R. Evans
Median Employee (1)

Year
2022
2022

$
$

Salary

Stock
Awards

Non-Equity
Incentive Plan
Compensation

Change in
Pension
Value(2)

854,167
98,082

$
$

2,394,776

$
— $

610,559
2,823

$
$

All Other
Compensation(3)
627,046
14,754

— $
— $

$
$

Total

4,486,548
115,659

(2)

(1) We identified our median employee based on the year-to-date total cash compensation actually paid as of October 4, 2020 to all of our
employees, other than our CEO, who were employed on October 4, 2020. We are using the same median employee for 2022 because
there has been no significant changes in our employee population or employee compensation arrangements.
See footnote (4) to our Summary Compensation Table for a description of how the values in the Change in Pension Value column are
calculated.
All Other Compensation includes 401(k) match, defined contributions, NQDC contributions, dividends on restricted stock and other
personal benefits for Mr. Evans and the 401(k) match and defined contributions for the median employee.

(3)

PAY VERSUS PERFORMANCE

In accordance with rules adopted by the Securities and Exchange Commission pursuant to the Dodd-Frank Wall Street
Reform and Consumer Protection Act of 2010, we provide the following disclosure regarding executive compensation for our
principal executive officer (“PEO”) and Non-PEO NEOs and Company performance for the fiscal years listed below. The
Compensation Committee did not consider the pay versus performance disclosure below in making its pay decisions for any of
the years shown.

Summary
Compensation
Table Total for
Linden R. Evans (1)

Compensation
Actually Paid
to Linden R.
Evans (1) (2) (3)

Average
Summary
Compensation
Table Total for
Non-PEO NEOs
(1)

Average
Compensation
Actually Paid
to Non-PEO
NEOs (1) (2) (3)

Total
Shareholder
Return

Peer Group
Total
Shareholder
Return (4)

Net income
(GAAP), in
millions

Value of initial Fixed $100
Investment Based on:

Company-
Selected
Performance
Measure

EPS from
ongoing
operations, as
adjusted (non-
GAAP)

(5)

4,486,548 $

4,506,289 $

1,208,492 $

1,224,584 $

4,440,908 $

5,151,457 $

1,318,764 $

1,453,664 $

4,221,114 $

3,055,790 $

1,565,573 $

1,003,991 $

99.15 $

96.19 $

80.92 $

101.15 $

117.12 $

98.84 $

270.8 $

251.3 $

242.8 $

3.97

3.74

3.73

2022

2021

2020
_______________
(1)

Linden R. Evans was our PEO for each year presented. The individuals comprising the Non-PEO NEOs for each year presented are
listed below:

2020
Richard W. Kinzley
Brian G. Iverson
Stuart A. Wevik
Scott A. Buchholz

2021
Richard W. Kinzley
Brian G. Iverson
Stuart A. Wevik
Erik D. Keller

2022
Richard W. Kinzley
Brian G. Iverson
Erik D. Keller
Jennifer C. Landis

(2)

(3)

The amounts shown for Compensation Actually Paid have been calculated in accordance with Item 402(v) of Regulation S-K and do
not reflect compensation actually earned, realized, or received by the Company's NEOs. These amounts reflect the Summary
Compensation Table Total with certain adjustments as described in footnote (3) below.

Compensation Actually Paid reflects the exclusions and inclusions of certain amounts for the PEO and the Non-PEO NEOs as set forth
below. Equity values are calculated in accordance with FASB ASC Topic 718. Amounts in the Exclusion of Stock Awards column are
the totals from the Stock Awards column set forth in the Summary Compensation Table. Amounts in the Exclusion of Change in
Pension Value column reflect the amounts attributable to the Change in Pension Value reported in the Summary Compensation Table.
Amounts in the Inclusion of Pension Service Cost are based on the service cost for services rendered during the listed year.

PROXYPROXY STATEMENT |

Summary
Compensation Table
Total for Linden R.
Evans

Exclusion of Change
in Pension Value for
Linden R. Evans

Exclusion of Stock
Awards for Linden
R. Evans

Inclusion of
Pension Service
Cost for Linden R.
Evans

Inclusion of Equity
Values for Linden
R. Evans

Compensation
Actually Paid to
Linden R. Evans

$
$
$

4,486,548
4,440,908
4,221,114

$
$
$

-
-
(79,100)

$
$
$

(2,394,776)
(2,238,529)
(1,820,599)

$
$
$

-
-
-

$
$
$

2,414,517
2,949,078
734,375

$
$
$

4,506,289
5,151,457
3,055,790

Average Summary
Compensation Table
Total for Non-PEO
NEOs

Average Exclusion of
Change in Pension
Value for Non-PEO
NEOs

Average Exclusion
of Stock Awards and
Option Awards for
Non-PEO NEOs

Average Inclusion of
Pension Service
Cost for Non-PEO
NEOs

$
$
$

1,208,492
1,318,764
1,565,573

$
$
$

-
(37,453)
(304,177)

$
$
$

(481,530)
(478,922)
(405,174)

$
$
$

-
9,128
33,347

Average Inclusion
of Equity Values
for Non-PEO NEOs
497,622
$
642,147
$
114,422
$

$
$
$

Average
Compensation
Actually Paid to
Non-PEO NEOs

1,224,584
1,453,664
1,003,991

Year
2022
2021
2020

The amounts in the Inclusion of Equity Values in the tables above are derived from the amounts set forth in the following tables:

Year-End Fair
Value of Equity
Awards Granted
During Year That
Remained
Unvested as of
Last Day of Year
for Linden R.
Evans

Change in Fair
Value from Last
Day of Prior Year to
Last Day of Year of
Unvested Equity
Awards for Linden
R. Evans

Vesting-Date Fair
Value of Equity
Awards Granted
During Year that
Vested During
Year for Linden
R. Evans

Change in Fair
Value from Last
Day of Prior Year to
Vesting Date of
Unvested Equity
Awards that Vested
During Year for
Linden R. Evans

Fair Value at
Last Day of
Prior Year of
Equity Awards
Forfeited During
Year for Linden
R. Evans

$
$
$

2,543,388
2,919,069
1,183,535

$
$
$

157,935
80,463
(259,008)

$
$
$

-
-
-

$
$
$

(286,806)
(50,454)
(190,152)

$
$
$

-
-
-

Value of
Dividends or
Other Earnings
Paid on Stock or
Option Awards
Not Otherwise
Included for
Linden R. Evans
-
$
-
$
-
$

Total - Inclusion
of Equity Values
for Linden R.
Evans

$
$
$

2,414,517
2,949,078
734,375

Average Year-End
Fair Value of
Equity Awards
Granted During
Year That
Remained
Unvested as of
Last Day of Year
for Non-PEO
NEOs

Average Change in
Fair Value from
Last Day of Prior
Year to Last Day of
Year of Unvested
Equity Awards for
Non-PEO NEOs

Average Vesting-
Date Fair Value of
Equity Awards
Granted During
Year that Vested
During Year for
Non-PEO NEOs

$
$
$

511,412
624,512
263,362

$
$
$

30,488
23,290
(68,513)

$
$
$

-
-
-

Average Change in
Fair Value from
Last Day of Prior
Year to Vesting
Date of Unvested
Equity Awards that
Vested During Year
for Non-PEO NEOs
$
$
$

(44,278)
(5,655)
(80,427)

Average Fair
Value at Last
Day of Prior
Year of Equity
Awards
Forfeited During
Year for Non-
PEO NEOs

$
$
$

-
-
-

Average Value
of Dividends or
Other Earnings
Paid on Stock or
Option Awards
Not Otherwise
Included for
Non-PEO NEOs
-
$
-
$
-
$

Total - Average
Inclusion of
Equity Values
for Non-PEO
NEOs

$
$
$

497,622
642,147
114,422

Year
2022
2021
2020

(4)

The Peer Group TSR set forth in this table utilizes the Edison Electric Institute Index (“EEI Index”), which we also utilize in the stock
performance graph required by Item 201(e) of Regulation S-K included in our Annual Report for the year ended December 31, 2022.
The comparison assumes $100 was invested for the period starting December 31, 2019, through the end of the listed year in the
Company and in the EEI Index, respectively. All dollar values assume reinvestment of the pre-tax value of dividends paid by
companies, where applicable, included in the EEI Index. Historical stock performance is not necessarily indicative of future stock
performance.

(5) We determined EPS from ongoing operations, as adjusted (non-GAAP) to be the most important financial performance measure used

to link Company performance to Compensation Actually Paid to our PEO and Non-PEO NEOs in 2022. This performance measure may
not have been the most important financial performance measure for years 2021 and 2020 and we may determine a different financial
performance measure to be the most important financial performance measure in future years.

A non-GAAP reconciliation to GAAP EPS is shown below:

EPS from ongoing operations, as adjusted (Non-GAAP Measure)

EPS available for common stock (GAAP)
Impairment of investment
EPS from ongoing operations, as adjusted (Non-GAAP)

Relationship between Pay and Performance

2022

Year Ended December 31,
2021

2020

3.97 $
—
3.97 $

3.74 $
—
3.74 $

3.65
0.08
3.73

The charts shown below present a graphical comparison of compensation actually paid to the PEO and the average
compensation actually paid to the other NEOs set forth in the Pay Versus Performance table above, as compared against the
following Company performance measures: (1) Total shareholder return (TSR); (2) Peer group TSR; (3) Net income; and (4)
EPS from ongoing operations, as adjusted. As presented, the first chart below compares the Company's TSR and peer group
TSR, assumes an initial investment of $100 on December 31, 2019, assumes all dividends were reinvested and depicts
performance at the end of each applicable year.

PROXY| PROXY STATEMENT

PROXYPROXY STATEMENT |Financial Performance Measures

The following table presents the financial performance measures that the Company considers to have been the most important
in linking Compensation Actually Paid to our PEO and other NEOs for 2022 to Company performance. The measures in this
table are not ranked.

Most Important Performance Measures
EPS from ongoing operations, as adjusted (non-GAAP)
Net income
Total Shareholder Return

PROXY| PROXY STATEMENTPROPOSAL 4

ADVISORY VOTE ON THE FREQUENCY OF THE ADVISORY VOTE ON OUR EXECUTIVE
COMPENSATION

Every six years, the Company is required to seek an advisory, non-binding shareholder vote on the frequency of submission to
shareholders of the advisory vote on executive compensation once every year, every two years or every three years. We last
submitted to our shareholders a vote on the frequency of future say on pay votes in 2017.

The Board recognizes the importance of receiving regular input from our shareholders on important issues such as executive
compensation and has been asking shareholders to provide their advisory vote on executive compensation since that time.
The Board believes that an annual advisory vote on executive compensation is consistent with the Company's policy of
seeking input from, and engaging in discussions with, our shareholders on corporate governance matters. As such, the Board
recommends that shareholders approve holding a say on pay vote every year.

Although the Board is recommending shareholders vote for a frequency of every year, for purposes of this proposal,
shareholders are entitled to vote for any of the frequency alternatives, or they may abstain entirely from voting on the proposal,
and they are not voting to approve or disapprove of on the Board's recommendation.

The frequency of the say on pay vote receiving the greatest number of votes cast in favor of such frequency will be the
frequency of the say on pay vote that shareholders are deemed to have approved. Although the outcome of this advisory vote
is non-binding, the Board will review the voting results and consider the outcome of the vote when selecting the frequency of
advisory votes on executive compensation. The Company will report its determination about the frequency of the advisory vote
on executive compensation in a Form 8-K or amendment to a Form 8-K filed within 150 days following the meeting.

The Board recommends a vote for the option of "1 YEAR" as the frequency with which shareholders will have an
advisory, non-binding vote on executive compensation.

PROXYPROXY STATEMENT |
TRANSACTION OF OTHER BUSINESS

Our Board does not intend to present any business for action by our shareholders at the meeting except the matters referred
to in this proxy statement. If any other matters should be properly presented at the meeting, it is the intention of the persons
named in the accompanying form of proxy to vote thereon in accordance with the recommendations of our Board.

SHAREHOLDER PROPOSALS FOR 2024 ANNUAL MEETING

Shareholder proposals intended to be presented at our 2024 annual meeting of shareholders and considered for inclusion in
our proxy materials must be received by our Corporate Secretary in writing at our executive offices at 7001 Mount Rushmore
Road, P.O. Box 1400, Rapid City, South Dakota 57709, on or prior to November 16, 2023. Any proposal submitted must be in
compliance with Rule 14a-8 of Regulation 14A of the Securities and Exchange Commission.

Additionally, a shareholder may submit a proposal or director nominee for consideration at our 2024 annual meeting of
shareholders, but not for inclusion of the proposal or director nominee in our proxy materials, if the shareholder gives timely
written notice of such proposal in accordance with Article I, Section 9 of our Bylaws. In general, Article I, Section 9 provides
that, to be timely, a shareholder’s notice must be delivered to our Corporate Secretary in writing not less than 90 days nor
more than 120 days prior to the anniversary date of the immediately preceding annual meeting of shareholders.

Our 2023 annual meeting is scheduled for April 25, 2023. Ninety days prior to the first anniversary of this date will be January
26, 2024, and 120 days prior to the first anniversary of this date will be December 27, 2023. For business to be properly
requested by the shareholder to be brought before the 2024 annual meeting of shareholders, the shareholder must comply
with all of the requirements of Article I, Section 9 of our Bylaws, not just the timeliness requirements set forth above. In
addition to satisfying the foregoing requirements, to comply with the universal proxy rules, shareholders who intend to solicit
proxies in support of director nominees other than the Board's nominees must provide notice that sets forth the information
required by Rule 14a-19 under the exchange Act no later than February 25, 2024.

PROXY| PROXY STATEMENTSHARED ADDRESS SHAREHOLDERS

In accordance with a notice sent to eligible shareholders who share a single address, we are sending only one annual report
and proxy statement to that address unless we receive instructions to the contrary from any shareholder at that address. This
practice, known as “householding,” is designed to reduce our printing and postage costs. However, if a shareholder of record
residing at such an address wishes to receive a separate annual report or proxy statement in the future, he or she may contact
Shareholder Relations at the below address.

Shareholder Relations
Black Hills Corporation
7001 Mount Rushmore Road
P.O. Box 1400
Rapid City, SD 57709
(605) 721-1700

Eligible shareholders of record receiving multiple copies of our annual report and proxy statement can request householding
by contacting us in the same manner. Shareholders who own shares through a bank, broker or other nominee can request
householding by contacting the nominee.

We hereby undertake to deliver promptly, upon written or oral request, a separate copy of the annual report to shareholders, or
proxy statement, as applicable, to our shareholders at a shared address to which a single copy of the document was delivered.

Please vote your shares by telephone, by the Internet or by promptly returning the accompanying form of proxy, whether or not
you expect to be present at the annual meeting.

ANNUAL REPORT ON FORM 10-K

A copy of our Annual Report on Form 10-K (excluding exhibits) for the year ended December 31, 2022, which is
required to be filed with the Securities and Exchange Commission, will be made available to shareholders to whom
this proxy statement is mailed, without charge, upon written or oral request to Shareholder Relations, Black Hills
Corporation, 7001 Mount Rushmore Road, P.O. Box 1400, Rapid City, SD 57709, Telephone Number: (605) 721-1700.
Our Annual Report on Form 10-K also may be accessed through our website at www.blackhillscorp.com.

IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS
FOR THE SHAREHOLDER MEETING TO BE HELD ON APRIL 25, 2023

Shareholders may view this proxy statement, our form of proxy and our 2022 Annual Report to Shareholders over the
Internet by accessing our website at www.blackhillscorp.com. Information on our website does not constitute a part
of this proxy statement.

By Order of the Board,

/s/ AMY K. KOENIG
Amy K. Koenig
Vice President - Governance, Corporate Secretary and Deputy
General Counsel

Dated: March 15, 2023

PROXYPROXY STATEMENT |(This page has been left blank intentionally.)

10-K| FORM 10-KUNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
Form 10-K

☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 2022
Or

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from _______________ to _______________

Commission File Number 001-31303

BLACK HILLS CORPORATION

Incorporated in South Dakota

IRS Identification Number 46-0458824

7001 Mount Rushmore Road
Rapid City, South Dakota 57702
Registrant’s telephone number (605) 721-1700

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading Symbol

Name of each exchange on which registered

Common stock of $1.00 par value

BKH

New York Stock Exchange

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☒ No ☐

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ☐ No ☒

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days. Yes ☒ No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule
405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to
submit such files). Yes ☒ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company,
or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging
growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer

Non-accelerated filer

☒

☐

Accelerated filer

Smaller reporting company

Emerging growth company

☐

If an emerging growth company, indicate by check mark if the Registrant has elected not to use the extended transition period for complying with
any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its
internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C.7262(b)) by the registered public accounting
firm that prepared or issued its audit report. ☒
If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant
included in the filing reflect the correction of an error to previously issued financial statements. ☐
Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based
compensation received by any of the registrant’s executive oﬃcers during the relevant recovery period pursuant to §240.10D-1(b). ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

The aggregate market value of the voting common equity held by non-affiliates of the registrant on the last business day of the registrant’s most
recently completed second fiscal quarter, June 30, 2022, was $4,702,221,557

Indicate the number of shares outstanding of each of the registrant’s classes of common stock, as of the latest practicable date.

Class

Outstanding at January 31, 2023

Common stock, $1.00 par value

66,103,478 shares

Documents Incorporated by Reference
Portions of the registrant’s Definitive Proxy Statement being prepared for the solicitation of proxies in connection with the 2023 Annual Meeting
of Stockholders to be held on April 26, 2023, are incorporated by reference in Part III of this Form 10-K.

10-KFORM 10-K |TABLE OF CONTENTS

Page

GLOSSARY OF TERMS AND ABBREVIATIONS

WEBSITE ACCESS TO REPORTS

FORWARD-LOOKING INFORMATION

Part I

ITEM 1.

BUSINESS

History and Organization

Electric Utilities

Gas Utilities

Utility Regulation Characteristics

Environmental Matters

Human Capital Resources

RISK FACTORS

UNRESOLVED STAFF COMMENTS

PROPERTIES

LEGAL PROCEEDINGS

MINE SAFETY DISCLOSURES

ITEM 1A.

ITEM 1B.

ITEM 2.

ITEM 3.

ITEM 4.

INFORMATION ABOUT OUR EXECUTIVE OFFICERS

Part II

ITEM 5.

ITEM 6.

ITEM 7.

MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS
AND ISSUER PURCHASES OF EQUITY SECURITIES

RESERVED

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS

Executive Summary

Key Elements of our Business Strategy

Recent Developments

Results of Operations - Consolidated Summary and Overview

Non-GAAP Financial Measure

Electric Utilities

Gas Utilities

Corporate and Other

Consolidated Interest Expense, Impairment of Investment, Other Income (Expense) and
Income Tax Benefit (Expense)

Liquidity and Capital Resources

Cash Flow Activities

Capital Resources

Credit Ratings

Capital Requirements

Critical Accounting Estimates

ITEM 7A.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

10-K| FORM 10-K

ITEM 8.

FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

Management’s Report on Internal Controls Over Financial Reporting

Reports of Independent Registered Public Accounting Firm

Consolidated Statements of Income

Consolidated Statements of Comprehensive Income

Consolidated Balance Sheets

Consolidated Statements of Cash Flows

Consolidated Statements of Equity

Notes to Consolidated Financial Statements

Note 1. Business Description and Significant Accounting Policies

Note 2. Regulatory Matters

Note 3. Commitments, Contingencies and Guarantees

Note 4. Revenue

Note 5. Property, Plant and Equipment

Note 6. Jointly Owned Facilities

Note 7. Asset Retirement Obligations

Note 8. Financing

Note 9. Risk Management and Derivatives

Note 10. Fair Value Measurements

Note 11. Other Comprehensive Income

Note 12. Variable Interest Entity

Note 13. Employee Benefit Plans

Note 14. Share-based Compensation Plans

Note 15. Income Taxes

Note 16. Business Segment Information

Note 17. Subsequent Events

ITEM 9.

ITEM 9A.

ITEM 9B.

ITEM 9C.

Part III

ITEM 10.

ITEM 11.

ITEM 12.

ITEM 13.

ITEM 14.

Part IV

ITEM 15.

ITEM 16.

SIGNATURES

CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE

CONTROLS AND PROCEDURES

OTHER INFORMATION

DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS

DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

EXECUTIVE COMPENSATION

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND
RELATED STOCKHOLDER MATTERS

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS AND DIRECTOR
INDEPENDENCE

PRINCIPAL ACCOUNTANT FEES AND SERVICES

EXHIBITS, FINANCIAL STATEMENT SCHEDULES

FORM 10-K SUMMARY

102

105

107

108

109

112

113

10-KFORM 10-K |

GLOSSARY OF TERMS AND ABBREVIATIONS

The following terms and abbreviations appear in the text of this report and have the definitions described below:

AFUDC

AOCI

APSC

Arkansas Gas

ARO

ASC

ASU

ATM

Availability

BHC

BHSC

Alternating Current

Allowance for Funds Used During Construction

Accumulated Other Comprehensive Income (Loss)

Arkansas Public Service Commission

Black Hills Energy Arkansas, Inc., an indirect, wholly-owned subsidiary of Black Hills
Utility Holdings, providing natural gas services to customers in Arkansas (doing
business as Black Hills Energy).

Asset Retirement Obligation

Accounting Standards Codification

Accounting Standards Update as issued by the FASB

At-the-market equity offering program

The availability factor of a power plant is the percentage of the time that it is available to
provide energy.

Black Hills Corporation; the Company

Black Hills Service Company, LLC, a direct, wholly-owned subsidiary of Black Hills
Corporation (doing business as Black Hills Energy)

Black Hills Colorado IPP

Black Hills Colorado IPP, LLC, a 50.1% owned subsidiary of Black Hills Electric
Generation

Black Hills Electric Generation

Black Hills Electric Generation, LLC, a direct, wholly-owned subsidiary of Black Hills
Non-regulated Holdings, providing wholesale electric capacity and energy primarily to
our affiliate utilities.

Black Hills Energy

The name used to conduct the business of our utility companies

Black Hills Energy Renewable
Resources (BHERR)

Black Hills Energy Renewable Resources, LLC, a direct, wholly-owned subsidiary of
Black Hills Non-regulated Holdings

Black Hills Energy Services

Black Hills Non-regulated
Holdings

Black Hills Power

Black Hills Utility Holdings

Black Hills Wyoming

Blockchain Interruptible Service
(BCIS) Tariff

Btu

Busch Ranch I

Black Hills Energy Services Company, an indirect, wholly-owned subsidiary of Black
Hills Utility Holdings, providing natural gas commodity supply for the Choice Gas
Programs (doing business as Black Hills Energy).

Black Hills Non-regulated Holdings, LLC, a direct, wholly-owned subsidiary of Black Hills
Corporation

Black Hills Power, Inc., a direct, wholly-owned subsidiary of Black Hills Corporation
(doing business as Black Hills Energy). Also known as South Dakota Electric.

Black Hills Utility Holdings, Inc., a direct, wholly-owned subsidiary of Black Hills
Corporation (doing business as Black Hills Energy)

Black Hills Wyoming, LLC, a direct, wholly-owned subsidiary of Black Hills Electric
Generation

A WPSC-approved tariff applicable to prospective new Wyoming Electric blockchain
customers. The tariff allows customers to negotiate rates and terms and conditions for
interruptible electric utility service of 10 MW or greater that would be interconnected with
Wyoming Electric’s system. Agreements under the BCIS tariff must be filed with the
WPSC prior to the first customer billing, be at least 2 years in duration and include
specific pricing for all electricity purchased (with pricing terms subject to renegotiation
every three years). BCIS customers shall not participate in the PCA to the extent of
service received under the tariff.

British thermal unit

The 29 MW wind farm near Pueblo, Colorado, jointly owned by Colorado Electric and
Black Hills Electric Generation. Colorado Electric and Black Hills Electric Generation
each have a 50% ownership interest in the wind farm. Black Hills Electric Generation
provides its share of energy from the wind farm to Colorado Electric through a PPA,
which expires in October 2037.

10-K| FORM 10-KBusch Ranch II

CACJA Adjustment

CFTC

Cheyenne Light

Cheyenne Prairie

Chief Operating Decision Maker
(CODM)

Choice Gas Program

City of Gillette

Clean Energy Plan

CO2

Colorado Electric

Colorado Gas

Common Use System

Consolidated Indebtedness to
Capitalization Ratio

Cooling Degree Day

Corriedale

COVID-19

CP Program

CPUC

CSAPR

The 59.4 MW wind farm near Pueblo, Colorado owned by Black Hills Electric
Generation to provide wind energy to Colorado Electric through a PPA expiring in
November 2044.

Clean Air Clean Jobs Act Adjustment is an adjustment mechanism that allows Colorado
Electric to collect from customers the capital costs related to Pueblo Airport Generation
CT #6.

United States Commodity Futures Trading Commission

Cheyenne Light, Fuel and Power Company, a direct, wholly-owned subsidiary of Black
Hills Corporation, providing electric service in the Cheyenne, Wyoming area (doing
business as Black Hills Energy). Also known as Wyoming Electric.

Cheyenne Prairie Generating Station serves the utility customers of South Dakota
Electric and Wyoming Electric. The facility includes one simple-cycle, 40 MW
combustion turbine that is wholly-owned by Wyoming Electric and one combined-cycle,
100 MW unit that is jointly-owned by Wyoming Electric (42 MW) and South Dakota
Electric (58 MW).

Chief Executive Officer

Regulator-approved programs in Wyoming and Nebraska that allow certain utility
customers to select their natural gas commodity supplier, providing the unbundling of
the commodity service from the distribution delivery service.

Gillette, Wyoming

2030 Ready Plan that establishes a roadmap and preferred resource portfolio for
Colorado Electric to cost-effectively achieve the State of Colorado’s requirement calling
upon electric utilities to reduce GHG emissions by a minimum of 80% by 2030. The
preferred resource portfolio calls for the addition of 149 MW of wind, 258 MW of solar
and 50 MW of battery storage to Colorado Electric’s system. The final mix of resources
would be determined by the results of a competitive solicitation starting in 2023.
Colorado legislation allows electric utilities to own up to 50% of the renewable
generation assets added to comply with the Clean Energy Plan.

Carbon dioxide

Black Hills Colorado Electric, LLC, a direct, wholly-owned subsidiary of Black Hills Utility
Holdings, providing electric service to customers in Colorado (doing business as Black
Hills Energy).

Black Hills Colorado Gas, Inc., an indirect, wholly-owned subsidiary of Black Hills Utility
Holdings, providing natural gas services to customers in Colorado (doing business as
Black Hills Energy).

The Common Use System is a jointly operated transmission system we participate in
with Basin Electric Power Cooperative and Powder River Energy Corporation. The
Common Use System provides transmission service over these utilities' combined 230-
kilovolt (kV) and limited 69-kV transmission facilities within areas of southwestern South
Dakota and northeastern Wyoming.

Any Indebtedness outstanding at such time, divided by capital at such time. Capital
being consolidated net-worth (excluding non-controlling interest) plus consolidated
indebtedness (including letters of credit and certain guarantees issued) as defined
within the current Revolving Credit Facility.

A cooling degree day is equivalent to each degree that the average of the high and low
temperature for a day is above 65 degrees. The warmer the climate, the greater the
number of cooling degree days. Cooling degree days are used in the utility industry to
measure the relative warmth of weather and to compare relative temperatures between
one geographic area and another. Normal degree days are based on the National
Weather Service data for selected locations.

The 52.5 MW wind farm near Cheyenne, Wyoming, jointly owned by South Dakota
Electric (32.5 MW) and Wyoming Electric (20 MW), serving as the dedicated wind
energy supply to the Renewable Ready program.

The official name for the 2019 novel coronavirus disease announced on February 11,
2020, by the World Health Organization, that is causing a global pandemic.

Commercial Paper Program

Colorado Public Utilities Commission

Cross-State Air Pollution Rule

10-KFORM 10-K |CT

CTII

Cushion Gas

CVA

Combustion Turbine

The 40 MW Gillette CT, a simple-cycle, gas-fired combustion turbine owned by the City
of Gillette.

The portion of natural gas necessary to force saleable gas from a storage field into the
transmission system and for system balancing, representing a permanent investment
necessary to use storage facilities and maintain reliability.

Credit Valuation Adjustment

Direct Current

Dividend Payout Ratio

Annual dividends paid on common stock divided by net income from continuing
operations available for common stock

DRSPP

DSM

Dth

EBITDA

ECA

Dividend Reinvestment and Stock Purchase Plan

Demand Side Management

Dekatherm. A unit of energy equal to 10 therms or one million British thermal units
(MMBtu).

Earnings before interest, taxes, depreciation and amortization, a non-GAAP measure.

Energy Cost Adjustment is an adjustment that allows us to pass the prudently-incurred
cost of fuel and purchased energy through to customers.

Economy Energy

Purchased energy that costs less than that produced with the utilities’ owned
generation.

Energy Efficiency Cost Recovery is an adjustment mechanism that allows us to recover
from customers the costs associated with providing energy efficiency programs.

Environmental Improvement Adjustment is an annual adjustment mechanism that allows
us to recover from customers eligible investments in, and expense related to, new
environmental measures.

Electric generating unit

The global energy sector’s shift from fossil-based systems of energy production and
consumption, including oil, natural gas and coal to renewable energy sources like wind
and solar, as well as battery storage solutions.

United States Environmental Protection Agency

Electric Vehicle

Exempt Wholesale Generator

Financial Accounting Standards Board

United States Federal Energy Regulatory Commission

Fitch Ratings Inc.

Accounting principles generally accepted in the United States of America

Gas Cost Adjustment is an adjustment that allows us to pass the prudently-incurred cost
of gas and certain services through to customers.

Greenhouse gases

Settlement with a utility’s commission where the revenue requirement is agreed upon,
but the specific adjustments used by each party to arrive at the amount are not specified
in public rate orders.

Happy Jack Wind Farm, LLC, owned by Duke Energy Generation Services

A heating degree day is equivalent to each degree that the average of the high and the
low temperatures for a day is below 65 degrees. The colder the climate, the greater the
number of heating degree days. Heating degree days are used in the utility industry to
measure the relative coldness of weather and to compare relative temperatures
between one geographic area and another. Normal degree days are based on the
National Weather Service data for selected locations.

We offer HomeServe products to our natural gas residential customers interested in
purchasing additional home repair service plans.

Non-regulated power generation and mining businesses that are vertically integrated
within our Electric Utilities segment.

EECR

EIA

EGU

Energy Transition

EPA

EWG

FASB

FERC

Fitch

GAAP

GCA

GHG

Global Settlement

Happy Jack

Heating Degree Day

HomeServe

Integrated Generation

10-K| FORM 10-KIowa Gas

IPP

IRA

IRC

IRP

IRS

ITC

IUB

Kansas Gas

KCC

LIBOR

Mcf

Mcfd

MDU

MEAN

MISO

MMBtu

Moody’s

MSHA

MWh

N/A

NAAQS

NAV

Nebraska Gas

Neil Simpson II

NERC

NOx

NOL

Black Hills Iowa Gas Utility Company, LLC, a direct, wholly-owned subsidiary of Black
Hills Utility Holdings, providing natural gas services to customers in Iowa (doing
business as Black Hills Energy).

Independent Power Producer

Inflation Reduction Act of 2022

Internal Revenue Code

Integrated Resource Plan

United States Internal Revenue Service

Investment Tax Credit

Iowa Utilities Board

Black Hills Kansas Gas Utility Company, LLC, a direct, wholly-owned subsidiary of
Black Hills Utility Holdings, providing natural gas services to customers in Kansas (doing
business as Black Hills Energy).

Kansas Corporation Commission

Kilovolt

London Interbank Offered Rate

Thousand cubic feet

Thousand cubic feet per day

Montana-Dakota Utilities Co., a subsidiary of MDU Resources Group, Inc.

Municipal Energy Agency of Nebraska

Midcontinent Independent System Operator, Inc.

Million British thermal units

Moody’s Investors Service, Inc.

United States Department of Labor’s Mine Safety and Health Administration

Megawatts

Megawatt-hours

Not Applicable

National Ambient Air Quality Standards

Net Asset Value

Black Hills Nebraska Gas, LLC, an indirect, wholly-owned subsidiary of Black Hills Utility
Holdings, providing natural gas services to customers in Nebraska (doing business as
Black Hills Energy).

A mine-mouth, coal-fired power plant owned and operated by South Dakota Electric with
a total capacity of 90 MW located at our Gillette, Wyoming energy complex.

North American Electric Reliability Corporation

Nitrogen oxide

Net Operating Loss

Northern Iowa Windpower

Northern Iowa Windpower, LLC, a 87.1 MW wind farm located near Joice, Iowa, owned
by Black Hills Electric Generation and operated by a third-party. We sell the wind energy
generated in the MISO market.

NPSC

OCI

OPEB

OSHA

OSM

PacifiCorp

PCA

Nebraska Public Service Commission

Other Comprehensive Income

Other Post-Employment Benefits

United States Department of Labor’s Occupational Safety & Health Administration

United States Department of the Interior’s Office of Surface Mining

PacifiCorp, a wholly owned subsidiary of MidAmerican Energy Holdings Company, itself
an affiliate of Berkshire Hathaway.

Power Cost Adjustment is an annual adjustment mechanism that allows us to pass a
portion of prudently-incurred delivered power costs, including fuel, purchased capacity
and energy, and transmission costs, through to customers.

10-KFORM 10-K |PCCA

Peak View

PHMSA

PPA

PRPA

PSA

PTC

Pueblo Airport Generation

PUHCA 2005

Ready

Ready Wyoming

Renewable Ready

RESA

Revolving Credit Facility

RMNG

RNG

RTO

SDPUC

SEC

Power Capacity Cost Adjustment is an annual adjustment that allows us to pass the
prudently-incurred purchased capacity costs, incremental to costs included in base
rates, through to customers.

The 60.8 MW wind farm owned by Colorado Electric.

United States Department of Transportation Pipeline and Hazardous Materials Safety
Administration

Power Purchase Agreement

Platte River Power Authority

Power Sales Agreement

Production Tax Credit

The 440 MW combined cycle gas-fired power generation plants jointly owned by
Colorado Electric (240 MW) and Black Hills Colorado IPP (200 MW). Black Hills
Colorado IPP owns and operates this facility. The plants commenced operation on
January 1, 2012.

Public Utility Holding Company Act of 2005

The Company’s branding platform which emphasizes that we will 1) prioritize our
customers; 2) act as a thoughtful, responsible leader; 3) listen first and lead with a focus
on relationships; and 4) be creative in our approach to solutions.

A 260-mile, multi-phase transmission expansion project in Wyoming. This transmission
project will serve the growing needs of customers by enhancing resiliency of Wyoming
Electric’s overall electric system and expanding access to power markets and
renewable resources. The project will help Wyoming Electric maintain top-quartile
reliability and enable economic development in the Cheyenne, Wyoming region.

Voluntary renewable energy subscription program for large commercial, industrial and
governmental customers in South Dakota and Wyoming.

Renewable Energy Standard Adjustment is an incremental retail rate limited to 2% for
Colorado Electric customers that provides funding for renewable energy projects and
programs to comply with Colorado’s Renewable Energy Standard.

Our $750 million credit facility used to fund working capital needs, letters of credit and
other corporate purposes, which was amended and restated on July 19, 2021, and now
terminates on July 19, 2026.

Rocky Mountain Natural Gas LLC, an indirect, wholly-owned subsidiary of Black Hills
Utility Holdings, providing natural gas transmission and wholesale services in western
Colorado (doing business as Black Hills Energy).

Renewable natural gas

Regional Transmission Organization

South Dakota Public Utilities Commission

United States Securities and Exchange Commission

Service Guard Comfort Plan

Appliance protection plan that provides home appliance repair services through on-
going monthly service agreements to residential utility customers.

Silver Sage

SO2

S&P

SourceGas Transaction

South Dakota Electric

SPP

SSIR

Silver Sage Windpower, LLC, owned by Duke Energy Generation Services

Sulfur dioxide

S&P Global Ratings, a division of S&P Global Inc.

On February 12, 2016, Black Hills Utility Holdings acquired SourceGas pursuant to a
purchase and sale agreement executed on July 12, 2015 for approximately $1.89
billion, which included the assumption of $760 million in debt at closing.

Black Hills Power, Inc., a direct, wholly-owned subsidiary of Black Hills Corporation,
providing electric service to customers in Montana, South Dakota and Wyoming (doing
business as Black Hills Energy).

Southwest Power Pool, a regional transmission organization (RTO) that oversees the
bulk electric grid and wholesale power market in the central United States.

System Safety and Integrity Rider

System Peak Demand

Represents the highest point of retail customer usage for a single hour.

TCA

Transmission Cost Adjustment is an annual adjustment mechanism that allows us to
recover from customers eligible transmission investments prior to the next rate review.

10-K| FORM 10-KPueblo Airport Generation

The 440 MW combined cycle gas-fired power generation plants jointly owned by

Colorado Electric (240 MW) and Black Hills Colorado IPP (200 MW). Black Hills

Colorado IPP owns and operates this facility. The plants commenced operation on

PCCA

Peak View

PHMSA

PPA

PRPA

PSA

PTC

PUHCA 2005

Ready

Ready Wyoming

RESA

RMNG

RNG

RTO

SDPUC

SEC

Silver Sage

SO2

S&P

SPP

SSIR

TCA

Power Capacity Cost Adjustment is an annual adjustment that allows us to pass the

prudently-incurred purchased capacity costs, incremental to costs included in base

rates, through to customers.

The 60.8 MW wind farm owned by Colorado Electric.

United States Department of Transportation Pipeline and Hazardous Materials Safety

Administration

Power Purchase Agreement

Platte River Power Authority

Power Sales Agreement

Production Tax Credit

January 1, 2012.

Public Utility Holding Company Act of 2005

The Company’s branding platform which emphasizes that we will 1) prioritize our

customers; 2) act as a thoughtful, responsible leader; 3) listen first and lead with a focus

on relationships; and 4) be creative in our approach to solutions.

A 260-mile, multi-phase transmission expansion project in Wyoming. This transmission

project will serve the growing needs of customers by enhancing resiliency of Wyoming

Electric’s overall electric system and expanding access to power markets and

renewable resources. The project will help Wyoming Electric maintain top-quartile

reliability and enable economic development in the Cheyenne, Wyoming region.

governmental customers in South Dakota and Wyoming.

Renewable Energy Standard Adjustment is an incremental retail rate limited to 2% for

Colorado Electric customers that provides funding for renewable energy projects and

programs to comply with Colorado’s Renewable Energy Standard.

Renewable Ready

Voluntary renewable energy subscription program for large commercial, industrial and

Revolving Credit Facility

Our $750 million credit facility used to fund working capital needs, letters of credit and

other corporate purposes, which was amended and restated on July 19, 2021, and now

terminates on July 19, 2026.

Rocky Mountain Natural Gas LLC, an indirect, wholly-owned subsidiary of Black Hills

Utility Holdings, providing natural gas transmission and wholesale services in western

Colorado (doing business as Black Hills Energy).

Service Guard Comfort Plan

Appliance protection plan that provides home appliance repair services through on-

Renewable natural gas

Regional Transmission Organization

South Dakota Public Utilities Commission

United States Securities and Exchange Commission

going monthly service agreements to residential utility customers.

Silver Sage Windpower, LLC, owned by Duke Energy Generation Services

Sulfur dioxide

S&P Global Ratings, a division of S&P Global Inc.

SourceGas Transaction

On February 12, 2016, Black Hills Utility Holdings acquired SourceGas pursuant to a

purchase and sale agreement executed on July 12, 2015 for approximately $1.89

billion, which included the assumption of $760 million in debt at closing.

South Dakota Electric

Black Hills Power, Inc., a direct, wholly-owned subsidiary of Black Hills Corporation,

providing electric service to customers in Montana, South Dakota and Wyoming (doing

business as Black Hills Energy).

Southwest Power Pool, a regional transmission organization (RTO) that oversees the

bulk electric grid and wholesale power market in the central United States.

System Safety and Integrity Rider

System Peak Demand

Represents the highest point of retail customer usage for a single hour.

Transmission Cost Adjustment is an annual adjustment mechanism that allows us to

recover from customers eligible transmission investments prior to the next rate review.

TCAM

TCJA

Tech Services

TFA

Transmission Tie

TSA

Utilities

VEBA

VIE

WEIS

Wind Capacity Factor

Winter Storm Uri

Transmission Cost Adjustment Mechanism is a WPSC-approved tariff based on a
formulaic approach that determines the recovery of Wyoming Electric's transmisson
costs.

Tax Cuts and Jobs Act enacted on December 22, 2017

Non-regulated product lines delivered by our Utilities that 1) provide electrical system
construction services to large industrial customers of our electric utilities, and 2) serve
gas transportation customers throughout its service territory by constructing and
maintaining customer-owned gas infrastructure facilities, typically through one-time
contracts.

Transmission Facility Adjustment is an annual adjustment mechanism that allows us to
recover charges for qualifying new and modified transmission facilities from customers.

South Dakota Electric owns 35% of a AC-DC-AC transmission tie that interconnects the
Western and Eastern transmission grids, which are independently-operated
transmission grids serving the western and eastern United States, respectively. Basin
Electric Power Cooperative owns the remaining ownership percentage. This
transmission tie allows us to buy and sell energy in the Eastern grid without having to
isolate and physically reconnect load or generation between the two transmission grids,
thus enhancing the reliability of our system. It accommodates scheduling transactions in
both directions simultaneously, provides additional opportunities to sell excess
generation or to make economic purchases to serve our native load and contract
obligations, and enables us to take advantage of power price differentials between the
two grids. The total transfer capacity of the tie is 400 MW, including 200 MW from West
to East and 200 MW from East to West.

United States Department of Homeland Security’s Transportation Security
Administration

Black Hills’ Electric and Gas Utilities

Voluntary Employee Benefit Association

Variable Interest Entity

Western Energy Imbalance Service

Measures the amount of electricity a wind turbine produces in a given time period
relative to its maximum potential

February 2021 winter weather event that caused extreme cold temperatures in the
central United States and led to unprecedented fluctuations in customer demand and
market pricing for natural gas and energy.

Working Capacity

Total gas storage capacity minus cushion gas

WPSC

WRDC

Wygen I

Wygen II

Wygen III

Wyodak Plant

Wyoming Electric

Wyoming Gas

Wyoming Public Service Commission

Wyodak Resources Development Corp., a direct, wholly-owned subsidiary of Black Hills
Non-regulated Holdings, providing coal supply primarily to five on-site, mine-mouth
generating facilities (doing business as Black Hills Energy).

A mine-mouth, coal-fired generating facility with a total capacity of 90 MW located at our
Gillette, Wyoming energy complex. Black Hills Wyoming owns 76.5% of the facility and
Municipal Energy Agency of Nebraska (MEAN) owns the remaining 23.5%.

A mine-mouth, coal-fired power plant owned by Wyoming Electric with a total capacity of
95 MW located at our Gillette, Wyoming energy complex.

A mine-mouth, coal-fired power plant operated by South Dakota Electric with a total
capacity of 116 MW located at our Gillette, Wyoming energy complex. South Dakota
Electric owns 52% of the power plant, MDU owns 25% and the City of Gillette owns the
remaining 23%.

The 402.3 MW mine-mouth, coal-fired generating facility located at our Gillette,
Wyoming energy complex, jointly owned by PacifiCorp (80%) and South Dakota Electric
(20%). Our WRDC mine supplies all of the fuel for the facility.

Cheyenne Light, Fuel and Power Company, a direct, wholly-owned subsidiary of Black
Hills Corporation, providing electric service to customers in the Cheyenne, Wyoming
area (doing business as Black Hills Energy).

Black Hills Wyoming Gas, LLC, an indirect, wholly-owned subsidiary of Black Hills Utility
Holdings, providing natural gas services to customers in Wyoming (doing business as
Black Hills Energy).

10-KFORM 10-K |WEBSITE ACCESS TO REPORTS

The reports we file with the SEC are available free of charge at our website www.blackhillscorp.com as soon as reasonably
practicable after they are filed. In addition, the charters of our Audit, Governance and Compensation Committees are located on
our website along with our Code of Business Conduct, Code of Ethics for our Chief Executive Officer and Senior Finance
Officers, Corporate Governance Guidelines of the Board of Directors and Policy for Director Independence. The information
contained on our website is not part of this document.

FORWARD-LOOKING INFORMATION

This Form 10-K contains forward-looking statements as defined by the SEC. Forward-looking statements are all statements
other than statements of historical fact, including, without limitation, those statements that are identified by the words
“anticipates,” “estimates,” “expects,” “intends,” “plans,” “predicts” and similar expressions and include statements concerning
plans, objectives, goals, strategies, future events or performance, and underlying assumptions and other statements that are
other than statements of historical facts. From time to time, the Company may publish or otherwise make available forward-
looking statements of this nature, including statements contained within Item 7 - Management’s Discussion & Analysis of
Financial Condition and Results of Operations.

Forward-looking statements involve risks and uncertainties, which could cause actual results or outcomes to differ materially
from those expressed. The Company’s expectations, beliefs and projections are expressed in good faith and are believed by the
Company to have a reasonable basis, including, without limitation, management’s examination of historical operating trends,
data contained in the Company’s records and other data available from third parties. Nonetheless, the Company’s expectations,
beliefs or projections may not be achieved or accomplished.

Any forward-looking statement contained in this document speaks only as of the date on which the statement is made and the
Company undertakes no obligation to update any forward-looking statement or statements to reflect events or circumstances
that occur after the date on which the statement is made or to reflect the occurrence of unanticipated events. New factors
emerge from time to time, such as adverse macroeconomic conditions, global pandemics or severe weather events, and it is not
possible for management to predict all of the factors, nor can it assess the effect of each factor on the Company’s business or
the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any
forward-looking statement. All forward-looking statements, whether written or oral and whether made by or on behalf of the
Company, are expressly qualified by the risk factors and cautionary statements in this Annual Report on Form 10-K, including
statements contained within Item 1A - Risk Factors.

10-K| FORM 10-KPART I

ITEM 1. BUSINESS

History and Organization

Black Hills Corporation, a South Dakota corporation (together with its subsidiaries, referred to herein as the “Company,” “we,”
“us” or “our”), is a customer-focused, growth-oriented utility company headquartered in Rapid City, South Dakota (incorporated in
South Dakota in 1941).

We operate our business in the United States, reporting our operating results through our Electric Utilities and Gas Utilities
segments. Certain unallocated corporate expenses that support our operating segments are presented as Corporate and Other.

Our Electric Utilities segment generates, transmits and distributes electricity to approximately 220,000 electric utility customers in
Colorado, Montana, South Dakota and Wyoming. We also own and operate non-regulated power generation and mining assets
that are vertically integrated into and primarily contracted to our Electric Utilities. Our Electric Utilities own 1,482 MW of
generation and 9,024 miles of electric transmission and distribution lines.

Our Gas Utilities segment serves approximately 1,107,000 natural gas utility customers in Arkansas, Colorado, Iowa, Kansas,
Nebraska, and Wyoming. Our Gas Utilities own and operate 4,713 miles of intrastate gas transmission pipelines and 42,222
miles of gas distribution mains and service lines, seven natural gas storage sites, more than 50,000 horsepower of compression
and over 515 miles of gathering lines.

Electric Utilities

We conduct electric utility operations through our Colorado, South Dakota and Wyoming subsidiaries. Our electric generating
facilities and power purchase agreements provide for the supply of electricity principally to our retail customers. Additionally, we
sell excess power to other utilities and marketing companies, including our affiliates. We also provide non-regulated services to
our retail customers under the Service Guard Comfort Plan and Tech Services.

Additionally, we own and operate non-regulated power generation and mining assets that are vertically integrated into and
primarily support our Electric Utilities. Nearly all of these operations are located at our electric generating complexes and are
physically integrated into our Electric Utilities’ operations.

Retail Customers
Residential
Commercial
Industrial
Other

Total Electric Retail Customers at End of Year

Retail Customers
Colorado Electric
South Dakota Electric
Wyoming Electric

Total Electric Retail Customers at End of Year

2022

As of December 31,
2021

2020

188,921
30,404
82
1,024
220,431

186,852
30,326
81
1,010
218,269

2022

As of December 31,
2021

100,573
75,169
44,689
220,431

99,709
74,509
44,051
218,269

184,872
30,225
83
1,017
216,197

2020

98,735
73,700
43,762
216,197

Capacity and Demand. System Peak Demand for the Electric Utilities’ retail customers for each of the last three years are
listed below:

2022 (a)
Summer Winter

410
403
294

334
355
281

System Peak Demand (in MW)

2021

2020

Summer

Winter

Summer

Winter

407
397
274

279
299
246

401
378
271

297
304
246

Colorado Electric
South Dakota Electric
Wyoming Electric
____________________
(a)

In December 2022, each of our Electric Utilities set new winter peak loads. In July 2022, South Dakota Electric and Wyoming Electric set
new all-time and summer peak loads. See recent peak discussion in the Recent Developments section of Management’s Discussion and
Analysis of Financial Condition and Results of Operations in Item 7 in this Annual Report on Form 10-K for additional information.

10-KFORM 10-K |

As of December 31, 2022, our Electric Utilities’ ownership interests in electric generating plants were as follows:

Colorado Electric:

Unit

Busch Ranch I (a)
Peak View (b) (c)
Pueblo Airport Generation #1-2
Pueblo Airport Generation CT #6
AIP Diesel
Diesel #1 and #3-5
Diesel #1-5

South Dakota Electric:
Cheyenne Prairie
Corriedale (c)
Wygen III
Neil Simpson II
Wyodak Plant
Neil Simpson CT
Lange CT
Ben French Diesel #1-5
Ben French CTs #1-4

Wyoming Electric:

Cheyenne Prairie
Cheyenne Prairie CT
Corriedale (c)
Wygen II

Integrated Generation:

Wygen I
Pueblo Airport Generation #4-5
Busch Ranch I (a)
Busch Ranch II (c)
Northern Iowa Windpower (c)

Fuel
Type

Wind
Wind
Gas
Gas
Oil
Oil
Oil

Gas
Wind
Coal
Coal
Coal
Gas
Gas
Oil
Gas/Oil

Gas
Gas
Wind
Coal

Coal
Gas
Wind
Wind
Wind

Total MW Capacity
____________________
(a)

Location

Ownership
Interest % (d)

Owned
Nameplate
Capacity
(MW)

In Service
Date

Pueblo, Colorado
Pueblo, Colorado
Pueblo, Colorado
Pueblo, Colorado
Pueblo, Colorado
Pueblo, Colorado
Rocky Ford, Colorado

Cheyenne, Wyoming
Cheyenne, Wyoming
Gillette, Wyoming
Gillette, Wyoming
Gillette, Wyoming
Gillette, Wyoming
Rapid City, South Dakota
Rapid City, South Dakota
Rapid City, South Dakota

Cheyenne, Wyoming
Cheyenne, Wyoming
Cheyenne, Wyoming
Gillette, Wyoming

Gillette, Wyoming
Pueblo, Colorado
Pueblo, Colorado
Pueblo, Colorado
Joice, Iowa

50%
100%
100%
100%
100%
100%
100%

58%
62%
52%
100%
20%
100%
100%
100%
100%

42%
100%
38%
100%

76.5%
50.1% (e)
50%
100%
100%

14.5
60.8
200.0
40.0
10.0
8.0
10.0

58.0
32.5
60.3
90.0
80.5
40.0
40.0
10.0
100.0

42.0
40.0
20.0
95.0

68.9
200.0
14.5
59.4
87.1
1,481.5

2012
2016
2011
2016
2001
1964
1964

2014
2020
2010
1995
1978
2000
2002
1965
1977-1979

2014
2014
2020
2008

2003
2012
2012
2019
2019

In 2013, Busch Ranch I was awarded a one-time cash grant in lieu of ITCs under the Section 1603 program created under the American
Recovery and Reinvestment Act.
The PTCs for Peak View flow back to customers through a rider mechanism as a reduction to Colorado Electric’s margins.
This facility qualifies for PTCs at $26/MWh under IRC 45 during the 10-year period beginning on the date the facility was originally placed
in service.
Jointly owned facilities are discussed in Note 6 of the Notes to Consolidated Financial Statements in this Annual Report on Form 10-K.
In 2016, Black Hills Electric Generation sold a 49.9% non-controlling interest in Black Hills Colorado IPP to a third party. See Note 12 of
the Notes to Consolidated Financial Statements in this Annual Report on Form 10-K for additional information.

(b)
(c)

(d)
(e)

Our Electric Utilities’ power supply by resource as a percent of the total power supply for our energy needs for the years ended
December 31 was as follows:

Power Supply
Coal
Natural Gas and Diesel Oil (a)
Wind

Total Generated

Coal, Natural Gas, Oil and Other Market Purchases
Wind Purchases

Total Purchased

Total

2022

2021

2020

35.1%
18.8%
11.4%
65.3%
29.6%
5.1%
34.7%
100.0%

34.2%
24.4%
11.3%
69.9%
25.1%
5.0%
30.1%
100.0%

40.3%
25.0%
8.8%
74.1%
21.1%
4.8%
25.9%
100.0%

____________________
(a)

The diesel-fueled generating units are generally used as supplemental peaking units. Power generated from these units, as a percentage
of total power supply, was 0.0% for each of the years presented.

10-K| FORM 10-KOur Electric Utilities’ weighted average cost of fuel utilized to generate electricity and the average price paid for purchased power
(excluding contracted capacity) per MWh for the years ended December 31 were as follows:

Fuel and Purchased Power (dollars per MWh)
Coal
Natural Gas and Diesel Oil

Total Generated Weighted Average Fuel Cost
Coal, Natural Gas, Oil and Other Market Purchases
Wind Purchases

Total Purchased Power Weighted Average Cost

Total Weighted Average Fuel and Purchased Power Cost

2022

2021

2020

12.76
37.09
17.57
66.35
33.78
61.56
32.82

11.55
33.65
17.40
64.85
34.69
59.84
30.17

11.38
8.59
9.09
40.80
42.06
41.03
17.36

Purchased Power. We have executed various PPAs to support our Electric Utilities’ capacity and energy needs beyond our
regulated power plants’ generation, which include long-term related party agreements with our non-regulated power generation
businesses. See additional information in Note 3 of the Notes to Consolidated Financial Statements in this Annual Report on
Form 10-K.

Coal Mining. We own and operate a single coal mine through our WRDC subsidiary which is reported within our Electric Utilities
segment. We surface mine, process and sell low-sulfur sub-bituminous coal at our mine located immediately adjacent to our
Gillette energy complex in the Powder River Basin in northeastern Wyoming, where our five coal-fired power plants are located.
We produced approximately 3.7 million tons of coal in 2022.

The mine provides low-sulfur coal directly to these five power plants via a conveyor belt system, minimizing transportation costs.
The fuel can be delivered to our adjacent power plants at very cost competitive prices (i.e., $1.09 per MMBtu for year ended
December 31, 2022) when compared to alternatives. Nearly all of the mine’s production is sold to our on-site generation facilities
under long-term supply contracts.

As of December 31, 2022, we estimated our recoverable reserves to be approximately 174 million tons, based on a life-of-mine
engineering study utilizing currently available drilling data and geological information prepared by internal engineering analyses.
The recoverable reserve life is equal to approximately 47 years at the current production levels.

Transmission and Distribution. Through our Electric Utilities, we own electric transmission and distribution systems composed
of high voltage lines (greater than 69 kV) and low voltage lines (69 kV or less). We also jointly operate an electric transmission
system, referred to as the Common Use System, with Basin Electric Power Cooperative and Powder River Energy Corporation.
Each participant in the Common Use System individually owns assets that are operated together for a single system. The
Common Use System also provides transmission service to our Transmission Tie. South Dakota Electric owns 35% of the
Transmission Tie. The Transmission Tie is further discussed in Note 6 of the Notes to Consolidated Financial Statements in this
Annual Report on Form 10-K.

At December 31, 2022, our Electric Utilities owned the electric transmission and distribution lines shown below:

Utility
Colorado Electric
South Dakota Electric (b)
Wyoming Electric

State
Colorado
South Dakota, Wyoming
Wyoming

Transmission (a)
(in Line Miles)

Distribution
(in Line Miles)

598
1,235
59
1,892

3,198
2,587
1,347
7,132

____________________
(a)
(b)

Electric transmission line miles include voltages of 69 kV and above.
South Dakota Electric transmission line miles include 43 miles within the Common Use System.

Material transmission services agreements are disclosed in Note 3 of the Notes to Consolidated Financial Statements in this
Annual Report on Form 10-K.

Seasonal Variations of Business. Our Electric Utilities are seasonal businesses and weather patterns may impact their
operating performance. Demand for electricity is sensitive to seasonal cooling, heating and industrial load requirements, as well
as market price. In particular, cooling demand is often greater in the summer and heating demand is often greater in the winter.

10-KFORM 10-K |
Competition. We generally have limited competition for the retail generation and distribution of electricity in our service areas.
Various legislative or regulatory restructuring and competitive initiatives have been discussed in several of the states in which
our utilities operate. These initiatives would be aimed at increasing competition or providing for distributed generation. To date,
these initiatives have not had a material impact on our utilities. In Colorado, our electric utility is subject to rules which may
require competitive bidding for generation supply. Because of these rules, we face competition from other utilities and non-
affiliated IPPs for the right to supply electric energy and capacity for Colorado Electric when resource plans require additional
resources. Additionally, electrification initiatives in our service territories could increase demand for electricity and increase
customer growth.

The independent power industry consists of many strong and capable competitors, some of which may have more extensive
operations or greater financial resources than we possess. With respect to the merchant power sector, FERC has taken steps to
increase access to the national transmission grid by utility and non-utility purchasers and sellers of electricity to foster
competition within the wholesale electricity markets. Our non-regulated power generation businesses could face greater
competition if utilities are permitted to robustly invest in power generation assets. Conversely, state regulations requiring utilities
to competitively bid generation resources may provide opportunity for IPPs in some regions. To date, these initiatives have not
had a material impact on our non-regulated power generation businesses.

Our mining business strategy is to sell nearly all of our production to on-site generation facilities under long-term supply
contracts. Historically, any off-site sales have been to consumers within close proximity to the WRDC mine. Rail transport market
opportunities for WRDC are limited due to the lower heating value (Btu) of the coal, combined with the fact that the WRDC mine
is served by only one railroad, resulting in less competitive transportation rates. Additionally, coal competes with other energy
sources, such as natural gas, wind, solar and hydropower. Costs and other factors relating to these alternative fuels, such as
safety, environmental and availability considerations affect the overall demand for coal as a fuel.

Operating Statistics. See a summary of key operating statistics in the Electric Utilities segment operating results within
Management’s Discussion and Analysis of Financial Condition and Results of Operations in Item 7 of this Annual Report on
Form 10-K.

Gas Utilities

We conduct natural gas utility operations through our Arkansas, Colorado, Iowa, Kansas, Nebraska and Wyoming subsidiaries.
Our Gas Utilities transport and distribute natural gas through our distribution network to approximately 1,107,000 customers.
Additionally, we sell contractual pipeline capacity and gas commodities to other utilities and marketing companies, including our
affiliates, on an as-available basis.

We also provide non-regulated services to our regulated customers. Black Hills Energy Services provides natural gas supply to
approximately 52,600 retail distribution customers under the Choice Gas Program in Nebraska and Wyoming. Additionally, we
provide services under the Service Guard Comfort Plan, Tech Services and HomeServe.

Retail Customers
Residential
Commercial
Industrial
Transportation

Total Natural Gas Retail Customers at End of Year

Retail Customers
Arkansas Gas
Colorado Gas
Iowa Gas
Kansas Gas
Nebraska Gas
Wyoming Gas

Total Natural Gas Retail Customers at End of Year

2022

As of December 31,
2021

864,038
85,203
2,189
155,685
1,107,115

853,908
84,234
2,158
153,929
1,094,229

2022

As of December 31,
2021

183,270
208,060
162,801
118,599
301,007
133,378
1,107,115

180,216
202,747
161,905
117,862
298,832
132,667
1,094,229

2020

844,999
83,135
2,235
152,568
1,082,937

2020

178,281
197,817
160,952
116,973
296,778
132,136
1,082,937

We procure natural gas for our distribution customers from a diverse mix of producers, processors and marketers and generally
use hedging, physical fixed-price purchases and market-based price purchases to achieve dollar-cost averaging within our
natural gas portfolio. The majority of our procured natural gas is transported in interstate pipelines under firm transportation
service agreements.

In addition to company-owned natural gas storage assets in Arkansas, Colorado and Wyoming, we also contract with third-party
transportation providers for natural gas storage service to provide gas supply during the winter heating season and to meet peak
day customer demand for natural gas.

10-K| FORM 10-K
The following table summarizes certain information regarding our company-owned regulated underground gas storage facilities
as of December 31, 2022:

Arkansas Gas
Colorado Gas
Wyoming Gas

Total

Working
Capacity
(Mcf)
9,273,700
2,361,495
5,733,900
17,369,095

Cushion
Gas
(Mcf)
13,433,040
6,164,715
17,545,600
37,143,355

Total
Capacity
(Mcf)
22,706,740
8,526,210
23,279,500
54,512,450

Maximum
Daily
Withdrawal
Capability
(Mcfd)

196,000
30,000
36,000
262,000

The following table summarizes certain information regarding our system infrastructure as of December 31, 2022:

Arkansas Gas
Colorado Gas
Iowa Gas
Kansas Gas
Nebraska Gas
Wyoming Gas

Total

Intrastate Gas
Transmission
Pipelines
(in line miles)

Gas Distribution
Mains
(in line miles)

Gas Distribution
Service Lines
(in line miles)

877
699
173
331
1,317
1,316
4,713

5,070
7,088
2,879
3,004
8,558
3,563
30,162

1,330
2,372
2,503
1,388
2,796
1,671
12,060

Seasonal Variations of Business. Our Gas Utilities are seasonal businesses and weather patterns may impact their operating
performance. Demand for natural gas is sensitive to seasonal heating and industrial load requirements, as well as market price.
In particular, demand is often greater in the winter months for heating. Natural gas is used primarily for residential and
commercial heating, and demand for this product can depend heavily upon weather throughout our service territories. As a
result, a significant amount of natural gas revenue is normally recognized in the heating season consisting of the first and fourth
quarters. Demand for natural gas can also be impacted by summer temperatures and precipitation, which can affect demand for
irrigation.

Competition. We generally have limited competition for the retail distribution of natural gas in our service areas. Various
restructuring and competitive initiatives have been discussed in several of the states in which our utilities operate. These
initiatives are aimed at increasing competition. Additionally, electrification initiatives in our service territories could negatively
impact demand for natural gas and decrease growth. To date, these initiatives have not had a material impact on our utilities.
Although we face competition from independent marketers for the sale of natural gas to our industrial and commercial
customers, in instances where independent marketers displace us as the seller of natural gas, we still collect fees for
transporting the gas through our distribution network.

Operating statistics. See a summary of key operating statistics in the Gas Utilities segment operating results within
Management’s Discussion and Analysis of Financial Condition and Results of Operations in Item 7 of this Annual Report on
Form 10-K.

10-KFORM 10-K |Utility Regulation Characteristics

Our Utilities are subject to regulation by a number of federal, state and other organizations, including, but not limited to, the
following:

•

State public utility commissions, which have jurisdiction over services and facilities, rates and charges, accounting,
valuation of property, depreciation rates and various other matters;

the FERC, which oversees the acquisition and disposition of generation, transmission and other facilities,
transmission of electricity and natural gas in interstate commerce, proposals to build and operate interstate natural
gas pipelines and storage facilities, and wholesale purchases and sales of electric energy, among other things;

the NERC, which, through its regional entities, establishes and enforces mandatory reliability standards, subject to
approval by the FERC, to ensure the reliability of the U.S. electric transmission and generation system and to
prevent major system blackouts;

the EPA, which has the responsibility to maintain and enforce national standards under a variety of environmental
laws, in some cases delegating authority to state agencies. The EPA also works with industries and all levels of
government, including federal and state governments, in a wide variety of voluntary pollution prevention programs
and energy conservation efforts;

the TSA, which regulates certain activities related to the safety and security of natural gas pipelines. In May and July
2021 the TSA issued security directives that included several new cybersecurity requirements for critical pipeline
owners and operators; and

the PHMSA, which is responsible for administering the federal regulatory program to help ensure the safe
transportation of natural gas, petroleum and other hazardous materials by pipelines, including pipelines associated
with natural gas storage, and develops regulations and other approaches to risk management to help ensure safety
in design, construction, testing, operation, maintenance and emergency response of pipeline facilities.

Rates and Regulation

Our Utilities are subject to the jurisdiction of the public utility commissions in the states where they operate and the FERC for
certain assets and transactions. These commissions oversee services and facilities, rates and charges, accounting, valuation of
property, depreciation rates and various other matters. Rate decisions are influenced by many factors, including the cost of
providing service, capital expenditures, the prudence of costs we incur, views concerning appropriate rates of return, general
economic conditions and the political environment. Certain commissions also have jurisdiction over the issuance of debt or
securities and the creation of liens on property located in their states to secure bonds or other securities.

The regulatory provisions for recovering the costs of service vary by jurisdiction. Our Utilities have cost recovery mechanisms
that allow us to pass the prudently-incurred cost of natural gas, fuel and purchased power to customers. These mechanisms
allow the utility operating in that state to collect or refund the difference between the cost of commodities and certain services
embedded in our base rates and the actual cost of the commodities and certain services without filing a general rate review. In
addition, some jurisdictions allow us to recover certain costs or earn a return on capital investments placed in service between
base rate reviews through approved rider tariffs, such as energy efficiency plan costs and system safety and integrity
investments. These tariffs allow the utility a return on the investment.

10-K| FORM 10-KElectric Utilities

The following table provides regulatory information for each of our Electric Utilities:

Subsidiary

Jurisdiction

Colorado Electric (a)

South Dakota Electric

Wyoming Electric (a) (c)

CO
WY
SD

FERC
WY

Authorized
Rate of
Return on
Equity

Authorized
Return on
Rate Base

Authorized
Capital
Structure
Debt/Equity

Authorized
Rate Base
(in millions)

Effective
Date

Additional Regulatory
Mechanisms

Percentage of
Power Marketing
Profit Shared
with Customers

9.37%

7.43%

48%/52%

$539.6

1/2017

ECA, TCA, PCCA,
EECR/DSM, RESA

9.37%
9.90%
Global
Settlement
10.80%
9.75%

6.02%
8.13%
7.76%

8.76%
7.48%

$57.9
$46.8
$543.9

1/2017 CACJA Adjustment Rider
10/2014
10/2014

67%/33%
47%/53%
Global
Settlement
43%/57% $177.8 (b) 2/2009 FERC Transmission Tariff
PCA, EECR/DSM, Rate
3/2023
48%/52%
Base Recovery on
Acquisition Adjustment,
TCAM

ECA
ECA, TFA, EIA

$506.4

90%

N/A
65%
70%

N/A
N/A

____________________
(a)

For both Colorado Electric and Wyoming Electric, transmission investments are recovered through retail rates rather than FERC
Transmission Tariffs. Effective September 1, 2022, a formulaic approach determines the revenue component of Colorado Electric's open
access transmission tariff.
Includes $160.7 million in 2022 rate base for the 2022 Projected Common Use System formula rate that is updated annually and $17.1
million in rate base for the Transmission Tie that is based on the approved stated rate from 2005.
For additional information regarding recent rate review updates, see Note 2 of the Notes to Consolidated Financial Statements in this
Annual Report on Form 10-K.

(b)

(c)

The following table summarizes the mechanisms we have in place for each of our Electric Utilities:

Electric Utility Jurisdiction
Colorado Electric
South Dakota Electric (SD) (a)
South Dakota Electric (WY) (b)
South Dakota Electric (FERC) (c)
Wyoming Electric (d)
____________________
(a)

Environmental
Cost

☑

EECR/DSM
☑

☑

Cost Recovery Mechanisms

Transmission
Expense
☑
☑
☑

☑

Fuel
Cost
☑
☑
☑

☑

Transmission
Capital
☑
☑

☑
☑

Purchased
Power
☑
☑
☑

☑

RESA
☑

South Dakota Electric’s EIA and TFA tariffs were suspended for a six-year moratorium period effective July 1, 2017. On January 7, 2020,
South Dakota Electric received approval from the SDPUC to extend the 6-year moratorium period by an additional 3 years whereby these
recovery mechanisms will not be effective prior to July 1, 2026.
South Dakota Electric has WPSC authorization to accumulate certain Energy Efficiency costs in a regulatory asset with determination of
recovery to be made in the next rate review.
South Dakota Electric has an approved FERC Transmission Tariff based on a formulaic approach that determines the revenue
component of South Dakota Electric’s open access transmission tariff.

(b)

(c)

(d) Wyoming Electric has a WPSC-approved transmission tariff based on a formulaic approach that determines the recovery of Wyoming

Electric's transmission costs.

10-KFORM 10-K |Gas Utilities

The following table provides regulatory information for each of our Gas Utilities:

Subsidiary
Arkansas Gas (a)

Jurisdiction
AR

Authorized
Rate of Return
on Equity
9.60%

Authorized
Return on
Rate Base
6.20% (b)

Authorized
Capital
Structure
Debt/Equity
55%/45%

Authorized
Rate Base
(in millions)
$674.6 (c)

Colorado Gas (a)
RMNG

Iowa Gas (a)

CO
CO

9.20%
9.90%

6.56%
6.71%

50%/50%
53%/47%

$303.20
$118.70

9.60%

6.75%

50%/50%

$300.90

Kansas Gas (a)

Global
Settlement

Effective
Date

Additional Regulatory Mechanisms

10/2022 GCA, Safety and Integrity Rider,

EECR, Weather Normalization
Adjustment, Billing Determinant
Adjustment

1/2022 GCA, SSIR, EECR/DSM
6/2018 SSIR, Liquids/Off-system/Market
Center Services Revenue Sharing
1/2022 GCA, EECR, System Safety and
Maintenance Adjustment Rider,
Gas Supply Optimization revenue
sharing

1/2022 GCA, Weather Normalization
Tariff, Gas System Reliability
Surcharge, Ad Valorem Tax
Surcharge, Cost of Bad Debt
Collected through GCA, Pension
Levelized Adjustment, Tax
Adjustment Rider, Gas Supply
Optimization revenue sharing

Nebraska Gas (d)

9.50%

6.71%

50%/50%

$504.20

3/2021 GCA, Cost of Bad Debt Collected

Wyoming Gas (d)

9.40%

6.98%

50%/50%

$354.40

through GCA, Infrastructure System
Replacement Cost Recovery
Surcharge, Choice Gas Program,
SSIR, Bad Debt expense recovered
through Choice Supplier Fee, Line
Locate Surcharge, HEAT Program
3/2020 GCA, EECR, Rate Base Recovery
on Acquisition Adjustment,
Wyoming Integrity Rider, Choice
Gas Program

____________________
(a)

For additional information regarding recent rate review updates, see Note 2 of the Notes to Consolidated Financial Statements in this
Annual Report on Form 10-K.
Arkansas Gas return on rate base is adjusted to remove certain liabilities from rate review capital structure for comparison with other
subsidiaries.
Arkansas Gas rate base is adjusted to include certain liabilities for comparison with other subsidiaries.
The Choice Gas Program mechanisms are applicable to only a portion of Nebraska Gas and Wyoming Gas customers.

(b)

10-K| FORM 10-KThe following table summarizes the mechanisms we have in place for each of our Gas Utilities:

Gas Utility Jurisdiction

Arkansas Gas
Colorado Gas
RMNG (a)
Iowa Gas
Kansas Gas
Nebraska Gas
Wyoming Gas

EECR/DSM
☑
☑

☑

Integrity
Additions
☑
☑
☑
☑
☑
☑
☑

Cost Recovery Mechanisms
Weather
Normal
☑

Pension
Recovery

Bad Debt

Gas Cost (b)
☑
☑

Revenue
Decoupling
☑

☑
☑

☑

☑
☑
☑
☑

____________________
(a)

RMNG, which is an intrastate transmission pipeline that provides natural gas transmission and wholesale services in western Colorado,
has an SSIR mechanism which allows recovery of investments through December 31, 2021. The other cost recovery mechanisms are not
applicable to RMNG.

(b)

All of our Gas Utilities, except where the Choice Gas Program is the only option, have GCAs that allow us to pass the prudently-incurred
cost of gas and certain services through to the customer between rate reviews.

Recent Tariff Filings

See Note 2 of the Notes to Consolidated Financial Statements in this Annual Report on Form 10-K for information regarding current
regulatory activity.

FERC

The Federal Power Act gives FERC exclusive rate-making jurisdiction over wholesale sales of electricity and the transmission of
electricity in interstate commerce. Pursuant to the Federal Power Act, all public utilities subject to FERC’s jurisdiction must
maintain tariffs and rate schedules on file with FERC that govern the rates, and terms and conditions for the provision of FERC-
jurisdictional wholesale power and transmission services. Public utilities are also subject to accounting, record-keeping and
reporting requirements administered by FERC. FERC also places certain limitations on transactions between public utilities and
their affiliates. Our public Electric Utility subsidiaries provide FERC-jurisdictional services subject to FERC’s oversight.

Our Electric Utilities entities are authorized by FERC to make wholesale sales of electric capacity and energy at market-based
rates under tariffs on file with FERC. As a condition of their market-based rate authority, Electric Quarterly Reports are filed with
FERC. Our Electric Utilities own and operate FERC-jurisdictional interstate transmission facilities and provide open access
transmission service under tariffs on file with FERC. Our Electric Utilities are subject to routine audit by FERC with respect to
their compliance with FERC’s regulations.

PUHCA 2005 provides FERC authority with respect to the books and records of a utility holding company. As a utility holding
company whose assets consist primarily of investments in our subsidiaries, including subsidiaries that are public utilities and also
a centralized service company subsidiary, BHSC, we are subject to FERC’s authority under PUHCA 2005.

PUHCA 2005 reiterated the definition and benefits of EWG status. Under PUHCA 2005, an EWG is an entity or generator
engaged, directly or indirectly through one or more affiliates, exclusively in the business of owning, operating or both owning and
operating all or part of one or more eligible facilities and selling electric energy at wholesale. Though EWGs are public utilities
within the definition set forth in the Federal Power Act and are subject to FERC regulation of rates and charges, they are exempt
from other FERC requirements. Through its subsidiaries, Black Hills Corporation is affiliated with three EWGs, Wygen I, Pueblo
Airport Generation (facilities #4-5) and Northern Iowa Windpower. Each of these three EWGs have been granted market-based
rate authority.

NERC

The Energy Policy Act of 2005 included provisions to create an Electric Reliability Organization, which is required to promulgate
mandatory reliability standards governing the operation of the bulk power system in the U.S. FERC certified NERC as the
Electric Reliability Organization and also issued an initial order approving many reliability standards that went into effect in 2007.
Entities that violate standards can be subject to fines and can also be assessed non-monetary penalties, depending upon the
nature and severity of the violation.

10-KFORM 10-K |

Pipeline Security

In May and July 2021, the TSA issued security directives in response to a ransomware attack on the Colonial Pipeline that
occurred earlier in 2021 that included several new cybersecurity requirements for critical pipeline owners and operators. Among
these requirements is the implementation of specific mitigation measures to protect against ransomware attacks and other
known threats to information and operational technology systems; development and implementation of a cybersecurity
contingency and recovery plan; and performance of a cybersecurity architecture design review. We have implemented several of
these directives and are evaluating the potential effect of several others on our operations and facilities, as well as the potential
cost of implementation, and will continue to monitor for any clarifications or amendments to these directives.

Gas Pipeline and Storage Integrity and Safety

We are subject to regulation by PHMSA, which requires the following for certain gas distribution and transmission pipelines and
underground storage facilities: inspection and maintenance plans; integrity management programs, including the determination
of pipeline integrity risks and periodic assessments on certain pipeline segments; an operator qualification program, which
includes certain trainings; a public awareness program that provides certain information; and a control room management plan. If
we fail to comply with applicable statutes and the PHMSA Office of Pipeline Safety’s rules and related regulations and orders, we
could be subject to significant penalties and fines.

Environmental Matters

We have clean energy goals to reduce GHG emissions that are based on prudent and proven solutions while minimizing cost
impacts to and ensuring safety of our customers. See more information in Key Elements of our Business Strategy within
Management’s Discussion and Analysis of Financial Condition and Results of Operations in Item 7 of this Annual Report on
Form 10-K.

We are subject to significant state and federal environmental regulations that encourage the use of clean energy technologies
and regulate emissions of GHGs. We have undertaken initiatives to meet current requirements and to prepare for anticipated
future regulations, reduce GHG emissions, and respond to state renewable and energy efficiency goals. Compliance with future
environmental regulations could result in substantial cost.

In July of 2019, the EPA adopted the Affordable Clean Energy rule, which requires states to develop plans by 2022 for GHG
reductions from coal-fired power plants. In a January 2021 decision, the U.S. Court of Appeals for the D.C. Circuit issued a
decision vacating and remanding the Affordable Clean Energy rule. Four petitions for review of the D.C. Circuit’s opinion were
subsequently granted by the U.S. Supreme Court on October 29, 2021, consolidated under West Virginia v. EPA et al. On June
30, 2022, the U.S. Supreme Court released its opinion in favor of West Virginia and aligned parties. The decision clarifies that
there are limits on how the EPA may regulate GHGs absent further direction from the U.S. Congress. The court concluded that
emission caps that would cause generation shifting from fossil-fuel-fired power plants to renewable energy facilities would
require specific congressional authorization and that such authorization had not been given under the Clean Air Act. The
decision by the U.S. Supreme Court may affect the EPA’s development of any new regulations to address CO2 emissions from
coal- and natural gas-fired power plants; however, at this time, we cannot predict the impact of any such regulations or the
decision by the U.S. Supreme Court on the results of operations, financial position, and liquidity. The EPA has indicated that it
intends to issue a proposed rule in early 2023 with a new set of emission guidelines for states to follow in submitting state plans
to establish and implement standards of performance for GHG emissions from existing fossil fuel-fired electric generating units.
We will continue to monitor any related guidelines and rulemakings issued by the EPA or state regulatory authorities.

In February 2022, the EPA proposed the Good Neighbor Rule Provisions, which are part of the CSAPR framework and is
intended to address ozone transport for the 2015 ozone NAAQS. The rule focuses on reductions of NOx, which is a precursor to
ozone formation, for states that do not have an approved State Implementation Plan (SIP). On January 31, 2023, the EPA
finalized a notice which disapproved 19 SIPs, partially disapproved two other SIPs and deferred action until December 2023 on
two SIPs, which included Wyoming. The EPA action on January 31, 2023 was a necessary prerequisite for the EPA to finalize a
proposed Good Neighbor Rule by the March 15, 2023 deadline. The EPA also released a new air quality modeling that indicated
two states (including Wyoming), which were previously within scope of the Good Neighbor Rule, no longer exceeded the cross-
state ozone emissions threshold. It is likely that the EPA will rely on this new air quality modeling as part of the final Good
Neighbor Rule. Based on the new air quality modeling, Wyoming will not be required to purchase additional NOx allowances
during the 2023 ozone season. Until the EPA takes action on Wyoming's SIP, which is anticipated in December 2023, we cannot
determine our future CSAPR compliance costs or impacts on our operations, but they could be material. However, we anticipate
that any costs incurred as a result of the proposed rule would be recoverable through our regulatory mechanisms.

Environmental risk changes constantly with the implementation of new or modified regulations, changing stakeholder interests
and needs, and through the introduction of innovative work practices and technologies. We continually assess risk and develop
mitigation strategies to manage and ensure compliance across the enterprise successfully and responsibly. For additional
information on environmental matters, see Item 1A and Note 3 of the Notes to Consolidated Financial Statements in this Annual
Report on Form 10-K.

10-K| FORM 10-KHuman Capital Resources

Overview

We are committed to supporting operational excellence by attracting, motivating, retaining and encouraging the development of
a highly qualified and diverse employee team. Our employees’ drive and dedication to their work, and their commitment to the
safety of our customers and their fellow employees, allows us to successfully grow and manage our business year over year.

Our Team

Total employees
Women in executive leadership positions (a)
Gender diversity (women as a % of total employees)
Represented by a union
Military veterans
Ethnic diversity (non-white employees as a % of total)

Number of external hires
External hires gender diversity (as a % of total external hires)
External hires ethnic diversity (as a % of total external hires)
Turnover rate (b)
Retirement rate
____________________
(a)
(b)

As of December 31,
2022
2,982
33%
25%
25%
11%
14%

For the year ended
December 31, 2022
487
30%
23%
13%
3%

As of December 31,
2021
2,884
30%
26%
25%
14%
12%

For the year ended
December 31, 2021
214
25%
20%
11%
3%

Executive leadership positions are defined as positions with Vice President, Senior Vice President or Chief in their title.
Includes voluntary and involuntary separations but excludes internships.

Total Employees

Electric Utilities
Gas Utilities
Corporate and Other

Total

Number of Employees
As of December 31, 2022
442
1,226
1,314
2,982

At December 31, 2022, approximately 19% of our total employees and 21% of our Electric and Gas Utilities employees were
eligible for retirement (age 55 with at least 5 years of service).

Collective Bargaining Agreements

At December 31, 2022, certain employees of our Electric Utilities and Gas Utilities were covered by the collective bargaining
agreements as shown in the table below. We have not experienced any labor stoppages in decades.

Utility

Colorado Electric
South Dakota Electric
Wyoming Electric

Total Electric Utilities

Iowa Gas

Kansas Gas

Nebraska Gas
Nebraska Gas
Wyoming Gas
Wyoming Gas

Total Gas Utilities

Total

Number of
Employees
105
130
35
270

Union Affiliation
IBEW Local 667
IBEW Local 1250
IBEW Local 111

Expiration Date of
Collective Bargaining
Agreement
April 15, 2023
March 31, 2027
June 30, 2024

IBEW Local 204
Communications Workers of
America, AFL-CIO Local
6407
IBEW Local 244
CWA Local 7476
IBEW Local 111
CWA Local 7476

January 31, 2026

December 31, 2024

March 13, 2025
October 30, 2023
June 30, 2024
October 30, 2023

129

83
137
15
82
464

734

10-KFORM 10-K |
Attraction

Attracting talent to join our team is critical to our ability to serve over 1.3 million customers safely and efficiently. We continuously
evaluate our recruitment strategies to determine their effectiveness to attract and build a high-performing, diverse workforce. Our
diversity recruiting strategies support our efforts to attract qualified individuals with targeted efforts to reach underrepresented
talent pools. Our internship program and our partnerships and participation in outreach programs with local schools and colleges
attract students to careers in energy. Our commitment to equitable and inclusive hiring practices, including pay equity, further
supports our vision of attracting, developing and retaining a high-performing workforce driven by improving life with energy.

Diversity & Inclusion

We believe in the benefits of diversity, equity and inclusion. We believe that a diverse workforce will assist us in executing our
strategic business plans, including our growth strategy. Workforce diversity trends, which include gender and diverse new hires,
promotions and turnover, are monitored at regular intervals throughout the year.

Development and Retention

Retaining and developing team members is critical to our continued success. Our retention efforts include competitive
compensation programs, monitoring employee engagement, career development resources for all employees and internal
training programs. Our compensation programs are designed to be strategically aligned, externally competitive, internally
equitable, personally motivating, cost effective and legally compliant. We continuously monitor employee engagement through
bi-annual engagement surveys and quarterly pulse surveys. Every leader is responsible for creating and implementing an action
plan based on their team’s engagement survey results. Our career development resources include management onboarding,
leadership development programs, mentoring programs, individual development assessments and more. Internal training
opportunities include corporate-wide and specialized training opportunities for different job functions. Our Field Career Path
Program (FCPP) promotes career growth through established standards of knowledge, skills, abilities and performance.

Employee Safety and Wellness

Safety is one of our company values, a top priority in all we do and deeply embedded in our culture. We are committed to
consistently outperforming utility industry averages in key safety metrics. Meetings of three or more employees begin with a
safety share, a practice which contributes to keeping safety top of mind. Since 2009, we have reduced workplace injuries by
more than 75% and continue to see long-term, sustained improvements in our safety practices and performance.

Total Case Incident Rate (incidents per 200,000 hours worked)
Preventable Motor Vehicle Incident Rate (vehicle accidents per 1 million miles driven)
% of injuries reported within 1 day

For the year ended
December 31, 2022

1.39
1.33
90.8%

10-K| FORM 10-K
ITEM 1A. RISK FACTORS

The nature of our business subjects us to a number of uncertainties and risks. Risks that may adversely affect our business
operations, financial condition, results of operations or cash flows are described below. These risk factors, along with other risk
factors that we discuss in our periodic reports filed with the SEC should be considered for a better understanding of our
Company.

STRATEGIC RISK

Our continued success is dependent on execution of our business plan and growth strategy, including our capital
investment program.

Our continued success depends, in significant part, on our ability to execute our strategic business plans, including our growth
strategy. Our plans and strategy include building sustainable operations and supporting the Energy Transition; consistently
outperforming utility industry averages in key safety metrics; modernizing utility infrastructure; transforming the customer
experience; growing our electric and natural gas customer load; and pursuing operational efficiencies. Our current plans and
strategy may be negatively impacted by disruptive forces and innovations in the marketplace, workforce capabilities, changing
political, business or regulatory conditions and technology advancements.

In addition, we have significant capital investment programs planned for the next five years that are key to our strategic business
plans. The successful execution of our capital investment program depends on, or could be affected by, a variety of factors that
include, but are not limited to: availability of low cost capital to fund projects, weather conditions, effective management of
projects, availability of qualified construction personnel including contractors, changes in commodity and other prices, impacts of
supply chain disruptions on availability and cost of materials, governmental approvals and permitting, regulatory cost recovery
and return on investment.

An inability to successfully and timely adapt to changing conditions and execute our strategic plans could materially affect our
financial operating results including earnings, cash flow and liquidity.

REGULATORY, LEGISLATIVE AND LEGAL RISKS

We may be subject to unfavorable or untimely federal and state regulatory outcomes.

Our regulated Electric and Gas Utilities are subject to cost-of-service/rate-of-return regulation and earnings oversight from
federal and eight state utility commissions. This regulatory treatment does not provide any assurance as to achievement of
desired earnings levels. Our customer rates are regulated based on an analysis of our costs and investments, as reviewed and
approved in regulatory proceedings. While rate regulation is premised on the full recovery of prudently incurred costs and a
reasonable rate of return on invested capital, there can be no assurance that our various regulatory authorities will judge all of
our costs to have been prudently incurred or that the regulatory process in which rates are determined will result in full or timely
recovery of our costs with a reasonable return on invested capital. In addition, adverse rate decisions, including rate
moratoriums, rate refunds, limits on rate increases, lower allowed returns on investments or rate reductions, could be influenced
by competitive, economic, political, legislative, public perception and regulatory pressures and adversely impact earnings, cash
flow and liquidity.

Each of our Electric and Gas Utilities are permitted to recover certain costs (such as increased fuel and purchased power costs,
including costs from certain severe weather events, or integrity capital investments) outside of a base rate review in order to
stabilize customer rates and reduce regulatory lag. If regulators decide to discontinue these tariff-based recovery mechanisms, it
could negatively impact earnings, cash flow and liquidity.

Costs could significantly increase to achieve or maintain compliance with existing or future environmental laws,
regulations or requirements including those associated with climate change.

Our business segments are subject to numerous environmental laws and regulations affecting many aspects of present and
future operations, including air emissions (i.e., SO2, NOx, volatile organic compounds, particulate matter and GHG), water
quality, wastewater discharges, solid waste and hazardous waste.

These laws and regulations may result in increased capital, operating and other costs. These laws and regulations generally
require the business segments to obtain and comply with a wide variety of environmental licenses, permits, inspections and
other government approvals. Compliance with environmental laws and regulations may require significant expenditures,
including expenditures for cleanup costs and damages arising from contaminated properties. Failure or inability to comply with
evolving environmental regulations may result in the imposition of fines, penalties and injunctive measures affecting operating
assets.

10-KFORM 10-K |Our business segments may not be successful in recovering increased capital and operating costs incurred to comply with new
environmental regulations through existing regulatory rate structures and contracts with customers. More stringent environmental
laws or regulations could result in additional costs of operation for existing facilities or impede the development of new facilities.

There is significant uncertainty regarding if and when new climate legislation, regulations or administrative policies will be
adopted to reduce or limit GHG and the impact any such regulations would have on us. New or more stringent regulations or
other energy efficiency requirements could require us to incur significant additional costs relating to, among other things, the
installation of additional emission control equipment, the acceleration of capital expenditures, the purchase of additional
emissions allowances or offsets, the acquisition or development of additional energy supply from renewable resources, the
closure or capacity reductions of coal-fired power generation facilities or conversion to natural gas, and potential increased
production from our combined cycle natural gas-fired generating units. Additional rules and regulations associated with fossil
fuels and GHG emissions could result in the impairment or retirement of some of our existing or future transmission, distribution,
generation and natural gas storage facilities or our coal mine. Further, these rules could create the need to purchase or build
clean-energy fuel sources to fulfill obligations to our customers. These actions could also result in increased operating costs
which could adversely impact customers and our financial operating results including earnings, cash flow and liquidity. We
cannot definitively estimate the effect of GHG legislation or regulation on our earnings, cash flow and liquidity.

Legislative and regulatory requirements may result in compliance penalties.

Business activities in the energy sector are heavily regulated, primarily by agencies of the federal government. Many agencies
employ mandatory civil penalty structures for regulatory violations. The FERC, NERC, PHMSA, CFTC, EPA, OSHA, SEC, TSA
and MSHA may impose significant civil and criminal penalties to enforce compliance requirements relative to our business,
which could have a material adverse effect on our financial operating results including earnings, cash flow and liquidity.

Municipal governments may seek to limit or deny our franchise privileges.

Municipal governments within our utility service territories possess the power of condemnation and could establish a municipal
utility within a portion of our current service territories by limiting or denying franchise privileges for our operations and exercising
powers of condemnation over all or part of our utility assets within municipal boundaries. We regularly engage in negotiations on
renewals of franchise agreements with our municipal governments. We have from time to time faced challenges or ballot
initiatives on franchise renewals. To date, we have been successful in resolving or defending most of these challenges. Although
condemnation is a process that is subject to constitutional protections requiring just and fair compensation, as with any judicial
procedure, the outcome is uncertain. If a municipality sought to pursue this course of action, we cannot assure that we would
secure adequate recovery of our investment in assets subject to condemnation. We also cannot quantify the impact that such
action would have on the remainder of our business operations.

Changes in Federal tax law may significantly impact our business.

We are subject to taxation by the various taxing authorities at the federal, state and local levels where we operate. Sweeping
legislation or regulation could be enacted by any of these governmental authorities which may affect our tax burden. Changes
may include numerous provisions that affect businesses, including changes to corporate tax rates, business-related exclusions,
and deductions and credits. The outcome of regulatory proceedings regarding the extent to which a change in corporate tax rate
will affect our utility customers and the time period over which that change will occur could significantly impact future earnings
and cash flows. Separately, a challenge by a taxing authority, changes in taxing authorities’ administrative interpretations,
decisions, policies and positions, our ability to utilize tax benefits such as carryforwards or tax credits, or a deviation from other
tax-related assumptions may cause actual financial results to deviate from previous estimates.

Our business, financial condition, results of operations and prospects may be materially adversely affected due to
adverse results of litigation.

Material legal proceedings are summarized in Note 3 of Notes to Consolidated Financial Statement in this Annual Report on Form
10-K. Unfavorable resolution of legal or administrative proceedings in which we are involved or other future legal or administrative
proceedings could have an adverse effect on our financial operating results, including earnings, cash flow and liquidity.

10-K| FORM 10-KOPERATING RISKS

Failure to attract and retain an appropriately qualified workforce could have a negative impact on our operations and
long-term business strategy.

Recent trends, such as higher turnover, a competitive and tight labor market and an aging workforce may lead to higher costs
and increased risk of negative outcomes for safety, compliance, customer service, and operations. Our ability to transition and
replace our retirement-eligible utility employees is a risk; at December 31, 2022, approximately 19% of our employees were
eligible for retirement. Our ability to avoid or minimize supply interruptions, work stoppages and labor disputes is also a risk with
approximately 25% of our employees represented by unions. Failure to hire and retain qualified employees, including the ability
to transfer significant internal historical knowledge and expertise to new employees, may adversely affect our ability to manage
and operate our business. If we are unable to successfully attract and retain an appropriately qualified workforce and maintain
satisfactory collective bargaining agreements, safety, service reliability, customer satisfaction and our results of operations could
be adversely affected.

Our plans and strategy include building sustainable operations and supporting the Energy Transition; consistently outperforming
utility industry averages in key safety metrics; modernizing utility infrastructure; transforming the customer experience; growing
our electric and natural gas customer load; and pursuing operating efficiencies. As part of our strategic plan, we will need to
attract and retain personnel who are qualified to implement our strategy and may need to retrain or re-skill certain employees to
support our long-term objectives.

The nature of our business subjects us to climate-related risk, stemming from both physical risk and transition risk of
climate change, over varying time horizons.

Physical risks of climate change refer to risks to our facilities or operations that may result from changes in the physical climate,
such as changes to temperature and weather patterns. Our utility businesses are seasonal businesses and weather conditions
and patterns can have a material impact on our operating performance. To the extent weather conditions are affected by climate
change, fluctuations in customers’ energy usage could be magnified. Climate change may lead to increased intensity and
frequency of storms, resulting in increased likelihood of fire, wind and extreme temperature events. Severe weather events, such
as snow and ice storms (e.g., Winter Storm Uri), fire, and strong winds could negatively impact our operations, including our
ability to provide energy safely, reliably and profitably and our ability to complete construction, expansion or refurbishment of
facilities as planned. Unmitigated impacts of climate change may intensify these events or increase the frequency of their
occurrence. Over time, we may need to make additional investments to protect our facilities from physical risks of climate
change.

Transition risks of climate change include changes to the energy systems as a result of new technologies, changing customer
demand and/or expectations and voluntary GHG reduction goals, as well as local, state or federal regulatory requirements
(discussed above) intended to reduce GHG emissions. Policies such as a carbon or methane tax could increase costs
associated with fossil fuel usage, resulting in higher operating costs including costs of energy generation, construction, and
transportation. Risks of the transition to a low-carbon economy could result in shrinking customer demand for fossil fuel-based
energy sources. This could come from increased use of behind the meter technology, such as residential solar and storage. Risk
of investor pressure over climate risk and/or ESG standards, activist campaigns against coal producers, employee preferences
to work for sustainable companies and consumers preference for renewable energy could impact our reputation and overall
access to capital and/or adequate insurance policies.

Supply chain challenges could negatively impact our operations.

We rely on various suppliers in our supply chain for the materials necessary to execute on our capital investment program that is
key to our strategic business plans and to respond to a significant unplanned event such as a natural disaster. Our largest
customers also rely on our supply chain and delays in critical materials could impact their ability to operate and grow as planned.
Our supply chain, material costs, and capital investment program may be negatively impacted by:

•

Unanticipated price increases due to recent macroeconomic factors, such as inflation, including wage inflation, or
rising demand for raw materials associated with the Energy Transition; and

Supply restrictions beyond our control or the control of our suppliers such as disruption of the freight system (e.g.
railroad labor union strikes), increased environmental threats from weather-related disasters, rising demand for raw
materials associated with the Energy Transition and/or geopolitical unrest (e.g. Russian invasion of Ukraine).

An inability to successfully manage challenges in our supply chain network could materially affect our financial operating results
including earnings, cash flow and liquidity.

10-KFORM 10-K |Cyberattacks, terrorism, or other malicious acts targeting our key technology systems could disrupt our operations or
lead to a loss or misuse of confidential and proprietary information.

To effectively operate our business, we rely upon a sophisticated electronic control system, information and operation
technology systems and network infrastructure to generate, distribute and deliver energy, and collect and retain sensitive
information including personal information about our customers and employees. Cyberattacks, terrorism or other malicious acts
targeting electronic control systems could result in a full or partial disruption of our electric and/or natural gas operations. Attacks
targeting other key technology systems, including our third-party vendors’ information systems, could further add to a full or
partial disruption of our operations. Recent geopolitical conflicts (e.g. Russia's invasion of Ukraine) have increased the risk of
cyberattack. Any disruption of these operations could result in a loss of service to customers and associated revenues, as well
as significant expense to repair damages and remedy security breaches. In addition, any theft, loss and/or fraudulent use of
customer, shareowner, employee or proprietary data could subject us to significant litigation, liability and costs, as well as
adversely impact our reputation with customers and regulators, among others. We maintain cyber risk insurance to mitigate a
portion, but not all, of these risks and losses.

As discussed in Utility Regulation Characteristics above, in 2021 the TSA issued security directives that included several new
cybersecurity requirements for critical pipeline owners and operators. Such directives or other requirements may require
expenditure of significant additional resources to respond to cyberattacks, to continue to modify or enhance protective measures,
or to assess, investigate and remediate any critical infrastructure security vulnerabilities. Any failure to comply with such
government regulations or failure in our cybersecurity protective measures may result in enforcement actions that may have a
material adverse effect on our business, results of operations and financial condition. In addition, there is no certainty that costs
incurred related to securing against threats will be recovered through rates.

We have instituted security measures and safeguards to protect our operational systems and information technology assets,
including certain safeguards required by FERC. Despite our implementation of security measures and safeguards, all of our
technology systems may still be vulnerable to disability, failures or unauthorized access.

Our financial performance depends on the successful operation of electric generating facilities, electric and natural gas
transmission and distribution systems, natural gas storage facilities and a coal mine.

The risks associated with managing these operations include:

•

Operating hazards. Operating hazards such as leaks, mechanical problems and accidents, including fires or
explosions, could impact employee and public safety, reliability and customer confidence;

Inherent dangers. Electricity and natural gas can be dangerous to employees and the general public. Failures of or
contact with power lines, natural gas pipelines or service facilities and equipment may result in fires, explosions,
property damage and personal injuries, including death. While we maintain liability and property insurance coverage,
such policies are subject to certain limits and deductibles. The occurrence of any of these events may not be fully
covered by our insurance;

Weather, natural conditions and disasters including impacts from climate change (discussed above);

Acts of sabotage, terrorism or other malicious attacks. Damage to our facilities due to deliberate acts could lead to
outages or other adverse effects;

Equipment and processes. Breakdown or failure of equipment or processes, unavailability or increased cost of
equipment, and performance below expected levels of output or efficiency could negatively impact our results of
operations;

Disrupted transmission and distribution. We depend on transmission and distribution facilities, including those
operated by unaffiliated parties, to deliver the electricity and natural gas that we sell to our retail and wholesale
customers. If transmission is interrupted physically, mechanically or with cyber means, our ability to sell or deliver
utility services and satisfy our contractual obligations may be hindered;

Natural gas supply for generation and distribution. Our regulated utilities and non-regulated entities purchase natural
gas from a number of suppliers for our generating facilities and for distribution to our customers. Our results of
operations could be negatively impacted by the lack of availability and cost of natural gas, and disruptions in the
delivery of natural gas due to various factors, including but not limited to, transportation delays, labor relations,
weather, sabotage, cyber-attacks and environmental regulations;

Replacement power. The cost of supplying or securing replacement power during scheduled and unscheduled
outages of generation facilities could negatively impact our results of operations;

Governmental permits. The inability to obtain required governmental permits and approvals along with the cost of
complying with or satisfying conditions imposed upon such approvals could negatively impact our ability to operate
and our results of operations;

10-K| FORM 10-K•

•

Operational limitations. Operational limitations imposed by environmental and other regulatory requirements and
contractual agreements, including those that restrict the timing of generation plant scheduled outages, could
negatively impact our results of operations;

Increased costs. Increased capital and operating costs to comply with increasingly stringent laws and regulations,
unexpected engineering, environmental and geological problems, and unanticipated cost overruns could negatively
impact our results of operations;

Supply chain challenges (discussed above);

Workforce capabilities and labor relations (discussed above); and

Public opposition. Opposition by members of public or special-interest groups could negatively impact our ability to
operate our businesses.

Any of these risks described above could damage our reputation and public confidence. These risks could also cause us to incur
significant costs or be unable to deliver energy and/or operate below expected capacity levels, which in turn could reduce
revenues or cause us to incur higher operating and maintenance costs and penalties. While we maintain insurance, obtain
warranties from vendors and obligate contractors to meet certain performance levels, the proceeds of such insurance and our
rights under contracts, warranties or performance guarantees may not be timely or adequate to cover lost revenues, increased
expenses, liability or liquidated damage payments.

Our operations are subject to various conditions that can result in fluctuations in customer usage, including customer
growth and general economic conditions in our service territories, weather conditions, and responses to price
increases and technological improvements.

Our results of operations and cash flows are affected by the demand for electricity and natural gas, which can vary greatly based
upon:

•

Fluctuations in customer growth and general economic conditions in our service territories. Customer growth and
energy use can be negatively impacted by population declines as well as adverse economic factors in our service
territories, including recession, inflation, workforce reductions, stagnant wage growth, changing levels of support
from state and local government for economic development, business closings, and reductions in the level of
business investment. Our utility businesses are impacted by economic cycles and the competitiveness of the
commercial and industrial customers we serve. Any economic downturn, inflation, disruption of financial markets, or
reduced incentives by state government for economic development could adversely affect the financial condition of
our customers and demand for their products or services. These risks could directly influence the demand for
electricity and natural gas as well as the need for additional power generation and generating facilities. We could
also be exposed to greater risks of accounts receivable write-offs if customers are unable to pay their bills.

Weather conditions. Our utility businesses are seasonal businesses and weather conditions and patterns can have a
material impact on our operating performance. Demand for electricity is typically greater in the summer and winter
months associated with cooling and heating, respectively. Demand for natural gas depends heavily upon winter-
weather patterns throughout our service territory and a significant amount of natural gas revenues are recognized in
the first and fourth quarters related to the heating season. Accordingly, our utility operations have historically
generated lower revenues, income and cash flows when weather conditions are cooler than normal in the summer
and warmer than normal in the winter. Demand for natural gas is also impacted by summer weather patterns that
are cooler than normal and provide higher than normal precipitation; both of which can reduce natural gas demand
for irrigation. Unusually mild summers and winters, therefore, could have an adverse effect on our financial
operating results, including earnings, cash flow and liquidity.

Our customers' focus on energy conservation. Customer growth and usage may be impacted by the voluntary
reduction in consumption of electricity and natural gas by our customers in response to increases in prices and
energy efficiency programs, electrification initiatives that could negatively impact the demand for natural gas,
economic conditions (i.e., inflation, recession) impacting customers’ disposable income and the use of distributed
generation resources or other emerging technologies. Continued technological improvements may make customer
and third-party distributed generation and energy storage systems, including fuel cells, micro-turbines, wind turbines,
solar cells and batteries, more cost effective and feasible for our customers. If more customers utilize their own
generation, demand for energy from us could decline. Such developments could affect the price of energy and
delivery of energy, require further improvements to our distribution systems to address changing load demands and
could make portions of our electric system power supply and transmission and/or distribution facilities obsolete prior
to the end of their useful lives.

Each of these factors described above could materially affect demand for electricity and natural gas which would impact our
financial operating results including earnings, cash flow and liquidity.

10-KFORM 10-K |If macroeconomic or other conditions adversely affect operations or require us to make changes to our strategic
business plan, we may be forced to record a non-cash goodwill impairment charge.

We had approximately $1.3 billion of goodwill on our consolidated balance sheets as of December 31, 2022. If we make
changes in our strategic business plan and growth strategy, or if macroeconomic or other conditions adversely affect operations
in any of our businesses, we may be forced to record a non-cash impairment charge. Goodwill is tested for impairment annually
or whenever events or changes in circumstances indicate impairment may have occurred. If the testing performed indicates that
impairment has occurred, we are required to record an impairment charge for the difference between the carrying value of the
goodwill and the implied fair value of the goodwill in the period the determination is made. The testing of goodwill for impairment
requires us to make significant estimates about our future performance and cash flows, as well as other assumptions. These
estimates can be affected by numerous factors, including: future business operating performance, changes in macroeconomic
conditions including recession, inflation and interest rates, changes in our regulatory environment, industry-specific market
conditions, changes in business operations, changes in competition or changes in technologies. Any changes in key
assumptions, or actual performance compared with key assumptions, about our business and its future prospects could affect
the fair value of either or both of our operating segments, which may result in an impairment charge. See additional information
in “Critical Accounting Estimates” under Item 7, Management’s Discussion and Analysis of Financial Condition and Results of
Operations and Note 1 of the Notes to Consolidated Financial Statements in this Annual Report on Form 10-K.

Widespread public health crises and epidemics or pandemics could negatively affect our business operations, results of
operations, financial condition and cash flows.

We are subject to the impacts of widespread public health crises, epidemics and pandemics, including, but not limited to,
impacts on the global, national or local economies, capital and credit markets, our workforce, customers and suppliers. There is
no assurance that our businesses will be able to operate without material adverse impacts depending on the nature of the public
health crisis, epidemic or pandemic. The ultimate severity, duration and impact of public health crises, epidemics and pandemics
cannot be predicted. Additionally, there is no assurance that vaccines, or other treatments, are or will be widely available or
effective, or that the public will be willing to participate, in an effort to contain the spread of disease. Actions taken in response to
such crises by federal, state and local government or regulatory agencies may adversely affect our financial operating results
including earnings, cash flow and liquidity.

FINANCIAL RISKS

A sub-investment grade credit rating could impact our ability to access capital markets.

Our senior unsecured debt rating is Baa2 (Stable outlook) by Moody’s; BBB+ (Stable outlook) by S&P; and BBB+ (Stable
outlook) by Fitch. Reduction of our investment grade credit ratings could impair our ability to refinance or repay our existing debt
and complete new financings on reasonable terms. A credit rating downgrade, particularly to sub-investment grade, could also
result in counterparties requiring us to post additional collateral under existing or new contracts. In addition, a ratings downgrade
would increase our interest expense under some of our existing debt obligations, including borrowings under our credit facilities,
potentially significantly increasing our cost of capital and other associated operating costs which may not be recoverable through
existing regulatory rate structures and contracts with customers.

We may be unable to obtain financing on reasonable terms needed to refinance debt, fund planned capital expenditures
or otherwise execute our operating strategy.

Our ability to execute our operating strategy is highly dependent upon our access to capital. Historically, we have addressed our
liquidity needs (including funds required to make scheduled principal and interest payments, refinance debt, pay dividends and
fund working capital and planned capital expenditures) with operating cash flow, borrowings under credit facilities, proceeds of
debt and equity offerings and proceeds from asset sales. Our ability to access capital markets and the costs and terms of
available financing depend on many factors, including changes in our credit ratings, general macroeconomic conditions which
may drive changes in interest rates and cause volatility in our stock price, changes in the federal or state regulatory environment
affecting energy companies and volatility in commodity prices.

In addition, because we are a holding company and our utility assets are owned by our subsidiaries, if we are unable to
adequately access the credit markets, we could be required to take additional measures designed to ensure that our utility
subsidiaries are adequately capitalized to provide safe and reliable service. Possible additional measures would be evaluated in
the context of then-prevailing market conditions, prudent financial management and any applicable regulatory requirements.

10-K| FORM 10-KOur use of derivative financial instruments as hedges against commodity prices and financial market risks could result
in material financial losses.

We use various financial and physical derivatives, including futures, forwards, options and swaps, to manage commodity price
and interest rate risks. The timing of the recognition of gains or losses on these economic hedges in accordance with GAAP may
not consistently match up with the gains or losses on the commodities being hedged. For Black Hills Energy Services under the
Choice Gas Program, and in certain instances within our regulated Utilities where unrealized and realized gains and losses from
derivative instruments are not approved for regulatory accounting treatment, fluctuating commodity prices may cause
fluctuations in reported financial results due to mark-to-market accounting treatment.

To the extent that we hedge our commodity price and interest rate exposures, we forgo the benefits we would otherwise
experience if commodity prices or interest rates were to change in our favor. In addition, even though they are closely monitored
by management, our hedging activities can result in losses. Such losses could occur under various circumstances, including if a
counterparty does not perform its obligations under the hedge arrangement, the hedge is economically imperfect, commodity
prices or interest rates move unfavorably related to our physical or financial positions, or hedging policies and procedures are
not followed.

Additionally, our exchange-traded futures contracts are subject to futures margin posting requirements. To the extent we are
unable to meet these requirements, this could have a significant impact on our business by reducing our ability to execute
derivative transactions to reduce commodity price uncertainty and to protect cash flows. Requirements to post collateral may
cause significant liquidity issues by reducing our ability to use cash for investment or other corporate purposes or may require us
to increase our level of debt. Further, a requirement for our counterparties to post collateral could result in additional costs being
passed on to us, thereby decreasing our profitability.

We have a holding company corporate structure with multiple subsidiaries. Corporate dividends and debt payments
are dependent upon cash distributions to the holding company from the subsidiaries.

As a holding company, our investments in our subsidiaries are our primary assets. Our operating cash flow and ability to service
our indebtedness depend on the operating cash flow of our subsidiaries and the payment of funds by them to us in the form of
dividends or advances. Our subsidiaries are separate legal entities that have no obligation to make any funds available for that
purpose, whether by dividends or otherwise. In addition, each subsidiary’s ability to pay dividends to us depends on any
applicable contractual or regulatory restrictions that may include requirements to maintain minimum levels of cash, working
capital, equity or debt service funds.

There is no assurance as to the amount, if any, of future dividends to the holding company because these subsidiaries depend
on future earnings, capital requirements and financial conditions to fund such dividends. See “Liquidity and Capital Resources”
within Management’s Discussion and Analysis of Financial Condition and Results of Operations in Item 7 and Note 8 of the
Notes to Consolidated Financial Statements of this Annual Report on Form 10-K for further information regarding these
restrictions and their impact on our liquidity.

We may be unable to obtain insurance coverage, and the coverage we currently have may not apply or may be
insufficient to cover a significant loss.

Our ability to obtain insurance, as well as the cost of such insurance, could be impacted by developments affecting the insurance
industry and the financial condition of insurers. Additionally, insurance providers could deny coverage or decline to extend
coverage under the same or similar terms that are presently available to us. A loss for which we are not adequately insured
could materially affect our financial results. The coverage we currently have in place may not apply to a particular loss, or it may
not be sufficient to cover all liabilities to which we may be subject, including liability and losses associated with wildfires, natural
gas and storage field explosions, cyber-security breaches, environmental hazards and natural disasters.

Market performance or changes in key valuation assumptions could require us to make significant unplanned
contributions to our pension plan and other postretirement benefit plans.

Assumptions related to interest rates, expected return on investments, mortality and other key actuarial assumptions have a
significant impact on our funding requirements and the expense recognized related to our pension and other postretirement
benefit plans. An adverse change to key assumptions associated with our defined benefit retirement plans may require
significant unplanned contributions to the plans which could adversely affect our financial operating results including earnings,
cash flow and liquidity. See Note 8 of the Notes to Consolidated Financial Statements of this Annual Report on Form 10-K for
further information

10-KFORM 10-K |Costs associated with our healthcare plans and other benefits could increase significantly.

The costs of providing healthcare benefits to our employees and retirees have increased substantially in recent years. We
believe that our employee benefit costs, including costs related to healthcare plans for our employees and former employees,
will continue to rise. Significant regulatory developments have required, and likely will continue to require, changes to our current
employee benefit plans and supporting administrative processes. Our electric and natural gas utility rates are regulated on a
state-by-state basis by the relevant state regulatory authorities based on an analysis of our costs, as reviewed and approved in a
regulatory proceeding. Within our utility rates, we have generally recovered the cost of providing employee benefits. As benefit
costs continue to rise, however, there is no assurance that the utility commissions will allow recovery of these increased costs.
The rising employee benefit costs, or inadequate recovery of such costs, may adversely affect our financial operating results
including earnings, cash flow, or liquidity.

ITEM 1B. UNRESOLVED STAFF COMMENTS

None.

ITEM 2. PROPERTIES

See Item 1 for a description of our principal business properties.

In addition to the properties disclosed in the Item 1, we own or lease several facilities throughout our service territories including
a corporate headquarters building and various office, service center, storage, shop and warehouse space. Substantially all of the
tangible utility properties of South Dakota Electric and Wyoming Electric are subject to liens securing first mortgage bonds
issued by South Dakota Electric and Wyoming Electric, respectively.

ITEM 3. LEGAL PROCEEDINGS

Information regarding our legal proceedings is incorporated herein by reference to the “Legal Proceedings” sub-caption within
Item 8, Note 3, “Commitments, Contingencies and Guarantees”, of the Notes to Consolidated Financial Statements in this
Annual Report on Form 10-K.

ITEM 4. MINE SAFETY DISCLOSURES

Information concerning mine safety violations or other regulatory matters required by Sections 1503(a) of the Dodd-Frank Wall
Street Reform and Consumer Protection Act is included in Exhibit 95 of this Annual Report.

10-K| FORM 10-KINFORMATION ABOUT OUR EXECUTIVE OFFICERS

Linden R. Evans, age 60, has been President and Chief Executive Officer since January 1, 2019, President and Chief
Operating Officer from 2016 through 2018, and President and Chief Operating Officer - Utilities from 2004 through 2015. Mr.
Evans served as the Vice President and General Manager of our former communication subsidiary in 2003 and 2004, and
Associate Counsel from 2001 to 2003. Mr. Evans has 21 years of experience with the Company.

Brian G. Iverson, age 60, has been Senior Vice President, General Counsel and Chief Compliance Officer since August 26,
2019. He served as Senior Vice President, General Counsel, Chief Compliance Officer and Corporate Secretary from February
1, 2019 to August 26, 2019, Senior Vice President, General Counsel and Chief Compliance Officer from 2016 to February 2019,
Senior Vice President - Regulatory and Governmental Affairs and Assistant General Counsel from 2014 to 2016, Vice President
and Treasurer from 2011 to 2014, Vice President - Electric Regulatory Services from 2008 to 2011 and as Corporate Counsel
from 2004 to 2008. Mr. Iverson has 19 years of experience with the Company.

Erik D. Keller, age 59, joined the Company as Senior Vice President and Chief Information Officer on July 27, 2020. Prior to
joining the company, he was an Information Technology consultant to Ontic Inc., a global provider of parts and services for
legacy aerospace platforms, from January 2020 to July 2020, and Chief Information Officer for BBA Aviation, a global aviation
support and aftermarket services provider, from February 2012 to January 2020.

Richard W. Kinzley, age 57, has been Senior Vice President and Chief Financial Officer since 2015. He served as Vice
President - Corporate Controller from 2013 to 2014, Vice President - Strategic Planning and Development from 2008 to 2013,
and as Director of Corporate Development from 2000 to 2008. Mr. Kinzley has 23 years of experience with the Company. As
previously announced, Mr. Kinzley intends to retire in mid-2023 He will continue to serve in his current position until March 31,
2023, after which Kimberly F. Nooney, the Company’s Vice President, Treasurer, will succeed Mr. Kinzley and Mr. Kinzley will
continue as Senior Vice President until his retirement to provide for a reasonable transition period.

Jennifer C. Landis, age 48, has been Senior Vice President - Chief Human Resources Officer since February 1, 2017. She
served as Vice President of Human Resources from April 2016 through January 2017, Director of Corporate Human Resources
and Talent Management from 2013 to April 2016, and Director of Organization Development from 2008 to 2013. Ms. Landis has
21 years of experience with the Company.

10-KFORM 10-K |PART II

ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER

PURCHASES OF EQUITY SECURITIES

Our common stock is traded on the New York Stock Exchange under the symbol BKH. As of January 31, 2023, we had 3,403
common shareholders of record and 70,195 beneficial owners, representing all 50 states, the District of Columbia and 6 foreign
countries.

COMPARATIVE STOCK PERFORMANCE

The following performance graph compares the cumulative total stockholder return from Black Hills Corporation common stock,
as compared with the S&P 500 Index, S&P 500 Utilities index, and our Performance Peer Group for the past five years. The
graph assumes an initial investment of $100 on December 31, 2017, and assumes all dividends were reinvested. The
stockholder return shown below for the five-year historical period may not be indicative of future performance. The information in
this "Comparative Stock Performance" section shall not be deemed to be "soliciting material" or to be "filed" with the Securities
and Exchange Commission or subject to Regulation 14A or 14C, or to the liabilities of Section 18 of the Securities Exchange Act
of 1934.

Black Hills Corporation
S&P 500
S&P 500 Utilities
Performance Peer Group (a)
____________________
(a)

Years ended December 31,

2017

2018

2019

2020

2021

2022

100.00
100.00
100.00
100.00

107.97
95.62
104.11
103.67

138.83
125.72
131.54
130.41

112.34
148.85
132.18
128.89

133.55
191.58
155.53
150.96

137.65
156.88
157.97
152.70

Performance Peer Group represents the Edison Electric Institute Index, which was used in our 2022 Proxy Statement filed with the SEC
on March 17, 2022.

DIVIDENDS

For information concerning dividends, our dividend policy and factors that may limit our ability to pay dividends, see “Key
Elements of our Business Strategy” and “Liquidity and Capital Resources” under Item 7, Management’s Discussion and Analysis
of Financial Condition and Results of Operations in this Annual Report on Form 10-K.

UNREGISTERED SECURITIES ISSUED

There were no unregistered securities sold during 2022.

10-K| FORM 10-KSECURITIES AUTHORIZED FOR ISSUANCE UNDER EQUITY COMPENSATION PLANS

See Item 12 in this Annual Report on Form 10-K for information regarding Securities Authorized for Issuance Under Equity
Compensation Plans.

ISSUER PURCHASES OF EQUITY SECURITIES

The following table contains monthly information about our acquisitions of equity securities for the three months ended
December 31, 2022:

Period
October 1, 2022 - October 31, 2022
November 1, 2022 - November 30, 2022
December 1, 2022 - December 31, 2022

Total

Total Number of
Shares Purchased
(a)

Average Price
Paid per Share

2 $
294 $
10,035 $
10,331 $

67.73
64.75
68.87
68.75

Total Number of
Shares
Purchased as
Part of Publicly
Announced Plans
or Programs

Maximum Number
(or Approximate
Dollar Value) of
Shares That May
Yet Be Purchased
Under the Plans
or Programs

—
—
—
—

____________________
(a)

Shares were acquired under the share withholding provisions of the Amended and Restated 2015 Omnibus Incentive Plan for payment of
taxes associated with the vesting of various equity compensation plans.

ITEM 6. (RESERVED)

ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Executive Summary

We are a customer-focused energy solutions provider with a mission of Improving Life with Energy for more than 1.3 million
customers and 800+ communities we serve. Our vision to be the Energy Partner of Choice directs our strategy to invest in the
safety, sustainability and growth of our eight-state service territory, including Arkansas, Colorado, Iowa, Kansas, Montana,
Nebraska, South Dakota and Wyoming, and to meet our essential objective of providing safe, reliable and cost-effective
electricity and natural gas.

We conduct our business operations through two operating segments: Electric Utilities and Gas Utilities. Certain unallocated
corporate expenses that support our operating segments are presented as Corporate and Other. We conduct our utility
operations under the name Black Hills Energy predominantly in rural areas of the Rocky Mountains and Midwestern states. We
consider ourself a domestic electric and natural gas utility company.

We have provided energy and served customers for 139 years, since the 1883 gold rush days in Deadwood, South Dakota.
Throughout our history, the common thread that unites the past to the present is our commitment to serve our customers and
communities. By being responsive and service focused, we can help our customers and communities thrive while meeting
rapidly changing customer expectations.

A critical component of our strategy involves sustainable operations and supporting the Energy Transition. How we operate our
company for the social good has never been more important. We are committed to cleaner energy and a low carbon future,
integrating the Energy Transition and more renewable energy into our overall strategy and decision making. In addition, we are
committed to a more sustainable future by better managing our impacts to the planet, whether that is water usage, recycling,
biodiversity, or other important measures, and remaining focused on our human capital through diversity and inclusion.

Our emphasis is on consistently outperforming utility industry averages in key safety metrics; modernizing utility infrastructure;
transforming the customer experience; growing our electric and natural gas customer load; and pursuing operating efficiencies.
These areas of focus will present the company with significant investment needs as we harden our infrastructure systems, meet
customer growth and fulfill customer expectations for cleaner energy services. It will also allow us to better understand our
customer and community needs while providing more intuitive and cost-effective solutions.

10-KFORM 10-K |Key Elements of our Business Strategy

Modernize and operate utility infrastructure to provide customers with safe, reliable, cost-effective electric and natural
gas service. Our utilities own and operate large electric and natural gas infrastructure systems with a geographic footprint that
spans nearly 1,600 miles. Our Electric Utilities own and operate 1,482 MW of generation capacity and 9,024 miles of
transmission and distribution lines and our Gas Utilities own and operate approximately 47,000 miles of natural gas transmission
and distribution pipelines.

A key strategic focus is to modernize and harden our utility infrastructure to meet customers’ and communities’ varied energy
needs, ensure the continued delivery of safe, reliable and cost-effective energy and reduce GHG emissions intensity. In addition,
we invest in the expansion, capacity and integrity of our systems to meet customer growth.

We rigorously comply with all applicable federal, state and local regulations and strive to consistently meet industry best practice
standards. A key component of our modernization effort is the development of programs by our Electric and Gas Utilities to
systematically and proactively replace aging infrastructure on a system-wide basis.

To meet our electric customers’ continued expectations of high levels of reliability, a key strength of the Company, our Electric
Utilities utilize an integrity program to ensure the timely repair and replacement of aging infrastructure. In alignment with this
program, in November 2021, Wyoming Electric announced its Ready Wyoming electric transmission expansion initiative. The
260-mile, multi-phase transmission expansion project will provide customers long-term price stability and greater flexibility as
power markets develop in the Western States. On October 11, 2022, the WPSC approved a CPCN submitted by Wyoming
Electric to construct the transmission expansion project. Construction of the project is expected to take place in multiple phases
or segments from 2023 through 2025 and will interconnect South Dakota Electric’s and Wyoming Electric’s transmission
systems.

Our Gas Utilities utilize a programmatic approach to system-wide pipeline replacement, particularly in high consequence areas.
Under the programmatic approach, obsolete, at-risk and vintage materials are replaced in a proactive and systematic time frame.
We have removed all cast- and wrought-iron from our natural gas transmission and distribution systems and continue to replace
aging infrastructure through programs that prioritize safety and reliability for our customers. Our Gas Utilities are authorized to
use system safety, integrity and replacement cost recovery mechanisms that provide for customer rate adjustments, between
rate reviews, which allow timely recovery of costs incurred in repairing and replacing the gas delivery systems with a return on
the investment.

As of December 31, 2022, we estimate our five-year capital investment to be approximately $3.5 billion, with most of that
investment targeted toward upgrading existing utility infrastructure supporting customer and community growth needs, and
complying with safety requirements. Our actual 2022 and forecasted capital expenditures for the next five years from 2023
through 2027 are as follows (in millions). Minor differences may result due to rounding.

Actual (a)

Forecasted

Capital Expenditures By
Segment:
(in millions)
Electric Utilities
Gas Utilities
Corporate and Other
Incremental projects (b)

Total

2022

2023

2024

2025

2026

2027

243
349
5
-
598

212
386
17
-
615

348
452
19
-
819

268
412
20
-
700

184
393
19
104
700

163
444
18
75
700

(a)

(b)

Includes accruals for property, plant and equipment as disclosed as supplemental cash flow information in the Consolidated Statements
of Cash Flows in the Consolidated Financial Statements in this Annual Report on Form 10-K.
These represent projects that are being evaluated by our segments for timing, cost and other factors.

Efficiently plan, construct and operate power generation facilities to serve our Electric Utilities. We best serve customers
and communities when generation is vertically integrated into our Electric Utilities. This business model remains a core strength
and strategy today as we invest in and operate efficient power generation resources to supply cost-effective electricity to our
customers. These generation assets can be rate-based or non-regulated assets within our Electric Utilities segment. However,
we believe that generation assets that are rate-based provide long-term benefits to customers.

Our power production strategy focuses on low-cost construction and efficient operation of our generating facilities. Our low
power production costs result from a variety of factors including low fuel costs (operations located near energy hubs), efficiency
in converting fuel into energy and low per unit operating and maintenance costs. In addition, we operate our plants with high
levels of Availability as compared to industry benchmarks.

10-K| FORM 10-KRate Base Generation: We continue to believe that customers are best served when the power generation facilities are owned
and rate-based by our Electric Utilities. Rate-based generation assets offer several advantages for customers and shareholders,
including:

•

When generating assets are included in the utility rate base and reviewed and approved by government authorities,
customer rates are more stable and predictable, and typically less expensive in the long run; especially when
compared to power otherwise purchased from the open market through wholesale contracts or PPAs that are
periodically re-priced to reflect current and varying market conditions;

Regulators participate in a planning process where long-term investments are designed to match long-term energy
demand;

The lower-risk profile of rate-based generation assets contributes to stronger credit ratings which, in turn, can benefit
both customers and investors by lowering the cost of capital; and

Investors are provided a long-term and stable return on their investment.

Integrated Generation: Our Electric Utilities segment also includes a power generation business that owns non-regulated
generating facilities that are contracted through long-term power purchase agreements with our electric utilities. Our power
generation business has an experienced staff with significant expertise in planning, building and operating power plants. This
team also provides shared services to our Electric Utilities’ generation facilities, resulting in efficient management of all of the
Company’s generation assets. Our power generation business competitively bids for energy and capacity through requests for
proposals by our Electric Utilities for energy resources necessary to serve customers. This business can bid competitively due to
construction expertise, fuel supply advantages and by co-locating new plants at our existing Electric Utilities’ energy complexes,
reducing infrastructure and operating costs. All power plants within this business, except Northern Iowa Windpower, are
contracted to our Electric Utilities under long-term contracts and are located at our utility-generating complexes, including Busch
Ranch, Pueblo Airport Generation, and the Gillette, Wyoming energy complex, and are physically integrated into our Electric
Utilities’ operations.

Generation Fuel Supply: Our generating facilities are strategically located close to energy hubs that help reduce fuel supply
costs. Our Colorado and Wyoming gas-fired generating facilities are located close to major natural gas energy hubs that provide
trading liquidity and transparent pricing. Due to their location in the resource rich areas of Colorado and Wyoming, natural gas
supply to fuel our gas-fired generation can be sourced at competitive prices. Our coal-fired power plants, all located at the
Gillette energy complex in northeastern Wyoming, are supplied by our adjacent coal mine. We operate and own majority
interests in four of the five power plants and own 20% of the fifth power plant. Our coal mine provides approximately 3.7 million
tons of low-sulfur coal directly to these power plants via a conveyor belt system, minimizing transportation costs. The fuel can be
delivered to our adjacent power plants at very cost competitive prices (i.e., $1.09 per MMBtu for year ended December 31, 2022)
when compared to alternatives. Nearly all the mine’s production is sold to these on-site generation facilities under long-term
supply contracts. Approximately one-half of our production is sold under cost-plus contracts with affiliates. A small portion of the
mine’s production is sold to off-site industrial customers and delivered by truck.

Supporting the Energy Transition by proactively integrating alternative and renewable energy into our utility energy
supply while mitigating customer rate impacts. In November 2020, we announced clean energy goals to reduce GHG
emissions intensity for our Electric Utilities by 40% by 2030 and 70% by 2040 and achieve GHG reductions of 50% by 2035 for
our Gas Utilities. Our goals are compared to a 2005 baseline. Electric Utility goals include Scope 1 emissions from electric utility
generating units and Scope 3 emissions from purchased power for sales. Our Gas Utilities goal includes Scope 1 emissions from
distribution system main and service lines. On August 31, 2022, we announced a new "Net Zero by 2035" target for our Gas
Utilities, which doubles the previous target of a 50% reduction by 2035 and expands the scope of the goal to all Scope 1 sources
of methane emissions on our distribution system. Net Zero will be achieved through pipeline material and main replacements,
advanced leak detection, third-party damage reduction, expanding the use of RNG and hydrogen, and utilizing carbon credit
offsets.

Since 2005, we have reduced GHG emissions intensity from our Gas Utilities distribution system mains and services by more
than 33% and achieved a one-third reduction from our Electric Utilities (a nearly 10% reduction since announcing our goal in
2020 for our Electric Utilities). We have plans in place today, without reliance on future technologies, to achieve our corporate
climate goals calling for a 40% reduction in greenhouse gas emissions intensity from our electric utility operations by 2030 and
70% by 2040. Additionally, our Electric Utilities have reduced nitrogen oxide and sulfur dioxide emissions by more than 75%
since 2005. Colorado Electric has achieved a nearly 50% reduction in GHG emissions since 2005 and is on track to reach the
State of Colorado’s 80% carbon reduction goal by 2030. Our goals are based on prudent and proven solutions to reduce our
emissions while minimizing cost impacts to our customers. This keeps our customers at the forefront of our decision-making,
which is central to our values.

10-KFORM 10-K |More of our customers, particularly our larger customers, are demanding cleaner sources of energy to meet their sustainability
goals. In addition, there is more interest from consumers, regulators and legislators to increase the use of renewable and other
alternative energy sources. To support this interest:

•

We created the Renewable Ready program for South Dakota Electric and Wyoming Electric customers. In support
of this program, we created and received approvals for new, voluntary renewable energy tariffs to serve certain
commercial, industrial and governmental customer requests for renewable energy resources. To meet the
renewable energy commitments under the new tariffs, in November 2020, we completed construction and placed
into service the Corriedale wind project, a 52.5 MW wind energy project near Cheyenne, Wyoming.

In June 2021, South Dakota Electric and Wyoming Electric submitted an IRP to the SDPUC and WPSC. The IRP
outlines a range of options for the two electric utilities over a 20-year planning horizon to meet long-term forecasted
energy needs while strengthening reliability and resiliency of the grid. The analysis focused on the least-cost
resource needs to best meet customers’ future peak energy needs while maintaining system flexibility and achieving
the Company’s generation emissions reduction goals. The IRP’s preferred options for South Dakota Electric in the
near-term planning period through 2026 are the addition of 100 MW of renewable generation, the conversion of Neil
Simpson II to natural gas in 2025 and consideration of up to 10 MW of battery storage.

On January 13, 2023, Colorado Electric submitted a unanimous settlement for its Clean Energy Plan filed May 25,
2022, with the CPUC. If approved, the plan would add approximately 400 MW of new clean energy resources
needed to reduce carbon emissions 80% by 2030. A final decision from the CPUC is expected in the first quarter of
2023.

Many states have enacted, and others are considering, mandatory renewable energy standards, requiring utilities to meet certain
thresholds of renewable energy generation. In addition, some states have either enacted or are considering legislation setting
GHG emission reduction targets. Federal legislation for renewable energy standards and GHG emission reductions has been
considered and may be implemented in the future. Mandates for the use of renewable energy or the reduction of GHG emissions
will likely drive the need for significant investment in our Electric Utilities and Gas Utilities segments. These mandates will also
likely increase prices for electricity and/or natural gas for our utility customers. As a regulated utility, we are responsible for
providing safe, reliable and cost-effective sources of energy to our customers. Accordingly, we employ a customer-focused
strategy for complying with standards and regulations that balances our customers’ rate concerns with environmental
considerations and administrative and legislative mandates. We attempt to strike this balance by prudently and proactively
incorporating renewable energy into our resource supply, while seeking to minimize the magnitude and frequency of rate
increases for our utility customers.

Inflation Reduction Act

The IRA, signed into law by President Biden on August 16, 2022, features $370 billion in spending and tax incentives on clean
energy provisions. Most notably, the IRA includes provisions that extend and expand the production and investment tax credits
for wind and solar; include energy storage, EVs, RNG, and carbon capture and sequestration; and allow for the transferability of
clean energy tax credits on existing and qualifying new facilities. We see the IRA as generally supportive of our Energy
Transition strategy and as having the potential to drive increased value for our customers and shareholders. We are still
evaluating the impacts of the IRA provisions on our future capital projects.

Explore opportunities as an energy solutions provider. Another strategic initiative is to grow our business through creative
energy solutions with new customers and partnerships. We see value creation by recruiting new customers and expanding
existing partnerships with data centers and blockchain opportunities; exploring energy markets such as RTOs; and expanding
our transmission capabilities. A few recent examples of our initiatives to grow our business through creative solutions include:

•

In 2022, Wyoming Electric entered into two new PPAs with third parties to purchase up to 106 MW of wind energy
and up to 150 MW of solar energy, upon construction of new renewable generation facilities (to be owned by third
parties) which are expected to be completed by the end of 2023. The renewable energy from these PPAs will be
used to serve our expanding partnerships with data centers.

We have supported enabling legislation in Wyoming for the growing blockchain businesses while implementing our
own BCIS Tariff to serve these customers. In June 2022, Wyoming Electric completed its first agreement, a five-year
agreement to deliver up to 45 MW with an option to expand service up to 75 MW to a new customer in Cheyenne,
Wyoming, under this Tariff. Energy will be sourced through the electric energy market and delivered through our
Electric Utilities’ infrastructure. Under the agreement, the customer will be responsible for costs of service, and the
load will be interruptible to prioritize the needs of Wyoming Electric’s existing retail customers.

10-K| FORM 10-K•

During the first quarter of 2022, Colorado Electric agreed to join SPP’s WEIS Market. On September 26, 2022,
South Dakota Electric and Wyoming Electric also agreed to join the WEIS Market. South Dakota Electric and
Wyoming Electric will join Colorado Electric in integrating into the WEIS Market in April 2023 and expects to
continue studying long-term solutions for joining or developing an organized wholesale market. The expansion
allows the utilities to participate in a real-time market.

Additionally, we are pursuing two important initiatives in the form of sustainable energy solutions for electric vehicles and RNG.
These two programs support our near-term sustainable strategy and contribute to the achievement of our aspirational
greenhouse gas emissions reduction goals.

•

Electric Vehicles: We expect EV market share to increase over the next one to three years, commensurate with a
significant uptick in vehicle range and product offerings and marked decrease in EV purchase prices. In addition to
future load growth opportunities, we are investigating behind-the-meter solutions for customers. In January 2022,
the CPUC approved a transportation electrification plan for Colorado Electric including the implementation of EV and
charger rebates and EV rates.

Renewable Natural Gas: In 2021, we developed a voluntary RNG and carbon offset program to help our residential
and small business natural gas customers offset up to 100% or more of the emissions associated with their own
natural gas usage. In 2022, we filed for approval to launch these programs in three of our states, receiving
regulatory approval for the program from both the KCC and the NPSC in Q4 2022. We intend to begin offering the
program to customers in 2023, as well as completing additional regulatory filings with commissions in our other
natural gas states.

Our teams are also evaluating multiple RNG investment opportunities and exploring value generation with our
natural gas storage assets. We also continue to expand our RNG interconnections, with six projects actively
injecting RNG into our natural gas system. In 2022, we created a new non-regulated business, BHERR, which will
drive new growth by investing capital into infrastructure assets that provide a pathway for RNG to enter the market.
BHERR builds on our expertise and experience in both RNG and natural gas asset operations, and aligns with
market demand and the path to a cleaner energy future.

Execute disciplined capital allocation and explore small strategic opportunities. We are planning a disciplined capital
investment program of approximately $600 million during the next year to improve our cash flows and reduce our debt to total
capitalization ratio. By carefully managing capital, we plan to continue to strengthen our balance sheet and enhance our liquidity.
With this goal in mind, we will continue to evaluate smaller scale acquisitions of private utility infrastructure systems and small
municipal systems that can be easily incorporated into our existing utility systems.

Deliver a competitive total return to investors and maintain an investment grade credit rating. We are proud of our track
record of annual dividend increases for shareholders. 2022 represented our 52nd consecutive year of increasing dividends. In
January 2023, our Board of Directors declared a quarterly dividend of $0.625 per share, equivalent to an annual dividend of
$2.50 per share. We intend to continue our record of annual dividend increases with a targeted dividend payout ratio of 55% to
65% of net income.

We require access to the capital markets to fund our planned capital investments or acquire strategic assets that support prudent
and earnings-accretive business growth. We have demonstrated our ability to cost-effectively access the debt and equity
markets, while maintaining our investment-grade issuer credit rating.

10-KFORM 10-K |Macroeconomic Trends

Recent Developments

We are monitoring adverse macroeconomic trends including potential recession, inflationary pressures on the prices of
commodities, materials, outside services and employee costs; supply chain constraints; rising interest rates and a competitive
and tight labor market. To date, we have experienced moderate net impacts from these trends. However, if current
macroeconomic conditions continue or deteriorate in 2023, adverse impacts to our businesses may be magnified.

Higher commodity energy costs continue to have an effect on customer bills and deferred energy costs. Our utilities have
regulatory mechanisms that allow them to pass prudently incurred costs of energy through to the customer, which mitigates our
exposure. Customer billing rates are adjusted periodically to reflect changes in our cost of energy. As a result of increased
customer billings, we incurred higher bad debt expense.

Higher deferred energy costs and rising interest rates have led to increased interest expense and increased short-term variable
rate borrowings, which include our Revolving Credit Facility and CP Program. However, the increased interest expense for the
year ended December 31, 2022 was limited since 88% of our debt at December 31, 2022, is fixed rate debt. Rising discount
rates and recent capital markets volatility had a limited impact to the unfunded status of the BHC Pension Plan when compared
to the prior year.

We are proactively managing increased costs of materials and supply chain disruptions to achieve our forecasted capital
investment targets. To support our 2023 capital investment program, we have contracted materials for the majority of our largest
forecasted projects. We continue to forecast multi-year key material requirements with suppliers to enhance predictable material
availability, challenge vendor price increases to ensure best value and cost transparency and invest in our distribution network to
ensure the safety and continuity of our system. We have also evaluated each of our forecasted projects and will prioritize
depending on future constraints. Project delays may occur if costs rise significantly or if materials are not available.

Inflationary pressures and supply chain constraints have increased our operating expenses, which included higher outside
services expenses (i.e., consulting and contractor rates), materials expenses and vehicle expenses driven by higher fuel prices.

We are faced with increased competition for employee and contractor talent in the current labor market. To date, we have seen a
limited net increase in total employee costs due to increased employee and contractor costs related to attraction and retention of
talent mostly offset by workforce attrition.

More detailed discussion of the future uncertainties can be found in Item 1A - Risk Factors.

Business Segment Highlights and Corporate Activity

Electric Utilities

•

See Note 2 of the Notes to Consolidated Financial Statements in this Annual Report on Form 10-K for recent rate
review activity for Wyoming Electric.

See Key Elements of our Business Strategy section above for discussion of recent developments related to Ready
Wyoming, Wyoming Electric's BCIS tariff, Colorado Electric's Clean Energy Plan filing, and the Electric Utilities
joining the WEIS Market.

In December 2022, each of our Electric Utilities set new winter peak loads:

•

On December 22, 2022, Colorado Electric set a new winter peak load of 334 MW, surpassing the previous
winter peak of 313 MW set in October 2018.

On December 21, 2022, South Dakota Electric set a new winter peak load of 355 MW, surpassing the
previous winter peaks of 327 MW set on January 5, 2022 and 326 MW set in February 2021.

On December 21, 2022, Wyoming Electric set a new winter peak load of 281 MW, surpassing the previous
peaks of 263 MW set on November 17, 2022, 262 MW set on February 23, 2022, 252 MW set on January 5,
2022 and 247 MW set in December 2019.

In December 2022, WRDC entered into a new agreement with PacifiCorp, effective January 1, 2023, to continue as
the sole supplier of coal (fuel) to the Wyodak Plant through December 31, 2026 with a one-year extension option to
December 31, 2027. Pricing and other terms of the new fuel supply agreement are similar to the previous contract
which ended December 31, 2022.

10-K| FORM 10-K•

In July 2022, South Dakota Electric and Wyoming Electric both set new all-time and summer peak loads:

•

On July 21, 2022, Wyoming Electric set a new all-time and summer peak load of 294 MW, surpassing the
previous peaks of 288 MW set on July 18, 2022, 282 MW set on June 13, 2022 and 274 MW set in July 2021.

On July 18, 2022, South Dakota Electric set a new all-time and summer peak load of 403 MW, surpassing the
previous summer peak of 397 MW set in July 2021.

Gas Utilities

•

See Note 2 of the Notes to Consolidated Financial Statements in this Annual Report on Form 10-K for recent rate
review activity for Arkansas Gas and RMNG.

See Key Elements of our Business Strategy section above for discussion of recent developments related to our Gas
Utilities' voluntary RNG and carbon offset programs.

Corporate and Other

•

On April 13, 2022, a jury awarded $41 million for claims made by GT Resources, LLC (“GTR”) against BHC and two
of its subsidiaries (Black Hills Exploration and Production, Inc. and Black Hills Gas Resources, Inc.), which ceased
oil and natural gas operations in 2018 as part of BHC’s decision to exit the exploration and production business. The
claims involved a dispute over a 2.3-million-acre concession award in Costa Rica that was acquired by a BHC
subsidiary in 2003. We believe we have meritorious defenses to the verdict and have appealed the verdict. See
additional information in Note 3 of the Notes to Consolidated Financial Statements in this Annual Report on Form
10-K for further information.

Results of Operations

Our discussion and analysis for the year ended December 31, 2022 compared to 2021 is included herein. For discussion and
analysis for the year ended December 31, 2021 compared to 2020, please refer to Item 7 of Part II, “Management’s Discussion
and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K for the year ended December
31, 2021, which was filed with the SEC on February 15, 2022.

Segment information does not include intercompany eliminations and all amounts are presented on a pre-tax basis unless
otherwise indicated. Minor differences in amounts may result due to rounding.

Consolidated Summary and Overview

Operating income (loss):

Electric Utilities
Gas Utilities
Corporate and Other

Operating Income

Interest expense, net
Impairment of investment
Other income (expense), net
Income tax (expense)
Net income
Net income attributable to non-controlling interest
Net income available for common stock

Total earnings per share of common stock, Diluted

For the Years Ended December 31,
2021
(in thousands, except per share amounts)

2020

2022

214,258
244,160
(3,174)
455,244

(160,989)
—
1,708
(25,205)
270,758
(12,371)
258,387

3.97

202,676
211,157
(4,404)
409,429

(152,404)
—
1,404
(7,169)
251,260
(14,516)
236,744

3.74

210,974
215,889
1,440
428,303

(143,470)
(6,859)
(2,293)
(32,918)
242,763
(15,155)
227,608

3.65

10-KFORM 10-K |

2022 Compared to 2021

The variance to the prior year included the following:

•

•
•

•

Electric Utilities’ operating income increased $12 million primarily due to increased rider revenues, prior year
impacts related to the Wygen I unplanned outage and Colorado Electric’s TCJA-related bill credits to customers,
increased transmission services revenue and off-system excess energy sales partially offset by higher operating
expenses and lower pricing on the new Wygen I PPA;
Gas Utilities’ operating income increased $33 million primarily due to new rates and rider recovery, favorable
weather, carrying costs on our Winter Storm Uri regulatory asset, prior year Black Hills Energy Services Winter
Storm Uri costs, customer growth partially offset by higher operating expenses;
Corporate and Other expenses decreased $1.2 million primarily due to an allocation of a 2020 employee cost true-
up in the first quarter of 2021, which was offset in our business segments;
Interest expense increased $8.6 million due to higher interest rates on higher short-term debt balances;
Income tax expense increased $18 million driven by higher pre-tax income and a higher effective tax rate primarily
due to prior year tax benefits from Colorado Electric and Nebraska Gas TCJA-related bill credits and decreased
flow-through tax benefits driven by prior year repairs and gain deferral partially offset by tax benefits from various
state tax rate changes; and
Net income attributable to non-controlling interest decreased $2.1 million due to lower net income from Black Hills
Colorado IPP primarily driven by lower fired-engine hours and a planned outage.

Segment Operating Results

Non-GAAP Financial Measure

The following discussion includes financial information prepared in accordance with GAAP, as well as another financial measure,
Electric and Gas Utility margin, that is considered a “non-GAAP financial measure.” Generally, a non-GAAP financial measure is
a numerical measure of a company’s financial performance, financial position or cash flows that excludes (or includes) amounts
that are included in (or excluded from) the most directly comparable measure calculated and presented in accordance with
GAAP. Electric and Gas Utility margin (revenue less cost of sales) is a non-GAAP financial measure due to the exclusion of
operation and maintenance expenses, depreciation and amortization expenses, and property and production taxes from the
measure.

Electric Utility margin is calculated as operating revenue less cost of fuel and purchased power. Gas Utility margin is calculated
as operating revenue less cost of natural gas sold. Our Electric and Gas Utility margin is impacted by the fluctuations in power
and natural gas purchases and other fuel supply costs. However, while these fluctuating costs impact Electric and Gas Utility
margin as a percentage of revenue, they only impact total Electric and Gas Utility margin if the costs cannot be passed through
to our customers.

Our Electric and Gas Utility margin measure may not be comparable to other companies’ Electric and Gas Utility margin
measures. Furthermore, this measure is not intended to replace operating income as determined in accordance with GAAP as
an indicator of operating performance.

10-K| FORM 10-KElectric Utilities

Operating results for the years ended December 31 for the Electric Utilities were as follows (in thousands):

Revenue:

Electric - regulated
Other - non-regulated

Total revenue

Fuel and Purchased Power:

Electric - regulated
Other - non-regulated

Total fuel and purchased power

2022

2021

2022 vs
2021
Variance

2020

2021 vs
2020
Variance

$ 852,141
48,021
900,162

$ 800,747
41,511
842,258

51,394
6,510
57,904

$ 699,712
39,145
738,857

$ 101,035
2,366
103,401

261,726
4,558
266,284

244,504
3,514
248,018

17,222
1,044
18,266

136,374
2,198
138,572

108,130
1,316
109,446

Electric Utility margin (non-GAAP)

633,878

594,240

39,638

600,285

(6,045)

Operations and maintenance
Depreciation and amortization
Total operating expenses

283,654
135,966
419,620

260,036
131,528
391,564

23,618
4,438
28,056

265,679
123,632
389,311

(5,643)
7,896
2,253

Operating income

$ 214,258

$ 202,676

11,582

$ 210,974

(8,298)

2022 Compared to 2021

Electric Utility margin increased over the prior year as a result of:

New rates and rider recovery
Prior year TCJA-related bill credits (a)
Prior year Wygen I unplanned outage
Transmission services and off-system excess energy sales
Integrated Generation (b)
Weather
Retail load growth
Lower pricing on new Wygen I PPA
Other

(in millions)

11.2
9.3
8.5
7.6
5.7
3.2
1.2
(8.5)
1.4
39.6

(a)

(b)

In February 2021, Colorado Electric delivered TCJA-related bill credits to its customers. These bill credits were offset by a reduction in
income tax expense and resulted in a minimal impact to Net income.
Primarily driven by favorable market pricing on contracts and off-system sales.

Operations and maintenance expense increased due to $10.3 million of higher generation-related expenses primarily due to
higher fuel and materials costs and increased royalties on higher mining revenues, $4.5 million of higher outside services
expenses primarily driven by higher contractor and consultant rates, $3.4 million of increased property taxes due to an expiration
of an abatement and a higher asset base driven by recent capital expenditures, $3.4 million of higher cloud computing licensing
costs, and $1.1 million of increased bad debt expense primarily attributable to higher customer billings.

Depreciation and amortization increased primarily due to higher asset base driven by prior and current year capital expenditures.

10-KFORM 10-K |Operating Statistics

For the year ended December 31,

Revenue (in thousands)
2021

2022

2020

2022

Quantities Sold (MWh)
2021

2020

Residential
Commercial
Industrial
Municipal

Subtotal Retail Revenue - Electric

Contract Wholesale
Off-system/Power Marketing Wholesale
Other (a)

Total Regulated

Non-Regulated (b)

Total Revenue and Quantities Sold
Other Uses, Losses or Generation, net (c)

Total Energy

246,651
277,981
166,374
20,497
711,503
25,869
48,578
66,191
852,141
48,021
900,162

244,589
275,998
149,040
19,092
688,719
16,128
41,682
54,218
800,747
41,511
842,258

$ 221,530
239,166
131,154
16,860
608,710
17,847
15,511
57,644
699,712
39,145
738,857

1,513,092
2,087,800
1,912,529
159,248
5,672,669
654,016
643,189
—
6,969,874
293,026
7,262,900
450,010
7,712,910

1,494,028
2,075,690
1,751,344
162,903
5,483,965
574,137
638,923
—
6,697,025
269,558
6,966,583
475,280
7,441,863

1,477,515
1,974,043
1,794,795
158,222
5,404,575
492,637
437,288
—
6,334,500
258,399
6,592,899
406,422
6,999,321

(a)
(b)

(c)

Primarily related to transmission revenues from the Common Use System.
Includes Integrated Generation and non-regulated services to our retail customers under the Service Guard Comfort Plan and Tech
Services.
Includes company uses and line losses.

For the year ended December 31,
Colorado Electric
South Dakota Electric
Wyoming Electric
Integrated Generation

Total Revenue and Quantities Sold

Electric Revenue (in thousands)
2021
302,896
319,362
180,413
39,587
842,258

2022
321,113
335,211
197,673
46,166
900,162

2020
252,094
280,431
169,179
37,153
738,857

2022
2,439,954
2,626,175
1,903,745
293,026
7,262,900

Quantities Sold (MWh)
2021
2,574,016
2,389,407
1,733,602
269,558
6,966,583

2020
2,243,034
2,363,776
1,727,690
258,399
6,592,899

Quantities Generated and Purchased by Fuel Type (MWh)
Generated:
Coal
Natural Gas and Oil
Wind

Total Generated

Purchased:

Coal, Natural Gas, Oil and Other Market Purchases
Wind

Total Purchased

Total Generated and Purchased

For the year ended December 31,
2021

2022

2020

2,708,804
1,454,164
875,843
5,038,811

2,280,776
393,323
2,674,099
7,712,910

2,546,926
1,817,133
842,616
5,206,675

1,866,382
368,806
2,235,188
7,441,863

2,817,846
1,753,568
614,236
5,185,650

1,478,536
335,135
1,813,671
6,999,321

10-K| FORM 10-K

10-KFORM 10-K | For the year ended December 31,Quantities Generated and Purchased (MWh)202220212020Generated:Colorado Electric474,401412,127265,552South Dakota Electric1,889,9811,980,6601,901,009Wyoming Electric905,796883,596851,522Integrated Generation1,768,6331,842,3772,085,042Total Generated5,038,8115,118,7605,103,125Purchased:Colorado Electric1,005,4461,027,728714,139South Dakota Electric826,392563,603489,457Wyoming Electric757,191643,857610,075Integrated Generation85,07087,91582,525Total Purchased2,674,0992,323,1031,896,196Total Generated and Purchased7,712,9107,441,8636,999,321For the year ended December 31,Degree Days202220212020ActualVariance from NormalActualVariance from NormalActualVariance from NormalHeating Degree Days:Colorado Electric5,5519%5,023(11)%5,103(9)%South Dakota Electric7,4956%6,819(5)%6,910(3)%Wyoming Electric7,0513%6,702(6)%6,771(5)%Combined (a)6,5186%5,974(7)%6,056(6)%Cooling Degree Days:Colorado Electric1,3629%1,24539%1,38454%South Dakota Electric81427%82730%6827%Wyoming Electric70147%60474%59471%Combined (a)1,04018%97340%98541%(a)Degree days are calculated based on a weighted average of total customers by state. For the year ended December 31,Contracted generating facilities availability by fuel type (a)202220212020Coal (b)91.5%86.7%94.3%Natural gas and diesel oil96.1%95.5%84.6%Wind93.7%95.8%95.1%Total availability94.4%93.2%89.2%Wind Capacity Factor34.7%34.0%31.8%(a)Availability and Wind Capacity Factor are calculated using a weighted average based on capacity of our generating fleet.(b)2021 included planned outages at Neil Simpson II, Wygen II, and Wygen III and unplanned outages at Wygen I, Neil Simpson II and Wyodak Plant.Gas Utilities

Operating results for the years ended December 31 for the Gas Utilities were as follows (in thousands):

2022

2021

2022 vs 2021
Variance

2020

2021 vs 2020
Variance

Revenue:

Natural gas - regulated
Other - non-regulated services

Total revenue

1,584,634
84,456
1,669,089

1,051,610
73,255
1,124,865

533,024
11,201
544,224

900,637
74,033
974,670

150,973
(778)
150,195

Cost of natural gas sold:
Natural gas - regulated
Other - non-regulated services
Total cost of natural gas sold

Gas Utility margin (non-GAAP)

Operations and maintenance
Depreciation and amortization
Total operating expenses

942,148
22,960
965,108

703,982

345,143
114,679
459,822

480,293
14,445
494,738

630,127

314,810
104,160
418,970

461,855
8,515
470,370

73,855

30,333
10,519
40,852

347,611
7,034
354,645

620,025

303,577
100,559
404,136

132,682
7,411
140,093

10,102

11,233
3,601
14,834

Operating income

244,160

211,157

33,003

215,889

(4,732)

2022 Compared to 2021

Gas Utility margin increased over the prior year as a result of:

New rates and rider recovery
Weather
Carrying costs on Winter Storm Uri regulatory asset (a)
Prior year Black Hills Energy Services Winter Storm Uri costs (b)
Customer growth and increased usage per customer
Mark-to-market on non-utility natural gas commodity contracts
Other

(in millions)

30.0
18.5
17.9
8.2
3.7
(3.3)
(1.1)
73.9

(a)

(b)

In certain jurisdictions, we have commission approval to recover carrying costs on Winter Storm Uri regulatory assets which offset
increased interest expense. Additionally, the carrying costs accrued during the year ended December 31, 2022 included a one-time, $10.3
million true-up to reflect commission authorized rates. See Note 2 of the Notes to Consolidated Financial Statements in this Annual
Report on Form 10-K for additional details.
Black Hills Energy Services offers fixed contract pricing for non-regulated gas supply services to our regulated natural gas customers. The
increased cost of natural gas sold during Winter Storm Uri was not recoverable through a regulatory mechanism.

Operations and maintenance expense increased due to $11.6 million of higher outside services and materials expenses driven
primarily by higher contractor and consultant fees, $5.0 million of increased bad debt expense primarily attributable to higher
customer billings, $4.6 million of higher cloud computing licensing costs, $3.2 million of higher property taxes driven by a higher
asset base on recent capital expenditures, $2.1 million of higher vehicle expense driven by higher fuel costs, $1.6 million of
higher employee-related expenses and $1.2 million increased travel and training expenses.

Depreciation and amortization increased primarily due to a higher asset base driven by prior and current year capital
expenditures.

10-K| FORM 10-KOperating Statistics

Revenue (in thousands)
For the year ended December 31,
2020
2021
2022

Quantities Sold and Transported (Dth)
For the year ended December 31,
2021

2022

2020

Residential
Commercial
Industrial
Other
Total Distribution

940,201
398,585
63,035
8,693
1,410,514

613,475
242,115
33,368
3,816
892,774

$ 527,518
193,017
24,014
582
745,131

66,915,630
32,362,343
7,667,231
—
106,945,204

60,080,805
29,091,657
6,260,235
—
95,432,697

61,962,171
28,784,319
6,881,354
—
97,627,844

Transportation and Transmission

174,120

158,836

155,506

160,917,802

154,570,280

149,062,476

Total Regulated

1,584,634

1,051,610

900,637

267,863,006

250,002,977

246,690,320

Non-regulated Services (a)

84,456

73,255

74,033

—

Total Revenue and Quantities Sold

$ 1,669,089

$ 1,124,865

$ 974,670

267,863,006

250,002,977

246,690,320

(a)

Includes Black Hills Energy Services and non-regulated services under the Service Guard Comfort Plan, Tech Services and HomeServe.

Revenue (in thousands)
For the year ended December 31,
2020
2021
2022

Quantities Sold and Transported (Dth)
For the year ended December 31,
2021

2020

2022

Arkansas Gas
Colorado Gas
Iowa Gas
Kansas Gas
Nebraska Gas
Wyoming Gas
Total Revenue and Quantities Sold

311,239
320,890
283,938
191,392
384,823
176,807
$ 1,669,089

218,497
208,019
171,673
121,603
273,361
131,712
$ 1,124,865

$ 184,849
186,085
137,982
101,118
246,381
118,255
$ 974,670

32,282,324
34,343,485
40,883,742
38,630,944
85,050,323
36,672,188
267,863,006

31,478,303
32,247,042
38,022,801
34,475,799
81,035,572
32,743,460
250,002,977

28,572,621
32,077,083
36,824,548
33,732,897
80,202,783
35,280,388
246,690,320

Heating Degree Days
Arkansas Gas (a)
Colorado Gas
Iowa Gas
Kansas Gas (a)
Nebraska Gas
Wyoming Gas
Combined (b)

2022

For the year ended December 31,
2021

2020

Actual

3,844
6,325
7,037
4,968
6,220
7,644
6,536

Variance
From Normal
2%
4%
7%
7%
4%
12%
5%

Actual

3,565
5,866
6,239
4,508
5,599
7,074
5,948

Variance
From Normal
(12)%
(11)%
(8)%
(8)%
(9)%
(7)%
(8)%

Actual

3,442
6,068
6,504
4,648
5,853
7,289
6,038

Variance
From Normal
(15)%
(8)%
(4)%
(5)%
(5)%
(4)%
(6)%

(a)
(b)

Arkansas and Kansas have weather normalization mechanisms that mitigate the weather impact on Gas Utility margins.
Heating degree days are calculated based on a weighted average of total customers by state excluding Kansas due to its weather
normalization mechanism. Arkansas Gas is partially excluded based on the weather normalization mechanism in effect from November
through April.

10-KFORM 10-K |

Corporate and Other

Corporate and Other operating results for the years ended December 31 were as follows (in thousands):

(in thousands)

2022

2021

2022 vs
2021
Variance

2020

2021 vs
2020
Variance

Operating income (loss)

(3,174) $

(4,404) $

1,230

1,440

(5,844)

2022 Compared to 2021

The variance in Operating income (loss) was primarily due to an allocation of a 2020 employee cost true-up in the first quarter of
2021, which was offset in our business segments.

Consolidated Interest Expense, Impairment of Investment, Other Income (Expense) and Income Tax Benefit (Expense)

(in thousands)

2022

2021

2022 vs
2021
Variance

2020

2021 vs
2020
Variance

Interest expense, net
Impairment of investment
Other income (expense), net
Income tax (expense)

2022 Compared to 2021

Interest expense, net

$ (160,989) $ (152,404) $

(8,585) $ (143,470) $

—
1,708
(25,205)

—
1,404
(7,169)

—
304
(18,036)

(6,859)
(2,293)
(32,918)

(8,934)
6,859
3,697
25,749

The increase in Interest expense, net was due to higher interest rates on higher short-term debt balances. See Note 8 of the
Notes to Consolidated Financial Statements in this Annual Report on Form 10-K for additional details.

Other income (expense), net

Other income (expense), net was comparable to the prior year primarily due to lower costs for our non-qualified benefit plans
which were driven by market performance mostly offset by a prior year recognition of death benefits from Company-owned life
insurance and higher non-service pension costs primarily driven by a higher discount rate.

Income tax benefit (expense)

Income tax expense increased due to higher pre-tax income and a higher effective tax rate. For the year ended December 31,
2022, the effective tax rate was 8.5% compared to 2.8% in 2021. The higher effective tax rate was primarily due to $10 million of
prior year tax benefits from Colorado Electric TCJA-related bill credits to customers (which were offset by reduced revenue) and
$5.4 million decreased flow-through tax benefits driven by prior year repairs and gain deferral partially offset by $4.0 million of
current year tax benefits from various state rate changes, and $1.8 million of increased tax benefits from federal PTCs driven by
a current year PTC rate increase (inflation adjustment). See Note 15 of the Notes to Consolidated Financial Statements in this
Annual Report on Form 10-K for additional details.

10-K| FORM 10-KOVERVIEW

Liquidity and Capital Resources

Our company requires significant cash to support and grow our businesses. Our primary sources of cash are generated from our
operating activities, five-year Revolving Credit Facility, CP Program, ATM and ability to access the public and private capital
markets through debt and equity securities offerings when necessary. This cash is used for, among other things, working capital,
capital expenditures, dividends, pension funding, investments in or acquisitions of assets and businesses, payment of debt
obligations and redemption of outstanding debt and equity securities when required or financially appropriate.

We experience significant cash requirements during peak months of the winter heating season due to higher natural gas
consumption, during periods of high natural gas prices, and during the construction season which typically peaks in spring and
summer.

We believe that our cash on hand, operating cash flows, existing borrowing capacity and ability to complete new debt and equity
financings, taken in their entirety, provide sufficient capital resources to fund our ongoing operating requirements, regulatory
liabilities, debt maturities, anticipated dividends, and anticipated capital expenditures discussed in this section.

The following table provides an informational summary of our financial position as of December 31 (dollars in thousands):

Financial Position Summary
Cash and cash equivalents
Restricted cash and equivalents
Notes payable
Current maturities of long-term debt
Long-term debt (a)
Stockholders’ equity

Ratios
Long-term debt ratio (b)
Total debt ratio (c)

2022

21,430
5,555
535,600
525,000
3,607,340
2,994,913

$
$
$
$
$
$

2021

8,921
4,889
420,180
—
4,126,923
2,787,094

$
$
$
$
$
$

55%
61%

60%
62%

(a)
(b)
(c)

Carrying value of long-term debt is net of deferred financing costs.
Long-term debt as a percentage of long-term debt and stockholders' equity combined.
Total debt (notes payable, current maturities of long-term debt and long-term debt) as a percentage of total debt and stockholders' equity
combined.

CASH FLOW ACTIVITIES

The following tables summarize our cash flows for the years ended December 31 (in thousands):

Operating Activities:

Cash earnings (net income plus non-cash adjustments) $
Changes in certain operating assets and liabilities:
Accounts receivable and other current assets
Accounts payable and accrued liabilities
Regulatory assets and liabilities

Contributions to defined benefit pension plans
Other operating activities
Net cash provided by (used in) operating activities

2022 Compared to 2021

2022

566,392 $

2021
527,705 $

2022 vs.
2021

38,687 $

2020
549,092

2021 vs.
2020
(21,387)

(259,851)
89,405
203,869
33,423
—
(15,014)
584,801 $

(78,877) $
10,660
(524,220)
(592,437)
—
167
(64,565) $

(180,974)
78,745
728,089
625,860
—
(15,181)
649,366 $

(8,088)
24,659
(15,753)
818
(12,700)
4,653

(70,789)
(13,999)
(508,467)
(593,255)
12,700
(4,486)
541,863 $ (606,428)

Cash earnings (income from continuing operations plus non-cash adjustments) were $39 million higher than prior year primarily
due to increased Electric and Gas Utility margins due to new rates and rider revenues and prior year impacts from Winter Storm
Uri.

10-KFORM 10-K |Net inflows from changes in certain operating assets and liabilities were $626 million higher than prior year, primarily attributable
to:

•

Cash inflows increased by approximately $728 million primarily as a result of changes in our regulatory assets and
liabilities primarily driven by prior year incremental fuel, purchased power and natural gas costs due to Winter Storm
Uri and current year recovery of a portion of Winter Storm Uri incremental and carrying costs from customers;

Cash outflows increased by approximately $181 million primarily as a result of changes in accounts receivable and
other current assets driven by increased revenue due to higher commodity prices and colder weather and increased
purchases of natural gas in storage;

Cash inflows increased by approximately $79 million as a result of changes in accounts payable and other current
liabilities driven by payment timing related to natural gas and power purchases and other working capital
requirements;

Cash outflows increased $15.2 million from other operating activities primarily due to higher cloud computing licensing costs,
increased payments on settled commodity derivatives and higher preliminary survey charges.

Investing Activities:

Capital expenditures
Other investing activities
Net cash provided by (used in) investing activities

(604,365) $

485

(603,880) $

(677,492) $
13,262
(664,230) $

73,127 $
(12,777)
60,350 $

(767,404) $
5,740
(761,664) $

89,912
7,522
97,434

2022

2021

2022 vs.
2021

2020

2021 vs.
2020

2022 Compared to 2021

Capital expenditures of approximately $604 million in 2022 compared to $677 million in 2021. Lower current year expenditures
are driven by lower programmatic safety, reliability and integrity spending at our Gas and Electric Utilities; and

Cash inflows decreased $13 million for other investing activities which was primarily driven by prior year sales of transmission
assets and facilities, none of which were individually material.

Financing Activities:

Dividends paid on common stock
Common stock issued
Short-term and long-term debt borrowings, net
Distributions to non-controlling interests
Other financing activities
Net cash provided by (used in) financing activities

2022 Compared to 2021

2022

2021

2022 vs.
2021

(156,723) $
90,044
115,420
(17,418)
931
32,254 $

(145,023) $
118,979
777,704
(15,749)
(4,045)
731,866 $

(11,700) $
(28,935)
(662,284)
(1,669)
4,976
(699,612) $

2020

(135,439) $
99,278
275,943
(15,839)
(7,061)
216,882 $

2021 vs.
2020

(9,584)
19,701
501,761
90
3,016
514,984

Net cash provided by financing activities decreased $700 million primarily due to prior year financing activities related to Winter
Storm Uri.

10-K| FORM 10-KCAPITAL RESOURCES

Short-term Debt

Revolving Credit Facility and CP Program

We have a $750 million Revolving Credit Facility that matures on July 19, 2026, with two one-year extension options (subject to
consent from lenders). This facility includes an accordion feature that allows us to increase total commitments up to $1.0 billion
with the consent of the administrative agent, the issuing agents and each bank increasing or providing a new commitment. We
also have a $750 million, unsecured CP Program that is backstopped by the Revolving Credit Facility. Amounts outstanding
under the Revolving Credit Facility and the CP Program, either individually or in the aggregate, cannot exceed $750 million.

The Revolving Credit Facility prohibits us from paying cash dividends if a default or an event of default exists prior to, or would
result after, paying a dividend. Although these contractual restrictions exist, we do not anticipate triggering any default measures
or restrictions.

The Revolving Credit Facility contains cross-default provisions that could result in a default under such agreements if BHC or its
material subsidiaries failed to 1) make timely payments of debt obligations; or 2) triggered other default provisions under any
debt agreement totaling, in the aggregate principal amount of $50 million or more that permit the acceleration of debt maturities
or mandatory debt prepayment.

See Note 8 of the Notes to Consolidated Financial Statements in this Annual Report on Form 10-K for more information on our
Revolving Credit Facility and CP Program.

Utility Money Pool

As a utility holding company, we are required to establish a cash management program to address lending and borrowing
activities between our utilities and the Company. We have established utility money pool agreements which address these
requirements. These agreements are on file with the FERC and appropriate state regulators. Under the utility money pool
agreements, our utilities may, at their option, borrow and extend short-term loans to our other utilities at market-based rates.
While the utility money pool may borrow funds from the Company (as ultimate parent company), the money pool arrangement
does not allow loans from our utility subsidiaries to the Company (as ultimate parent company) or to non-regulated affiliates.

Long-term Debt

For information on our long-term debt, see Note 8 of the Notes to Consolidated Financial Statements in this Annual Report on
Form 10-K.

Covenant Requirements

The Revolving Credit Facility and Wyoming Electric’s financing agreements contain covenant requirements. We were in
compliance with these covenants as of December 31, 2022. See additional information in Note 8 of the Notes to Consolidated
Financial Statements in this Annual Report on Form 10-K.

Equity

Shelf Registration

We have a shelf registration statement on file with the SEC under which we may issue, from time to time, senior debt securities,
subordinated debt securities, common stock, preferred stock, warrants and other securities. Although the shelf registration
statement does not limit our issuance capacity, our ability to issue securities is limited to the authority granted by our Board of
Directors, certain covenants in our financing arrangements and restrictions imposed by federal and state regulatory authorities.
The shelf registration expires in August 2023. Our articles of incorporation authorize the issuance of 100 million shares of
common stock and 25 million shares of preferred stock. As of December 31, 2022, we had approximately 66 million shares of
common stock outstanding and no shares of preferred stock outstanding.

ATM

Our ATM allows us to sell shares of our common stock with an aggregate value of up to $400 million. The shares may be offered
from time to time pursuant to a sales agreement dated August 4, 2020. Shares of common stock are offered pursuant to our
shelf registration statement filed with the SEC.

For additional information regarding equity, see Note 8 of the Notes to Consolidated Financial Statements in this Annual Report
on Form 10-K.

10-KFORM 10-K |Future Financing Plans

We will continue to assess debt and equity needs to support our capital investment plans and other strategic objectives. We plan
to fund our capital plan and strategic objectives by using cash generated from operating activities and various financing
alternatives, which could include our Revolving Credit Facility, our CP Program, the issuance of common stock under our ATM
program or in an opportunistic block trade. In the first quarter of 2023, we plan to re-finance a portion of our short-term
borrowings into long-term debt. We also plan to re-finance our $525 million, 4.25%, senior unsecured notes due November 30,
2023, at or before maturity date. Additionally, we plan to renew our ATM and shelf registration at or before shelf expiration in
August 2023.

CREDIT RATINGS

Financing for operational needs and capital expenditure requirements, not satisfied by operating cash flows, depends upon the
cost and availability of external funds through both short and long-term financing. In order to operate and grow our business, we
need to consistently maintain the ability to raise capital on favorable terms. Access to funds is dependent upon factors such as
general economic and capital market conditions, regulatory authorizations and policies, the Company’s credit ratings, cash flows
from routine operations and the credit ratings of counterparties. After assessing the current operating performance, liquidity and
credit ratings of the Company, management believes that the Company will have access to the capital markets at prevailing
market rates for companies with comparable credit ratings. We note that credit ratings are not recommendations to buy, sell, or
hold securities and may be subject to revision or withdrawal at any time by the assigning rating agency. Each rating should be
evaluated independently of any other rating.

The following table represents the credit ratings, outlook and risk profile of BHC at December 31, 2022:

Rating Agency

S&P (a)
Moody’s (b)
Fitch (c)

Senior Unsecured Rating
BBB+
Baa2
BBB+

Outlook
Stable
Stable
Stable

(a)
(b)
(c)

On August 26, 2022, S&P reported BBB+ rating and maintained a Stable outlook.
On December 20, 2022, Moody's reported our Baa2 rating and maintained a Stable outlook.
On October 6, 2022, Fitch reported BBB+ rating and maintained a Stable outlook.

Certain fees and interest rates under our Revolving Credit Facility are based on our credit ratings at all three rating agencies. If
all of our ratings are at the same level, or if two of our ratings are the same level and one differs, these fees and interest rates
will be based on the ratings that are at the same level. If all of our ratings are at different levels, these fees and interest rates will
be based on the middle level. Currently, our Fitch and S&P ratings are at the same level, and our Moody’s rating is one level
below. Therefore, if Fitch or S&P downgrades our senior unsecured debt, we will be required to pay higher fees and interest
rates under our Revolving Credit Facility.

The following table represents the credit ratings of South Dakota Electric at December 31, 2022:

S&P (a)
Fitch (b)

Rating Agency

(a)
(b)

On March 31, 2022, S&P reported A rating.
On October 6, 2022, Fitch reported A rating.

Senior Secured Rating
A
A

We do not have any trigger events (i.e. an acceleration of repayment of outstanding indebtedness, an increase in interest costs,
or the posting of additional cash collateral) tied to our stock price and have not executed any transactions that require us to issue
equity based on our credit ratings.

CAPITAL REQUIREMENTS

Capital Expenditures

Capital expenditures are a substantial portion of our cash requirements each year and we continue to forecast a robust capital
expenditure program during the next five years. See above in Key Elements of our Business Strategy for forecasted capital
expenditure requirements. A significant portion of our capital expenditures are for safety, reliability and integrity of our system
and is included in utility rate base and eligible for recovery from our utility customers with regulatory approval. Those capital
expenditures also earn a rate of return authorized by the commissions in the jurisdictions in which we operate.

10-K| FORM 10-KOur historical capital expenditures by reportable segment are shown in Note 16 of the Notes to Consolidated Financial
Statements in this Annual Report on Form 10-K.

Repayments of Indebtedness

For information relating to repayments of our short- and long-term debt and associated interest payments, see Note 8 of the
Notes to Consolidated Financial Statements in this Annual Report on Form 10-K.

Unconditional Purchase Obligations

We have unconditional purchase obligations which include the energy and capacity costs associated with our PPAs,
transmission services agreements, and natural gas capacity, transportation and storage agreements. Additionally, our Gas
Utilities have commitments to purchase physical quantities of natural gas under contracts indexed to various forward natural gas
price curves. For additional information. see Note 3 of the Notes to Consolidated Financial Statements in this Annual Report on
Form 10-K.

Defined Benefit Pension Plan

We have one defined benefit pension plan, the Black Hills Retirement Plan (Pension Plan). The unfunded status of the Pension
Plan is defined as the amount the projected benefit obligation exceeds the plan assets. The unfunded status of the Pension Plan
is $35 million as of December 31, 2022, compared to $20 million as of December 31, 2021. The increase in the unfunded status
of the Pension Plan was primarily driven by an increase in the discount rate. We do not have required contributions and we do
not expect to make contributions to our Pension Plan in 2023. See further information in Note 13 of the Notes to Consolidated
Financial Statements in this Annual Report on Form 10-K.

Common Stock Dividends

Future cash dividends, if any, will be dependent on our results of operations, financial position, cash flows, reinvestment
opportunities and other factors, and will be evaluated and approved by our Board of Directors.

Additionally, there are certain statutory limitations that could affect future cash dividends paid. Federal law places limits on the
ability of public utilities within a holding company structure to declare dividends. Specifically, under the Federal Power Act, a
public utility may not pay dividends from any funds properly included in a capital account. The utility subsidiaries’ dividends may
be limited directly or indirectly by state regulatory commissions or bond indenture covenants. See additional information in Note
8 of the Notes to Consolidated Financial Statements in this Annual Report on Form 10-K.

On January 25, 2023, our Board of Directors declared a quarterly dividend of $0.625 per share, equivalent to an annual dividend
rate of $2.50 per share. The table below provides our dividends paid (in thousands), dividend payout ratio and dividends paid per
share for the three years ended December 31:

Common Stock Dividends Paid
Dividend Payout Ratio
Dividends Per Share

Our three-year compound annualized dividend growth rate was 5.5%.

Collateral Requirements

2022

156,723

61%

2.41

2021

145,023

61%

2.29

2020

135,439

60%

2.17

Our Utilities maintain wholesale commodity contracts for the purchases and sales of electricity and natural gas which have
performance assurance provisions that allow the counterparty to require collateral postings under certain conditions, including
when requested on a reasonable basis due to a deterioration in our financial condition or nonperformance. A significant
downgrade in our credit ratings, such as a downgrade to a level below investment grade, could result in counterparties requiring
collateral postings under such adequate assurance provisions. The amount of credit support that we may be required to provide
at any point in the future is dependent on the amount of the initial transaction, changes in the market price, open positions and
the amounts owed by or to the counterparty. At December 31, 2022, we had sufficient liquidity to cover collateral that could be
required to be posted under these contracts. The cash collateral we were required to post at December 31, 2022 was not
material. See Note 9 of the Notes to Consolidated Financial Statements in this Annual Report on Form 10-K.

Guarantees

We provide various guarantees, which represent off-balance sheet commitments, supporting certain of our subsidiaries under
specified agreements or transactions. For more information on these guarantees, see Note 3 of the Notes to Consolidated
Financial Statements in this Annual Report on Form 10-K.

10-KFORM 10-K |
Critical Accounting Estimates

We prepare our consolidated financial statements in conformity with GAAP. In many cases, the accounting treatment of a
particular transaction is specifically dictated by GAAP and does not require management’s judgment in application. There are
also areas which require management’s judgment in selecting among available GAAP alternatives. We are required to make
certain estimates, judgments and assumptions that we believe are reasonable based upon the information available. We
continue to closely monitor the macroeconomic environment and related impacts on our critical accounting estimates including,
but not limited to, collectability of customer receivables, recoverability of regulatory assets, impairment risk of goodwill and long-
lived assets, and contingent liabilities. These estimates and assumptions affect the reported amounts of assets and liabilities at
the date of the financial statements and the reported amounts of revenues and expenses during the periods presented. Actual
results may differ from our estimates and to the extent there are material differences between these estimates, judgments or
assumptions and actual results, our financial statements will be affected. We believe the following accounting estimates are the
most critical in understanding and evaluating our reported financial results. We have reviewed these critical accounting estimates
and related disclosures with our Audit Committee.

The following discussion of our critical accounting estimates should be read in conjunction with Note 1, “Business Description
and Significant Accounting Policies” of the Notes to Consolidated Financial Statements in this Annual Report on Form 10-K.

Regulation

Our regulated Electric and Gas Utilities are subject to cost-of-service regulation and earnings oversight from federal and state
utility commissions. This regulatory treatment does not provide any assurance as to achievement of desired earnings levels. Our
retail electric and gas utility rates are regulated on a state-by-state basis by the relevant state regulatory commissions based on
an analysis of our costs, as reviewed and approved in a regulatory proceeding. The rates that we are allowed to charge may or
may not match our related costs and allowed return on invested capital at any given time.

Management continually assesses the probability of future recoveries associated with regulatory assets and future obligations
associated with regulatory liabilities. Factors such as the current regulatory environment, recently issued rate orders and
historical precedents are considered. As a result, we believe that the accounting prescribed under rate-based regulation remains
appropriate and our regulatory assets are probable of recovery in current rates or in future rate proceedings.

To some degree, each of our Electric and Gas Utilities are permitted to recover certain costs (such as increased fuel and
purchased power costs) outside of a base rate review. To the extent we are able to pass through such costs to our customers,
and a state regulatory commission subsequently determines that such costs should not have been paid by the customers, we
may be required to refund such costs.

As of December 31, 2022 and 2021, we had total regulatory assets of $653 million and $797 million, respectively, and total
regulatory liabilities of $519 million and $503 million, respectively. See Note 2 of the Notes to Consolidated Financial Statements
in this Annual Report on Form 10-K for further information.

Goodwill

We perform a goodwill impairment test on an annual basis or upon the occurrence of events or changes in circumstances that
indicate that the asset might be impaired. Our annual goodwill impairment testing date is as of October 1, which aligns with our
financial planning process.

Accounting standards for testing goodwill for impairment require the application of either a qualitative or quantitative assessment
to analyze whether or not goodwill has been impaired. Goodwill is tested for impairment at the reporting unit level. Under either
the qualitative or quantitative assessment, the estimated fair value of a reporting unit is compared with its carrying amount,
including goodwill. If the carrying amount exceeds fair value, then an impairment loss would be recognized in an amount equal to
that excess, limited to the amount of goodwill allocated to that reporting unit.

10-K| FORM 10-K97%

Application of the goodwill impairment test requires judgment, including the identification of reporting units and determining the
fair value of the reporting unit. We have determined that the reporting units for goodwill impairment testing are our operating
segments, or components of an operating segment, that constitute a business for which discrete financial information is available
and for which the CODM regularly reviews the operating results. We estimate the fair value of our reporting units using a
combination of an income approach, which estimates fair value based on discounted future cash flows, and a market approach,
which estimates fair value based on market comparables within the utility and energy industries. These valuations require
significant judgments, including, but not limited to: 1) estimates of future cash flows, based on our internal five-year business
plans and adjusted as appropriate for our view of market participant assumptions, with long range cash flows estimated using a
terminal value calculation; 2) estimates of long-term growth rates for our businesses; 3) the determination of an appropriate
weighted-average cost of capital or discount rate; and 4) the utilization of market information such as recent sales transactions
for comparable assets within the utility and energy industries. Varying by reporting unit, weighted average cost of capital in the
range of 6.9% to 7.0% and long-term growth rate projections of 1.75% were utilized in the goodwill impairment test performed as
of October 1, 2022. Although 1.75% was used for a long-term growth rate projection, the short-term projected growth rate is
higher with planned recovery of capital investments through rider mechanisms and rate reviews. Under the market approach, we
estimate fair value using multiples derived from comparable sales transactions and enterprise value to EBITDA for comparative
peer companies for each respective reporting unit. These multiples are applied to operating data for each reporting unit to arrive
at an indication of fair value. In addition, we add a reasonable control premium when calculating fair value utilizing the peer
multiples, which is estimated as the premium that would be received in a sale in an orderly transaction between market
participants.

At October 1, 2022, fair value exceeded the carrying value at all reporting units. However, the Gas Utilities reporting unit’s fair
value exceeded its carrying value by less than 10% and could be at risk for impairment if adverse macroeconomic conditions
persist or deteriorate. The decrease in the fair value cushion of the Gas Utilities reporting unit when compared to the prior year
was primarily due to an increase in the weighted average cost of capital.

The estimates and assumptions used in our impairment assessments are based on available market information and we believe
they are reasonable. However, variations in any of the assumptions could result in materially different calculations of fair value
and determinations of whether or not an impairment is indicated.

For the years ended December 31, 2022, 2021, and 2020, there were no impairment losses recorded. At December 31, 2022,
the fair value exceeded the carrying value at all reporting units.

See Item 1A - Risk Factors and Note 1 of the Notes to Consolidated Financial Statements in this Annual Report on Form 10-K
for additional information.

Income Taxes

The Company and its subsidiaries file consolidated federal income tax returns. Each entity records income taxes as if it were a
separate taxpayer for both federal and state income tax purposes and consolidating adjustments are allocated to the
subsidiaries based on separate company computations of taxable income or loss.

The Company uses the asset and liability method in accounting for income taxes. Under the asset and liability method, deferred
income taxes are recognized at currently enacted income tax rates, to reflect the tax effect of temporary differences between the
financial and tax basis of assets and liabilities as well as operating loss and tax credit carryforwards. Such temporary differences
are the result of provisions in the income tax law that either require or permit certain items to be reported on the income tax
return in a different period than they are reported in the financial statements.

In assessing the realization of deferred tax assets, management considers whether it is more likely than not that some portion or
all of the deferred tax assets will not be realized and provides any necessary valuation allowances as required. If we determine
that we will be unable to realize all or part of our deferred tax assets in the future, an adjustment to the deferred tax asset would
be made in the period such determination was made. These adjustments may increase or decrease earnings. Although we
believe our assumptions, judgments and estimates are reasonable, changes in tax laws or our interpretations of tax laws and the
resolution of current and any future tax audits could significantly impact the amounts provided for income taxes in our
consolidated financial statements.

See Note 15 of the Notes to Consolidated Financial Statements in this Annual Report on Form 10-K for additional information.

10-KFORM 10-K |ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Our activities in the regulated and non-regulated energy sectors expose us to a number of risks in the normal operations of our
businesses. Depending on the activity, we are exposed to varying degrees of market risk and credit risk.

Market risk is the potential loss that may occur as a result of an adverse change in market price, rate or supply. We are exposed,
but not limited to, the following market risks:

•

Commodity price risk associated with our retail natural gas services, wholesale electric power marketing activities and fuel
procurement for several of our gas-fired generation assets. Market fluctuations may occur due to unpredictable factors
such as the COVID-19 pandemic, weather (e.g. Winter Storm Uri), geopolitical events, market speculation, recession,
inflation, pipeline constraints, and other factors that may impact natural gas and electric energy supply and demand; and

Interest rate risk associated with future debt, including reduced access to liquidity during periods of extreme capital
markets volatility, such as the 2008 financial crisis and the COVID-19 pandemic.

Credit risk is associated with financial loss resulting from non-performance of contractual obligations by a counterparty.

To manage and mitigate these identified risks, we have adopted the Black Hills Corporation Risk Policies and Procedures. The
Black Hills Corporation Risk Policies and Procedures have been approved by our Executive Risk Committee. These policies
relate to numerous matters including governance, control infrastructure, authorized commodities and trading instruments,
prohibited activities and employee conduct. We report any issues or concerns pertaining to the Risk Policies and Procedures to
the Audit Committee of our Board of Directors. The Executive Risk Committee, which includes senior level executives, meets at
least quarterly and as necessary, to review our business and credit activities and to ensure that these activities are conducted
within the authorized policies.

Commodity Price Risk

Electric and Gas Utilities

Our utilities have various provisions that allow them to pass the prudently-incurred cost of energy through to the customer. To
the extent energy prices are higher or lower than amounts in our current billing rates, adjustments are made on a periodic basis
to reflect billed amounts to match the actual energy cost we incurred. In Colorado, South Dakota and Wyoming, we have ECA or
PCA provisions that adjust electric rates when energy costs are higher or lower than the costs included in our tariffs. In
Arkansas, Colorado, Iowa, Kansas, Nebraska and Wyoming, we have GCA provisions that adjust natural gas rates when our
natural gas costs are higher or lower than the energy cost included in our tariffs. These adjustments are subject to periodic
prudence reviews by the state regulatory commissions. If state regulatory commissions decide to discontinue these tariff-based
adjustment mechanisms, or there are delays in the timing of recovery under these mechanisms, we may be more exposed to
commodity price risk.

The operations of our utilities, including natural gas sold by our Gas Utilities and natural gas used by our Electric Utilities’
generation plants or those plants under PPAs where our Electric Utilities must provide the generation fuel (tolling agreements),
expose our utility customers to natural gas price volatility. Therefore, as allowed or required by state regulatory commissions, we
have entered into commission-approved hedging programs utilizing natural gas futures, options, over-the-counter swaps and
basis swaps to reduce our customers’ underlying exposure to these fluctuations.

For our regulated Utilities’ hedging plans, unrealized and realized gains and losses, as well as option premiums and
commissions on these transactions are recorded as Regulatory assets or Regulatory liabilities in the accompanying
Consolidated Balance Sheets in accordance with the state utility commission guidelines. When the related costs are recovered
through our rates, the hedging activity is recognized in the Consolidated Statements of Income. See additional information in
Note 9 of the Notes to Consolidated Financial Statements in this Annual Report on Form 10-K.

Wholesale Power

We periodically have wholesale power purchase and sale contracts used to manage purchased power costs and load
requirements associated with serving our electric customers that are considered derivative instruments and do not qualify for the
normal purchase and normal sales exception for derivative accounting. Changes in the fair value of these commodity derivatives
are recognized in the Consolidated Statements of Income.

A potential risk related to wholesale power sales is the price risk arising from the sale of power that exceeds our generating
capacity. These potential short positions can arise from unplanned plant outages or from unanticipated load demands. To
manage such risk, we restrict wholesale off-system sales to amounts by which our anticipated generating capabilities and
purchased power resources exceed our anticipated load requirements plus a required reserve margin.

10-K| FORM 10-KBlack Hills Energy Services

To support our Choice Gas Program customers, we buy and sell natural gas at competitive prices by managing commodity price
risk. As a result of these activities, this area of our business is exposed to risks associated with changes in the market price of
natural gas. We manage our exposure to such risks using over-the-counter and exchange traded options and swaps with
counterparties in anticipation of forecasted purchases and sales. A portion of our over-the-counter swaps have been designated
as cash flow hedges to mitigate the commodity price risk associated with fixed price forward contracts to supply gas to our
Choice Gas Program customers. The gain or loss on these designated derivatives is reported in AOCI in the accompanying
Consolidated Balance Sheets and reclassified into earnings in the same period that the underlying hedged item is recognized in
earnings.

At December 31, 2022 and 2021, a 10% change in market prices for our derivative instruments would not materially impact pre-
tax income, the fair values of our derivative assets and liabilities, or OCI.

See additional commodity risk and derivative information in Note 9 of the Notes to Consolidated Financial Statements in this
Annual Report on Form 10-K.

Interest Rate Risk

Periodically, we have engaged in activities to manage risks associated with changes in interest rates. We have utilized pay-fixed
interest rate swap agreements to reduce exposure to interest rate fluctuations associated with floating rate debt obligations and
anticipated debt refinancings. At December 31, 2022, we had no interest rate swaps in place. Further details of past swap
agreements are set forth in Note 9 of the Notes to Consolidated Financial Statements in this Annual Report on Form 10-K.

At December 31, 2022, 88% of our debt is fixed rate debt, which limits our exposure to variable interest rate fluctuations. A
hypothetical 100 basis point increase in the benchmark rate on our variable rate debt would have increased annual pretax
interest expense by approximately $4.1 million and $2.7 million for the years ended December 31, 2022 and 2021, respectively.
See Note 8 for further information on cash amounts outstanding under short- and long-term variable rate borrowings.

We are subject to interest rate risk associated with our pension and post-retirement benefit obligations. Changes in interest rates
impact the liabilities associated with these benefit plans as well as the amount of income or expense recognized for these plans.
Declines in the value of the plan assets could diminish the funded status of the pension plans and potentially increase the
requirements to make cash contributions to these plans. See additional information in Critical Accounting Estimates in Item 7
and Note 13 of the Notes to Consolidated Financial Statements in this Annual Report on Form 10-K.

Credit Risk

We have adopted the Black Hills Corporation Credit Policy that establishes guidelines, controls and limits to manage and
mitigate credit risk within risk tolerances established by the Board of Directors. We attempt to mitigate our credit exposure by
conducting business primarily with high credit quality entities, setting tenor and credit limits commensurate with counterparty
financial strength, obtaining master netting agreements and mitigating credit exposure with less creditworthy counterparties
through parental guarantees, cash collateral requirements, letters of credit and other security agreements.

We perform ongoing credit evaluations of our customers and adjust credit limits based upon payment history and the customer’s
current creditworthiness, as determined by review of their current credit information. We maintain a provision for estimated credit
losses based upon historical experience, changes in current market conditions, expected losses and any specific customer
collection issue that is identified. Our credit exposure at December 31, 2022 was concentrated primarily among retail utility
customers, investment grade companies, cooperative utilities and federal agencies.

See more information in Notes 1 and 9 of the Notes to Consolidated Financial Statements in this Annual Report on Form 10-K.

10-KFORM 10-K |ITEM 8.

FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

Management’s Report on Internal Control Over Financial Reporting

We are responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rules 13a-
15(f) and 15d-15(f) under the Securities Exchange Act of 1934, as amended. Our internal control over financial reporting is a
process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial
statements for external purposes in accordance with generally accepted accounting principles.

All internal control systems, no matter how well designed, have inherent limitations. Therefore, even those systems determined
to be effective can provide only reasonable assurance with respect to financial statement preparation and presentation. Because
of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of
any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of
changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Under the supervision and with the participation of management, including our Chief Executive Officer and Chief Financial
Officer, we conducted an evaluation of the effectiveness of our internal control over financial reporting as of December 31, 2022,
based on the criteria set forth in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring
Organizations of the Treadway Commission “COSO”. This evaluation included review of the documentation of controls,
evaluation of the design effectiveness of controls, testing of the operating effectiveness of controls and a conclusion on this
evaluation. Based on our evaluation, we have concluded that our internal control over financial reporting was effective as of
December 31, 2022.

Deloitte & Touche LLP, an independent registered public accounting firm, as auditors of Black Hills Corporation’s financial
statements, has issued an attestation report on the effectiveness of Black Hills Corporation's internal control over financial
reporting as of December 31, 2022. Deloitte & Touche LLP's report on Black Hills Corporation's internal control over financial
reporting is included herein.

Black Hills Corporation

10-K| FORM 10-KREPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the shareholders and the Board of Directors of Black Hills Corporation

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of Black Hills Corporation and subsidiaries (the "Company") as
of December 31, 2022 and 2021, the related consolidated statements of income, comprehensive income, shareholders' equity,
and cash flows, for each of the three years in the period ended December 31, 2022, and the related notes (collectively referred
to as the "financial statements"). In our opinion, the financial statements present fairly, in all material respects, the financial
position of the Company as of December 31, 2022 and 2021, and the results of its operations and its cash flows for each of the
three years in the period ended December 31, 2022, in conformity with accounting principles generally accepted in the United
States of America.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States)
(PCAOB), the Company's internal control over financial reporting as of December 31, 2022, based on criteria established in
Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway
Commission and our report dated February 14, 2023, expressed an unqualified opinion on the Company's internal control over
financial reporting.

Basis for Opinion

These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on
the Company's financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are
required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable
rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the
audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to
error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial
statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included
examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included
evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall
presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matter

The critical audit matter communicated below is a matter arising from the current-period audit of the financial statements that
was communicated or required to be communicated to the audit committee and that (1) relates to accounts or disclosures that
are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The
communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and
we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the
accounts or disclosures to which it relates.

Regulatory Accounting - Impact of Rate Regulation on the Financial Statements — Refer to Notes 1 and 2 to the
Financial Statements.

Critical Audit Matter Description

The Company is subject to cost-of-service regulation and earnings oversight by state and federal utility commissions
(collectively, the “Commissions”), which have jurisdiction over the Company’s electric rates in Colorado, Montana, South Dakota
and Wyoming and natural gas rates in Arkansas, Colorado, Iowa, Kansas, Nebraska and Wyoming. Management has
determined it meets the requirements under accounting principles generally accepted in the United States of America to prepare
its financial statements applying the specialized rules to account for the effects of cost-based rate regulation. Accounting for the
economics of rate regulation impacts multiple financial statement line items and disclosures, such as property, plant, and
equipment; regulatory assets and liabilities; revenue; operating expenses; and income tax benefit (expense).

10-KFORM 10-K |Rates are regulated on a state-by-state basis by the relevant state regulatory commissions based on an analysis of the costs, as
reviewed and approved in a regulatory proceeding. Rate regulation is premised on the full recovery of prudently incurred costs
and a reasonable rate of return on invested capital. Decisions to be made by the Commissions in the future will impact the
accounting for regulated operations, including decisions about the amount of allowable costs and return on invested capital
included in rates and any refunds that may be required. While the Company has indicated its regulatory assets are probable of
recovery in current rates or in future proceedings, there is a risk that the Commissions will not judge all costs to have been
prudently incurred or that the rate regulation process in which rates are determined will not always result in rates that produce a
full recovery of costs and a reasonable return on invested capital.

We identified the impact of rate regulation as a critical audit matter due to the significant judgments made by management to
support its assertions about impacted account balances and disclosures and the high degree of subjectivity involved in
assessing the impact of future regulatory orders on the financial statements. Management judgments include assessing the
likelihood of (1) recovery in future rates of incurred costs, and (2) a refund or future rate reduction to be provided to customers.
Given the uncertainty of future decisions by the Commissions, auditing these judgments required specialized knowledge of
accounting for rate regulation and the rate setting process due to its inherent complexities.

How the Critical Audit Matter Was Addressed in the Audit

Our audit procedures related to the uncertainty of future decisions by the Commissions included the following, among others:

•

We tested the effectiveness of management’s controls over the evaluation of the likelihood of (1) the recovery in future
rates of costs incurred as property, plant, and equipment and deferred as regulatory assets, and (2) refunds or future
reductions in rates that should be reported as regulatory liabilities. We tested the effectiveness of management’s controls
over the initial recognition of amounts as property, plant, and equipment; regulatory assets or liabilities; and the monitoring
and evaluation of regulatory developments that may affect the likelihood of recovering costs in future rates or of a future
reduction in rates.

We read relevant regulatory orders issued by the Commissions, procedural memorandums, filings made by the Company,
and other publicly available information, as appropriate, to assess the likelihood of recovery in future rates or of a future
reduction in rates based on precedence of the Commissions’ treatment of similar costs under similar circumstances. We
evaluated the external information and compared it to the Company’s recorded regulatory asset and liability balances for
completeness and for any evidence that might contradict management’s assertions.

We obtained and evaluated an analysis from management regarding probability of recovery for regulatory assets or refund
or future reduction in rates for regulatory liabilities not yet addressed in a regulatory order to assess management’s
assertion that amounts are probable of recovery or of a future reduction in rates.

We inspected minutes of the board of directors to identify any evidence that may contradict management’s assertions
regarding probability of recovery or refunds. We also inquired of management regarding current year rate filings and new
regulatory assets or liabilities.

We evaluated the Company’s disclosures related to the impacts of rate regulation, including the balances recorded and
regulatory developments.

/s/ DELOITTE & TOUCHE LLP

Minneapolis, Minnesota
February 14, 2023

We have served as the Company's auditor since 2002.

10-K| FORM 10-KREPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the shareholders and the Board of Directors of Black Hills Corporation

Opinion on Internal Control over Financial Reporting

We have audited the internal control over financial reporting of Black Hills Corporation and subsidiaries (the “Company”) as of
December 31, 2022, based on criteria established in Internal Control — Integrated Framework (2013) issued by the Committee
of Sponsoring Organizations of the Treadway Commission (COSO). In our opinion, the Company maintained, in all material
respects, effective internal control over financial reporting as of December 31, 2022, based on criteria established in Internal
Control — Integrated Framework (2013) issued by COSO.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States)
(PCAOB), the consolidated financial statements as of and for the year ended December 31, 2022, of the Company and our
report dated February 14, 2023, expressed an unqualified opinion on those financial statements.

Basis for Opinion

The Company’s management is responsible for maintaining effective internal control over financial reporting and for its
assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management's Report
on Internal Control over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over
financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be
independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and
regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the
audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all
material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk
that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the
assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our
audit provides a reasonable basis for our opinion.

Definition and Limitations of Internal Control over Financial Reporting

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the
reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally
accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that
(1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions
of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit
preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and
expenditures of the company are being made only in accordance with authorizations of management and directors of the
company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or
disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also,
projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate
because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

/s/ DELOITTE & TOUCHE LLP

Minneapolis, Minnesota
February 14, 2023

10-KFORM 10-K |BLACK HILLS CORPORATION
CONSOLIDATED STATEMENTS OF INCOME

December 31,
2022

December 31,
2021
(in thousands, except per share amounts)

December 31,
2020

Revenue

2,551,816

1,949,102

1,696,941

Operating expenses:
Fuel, purchased power and cost of natural gas sold
Operations and maintenance
Depreciation, depletion and amortization
Taxes - property and production

Total operating expenses

Operating income

Other income (expense):
Interest expense incurred net of amounts capitalized (including
amortization of debt issuance costs, premiums and discounts)
Interest income
Impairment of investment
Other income (expense), net

Total other income (expense)

Income before income taxes
Income tax expense

Net income

Net income attributable to non-controlling interest
Net income available for common stock

Earnings per share of common stock:
Earnings per share, Basic
Earnings per share, Diluted

Weighted average common shares outstanding:

Basic
Diluted

1,230,550
548,430
250,909
66,683
2,096,572

741,934
501,690
235,953
60,096
1,539,673

492,404
495,404
224,457
56,373
1,268,638

455,244

409,429

428,303

(162,584)
1,595
—
1,708
(159,281)
295,963
(25,205)
270,758
(12,371)
258,387

3.98
3.97

64,858
65,021

$
$

(154,112)
1,708
—
1,404
(151,000)
258,429
(7,169)
251,260
(14,516)
236,744

3.74
3.74

63,219
63,325

$
$

(144,931)
1,461
(6,859)
(2,293)
(152,622)
275,681
(32,918)
242,763
(15,155)
227,608

3.65
3.65

62,378
62,439

$
$

The accompanying Notes to Consolidated Financial Statements are an integral part of these Consolidated Financial Statements.

10-K| FORM 10-KBLACK HILLS CORPORATION
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

Year ended

Net income

December 31,
2022

270,758

December 31,
2021
(in thousands)
251,260
$

December 31,
2020

242,763

Other comprehensive income (loss), net of tax:

Benefit plan liability adjustments - net gain (loss) (net of tax of
$(1,505), $(664) and $191, respectively)
Reclassification adjustment of benefit plan liability - net loss (net of
tax of $(226), $(665) and $(958), respectively)
Reclassification adjustment of benefit plan liability - prior service
cost (net of tax of $28, $27 and $23, respectively)
Derivative instruments designated as cash flow hedges:

Reclassification of net realized (gains) losses on settled/amortized
interest rate swaps (net of tax of $(721), $(677) and $(287),
respectively)
Net unrealized gains (losses) on commodity derivatives (net of tax of
$193, $(980) and $14, respectively)
Reclassification of net realized (gains) losses on settled commodity
derivatives (net of tax of $663, $502 and $(96), respectively)

Other comprehensive income (loss), net of tax

4,604

525

(65)

2,129

(631)

(2,045)
4,517

1,959

1,726

(71)

2,174

3,023

(1,549)
7,262

(1,062)

1,429

(80)

2,564

(47)

505
3,309

Comprehensive income
Less: comprehensive income attributable to non-controlling interest
Comprehensive income available for common stock

275,275
(12,371)
262,904

258,522
(14,516)
244,006

246,072
(15,155)
230,917

See Note 11 for additional disclosures related to Comprehensive Income.

The accompanying Notes to Consolidated Financial Statements are an integral part of these Consolidated Financial Statements.

10-KFORM 10-K |BLACK HILLS CORPORATION
CONSOLIDATED BALANCE SHEETS

ASSETS

Current assets:

Cash and cash equivalents
Restricted cash and equivalents
Accounts receivable, net
Materials, supplies and fuel
Derivative assets, current
Income tax receivable, net
Regulatory assets, current
Other current assets

Total current assets

Property, plant and equipment

Less accumulated depreciation and depletion
Total property, plant and equipment, net

Other assets:
Goodwill
Intangible assets, net
Regulatory assets, non-current
Other assets, non-current

Total other assets, non-current

TOTAL ASSETS

As of

December 31,
2022

December 31,
2021

(in thousands)

21,430
5,555
508,192
207,421
582
17,637
260,312
50,579
1,071,708

8,374,790
(1,576,842)
6,797,948

1,299,454
9,589
392,669
46,862
1,748,574
9,618,230

8,921
4,889
321,652
150,979
4,373
18,017
270,290
29,012
808,133

7,856,573
(1,407,397)
6,449,176

1,299,454
10,770
526,309
38,054
1,874,587
9,131,896

The accompanying Notes to Consolidated Financial Statements are an integral part of these Consolidated Financial Statements.

10-K| FORM 10-KBLACK HILLS CORPORATION
CONSOLIDATED BALANCE SHEETS
(Continued)

LIABILITIES AND EQUITY

Current liabilities:

Accounts payable
Accrued liabilities
Derivative liabilities, current
Regulatory liabilities, current
Notes payable
Current maturities of long-term debt

Total current liabilities

Long-term debt, net of current maturities

Deferred credits and other liabilities:
Deferred income tax liabilities, net
Regulatory liabilities, non-current
Benefit plan liabilities
Other deferred credits and other liabilities

Total deferred credits and other liabilities

Commitments, contingencies and guarantees (Note 3)

Equity:
Stockholders’ equity -

Common stock $1.00 par value; 100,000,000 shares authorized; issued:
66,140,396 and 64,793,095, respectively
Additional paid-in capital
Retained earnings
Treasury stock at cost - 36,726 and 54,078, respectively
Accumulated other comprehensive income (loss)

Total stockholders’ equity

Non-controlling interest
Total equity

TOTAL LIABILITIES AND TOTAL EQUITY

As of

December 31,
2022

December 31,
2021

(in thousands, except share
amounts)

310,020
243,457
6,600
46,013
535,600
525,000
1,666,690

217,761
244,759
1,439
17,574
420,180
—
901,713

3,607,340

4,126,923

508,941
472,560
116,742
156,062
1,254,305

465,388
485,377
123,925
141,447
1,216,137

66,140
1,882,653
1,064,122
(2,435)
(15,567)
2,994,913
94,982
3,089,895
9,618,230

64,793
1,783,436
962,458
(3,509)
(20,084)
2,787,094
100,029
2,887,123
9,131,896

The accompanying Notes to Consolidated Financial Statements are an integral part of these Consolidated Financial Statements.

10-KFORM 10-K |BLACK HILLS CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS

Year ended

Operating activities:
Net income

Adjustments to reconcile net income to net cash provided by (used in)
operating activities:

December 31,
2022

December 31,
2021
(in thousands)

December 31,
2020

270,758

251,260

242,763

Depreciation, depletion and amortization
Deferred financing cost amortization
Impairment of investment
Stock compensation
Deferred income taxes
Employee benefit plans
Other adjustments, net

Change in certain operating assets and liabilities:

Materials, supplies and fuel
Accounts receivable and other current assets
Accounts payable and other current liabilities
Regulatory assets
Regulatory liabilities

Contributions to defined benefit pension plans
Other operating activities, net

Net cash provided by (used in) operating activities
Investing activities:

Property, plant and equipment additions
Other investing activities

Net cash (used in) investing activities
Financing activities:

Dividends paid on common stock
Common stock issued
Term Loan - borrowings
Term Loan - repayments
Net borrowings (payments) of Revolving Credit Facility and CP Program
Long-term debt - issuance
Long-term debt - repayments
Distributions to non-controlling interests
Other financing activities

Net cash provided by financing activities

Net change in cash, restricted cash and cash equivalents
Cash, restricted cash and cash equivalents beginning of year
Cash, restricted cash and cash equivalents end of year

Supplemental cash flow information:

Cash (paid) refunded during the period:
Interest (net of amounts capitalized)
Income taxes

Non-cash investing and financing activities:

Accrued property, plant and equipment purchases at December 31
Increase in capitalized assets associated with asset retirement
obligations

$
$

250,909
9,843
—
8,551
25,592
5,459
(4,720)

(75,403)
(184,448)
89,405
203,869
—
—
(15,014)
584,801

(604,365)
485
(603,880)

(156,723)
90,044
—
—
115,420
—
—
(17,418)
931
32,254
13,175
13,810
26,985

235,953
6,968
—
9,655
7,261
9,590
7,018

(35,707)
(43,170)
10,660
(514,687)
(9,533)
—
167
(64,565)

(677,492)
13,262
(664,230)

(145,023)
118,979
800,000
(800,000)
186,140
600,000
(8,436)
(15,749)
(4,045)
731,866
3,071
10,739
13,810

224,457
7,883
6,859
5,373
38,091
11,997
11,669

2,755
(10,843)
24,659
(5,047)
(10,706)
(12,700)
4,653
541,863

(767,404)
5,740
(761,664)

(135,439)
99,278
—
—
(115,460)
400,000
(8,597)
(15,839)
(7,061)
216,882
(2,919)
13,658
10,739

(152,546) $
$
771

(142,685) $
$
1,521

(136,549)
2,172

59,347

14,032

68,758

2,109

72,215

4,774

The accompanying Notes to Consolidated Financial Statements are an integral part of these Consolidated Financial Statements.

10-K| FORM 10-KBLACK HILLS CORPORATION
CONSOLIDATED STATEMENTS OF EQUITY

Common Stock

Treasury Stock

Shares
61,480,658
—
—
—
123,578
1,222,943
—

—
—
62,827,179
—
—
—
153,719
1,812,197
—
—
—
64,793,095
—
—
—
39,546
1,307,755
—
—
66,140,396

Value
$ 61,481
—
—
—
123
1,223
—

—
—
$ 62,827
—
—
—
154
1,812
—
—
—
$ 64,793
—
—
—
39
1,308
—
—
$ 66,140

Value

3,956
—
—
—
28,536
—
—

—
—
$ 32,492
—
—
—
21,586
—
—
—
—
54,078
—
—
—
(17,352)
—
—
—
36,726

(267)
—
—
—
(1,852)
—
—

—
—
$ (2,119)
—
—
—
(1,390)
—
—
—
—
$ (3,509)
—
—
—
1,074
—
—
—
$ (2,435)

Additional
Paid in
Capital
$ 1,552,788
—
—
—
6,923
98,777
(1,203)

—
—
$ 1,657,285
—
—
—
9,256
118,112
(1,217)
—
—
$ 1,783,436
—
—
—
10,481
89,889
(1,153)
—
$ 1,882,653

(in thousands except share amounts)
Balance at December 31, 2019
Net income
Other comprehensive income, net of tax
Dividends on common stock ($2.17 per share)
Share-based compensation
Issuance of common stock
Issuance costs
Implementation of ASU 2016-13 Financial
Instruments - Credit Losses
Distributions to non-controlling interest
Balance at December 31, 2020
Net income
Other comprehensive income, net of tax
Dividends on common stock ($2.29 per share)
Share-based compensation
Issuance of common stock
Issuance costs
Other
Distributions to non-controlling interest
Balance at December 31, 2021
Net income
Other comprehensive income, net of tax
Dividends on common stock ($2.41 per share)
Share-based compensation
Issuance of common stock
Issuance costs
Distributions to non-controlling interest
Balance at December 31, 2022

Retained
Earnings

778,776
227,608
—
(135,439)
—
—
—

(207)
—
870,738
236,744
—
(145,023)
—
—
—
(1)
—
962,458
258,387
—
(156,723)
—
—
—
—
$ 1,064,122

Non
controlling
Interest

101,946
15,155
—
—
—
—
—

—
(15,839)
101,262
14,516
—
—
—
—
—
—
(15,749)
100,029
12,371
—
—
—
—
—
(17,418)
94,982

AOCI
$ (30,655)
—
3,309
—
—
—
—

—
—
$ (27,346)
—
7,262
—
—
—
—
—
—
$ (20,084)
—
4,517
—
—
—
—
—
$ (15,567)

Total
$ 2,464,069
242,763
3,309
(135,439)
5,194
100,000
(1,203)

(207)
(15,839)
$ 2,662,647
251,260
7,262
(145,023)
8,020
119,924
(1,217)
(1)
(15,749)
$ 2,887,123
270,758
4,517
(156,723)
11,594
91,197
(1,153)
(17,418)
$ 3,089,895

The accompanying Notes to Consolidated Financial Statements are an integral part of these Consolidated Financial Statements.

10-KFORM 10-K |BLACK HILLS CORPORATION
Notes to Consolidated Financial Statements
December 31, 2022, 2021 and 2020

(1)

BUSINESS DESCRIPTION AND SIGNIFICANT ACCOUNTING POLICIES

Business Description

Black Hills Corporation is a customer-focused, growth-oriented utility company headquartered in Rapid City, South Dakota. We
are a holding company that, through our subsidiaries, conducts our operations through the following reportable segments:
Electric Utilities and Gas Utilities. Certain unallocated corporate expenses that support our operating segments are presented as
Corporate and Other.

Use of Estimates and Basis of Presentation

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that
affect the reported amounts of certain assets and liabilities and disclosure of contingent assets and liabilities at the date of the
financial statements and the reported amounts of revenues and expenses during the reporting period. Changes in facts and
circumstances or additional information may result in revised estimates and actual results could differ materially from those
estimates.

COVID-19 Pandemic

In March 2020, the World Health Organization categorized COVID-19 as a pandemic and the President of the United States
declared the outbreak a national emergency. The U.S. government has deemed electric and natural gas utilities to be critical
infrastructure sectors that provide essential services during this emergency. As a provider of essential services, the Company
has an obligation to provide services to our customers. The Company remains focused on protecting the health of our
customers, employees and the communities in which we operate while assuring the continuity of our business operations.

The Company’s Consolidated Financial Statements reflect estimates and assumptions made by management that affect the
reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the Consolidated
Financial Statements and reported amounts of revenue and expenses during the reporting periods presented. The Company
considered the impacts of COVID-19 on the assumptions and estimates used and determined that, for the years ended
December 31, 2022, 2021 and 2020, there were no material adverse impacts on the Company’s results of operations.

Principles of Consolidation

The consolidated financial statements include the accounts of Black Hills Corporation and its wholly-owned and majority-owned
and controlled subsidiaries. All intercompany balances and transactions have been eliminated in consolidation. For additional
information on intercompany revenues, see Note 16.

Our Consolidated Statements of Income include operating activity of acquired companies beginning with their acquisition date.
We use the proportionate consolidation method to account for our ownership interest in any jointly-owned electric utility
generation facility, wind farm or transmission tie. See Note 6 for additional information.

Variable Interest Entities

We evaluate arrangements and contracts with other entities to determine if they are VIEs and if we are the primary beneficiary.
GAAP provides a framework for identifying VIEs and determining when a company should include the assets, liabilities, non-
controlling interest and results of activities of a VIE in its consolidated financial statements.

A VIE should be consolidated if a party with an ownership, contractual or other financial interest in the VIE (a variable interest
holder) has the power to direct the VIE’s most significant activities and the obligation to absorb losses or right to receive benefits
of the VIE that could be significant to the VIE. A variable interest holder that consolidates the VIE is called the primary
beneficiary. Upon consolidation, the primary beneficiary generally must initially record all of the VIE’s assets, liabilities and non-
controlling interests at fair value and subsequently account for the VIE as if it were consolidated.

Our evaluation of whether our interest qualifies as the primary beneficiary of a VIE involves significant judgments, estimates and
assumptions and includes a qualitative analysis of the activities that most significantly impact the VIE’s economic performance
and whether the Company has the power to direct those activities, the design of the entity, the rights of the parties and the
purpose of the arrangement. Black Hills Colorado IPP is a VIE. See additional information in Note 12.

10-K| FORM 10-KCash, Cash Equivalents and Restricted Cash

We consider all highly liquid investments with an original maturity of three months or less to be cash and cash equivalents. We
maintain cash accounts for various specified purposes, which are classified as restricted cash.

Revenue Recognition

Our revenue contracts generally provide for performance obligations that are fulfilled and transfer control to customers over time,
represent a series of distinct services that are substantially the same, involve the same pattern of transfer to the customer and
provide a right to consideration from our customers in an amount that corresponds directly with the value to the customer for the
performance completed to date. Therefore, we recognize revenue in the amount to which we have a right to invoice. Our primary
types of revenue contracts are:

•

Regulated natural gas and electric utility services tariffs - Our Utilities have regulated operations, as defined by ASC
980, Regulated Operations, that provide services to regulated customers under tariff rates, charges, terms and
conditions of service and prices determined by the jurisdictional regulators designated for our service territories. Our
regulated services primarily encompass single performance obligations for delivery of either commodity natural gas,
commodity electricity, natural gas transportation or electric transmission services. These service revenues are
variable based on quantities delivered, influenced by seasonal business and weather patterns. Tariffs are only
permitted to be changed through a rate-setting process involving the state or federal regulatory commissions to
establish contractual rates between the utility and its customers. All of our Utilities’ regulated sales are subject to
regulatory-approved tariffs.

Power sales agreements - Our Electric Utilities segment has long-term wholesale power sales agreements with
other load-serving entities, including affiliates, for the sale of excess power from owned generating units. These
agreements include a combination of “take or pay” arrangements, where the customer is obligated to pay for the
energy regardless of whether it actually takes delivery, as well as “requirements only” arrangements, where the
customer is only obligated to pay for the energy the customer needs. In addition to these long-term contracts, we
also sell excess energy to other load-serving entities on a short-term basis. The pricing for all of these arrangements
is included in the executed contracts or confirmations, reflecting the standalone selling price and is variable based
on energy delivered. Certain energy sale and purchase transactions with the same counterparty and at the same
delivery point are netted to reflect the economic substance of the arrangement.

The majority of our revenue contracts are based on variable quantities delivered. Any fixed consideration contracts with an
expected duration of one year or more are immaterial to our consolidated revenues. Variable consideration constraints in the
form of discounts, rebates, credits, price concessions, incentives, performance bonuses, penalties or other similar items are not
material for our revenue contracts. We are the principal in our revenue contracts, as we have control over the services prior to
those services being transferred to the customer.

Revenue Not in Scope of ASC 606

Other revenues included in the tables in Note 4 include our revenue accounted for under separate accounting guidance,
including lease revenue under ASC 842, Leases, derivative revenue under ASC 815, Derivatives and Hedging, and alternative
revenue programs revenue under ASC 980, Regulated Operations.

Significant Judgments and Estimates

Unbilled Revenue

To the extent that deliveries have occurred, but a bill has not been issued, our Utilities accrue an estimate of the revenue since
the latest billing. This estimate is calculated based upon several factors including billings through the last billing cycle in a month
and prices in effect in our jurisdictions. Each month, the estimated unbilled revenue amounts are trued-up and recorded in
Accounts receivable, net on the accompanying Consolidated Balance Sheets.

Contract Balances

The nature of our primary revenue contracts provides an unconditional right to consideration upon service delivery; therefore, no
customer contract assets or liabilities exist. The unconditional right to consideration is represented by the balance in our
Accounts receivable, which is further discussed below.

Additional information is included in Note 4.

10-KFORM 10-K |Accounts Receivable and Allowance for Credit Losses

Accounts receivable for our Electric and Gas Utilities business segments primarily consists of sales to residential, commercial,
industrial, transportation and other customers, all of which do not bear interest. These accounts receivable are stated at billed
and estimated unbilled amounts, net of allowance for credit losses. Accounts receivable for our power generation and mining
businesses consists of amounts due from sales of electric energy and capacity and coal primarily to affiliates or regional utilities.
We maintain an allowance for credit losses which reflects our estimate of uncollectible trade receivables. We regularly review our
trade receivable allowance by considering such factors as historical experience, credit worthiness, the age of the receivable
balances and current economic conditions that may affect collectability.

In specific cases where we are aware of a customer’s inability or reluctance to pay, we record an allowance for credit losses to
reduce the net receivable balance to the amount we reasonably expect to collect. However, if circumstances change, our
estimate of the recoverability of accounts receivable could be affected. Circumstances which could affect our estimates include,
but are not limited to, customer credit issues, expected losses, the level of commodity prices, customer deposits and general
economic conditions. Accounts are written off once they are deemed to be uncollectible or the time allowed for dispute under the
contract has expired.

We utilize master netting agreements which consist of an agreement between two parties who have multiple contracts with each
other that provide for the net settlement of all contracts in the event of default on or termination of any one contract. When the
right of offset exists, accounting standards permit the netting of receivables and payables under a legally enforceable master
netting agreement between counterparties. Accounting standards also permit offsetting of fair value amounts recognized for the
right to reclaim, or the obligation to return, cash collateral against fair value amounts recognized for derivative instruments
executed with the same counterparty.

Following is a summary of accounts receivable as of December 31 (in thousands):

Billed Accounts Receivable
Unbilled Revenue
Less Allowance for Credit Losses
Accounts Receivable, net

2022

2021

267,571
243,574
(2,953)
508,192

181,027
142,738
(2,113)
321,652

Changes to allowance for credit losses for the years ended December 31, were as follows (in thousands):

Balance at
Beginning of
Year

$
$
$

2,113
7,003
2,444

$
$
$

Additions
Charged to
Costs and
Expenses

Recoveries
and
Other
Additions

Write-offs and
Other
Deductions

Balance at
End of Year

9,110
2,444
8,927

$
$
$

3,529
3,560
4,728

$
$
$

(11,799) $
(10,894) $
(9,096) $

2,953
2,113
7,003

2022
2021
2020

Materials, Supplies and Fuel

The following amounts by major classification are included in Materials, supplies and fuel on the accompanying Consolidated
Balance Sheets as of December 31 (in thousands):

Materials and supplies
Fuel
Natural gas in storage

Total materials, supplies and fuel

2022

2021

99,734
3,115
104,572
207,421

86,400
1,267
63,312
150,979

Materials and supplies represent parts and supplies for business segments. Fuel represents diesel oil and gas used by our
Electric Utilities to produce power. Natural gas in storage primarily represents gas purchased for use by our gas customers. All
of our Materials, supplies and fuel are recorded using the weighted-average cost method and are valued at the lower-of-cost or
net realizable value. The value of our natural gas in storage fluctuates with seasonal volume requirements of our business and
the commodity price of natural gas.

10-K| FORM 10-K

Property, Plant and Equipment

Additions to property, plant and equipment are recorded at cost. Included in the cost of regulated construction projects is
AFUDC, when applicable, which represents the approximate composite cost of borrowed funds and a return on equity used to
finance a regulated utility project. The following table presents AFUDC amounts (in thousands) for the years ended December
31:

Income Statement Location

2022

2021

2020

AFUDC Borrowed

AFUDC Equity

Interest expense incurred net of amounts
capitalized (including amortization of debt
issuance costs, premiums and discounts)
Other income (expense), net

5,638

4,068

5,617

644

593

318

We also capitalize interest, when applicable, on undeveloped leasehold costs and certain non-regulated construction projects. In
addition, asset retirement costs associated with tangible long-lived regulated utility assets are recognized as liabilities with an
increase to the carrying amounts of the related long-lived regulated utility assets in the period incurred. The amounts capitalized
are included in Property, plant and equipment on the accompanying Consolidated Balance Sheets. We also classify our Cushion
Gas as Property, plant and equipment.

The cost of regulated utility property, plant and equipment retired, or otherwise disposed in the ordinary course of business, less
salvage plus retirement costs, is charged to accumulated depreciation. Estimated removal costs related to our regulated
properties that do not have legal retirement obligations are reclassified from accumulated depreciation and reflected as
regulatory liabilities. Retirement or disposal of all other assets result in gains or losses recognized as a component of operating
income. Ordinary repairs and maintenance of property, except as allowed under rate regulations, are charged to operations as
incurred.

Depreciation provisions for property, plant and equipment are generally computed on a straight-line basis based on the
applicable estimated service life of the various classes of property. The composite depreciation method is applied to regulated
utility property. Capitalized mining costs and coal leases are amortized on a unit-of-production method based on volumes
produced and estimated reserves. For certain non-regulated power plant components, depreciation is computed on a unit-of-
production methodology based on plant hours run.

See Note 5 for additional information.

Asset Retirement Obligations

Accounting standards for AROs associated with long-lived assets require that the present value of retirement costs for which we
have a legal obligation be recorded as liabilities with an equivalent amount added to the asset cost and depreciated over an
appropriate period. The associated ARO accretion expense for our non-regulated operations, and regulated operations without a
corresponding recovery mechanism, is included within Depreciation, depletion and amortization on the accompanying
Consolidated Statements of Income. The accounting for the obligation for regulated operations with a regulatory mechanism has
no income statement impact due to the deferral of the adjustments through the establishment of a regulatory asset or a
regulatory liability.

We initially record liabilities for the present value of retirement costs for which we have a legal obligation, with an equivalent
amount added to the asset cost. The asset is then depreciated or depleted over the appropriate useful life and the liability is
accreted over time by applying an interest method of allocation. Any difference in the actual cost of the settlement of the liability
and the recorded amount is recognized as a gain or loss in the results of operations at the time of settlement for our non-
regulated operations. Additional information is included in Note 7.

Goodwill and Intangible Assets

Goodwill and intangible assets with indefinite lives are not amortized, but the carrying values are reviewed upon an indicator of
impairment or at least annually. Intangible assets with a finite life are amortized over their estimated useful lives.

The Company has determined that the reporting units for its goodwill impairment test are its operating segments, or components
of an operating segment.

10-KFORM 10-K |Our goodwill impairment analysis includes an income approach and a market approach to estimate the fair value of our reporting
units. This analysis requires the input of several critical assumptions, including future growth rates, cash flow projections,
operating cost escalation rates, rates of return, a risk-adjusted discount rate, timing and level of success in regulatory rate
proceedings, the cost of debt and equity capital, long-term earnings and merger multiples for comparable companies.

We believe that goodwill reflects the inherent value of the relatively stable, long-lived cash flows of our Utilities businesses,
considering the regulatory environment, and the long-lived cash flow and rate base growth opportunities at our Utilities, and
those businesses vertically integrated. Goodwill amounts have not changed since 2016. As of December 31, 2022 and 2021,
Goodwill balances were as follows (in thousands):

Goodwill

Electric Utilities

Gas Utilities

Total

257,244

1,042,210

1,299,454

Our intangible assets represent contract intangibles, easements, rights-of-way, customer listings and trademarks. The finite-lived
intangible assets are amortized using a straight-line method based on estimated useful lives; these assets are currently being
amortized from 3 years to 37 years. Changes to intangible assets for the years ended December 31, were as follows (in
thousands):

Intangible assets, net, beginning balance

Amortization expense (a)

Intangible assets, net, ending balance

2022

2021

2020

10,770
(1,181)
9,589

11,944
(1,174)
10,770

13,266
(1,322)
11,944

(a)

Amortization expense for existing intangible assets is expected to be $1.2 million for each year of the next five years.

Accrued Liabilities

The following amounts by major classification are included in Accrued liabilities on the accompanying Consolidated Balance
Sheets as of December 31 (in thousands):

Accrued employee compensation, benefits and withholdings
Accrued property taxes
Customer deposits and prepayments
Accrued interest
Other (none of which is individually significant)

Total accrued liabilities

Fair Value Measurements

2022

2021

62,890
52,430
47,655
33,798
46,684
243,457

74,387
50,874
48,814
33,680
37,004
244,759

Financial Instruments
We use the following fair value hierarchy for determining inputs for our financial instruments. Our assets and liabilities for
financial instruments are classified and disclosed in one of the following fair value categories:

Level 1 — Unadjusted quoted prices available in active markets that are accessible at the measurement date for identical
unrestricted assets or liabilities. Level 1 instruments primarily consist of highly liquid and actively traded financial instruments
with quoted pricing information on an ongoing basis.

Level 2 — Pricing inputs include quoted prices for identical or similar assets and liabilities in active markets other than quoted
prices in Level 1, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted
prices that are observable for the asset or liability and inputs that are derived principally from or corroborated by observable
market data by correlation or other means.

Level 3 — Pricing inputs are generally less observable from objective sources. These inputs reflect management’s best estimate
of fair value using its own assumptions about the assumptions a market participant would use in pricing the asset or liability.

Assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value
measurement. Our assessment of the significance of a particular input to the fair value measurement requires judgment and may
affect the placement within the fair value hierarchy levels. We record transfers, if necessary, between levels at the end of the
reporting period for all of our financial instruments.

10-K| FORM 10-K

Transfers into Level 3, if any, occur when significant inputs used to value the derivative instruments become less observable,
such as a significant decrease in the frequency and volume in which the instrument is traded, negatively impacting the
availability of observable pricing inputs. Transfers out of Level 3, if any, occur when the significant inputs become more
observable, such as when the time between the valuation date and the delivery date of a transaction becomes shorter, positively
impacting the availability of observable pricing inputs.

Valuation Methodologies for Derivatives

The wholesale electric energy and natural gas commodity contracts for our Utilities are valued using the market approach and
include forward strip pricing at liquid delivery points, exchange-traded futures, options, basis swaps and over-the-counter swaps
and options (Level 2). For exchange-traded futures, options and basis swap assets and liabilities, fair value was derived using
broker quotes validated by the exchange settlement pricing for the applicable contract. For over-the-counter instruments, the fair
value is obtained by utilizing a nationally recognized service that obtains observable inputs to compute the fair value, which we
validate by comparing our valuation with the counterparty. The fair value of these swaps includes a CVA based on the credit
spreads of the counterparties when we are in an unrealized gain position or on our own credit spread when we are in an
unrealized loss position.

Additional information on fair value measurements is included in Notes 10 and 13.

Derivatives and Hedging Activities

All our derivatives are measured at fair value and recognized as either assets or liabilities on the Consolidated Balance Sheets,
except for derivative contracts that qualify for and are elected under the normal purchase and normal sales exception. Normal
purchases and normal sales are contracts where physical delivery is probable, quantities are expected to be used or sold in the
normal course of business over a reasonable amount of time and pricing is clearly and closely related to the asset being
purchased or sold. Normal purchase and sales contracts are recognized when the underlying physical transaction is completed
under the accrual basis of accounting.

In addition, certain derivative contracts approved by regulatory authorities are either recovered or refunded through customer
rates. Any changes in the fair value of these approved derivative contracts are deferred as a regulatory asset or regulatory
liability pursuant to ASC 980, Regulated Operations.

We also have some derivatives that qualify for hedge accounting and are designated as cash flow hedges. The gain or loss on
these designated derivatives is deferred in AOCI and reclassified into earnings when the corresponding hedged transaction is
recognized in earnings. Changes in the fair value of all other derivative contracts are recognized in earnings.

See additional information in Notes 9, 10 and 11.

Deferred Financing Costs

Deferred financing costs include loan origination fees, underwriter fees, legal fees and other costs directly attributable to the
issuance of debt. Deferred financing costs are amortized over the estimated useful life of the related debt. These costs are
presented on the balance sheet as an adjustment to the related debt liabilities. See additional information in Note 8.

Regulatory Accounting

Our regulated Electric Utilities and Gas Utilities are subject to cost-of-service regulation and earnings oversight from federal and
state regulatory commissions. Our Electric and Gas Utilities account for income and expense items in accordance with
accounting standards for regulated operations. These accounting policies differ in some respects from those used by our non-
regulated businesses. Under these regulated operations accounting standards:

•

Certain costs, which would otherwise be charged to expense or OCI, are deferred as regulatory assets based on the
expected ability to recover the costs in future rates.

10-KFORM 10-K |•

Certain credits, which would otherwise be reflected as income or OCI, are deferred as regulatory liabilities based on
the expectation the amounts will be returned to customers in future rates, or because the amounts were collected in
rates prior to the costs being incurred.

Management continually assesses the probability of future recoveries and obligations associated with regulatory assets and
liabilities. Factors such as the current regulatory environment, recently issued rate orders, and historical precedents are
considered. As a result, we believe that the accounting prescribed under rate-based regulation remains appropriate and our
regulatory assets are probable of recovery in current rates or in future rate proceedings.

If changes in the regulatory environment occur, we may no longer be eligible to apply this accounting treatment and may be
required to eliminate regulatory assets and liabilities from our balance sheet. Such changes could adversely affect our results of
operations, financial position or cash flows.

See Note 2 for further information.

Income Taxes

The Company and its subsidiaries file consolidated federal income tax returns. Each entity records both federal and state income
taxes as if it were a separate taxpayer and consolidating expense adjustments are allocated to the subsidiaries based on
separate company computations of taxable income or loss.

We use the asset and liability method in accounting for income taxes. Under the asset and liability method, deferred income
taxes are recognized at currently enacted income tax rates, to reflect the tax effect of temporary differences between the
financial and tax basis of assets and liabilities as well as operating loss and tax credit carryforwards. Such temporary differences
are the result of provisions in the income tax law that either require or permit certain items to be reported on the income tax
return in a different period than they are reported in the financial statements.

It is our policy to apply the flow-through method of accounting for ITCs. Under the flow-through method, ITCs are reflected in net
income as a reduction to income tax expense in the year they qualify. An exception to this general policy is the deferral method,
which applies to our regulated businesses. Such a method results in the ITC being amortized as a reduction to income tax
expense over the estimated useful lives of the underlying property that gave rise to the credit.

We recognize interest income or interest expense and penalties related to income tax matters in Income tax expense on the
Consolidated Statements of Income.

We account for uncertainty in income taxes recognized in the financial statements in accordance with the accounting standards
for income taxes. The unrecognized tax benefit is classified in Other deferred credits and other liabilities or in Deferred income
tax liabilities, net on the accompanying Consolidated Balance Sheets. See Note 15 for additional information.

Earnings per Share of Common Stock

Basic earnings per share is computed by dividing Net income available for common stock by the weighted average number of
common shares outstanding during each year. Diluted earnings per share is computed by including all dilutive common shares
outstanding during each year. Diluted common shares are primarily due to equity units, outstanding stock options, restricted
stock and performance shares under our equity compensation plans.

A reconciliation of share amounts used to compute earnings per share is as follows for the years ended December 31 (in
thousands):

Net income available for common stock
Weighted average shares - basic
Dilutive effect of:

Equity compensation

Weighted average shares - diluted
Net income available for common stock, per share - Diluted

2022

258,387
64,858

163
65,021
3.97

2021

236,744
63,219

106
63,325
3.74

2020

227,608
62,378

61
62,439
3.65

The following securities were excluded from the diluted earnings per share computation for the years ended December 31
because of their anti-dilutive nature (in thousands):

Equity compensation
Anti-dilutive shares excluded from computation of earnings per share

2022

2021

2020

-
-

13
13

60
60

10-K| FORM 10-K
Non-controlling Interests

We account for changes in our controlling interests of subsidiaries according to ASC 810, Consolidation. ASC 810 requires that
the Company record such changes as equity transactions, recording no gain or loss on such a sale. GAAP requires that non-
controlling interests in subsidiaries and affiliates be reported in the equity section of a company’s balance sheet. In addition, the
amounts attributable to the non-controlling interest net income (loss) of those subsidiaries are reported separately in the
consolidated statements of income and comprehensive income. See Note 12 for additional detail on non-controlling interests.

Share-Based Compensation

We account for our share-based compensation arrangements in accordance with ASC 718, Compensation-Stock Compensation,
by recognizing compensation costs for all share-based awards over the respective service period for employee services received
in exchange for an award of equity or equity-based compensation. Awards that will be settled in stock are accounted for as
equity and the compensation expense is based on the grant date fair value. Awards that are settled in cash are accounted for as
liabilities and the compensation expense is re-measured each period based on the current market price and performance
achievement measures. See additional information in Note 14.

Recently Issued Accounting Standards

Facilitation of the Effects of Reference Rate Reform on Financial Reporting, ASU 2020-04

In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference
Rate Reform on Financial Reporting, which was subsequently amended by ASU 2021-01 and ASU 2022-06. The standard
provides relief for companies preparing for discontinuation of interest rates, such as LIBOR, and allows optional expedients and
exceptions for applying GAAP to contracts, hedging relationships and other transactions affected by reference rate reform if
certain criteria are met. The amendments in this update are elective and are effective upon the ASU issuance through December
31, 2024. We are currently evaluating if we will apply the optional guidance as we assess the impact of the discontinuance of
LIBOR on our current arrangements. We do not expect the ASU to have a material impact on our financial position, results of
operations and cash flows.

10-KFORM 10-K |(2)

REGULATORY MATTERS

We had the following regulatory assets and liabilities as of December 31 (in thousands):

Regulatory assets

Winter Storm Uri (a)
Deferred energy and fuel cost adjustments (b)
Deferred gas cost adjustments (b)
Gas price derivatives (b)
Deferred taxes on AFUDC (b)
Employee benefit plans and related deferred taxes (c)
Environmental (b)
Loss on reacquired debt (b)
Deferred taxes on flow-through accounting (b)
Decommissioning costs (b)
Other regulatory assets (b)

Total regulatory assets

Less current regulatory assets

Regulatory assets, non-current

Regulatory liabilities

Deferred energy and gas costs (b)
Employee benefit plan costs and related deferred taxes (c)
Cost of removal (b)
Excess deferred income taxes (c)
Other regulatory liabilities (c)

Total regulatory liabilities

Less current regulatory liabilities

Regulatory liabilities, non-current

2022

2021

347,980
72,580
12,147
8,793
7,333
89,259
1,343
19,213
69,529
3,472
21,332
652,981
(260,312)
392,669

24,030
34,258
175,614
254,833
29,838
518,573
(46,013)
472,560

509,025
59,973
9,488
2,584
7,457
88,923
1,385
21,011
63,243
5,961
27,549
796,599
(270,290)
526,309

6,113
32,241
179,976
264,042
20,579
502,951
(17,574)
485,377

(a)
(b)
(c)

Timing of Winter Storm Uri incremental cost recovery and associated carrying costs vary by jurisdiction. See further information below.
Recovery of costs, but we are not allowed a rate of return.
In addition to recovery or repayment of costs, we are allowed a return on a portion of this amount or a reduction in rate base.

Regulatory assets represent items we expect to recover from customers through probable future rates.

Winter Storm Uri - See discussion below for Winter Storm Uri regulatory asset information.

Deferred Energy and Fuel Cost Adjustments - Deferred energy and fuel cost adjustments represent the cost of electricity
delivered to our Electric Utilities’ customers that is either higher or lower than the current rates and will be recovered or
refunded in future rates. Deferred energy and fuel cost adjustments are recorded and recovered or amortized as approved
by the appropriate state regulatory commission. Our Electric Utilities file periodic quarterly, semi-annual and/or annual
filings to recover these costs based on the respective cost mechanisms approved by their applicable state regulatory
commissions.

Deferred Gas Cost Adjustments - Our regulated Gas Utilities have GCA provisions that allow them to pass the cost of gas
on to their customers. The GCA is based on forecasts of the upcoming gas costs and recovery or refund of prior under-
recovered or over-recovered costs. To the extent that gas costs are under-recovered or over-recovered, they are recorded
as a regulatory asset or liability, respectively. Our Gas Utilities file periodic monthly, quarterly, semi-annual and/or annual
filings to recover these costs based on the respective cost mechanisms approved by their applicable state regulatory
commissions.

Gas Price Derivatives - Our regulated Gas Utilities, as allowed or required by state regulatory commissions, have entered
into certain exchange-traded natural gas futures and options to reduce our customers’ underlying exposure to fluctuations
in gas prices. Gas price derivatives represent our unrealized positions on our commodity contracts supporting our utilities.
Gas price derivatives at December 31, 2022 are hedged over a maximum forward term of two years.

Deferred Taxes on AFUDC - The equity component of AFUDC is considered a permanent difference for tax purposes with
the tax benefit being flowed through to customers as prescribed or allowed by regulators. If, based on a regulator’s action,
it is probable the utility will recover the future increase in taxes payable represented by this flow-through treatment through
a rate revenue increase, a regulatory asset is recognized. This regulatory asset is a temporary difference for which a
deferred tax liability must be recognized. Accounting standards for income taxes specifically address AFUDC-equity and
require a gross-up of such amounts to reflect the revenue requirement associated with a rate-regulated environment.

10-K| FORM 10-K
Employee Benefit Plans and Related Deferred Taxes - Employee benefit plans include the unrecognized prior service
costs and net actuarial loss associated with our defined benefit pension plan and post-retirement benefit plans in
regulatory assets rather than in AOCI. In addition, this regulatory asset includes the income tax effect of the adjustment
required under accounting for compensation - defined benefit plans, to record the full pension and post-retirement benefit
obligations. Such income tax effect has been grossed-up to account for the revenue requirement associated with a rate
regulated environment.

Environmental - Environmental costs associated with certain former manufactured gas plant sites. These costs are first
offset by recognition of insurance proceeds and settlements with other third parties. Any remaining cost will be requested
for recovery in future rate filings. Recovery for these specific environmental costs has not yet been approved by the
applicable state regulatory commission and therefore, the recovery period is unknown at this time.

Loss on Reacquired Debt - Loss on reacquired debt is recovered over the remaining life of the original issue or, if
refinanced, over the life of the new issue.

Deferred Taxes on Flow-Through Accounting - Under flow-through accounting, the income tax effects of certain tax items
are reflected in our cost of service for the customer and result in lower utility rates in the year in which the tax benefits are
realized. A regulatory asset was established to reflect that future increases in income taxes payable will be recovered from
customers as the temporary differences reverse. As a result of this regulatory treatment, we continue to record a tax
benefit for costs considered currently deductible for tax purposes but are capitalized for book purposes.

Decommissioning Costs - South Dakota Electric and Colorado Electric received approval in 2014 for recovery of the
remaining net book values and decommissioning costs of their decommissioned coal plants. In 2018, Arkansas Gas
received approval to record Liquefied Natural Gas Plant decommissioning costs as a regulatory asset and received
approval in 2020 to begin recovering those costs over three years.

Regulatory liabilities represent items we expect to refund to customers through probable future decreases in rates.

Deferred Energy and Gas Costs - Deferred energy and gas costs that have been over-recovered through customer rates
and will be returned to customers in future periods.

Employee Benefit Plan Costs and Related Deferred Taxes - Employee benefit plans represent the cumulative excess of
pension and retiree healthcare costs recovered in rates over pension expense recorded in accordance with ASC 715,
Compensation-Retirement Benefits. In addition, this regulatory liability includes the income tax effect of the adjustment
required under ASC 715, Compensation-Retirement Benefits, to record the full pension and post-retirement benefit
obligations. Such income tax effect has been grossed-up to account for the revenue requirement associated with a rate
regulated environment.

Cost of Removal - Cost of removal represents the estimated cumulative net provisions for future removal costs for which
there is no legal obligation for removal included in depreciation expense.

Excess Deferred Income Taxes - The revaluation of the regulated utilities' deferred tax assets and liabilities due to the
passage of the TCJA was recorded as an excess deferred income tax to be refunded to customers primarily using the
normalization principles as prescribed in the TCJA. See Note 15 for additional information.

Recent Regulatory Activity

Winter Storm Uri

In February 2021, Winter Storm Uri caused a substantial increase in heating and energy demand and contributed to
unforeseeable and unprecedented market prices for natural gas and electricity. As a result, we incurred significant incremental
fuel, purchased power and natural gas costs.

Our Utilities submitted Winter Storm Uri cost recovery applications in our state jurisdictions seeking to recover $546 million of
these incremental costs through separate tracking mechanisms over a weighted-average recovery period of 3.5 years. In these
applications, we sought approval to recover carrying costs. We have received final commission approval for all of our Winter
Storm Uri cost recovery applications, which will allow our Utilities to recover incremental fuel, purchased power and natural gas
costs.

For the years ended December 31, 2022 and 2021, our Utilities collected $174 million and $40 million, respectively, of Winter
Storm Uri incremental costs and carrying costs from customers. As of December 31, 2022, we estimate that our remaining
Winter Storm Uri regulatory asset has a weighted-average recovery period of 2.6 years.

10-KFORM 10-K |For years ended December 31, 2022 and 2021, $22 million and $4.1 million, respectively, of carrying costs were accrued and
recorded to a regulatory asset. The carrying costs accrued during the year ended December 31, 2022 included a one-time, $10
million true-up recorded in the second quarter to reflect commission authorized rates.

TCJA

On December 30, 2020, an administrative law judge approved a settlement of Colorado Electric’s plan to provide $9.3 million of
TCJA-related bill credits to its customers. The bill credits, which represent a disposition of excess deferred income tax benefits
resulting from the TCJA, were delivered to customers in February 2021.

On January 26, 2021, the NPSC approved Nebraska Gas’s plan to provide $2.9 million of TCJA-related bill credits to its
customers. The bill credits, which represent a disposition of excess deferred income tax benefits resulting from the TCJA, were
delivered to customers in June 2021.

As part of Kansas Gas’ 2021 rate review settlement agreement, Kansas Gas will deliver $9.1 million, or approximately $3.0
million of TCJA and state tax reform benefits to customers annually, for three years starting in 2022. For the year ended
December 31, 2022, Kansas Gas delivered TCJA and state tax reform benefits to customers of $2.9 million.

These Colorado Electric, Kansas Gas and Nebraska Gas tax benefits delivered to customers, which resulted in a reduction in
revenue, were offset by a reduction in income tax expense and resulted in a minimal impact to Net income for the years ended
December 31, 2022 and 2021.

Arkansas Gas

On December 10, 2021, Arkansas Gas filed a rate review with the APSC seeking recovery of significant infrastructure
investments in its 7,200-mile natural gas pipeline system. On October 10, 2022, the APSC approved a partial settlement
agreement with all intervening parties for a general rate increase and authorized a capital structure of 45% equity and 55% debt
and a return on equity of 9.6%. The APSC’s decision shifts approximately $10 million of rider revenue to base rates and is
expected to generate $8.8 million of new annual revenue. The APSC also approved a new comprehensive safety and integrity
rider which replaces three former riders. New rates were effective on October 21, 2022.

Wyoming Electric

On June 1, 2022, Wyoming Electric filed a rate review with the WPSC seeking recovery of significant infrastructure investments
in its 1330-mile electric distribution and 59-mile electric transmission systems. On January 26, 2023, the WPSC approved a
settlement agreement with intervening parties for a general rate increase. The settlement is expected to generate $8.7 million in
new annual revenue with a capital structure of 52% equity and 48% debt and a return on equity of 9.75%. New rates will be
effective on March 1, 2023. The agreement also includes approval of a new rider that will be filed annually to recover
transmission investment and expenses.

Colorado Gas

RMNG Rate Review

On October 7, 2022, RMNG filed a rate review with the CPUC seeking recovery of significant infrastructure investments in its
600-mile natural gas pipeline system. The rate review requests $12.3 million in new annual revenue based on a future test year
with a capital structure of 52% equity and 48% debt and a return on equity of 12.3%. The rate review also requests a $7.7 million
shift of SSIR revenues to base rates. The request seeks to finalize rates in the third quarter of 2023.

10-K| FORM 10-KColorado Gas Rate Reviews and SSIR

On June 1, 2021, Colorado Gas filed a rate review with the CPUC seeking recovery of significant infrastructure investments in its
7,000-mile natural gas pipeline system. In the fourth quarter of 2021, Colorado Gas reached a settlement agreement with the
CPUC staff and various intervenors for a general rate increase, which was subsequently approved by an administrative law
judge. New rates were effective January 1, 2022, and the settlement is expected to generate $6.5 million of new annual revenue.
The new revenue is based on a return on equity of 9.2% and a capital structure of 50.3% equity and 49.7% debt.

On September 11, 2020, in accordance with the final Order from the rate review filed on February 1, 2019, Colorado Gas filed a
SSIR proposal with the CPUC that would recover safety and integrity focused investments in its system for five years. On July 6,
2021, Colorado Gas received approval from the CPUC for its SSIR proposal to recover these investments for three years
effective January 1, 2022. The return on SSIR investments will be the current weighted-average cost of long-term debt.

Iowa Gas

Rate Review

On June 1, 2021, Iowa Gas filed a rate review with the IUB seeking recovery of significant infrastructure investments in its 5,000-
mile natural gas pipeline system. On December 28, 2021, the IUB approved a settlement agreement with all intervening parties
for a general rate increase. The settlement shifted $2.2 million of rider revenue to base rates and is expected to generate $3.7
million in new annual revenue with a capital structure of 50% equity and 50% debt and a return on equity of 9.6%. Final rates
were enacted on January 1, 2022 and replaced interim rates effective June 11, 2021.

Kansas Gas

Rate Review

On May 7, 2021, Kansas Gas filed a rate review and rider renewal with the KCC seeking recovery of significant infrastructure
investments in its 4,600-mile natural gas pipeline system. On December 30, 2021, Kansas Gas received approval from the KCC
on its Global Settlement agreement with KCC staff and various intervenors for a general rate increase and renewal of its safety
and integrity rider. The settlement shifted $6.6 million of rider revenue to base rates, effective January 1, 2022, and also allowed
rider renewal for at least five more years.

South Dakota Electric

FERC Formula Rate

The annual rate determination process is governed by the FERC formula rate protocols established in the filed FERC joint-
access transmission tariff. Effective January 1, 2022, the annual revenue requirement for the FERC Transmission Formula Rate
was $30 million and included estimated weighted average capital additions of $30 million for 2021 and 2022 combined.

Black Hills Wyoming and Wyoming Electric

Wygen I FERC Filing

On October 15, 2020, the FERC approved a settlement agreement that represents a resolution of all issues in the joint
application filed by Wyoming Electric and Black Hills Wyoming on August 2, 2019 for approval of a new 60 MW PPA. Under the
terms of the settlement, Wyoming Electric will continue to receive 60 MW of capacity and energy from the Wygen I power plant.
The new agreement commenced on January 1, 2022, replaced the existing PPA and will expire after 11 years.

10-KFORM 10-K |(3)

COMMITMENTS, CONTINGENCIES AND GUARANTEES

Unconditional Purchase Obligations

We have various PPAs and transmission service agreements, which extend to 2030, to support our Electric Utilities' capacity and
energy needs beyond our regulated power plants' generation.

Our Utilities purchase natural gas, including transportation and storage capacity, to meet customers' needs under short-term and
long-term purchase contracts. These contracts extend to 2044.

The following is a schedule of unconditional purchase obligations required under the power purchase, transmission services and
natural gas transportation and storage agreements (in thousands):

PPAs (a)

Transmission
Services
Agreements

Natural gas supply,
transportation and
storage agreements (b)

Future commitments for the year ending December 31,
2023
2024
2025
2026
2027
Thereafter
Total future commitments
___________________________
(a) This schedule does not reflect renewable energy PPA future obligations since these agreements vary based on weather conditions.
(b) Our Gas Utilities have commitments to purchase physical quantities of natural gas under contracts indexed to various forward natural gas
price curves. A portion of our gas purchases are purchased under evergreen contracts and are therefore, for purposes of this disclosure,
carried out for 60 days.

130,031
98,881
72,662
45,102
14,862
56,595
418,133

12,320
-
-
-
-
-
12,320

11,175
2,738
-
-
-
-
13,913

Lease Agreements

Lessee

We lease from third parties certain office and operation center facilities, communication tower sites, equipment and materials
storage. Our leases have remaining terms ranging from less than one year to 33 years, including options to extend that are
reasonably certain to be exercised. Our operating and finance leases were not material to the Company’s Consolidated Financial
statements.

Lessor

We lease to third parties certain generating station ground leases, communication tower sites and a natural gas pipeline. These
leases have remaining terms ranging from less than one year to 34 years. Lease revenue was not material for the years ended
December 31, 2022, 2021 and 2020.

As of December 31, 2022, scheduled maturities of operating lease payments to be received in future years were as follows (in
thousands):

2023
2024
2025
2026
2027
Thereafter
Total lease receivables

Environmental Matters

Operating Leases

2,381
2,125
2,070
1,881
1,845
49,387
59,689

We are subject to costs resulting from a number of federal, state and local laws and regulations which affect future planning and
existing operations. Laws and regulations can result in increased capital expenditures, operating and other costs as a result of
compliance, remediation and monitoring obligations. Due to the environmental issues discussed below, we may be required to
modify, curtail, replace or cease operating certain facilities or operations to comply with statutes, regulations and other
requirements of regulatory bodies.

10-K| FORM 10-KReclamation Liability

For our Pueblo Airport Generation site, we posted a bond of $4.1 million with the State of Colorado to cover the costs of
remediation for a waste water containment pond permitted to provide wastewater storage and processing for this zero-discharge
facility. The reclamation liability is recorded at the present value of the estimated future cost to reclaim the land.

Under our land leases for our wind generation facilities, we are required to reclaim land where we have placed wind turbines.
The reclamation liabilities are recorded at the present value of the estimated future cost to reclaim the land.

Under its mining permit, WRDC is required to reclaim all land where it has mined reserves. The reclamation liability is recorded
at the present value of the estimated future cost to reclaim the land.

See Note 7 for additional information.

Manufactured Gas Processing

In 2008, we acquired whole and partial liabilities for former manufactured gas processing sites in Nebraska and Iowa, which
were previously used to convert coal to natural gas. The acquisition provided for an insurance recovery, now valued at $1.3
million recorded in Other assets, non-current on our Consolidated Balance Sheets, which will be used to help offset remediation
costs. We also have a $1.3 million regulatory asset for manufactured gas processing sites; see Note 2 for additional information.
As of December 31, 2022, we had $2.6 million accrued for remediation of Iowa’s manufactured gas processing site as the
landowner. As of December 31, 2022, we had $0.6 million accrued for remediation of Nebraska’s manufactured gas processing
site as the land owner. These liabilities are included in Other deferred credits and other liabilities on our Consolidated Balance
Sheets. The remediation cost estimate could change materially due to results of further investigations, actions of environmental
agencies or the financial viability of other responsible parties.

Legal Proceedings

In the normal course of business, we are subject to various lawsuits, actions, proceedings, claims and other matters asserted
under laws and regulations. We believe the amounts provided in the consolidated financial statements to satisfy alleged liabilities
are adequate in light of the probable and estimable contingencies. However, there can be no assurance that the actual amounts
required to satisfy alleged liabilities from various legal proceedings, claims and other matters discussed, and to comply with
applicable laws and regulations will not exceed the amounts reflected in the consolidated financial statements.

We record gain contingencies when realized and expected recoveries under applicable insurance contracts when we are
assured of recovery.

In the normal course of business, we enter into agreements that include indemnification in favor of third parties, such as
information technology agreements, purchase and sale agreements and lease contracts. We have also agreed to indemnify our
directors, officers and employees in accordance with our articles of incorporation, as amended. Certain agreements do not
contain any limits on our liability and therefore, it is not possible to estimate our potential liability under these indemnifications. In
certain cases, we have recourse against third parties with respect to these indemnities. Further, we maintain insurance policies
that may provide coverage against certain claims under these indemnities.

GT Resources, LLC v. Black Hills Corporation, Case No. 2020CV30751 (U.S. District Court for the City and County of Denver,
Colorado)

On April 13, 2022, a jury awarded $41 million for claims made by GT Resources, LLC (“GTR”) against BHC and two of its
subsidiaries (Black Hills Exploration and Production, Inc. and Black Hills Gas Resources, Inc.), which ceased oil and natural gas
operations in 2018 as part of BHC’s decision to exit the exploration and production business. The claims involved a dispute over
a 2.3 million-acre concession award in Costa Rica which was acquired by a BHC subsidiary in 2003. GTR retained rights to
receive a royalty interest on any hydrocarbon production from the concession upon the occurrence of contingent events. GTR
contended that BHC and its subsidiaries failed to adequately pursue the opportunity and failed to transfer the concession to
GTR. We believe we have meritorious defenses to the verdict and have appealed the verdict. At this time, we believe that the
liability related to this matter, if any, is not reasonably estimable.

10-KFORM 10-K |Guarantees

We have entered into various parent company-level guarantees providing financial or performance assurance to third parties on
behalf of certain of our subsidiaries. These guarantees do not represent incremental consolidated obligations, but rather,
represent guarantees of subsidiary obligations to allow those subsidiaries to conduct business without posting other forms of
assurance. The agreements, which are off-balance sheet commitments, include support for business operations, indemnification
for reclamation and surety bonds. The guarantees were entered into in the normal course of business. To the extent liabilities
are incurred as a result of activities covered by these guarantees, such liabilities are included in our Consolidated Balance
Sheets.

See Note 8 for additional information on our off-balance sheet Letters of Credit commitment.

We had the following guarantees in place as of (in thousands):

Nature of Guarantee
Indemnification for reclamation/surety bonds
Guarantees supporting business transactions

(4)

REVENUE

Maximum Exposure at
December 31, 2022

$
$
$

107,314
484,968
592,282

The following tables depict the disaggregation of revenue, including intercompany revenue, from contracts with customers by
customer type and timing of revenue recognition for each of the reportable segments, for the years ended December 31, 2022,
2021 and 2020. Sales tax and other similar taxes are excluded from revenues.

Year ended December 31, 2022
Customer types:

Retail
Transportation
Wholesale
Market - off-system sales
Transmission/Other
Revenue from contracts with customers
Other revenues

Total revenues

Timing of revenue recognition:

Services transferred at a point in time
Services transferred over time
Revenue from contracts with customers

Year ended December 31, 2021
Customer types:

Retail
Transportation
Wholesale
Market - off-system sales
Transmission/Other
Revenue from contracts with customers
Other revenues

Total revenues

Timing of revenue recognition:

Services transferred at a point in time
Services transferred over time
Revenue from contracts with customers

Electric
Utilities

Gas
Utilities

Inter-
company
Revenues

Total

(in thousands)

739,734
—
44,832
48,578
61,470
894,614
5,548
900,162

$ 1,453,266
173,275
—
829
37,879
1,665,249
3,841
$ 1,669,090

(413)
—
—
(16,594)
(17,007)
(429)

— $ 2,193,000
172,862
44,832
49,407
82,755
2,542,856
8,960
(17,436) $ 2,551,816

30,454
864,160
894,614

— $

1,665,249
$ 1,665,249

— $

30,454
(17,007)
2,512,402
(17,007) $ 2,542,856

Electric
Utilities

Gas
Utilities

Inter-
company
Revenues

Total

(in thousands)

711,448
—
30,848
41,682
52,945
836,923
5,335
842,258

913,725
158,053
—
396
39,365
1,111,539
13,326
$ 1,124,865

(428)
—
—
(17,200)
(17,628)
(393)

— $ 1,625,173
157,625
30,848
42,078
75,110
1,930,834
18,268
(18,021) $ 1,949,102

27,141
809,782
836,923

— $

1,111,539
$ 1,111,539

— $

27,141
(17,628)
1,903,693
(17,628) $ 1,930,834

10-K| FORM 10-K

Year ended December 31, 2020
Customer types:

Retail
Transportation
Wholesale
Market - off-system sales
Transmission/Other
Revenue from contracts with customers
Other revenues

Total revenues

Timing of revenue recognition:

Services transferred at a point in time
Services transferred over time
Revenue from contracts with customers

Electric
Utilities

Gas Utilities

Inter-
company
Revenues

Total

(in thousands)

636,902 $

—
24,845
15,512
55,422
732,681
6,176
738,857 $

765,922 $
154,581
—
260
43,658
964,421
10,249
974,670 $

(526)
—
—
(15,772)
(16,298)
(288)

— $ 1,402,824
154,055
24,845
15,772
83,308
1,680,804
16,137
(16,586) $ 1,696,941

27,089 $

705,592
732,681 $

— $

964,421
964,421 $

— $

27,089
(16,298)
1,653,715
(16,298) $ 1,680,804

10-KFORM 10-K |(5)

PROPERTY, PLANT AND EQUIPMENT

Property, plant and equipment at December 31 consisted of the following (dollars in thousands):

2022

2021

Lives (in years)

Electric Utilities
Electric plant:
Production
Electric transmission
Electric distribution
Integrated Generation
Plant acquisition adjustment (a)
General
Total electric plant in service
Construction work in progress
Total electric plant

Less accumulated depreciation and depletion

Electric plant net of accumulated
depreciation and depletion

Property,
Plant and
Equipment

$ 1,482,081
632,872
1,082,535
713,519
4,870
274,857
4,190,734
152,953
4,343,687
(1,104,056)

$ 3,239,631

Weighted
Average
Useful Life (in
years)

Property,
Plant and
Equipment

Weighted
Average
Useful Life (in
years)

41
49
47
30
32
28

41
48
47
31
32
27

$ 1,452,055
546,126
1,000,619
720,490
4,870
266,935
3,991,095
181,451
4,172,546
(1,016,738)

$ 3,155,808

____________________
(a) The plant acquisition adjustment is included in rate base and is being recovered with 8 years remaining.

Minimum

Maximum

32
40
45
19
32
24

46
51
50
38
32
31

2022

2021

Lives (in years)

Gas Utilities
Gas plant:

Production
Gas transmission
Gas distribution
Cushion gas - depreciable (a)
Cushion gas - not depreciable (a)
Storage
General

Total gas plant in service
Construction work in progress

Total gas plant

Less accumulated depreciation

Property,
Plant and
Equipment

Weighted
Average
Useful Life
(in years)

Property,
Plant and
Equipment

Weighted
Average
Useful Life
(in years)

17,843
695,345
2,620,174
—
63,137
65,781
497,407
3,959,687
52,041
4,011,728
(471,013)
3,540,715

45
58
57
N/A
N/A
41
23

14,841
645,550
2,394,352
3,539
42,478
56,289
474,964
3,632,013
37,860
3,669,873
(389,115)
3,280,758

40
58
53
28
N/A
38
21

Minimum

Maximum

24
32
48
N/A
N/A
36
3

47
72
60
N/A
N/A
48
25

Gas plant net of accumulated depreciation

____________________
(a) Depreciation of Cushion Gas is determined by the respective regulatory jurisdiction in which the Cushion Gas resides. In 2022, assets
classified as Cushion gas - depreciable were fully depreciated and removed from gross plant in service and accumulated depreciation.

2022

2021

Lives (in years)

Corporate

Total plant in service
Construction work in progress

Total gross property, plant and equipment

Less accumulated depreciation

Total net of accumulated depreciation

Property,
Plant and
Equipment

5,685
13,690
19,375
(1,773)
17,602

Weighted
Average
Useful Life (in
years)
11

Property,
Plant and
Equipment
5,694
$
8,460
14,154
(1,544)
12,610

Weighted
Average
Useful Life
(in years)
10

Minimum Maximum

10-K| FORM 10-K(6)

JOINTLY OWNED FACILITIES

Our consolidated financial statements include our share of several jointly-owned facilities as described below. Our share of the
facilities’ expenses is reflected in the appropriate categories of operating expenses in the Consolidated Statements of Income.
Each owner of the facility is responsible for financing its investment in the jointly-owned facilities.

At December 31, 2022, our interests in jointly-owned generating facilities and transmission systems were (in thousands):

Wyodak Plant (a)
Transmission Tie
Wygen III (b)
Wygen I (c)

Ownership
Interest

20% $
35% $
52% $
76.5% $

Plant in Service
121,769
24,482
143,818
114,811

Construction
Work in
Progress

Less
Accumulated
Depreciation

Plant Net of
Accumulated
Depreciation

$
$
$
$

93
300
1,051
1,579

$
$
$
$

(70,884) $
(7,375) $
(29,634) $
(56,553) $

50,978
17,407
115,235
59,837

(a)

(b)
(c)

In addition to supplying South Dakota Electric with coal for its share of the Wyodak Plant, our mine supplies PacifiCorp’s share of the coal
under a separate long-term agreement. This coal supply agreement is collateralized by a mortgage on and a security interest in some of
WRDC’s coal reserves.
South Dakota Electric retains responsibility for plant operations. Our mine supplies fuel to Wygen III for the life of the plant.
Black Hills Wyoming retains responsibility for plant operations. Our mine supplies fuel to Wygen I for the life of the plant.

(7)

ASSET RETIREMENT OBLIGATIONS

We have identified legal obligations related to reclamation of mining sites; removal of fuel tanks, transformers containing
polychlorinated biphenyls, an evaporation pond; and reclamation of wind turbine sites at our Electric Utilities segment. In
addition, we have identified legal obligations related to retirement of gas pipelines, wells and compressor stations at our Gas
Utilities and removal of asbestos at our Utilities. We periodically review and update estimated costs related to these AROs. The
actual cost may vary from estimates due to regulatory requirements, changes in technology and increased labor, materials and
equipment costs.

The following tables present the details of AROs which are included on the accompanying Consolidated Balance Sheets in Other
deferred credits and other liabilities (in thousands):

Electric Utilities
Gas Utilities (a)

Total

Electric Utilities
Gas Utilities (a)

Total

30,089
45,455
75,544

December 31,
2020

29,157
42,274
71,431

December 31,
2021

Liabilities
Incurred

Liabilities
Settled

Accretion

— $
—
— $

(3,003) $
(158)
(3,161) $

1,353
2,016
3,369

Revisions to
Prior Estimates
$

(856) $

14,032
13,176

December 31,
2022

27,583
61,345
88,928

Liabilities
Incurred

Liabilities
Settled

Accretion

— $
—
— $

(978) $
(66)
(1,044) $

1,315
1,733
3,048

Revisions to
Prior Estimates
595
$
1,514
2,109

December 31,
2021

30,089
45,455
75,544

(a)

The Revisions to Prior Estimates were primarily driven by changes in estimates associated with natural gas wells and compressor
stations.

We also have legally required AROs related to certain assets within our electric transmission and distribution systems. These
retirement obligations are pursuant to an easement or franchise agreement and are only required if we discontinue our utility
service under such easement or franchise agreement. Accordingly, it is not possible to estimate a time period when these
obligations could be settled, and therefore, a liability for the cost of these obligations cannot be measured at this time.

10-KFORM 10-K |
(8)

FINANCING

Short-term debt

Revolving Credit Facility and CP Program

On July 19, 2021, we amended and restated our corporate Revolving Credit Facility, maintaining total commitments of $750
million and extending the term through July 19, 2026 with two one year extension options (subject to consent from lenders). This
Revolving Credit Facility is similar to the former revolving credit facility, which includes an accordion feature that allows us to
increase total commitments up to $1.0 billion with the consent of the administrative agent, the issuing agents and each bank
increasing or providing a new commitment. Borrowings continue to be available under a base rate or various Eurodollar rate
options. The interest costs associated with the letters of credit or borrowings and the commitment fee under the Revolving Credit
Facility are determined based upon our Corporate credit rating from S&P, Fitch and Moody's for our senior unsecured long-term
debt. Based on our current credit ratings, the margins for base rate borrowings, Eurodollar borrowings and letters of credit were
0.125%, 1.125% and 1.125%, respectively, at December 31, 2022. Based on our credit ratings, a 0.175% commitment fee was
charged on the unused amount at December 31, 2022.

We have a $750 million, unsecured CP Program that is backstopped by the Revolving Credit Facility. Amounts outstanding
under the Revolving Credit Facility and the CP Program, either individually or in the aggregate, cannot exceed $750 million. The
notes issued under the CP Program may have maturities not to exceed 397 days from the date of issuance and bear interest (or
are sold at par less a discount representing an interest factor) based on, among other things, the size and maturity date of the
note, the frequency of the issuance and our credit ratings. Under the CP Program, any borrowings rank equally with our
unsecured debt. Notes under the CP Program are not registered and are offered and issued pursuant to a registration
exemption.

Our Revolving Credit Facility and CP Program, which are classified as Notes payable on the Consolidated Balance Sheets, had
the following borrowings, outstanding letters of credit, and available capacity at December 31 (dollars in thousands):

Amount outstanding
Letters of credit (a)
Available capacity
Weighted average interest rates

2022

2021

535,600
24,626
189,774

4.88%

420,180
27,209
302,611

0.30%

(a)

Letters of credit are off-balance sheet commitments that reduce the borrowing capacity available on our corporate Revolving Credit
Facility.

Revolving Credit Facility and CP Program borrowing activity for the years ended December 31 was as follows (in thousands):

Maximum amount outstanding (based on daily outstanding balances)
Average amount outstanding (based on daily outstanding balances)
Weighted average interest rates

Deferred Financing Costs on the Revolving Credit Facility

2022

2021

572,300
390,653

2.11%

440,000
258,392

0.22%

Total accumulated deferred financing costs on the Revolving Credit Facility of $8.9 million are being amortized over its estimated
useful life and were included in Interest expense on the accompanying Consolidated Statements of Income. See below for
additional details.

Term Loan

On February 24, 2021, we entered into a nine-month, $800 million unsecured term loan to provide additional liquidity and to
meet our cash needs related to the incremental fuel, purchased power and natural gas costs from Winter Storm Uri. The term
loan carried no prepayment penalty and was subject to the same covenant requirements as our Revolving Credit Facility. We
repaid $200 million of this term loan in the first quarter of 2021. Proceeds from the August 26, 2021 public debt offering
(discussed below) were used to repay the remaining balance on this term loan.

10-K| FORM 10-KLong-term debt

Long-term debt outstanding was as follows (dollars in thousands):

Corporate

Senior unsecured notes due 2023
Senior unsecured notes due 2024
Senior unsecured notes due 2026
Senior unsecured notes due 2027
Senior unsecured notes, due 2029
Senior unsecured notes, due 2030
Senior unsecured notes due 2033
Senior unsecured notes, due 2046
Senior unsecured notes, due 2049

Total Corporate debt
Less unamortized debt discount

Total Corporate debt, net

South Dakota Electric

First Mortgage Bonds due 2032
First Mortgage Bonds due 2039
First Mortgage Bonds due 2044

Total South Dakota Electric debt

Less unamortized debt discount

Total South Dakota Electric debt, net

Wyoming Electric

Industrial development revenue bonds due
2027(a) (b)
First Mortgage Bonds due 2037
First Mortgage Bonds due 2044
Total Wyoming Electric debt

Less unamortized debt discount

Total Wyoming Electric debt, net

Total long-term debt

Less current maturities
Less unamortized deferred financing costs (c)

Long-term debt, net of current maturities
and deferred financing costs

Interest Rate at
December 31,
2022

Balance Outstanding

December 31,
2022

December 31,
2021

Due Date

November 30, 2023
August 23, 2024
January 15, 2026
January 15, 2027
October 15, 2029
June 15, 2030
May 1, 2033
September 15, 2046
October 15, 2049

4.25%
1.04%
3.95%
3.15%
3.05%
2.50%
4.35%
4.20%
3.88%

August 15, 2032
November 1, 2039
October 20, 2044

7.23%
6.13%
4.43%

March 1, 2027
November 20, 2037
October 20, 2044

3.68%
6.67%
4.53%

525,000
600,000
300,000
400,000
400,000
400,000
400,000
300,000
300,000
3,625,000
(5,259)
3,619,741

75,000
180,000
85,000
340,000
(69)
339,931

10,000
110,000
75,000
195,000
—
195,000
4,154,672
(525,000)
(22,332)

525,000
600,000
300,000
400,000
400,000
400,000
400,000
300,000
300,000
3,625,000
(6,125)
3,618,875

75,000
180,000
85,000
340,000
(74)
339,926

10,000
110,000
75,000
195,000
—
195,000
4,153,801
—
(26,878)

3,607,340

4,126,923

(a)
(b)

(c)

Variable interest rate.
A reimbursement agreement is in place with Wells Fargo on behalf of Wyoming Electric for the 2009A bonds of $10 million due March 1,
2027. In the case of default, we hold the assumption of liability for drawings on Wyoming Electric’s Letter of Credit attached to these
bonds.
Includes deferred financing costs associated with our Revolving Credit Facility of $1.8 million and $2.5 million as of December 31, 2022
and December 31, 2021, respectively.

Scheduled maturities of long-term debt and associated interest payments by year are shown below (in thousands):

2023

2024

Payments Due by Period
2027

2026

2025

Thereafter

Total

Principal payments on Long-
term debt including current
maturities (a)
Interest payments on Long-
term debt (a)

$ 525,000

$ 600,000

— $ 300,000

$ 410,000

$ 2,325,000

$ 4,160,000

148,125

125,813

119,591

113,666

101,134

994,804

1,603,133

(a)

Long-term debt amounts do not include deferred financing costs or discounts or premiums on debt. Estimated interest payments on
variable rate debt are calculated by utilizing the applicable rates as of December 31, 2022.

We plan to re-finance our $525 million, 4.25%, senior unsecured notes due November 30, 2023, at or before maturity date. In
the event we are unable to refinance these senior unsecured notes, we have sufficient alternative measures available to manage
cash flows such that our current plans to manage liquidity would be sufficient to meet our obligations in the foreseeable future.

10-KFORM 10-K |

Our debt securities contain certain restrictive financial covenants, all of which the Company and its subsidiaries were in
compliance with at December 31, 2022. See below for additional information.

Substantially all of the tangible utility property of South Dakota Electric and Wyoming Electric is subject to the lien of indentures
securing their first mortgage bonds. First mortgage bonds of South Dakota Electric and Wyoming Electric may be issued in
amounts limited by property, earnings and other provisions of the mortgage indentures.

Debt Transactions

On August 26, 2021, we completed a public debt offering which consisted of $600 million, 1.037% three-year senior unsecured
notes due August 23, 2024. The notes include an optional redemption provision and may be redeemed, in whole or in part,
without premium, on or after February 23, 2022. The proceeds from the offering, which were net of $3.7 million of deferred
financing costs, were used to repay amounts outstanding under our term loan entered into on February 24, 2021.

On June 17, 2020, we completed a public debt offering which consisted of $400 million of 2.50% 10-year senior unsecured notes
due June 15, 2030. The proceeds were used to repay short-term debt and for working capital and general corporate purposes.

Amortization of Deferred Financing Costs

Our deferred financing costs and associated amortization expense included in Interest expense on the accompanying
Consolidated Statements of Income were as follows (in thousands):

Deferred Financing Costs Remaining at
December 31, 2022

Amortization Expense for the years ended December 31,
2020
2021
2022

22,332

4,549

3,769

3,272

Debt Covenants

Revolving Credit Facility

Under our Revolving Credit Facility, we are required to maintain a Consolidated Indebtedness to Capitalization Ratio not to
exceed 0.65 to 1.00. Subject to applicable cure periods, a violation of any of these covenants would constitute an event of
default that entitles the lenders to terminate their remaining commitments and accelerate all principal and interest outstanding.
We were in compliance with our covenants at December 31, 2022 as shown below:

Consolidated Indebtedness to Capitalization Ratio

60.9%

Less than

65%

As of December 31,
2022

Covenant Requirement

Wyoming Electric

Covenants within Wyoming Electric's financing agreements require Wyoming Electric to maintain a debt to capitalization ratio of
no more than 0.60 to 1.00. As of December 31, 2022, we were in compliance with these financial covenants.

Dividend Restrictions

Our Revolving Credit Facility and other debt obligations contain restrictions on the payment of cash dividends when a default or
event of default occurs.

Due to our holding company structure, substantially all of our operating cash flows are provided by dividends paid or distributions
made by our subsidiaries. The cash to pay dividends to our shareholders is derived from these cash flows. As a result, certain
statutory limitations or regulatory or financing agreements could affect the levels of distributions allowed to be made by our
subsidiaries.

Our Utilities are generally limited to the amount of dividends allowed to be paid to our utility holding company under the Federal
Power Act and settlement agreements with state regulatory jurisdictions. As of December 31, 2022, the amount of restricted net
assets at our Utilities that may not be distributed to our utility holding company in the form of a loan or dividend was
approximately $155 million.

South Dakota Electric and Wyoming Electric are generally limited to the amount of dividends allowed to be paid to our utility
holding company under certain financing agreements.

10-K| FORM 10-K
Equity

At-the-Market Equity Offering Program

On August 3, 2020, we filed a shelf registration and DRSPP with the SEC. In conjunction with these shelf filings, we renewed the
ATM. The renewed ATM program, which allows us to sell shares of our common stock, is the same as the prior program other
than the aggregate value increased from $300 million to $400 million and a forward sales option was incorporated. This forward
sales option allows us to sell our shares through the ATM program at the current trading price without actually issuing any
shares to satisfy the sale until a future date. Under the ATM, shares may be offered from time to time pursuant to a sales
agreement dated August 3, 2020. Shares of common stock are offered pursuant to our shelf registration statement filed with the
SEC.

ATM activity for the years ended December 31 was as follows (net proceeds and issuance costs in millions):

Number of shares issued
Average price per share
Proceeds, (net of issuance costs of $(0.9), $(1.1) and $0 respectively)

February 2020 Equity Issuance

December 31,
2022
1,307,755
69.74
90.3

$
$

December 31,
2021
1,812,197
66.18
118.8

$
$

December 31,
2020

$
$

-
-
-

On February 27, 2020, we issued 1.2 million shares of common stock to a single investor through an underwritten registered
transaction at a price of $81.77 per share for proceeds of $99 million, net of $1.0 million of issuance costs. The shares of
common stock were offered pursuant to our shelf registration statement filed with the SEC.

Shareholder Dividend Reinvestment and Stock Purchase Plan

We have a DRSPP under which shareholders may purchase additional shares of common stock through dividend reinvestment
and/or optional cash payments at 100% of the recent average market price. We have the option of issuing new shares or
purchasing the shares on the open market. We issued new shares until March 1, 2018, after which we began purchasing shares
on the open market. At December 31, 2022, there were 74,198 shares of unissued stock available for future offering under the
DRSPP.

Preferred Stock

Our articles of incorporation authorize the issuance of 25 million shares of preferred stock of which we had no shares of
preferred stock outstanding as of December 31, 2022 and 2021.

(9)

RISK MANAGEMENT AND DERIVATIVES

Market and Credit Risk Disclosures

Our activities in the energy industry expose us to a number of risks in the normal operations of our businesses. Depending on
the activity, we are exposed to varying degrees of market risk and credit risk. To manage and mitigate these identified risks, we
have adopted the Black Hills Corporation Risk Policies and Procedures. Valuation methodologies for our derivatives are detailed
within Note 1.

Market Risk

Market risk is the potential loss that may occur as a result of an adverse change in market price, rate or supply. We are exposed,
but not limited to, the following market risks:

•

Commodity price risk associated with our retail natural gas and wholesale electric power marketing activities and our
fuel procurement for several of our gas-fired generation assets, which include market fluctuations due to
unpredictable factors such as the COVID-19 pandemic, weather (e.g. Winter Storm Uri), geopolitical events, market
speculation, recession, inflation, pipeline constraints, and other factors that may impact natural gas and electric
supply and demand; and

10-KFORM 10-K |Credit Risk

Credit risk is the risk of financial loss resulting from non-performance of contractual obligations by a counterparty.

We attempt to mitigate our credit exposure by conducting business primarily with high credit quality entities, setting tenor and
credit limits commensurate with counterparty financial strength, obtaining master netting agreements and mitigating credit
exposure with less creditworthy counterparties through parental guarantees, cash collateral requirements, letters of credit and
other security agreements.

Derivatives and Hedging Activity

Our derivative and hedging activities included in the accompanying Consolidated Balance Sheets, Consolidated Statements of
Income and Consolidated Statements of Comprehensive Income (Loss) are detailed below and within Note 10.

The operations of our Utilities, including natural gas sold by our Gas Utilities and natural gas used by our Electric Utilities’
generation plants or those plants under PPAs where our Electric Utilities must provide the generation fuel (tolling agreements),
expose our utility customers to natural gas price volatility. Therefore, as allowed or required by state utility commissions, we
have entered into commission approved hedging programs utilizing natural gas futures, options, over-the-counter swaps and
basis swaps to reduce our customers’ underlying exposure to these fluctuations. These transactions are considered derivatives,
and in accordance with accounting standards for derivatives and hedging, mark-to-market adjustments are recorded as
Derivative assets or Derivative liabilities on the accompanying Consolidated Balance Sheets, net of balance sheet offsetting as
permitted by GAAP.

For our regulated Utilities’ hedging plans, unrealized and realized gains and losses, as well as option premiums and
commissions on these transactions are recorded as Regulatory assets or Regulatory liabilities in the accompanying
Consolidated Balance Sheets in accordance with state regulatory commission guidelines. When the related costs are recovered
through our rates, the hedging activity is recognized in the Consolidated Statements of Income.

We periodically have wholesale power purchase and sale contracts used to manage purchased power costs and load
requirements associated with serving our electric customers that are considered derivative instruments due to not qualifying for
the normal purchase and normal sales exception to derivative accounting. Changes in the fair value of these commodity
derivatives are recognized in the Consolidated Statements of Income.

To support our Choice Gas Program customers, we buy, sell and deliver natural gas at competitive prices by managing
commodity price risk. As a result of these activities, this area of our business is exposed to risks associated with changes in the
market price of natural gas. We manage our exposure to such risks using over-the-counter and exchange traded options and
swaps with counterparties in anticipation of forecasted purchases and sales during time frames ranging from January 2023
through December 2024. A portion of our over-the-counter swaps have been designated as cash flow hedges to mitigate the
commodity price risk associated with deliveries under fixed price forward contracts to deliver gas to our Choice Gas Program
customers. The gain or loss on these designated derivatives is reported in AOCI in the accompanying Consolidated Balance
Sheets and reclassified into earnings in the same period that the underlying hedged item is recognized in earnings.
Effectiveness of our hedging position is evaluated at least quarterly.

The contract or notional amounts and terms of the natural gas derivative commodity instruments held by our utilities are
comprised of both short and long positions. We had the following net long positions as of:

Natural gas futures purchased
Natural gas options purchased, net
Natural gas basis swaps purchased
Natural gas over-the-counter swaps, net (b)
Natural gas physical commitments, net (c)

December 31, 2022

December 31, 2021

Notional
Amounts

630,000
1,790,000
900,000
4,460,000
17,864,412

Maximum
Term
(months) (a)
3
3
3
24
12

Notional
Amounts

590,000
3,100,000
870,000
4,570,000
16,416,677

Maximum
Term
(months) (a)
3
3
3
34
24

Units
MMBtus
MMBtus
MMBtus
MMBtus
MMBtus

(a)
(b)
(c)

Term reflects the maximum forward period hedged.
As of December 31, 2022, 1,646,200 MMBtus of natural gas over-the-counter swaps purchased were designated as cash flow hedges.
Volumes exclude derivative contracts that qualify for the normal purchase, normal sales exception permitted by GAAP.

10-K| FORM 10-K

We have certain derivative contracts which contain credit provisions. These credit provisions may require the Company to post
collateral when credit exposure to the Company is in excess of a negotiated line of unsecured credit. At December 31, 2022, the
Company posted $2.9 million related to such provisions, which is included in Other current assets on the Consolidated Balance
Sheets.

Derivatives by Balance Sheet Classification

As required by accounting standards for derivatives and hedges, fair values within the following tables are presented on a gross
basis aside from the netting of asset and liability positions. Netting of positions is permitted in accordance with accounting
standards for offsetting and under terms of our master netting agreements that allow us to settle positive and negative positions.

The following tables present the fair value and balance sheet classification of our derivative instruments as of December 31, (in
thousands):

Derivatives designated as hedges:
Asset derivative instruments:

Current commodity derivatives
Noncurrent commodity derivatives

Liability derivative instruments:

Current commodity derivatives
Total derivatives designated as hedges

Derivatives not designated as hedges:

Asset derivative instruments:

Current commodity derivatives
Noncurrent commodity derivatives

Liability derivative instruments:

Current commodity derivatives
Noncurrent commodity derivatives

Total derivatives not designated as hedges

Derivatives Designated as Hedge Instruments

Balance Sheet Location

2022

2021

Derivative assets - current
Other assets, non-current

Derivative liabilities - current

Derivative assets - current
Other assets, non-current

Derivative liabilities - current
Other deferred credits and other
liabilities

118
198

(1,703)
(1,387) $

464
337

(4,897)

(18)
(4,114) $

2,017
18

—
2,035

2,356
804

(1,439)

(20)
1,701

The impact of cash flow hedges on our Consolidated Statements of Comprehensive Income and Consolidated Statements of
Income is presented below for the years ended December 31, 2022, 2021 and 2020. Note that this presentation does not reflect
the gains or losses arising from the underlying physical transactions; therefore, it is not indicative of the economic profit or loss
we realized when the underlying physical and financial transactions were settled.

Derivatives in Cash
Flow Hedging
Relationships

Interest rate swaps
Commodity derivatives

2022

2021

2020

Amount of Gain/(Loss)
Recognized in OCI
(in thousands)
$

2,851

2,850

2,851

Total

(3,532)

(682) $

1,952
4,803

540
3,391

Income Statement
Location

Interest expense
Fuel, purchased power
and cost of natural gas
sold

2022

2020

2021
Amount of Gain/(Loss)
Reclassified from AOCI into
Income
(in thousands)
$ (2,850) $ (2,851) $ (2,851)

2,708

(142) $

2,051

(601)
(800) $ (3,452)

As of December 31, 2022, $4.5 million of net losses related to our interest rate swaps and commodity derivatives are expected
to be reclassified from AOCI into earnings within the next 12 months. As market prices fluctuate, estimated and actual realized
gains or losses will change during future periods.

10-KFORM 10-K |

Derivatives Not Designated as Hedge Instruments

The following table summarizes the impacts of derivative instruments not designated as hedge instruments on our Consolidated
Statements of Income for the years ended December 31, 2022, 2021 and 2020. Note that this presentation does not reflect the
expected gains or losses arising from the underlying physical transactions; therefore, it is not indicative of the economic gross
profit we realized when the underlying physical and financial transactions were settled.

Derivatives Not Designated as
Hedging Instruments

Income Statement Location

Commodity derivatives - Electric

Commodity derivatives - Natural Gas

Fuel, purchased power and cost of
natural gas sold
Fuel, purchased power and cost of
natural gas sold

2022
2021
Amount of Gain/(Loss) on Derivatives
Recognized in Income
(in thousands)

2020

— $

(144) $

144

(797)
(797) $

2,599
2,455

1,640
1,784

As discussed above, financial instruments used in our regulated Gas Utilities are not designated as cash flow hedges. However,
there is no earnings impact because the unrealized gains and losses arising from the use of these financial instruments are
recorded as Regulatory assets or Regulatory liabilities. The net unrealized losses included in a Regulatory asset related to these
financial instruments used in our Gas Utilities were $8.8 million and $2.6 million at December 31, 2022 and 2021, respectively.
For our Electric Utilities, the unrealized gains and losses arising from these derivatives are recognized in the Consolidated
Statements of Income.

(10)

FAIR VALUE MEASUREMENTS

Recurring Fair Value Measurements

Derivatives

The following tables set forth, by level within the fair value hierarchy, our gross assets and gross liabilities and related offsetting
as permitted by GAAP that were accounted for at fair value on a recurring basis for derivative instruments.

Level 1

Level 2

As of December 31, 2022

Cash Collateral
and Counterparty
Netting (a)

Level 3
(in thousands)

Total

Assets:

Commodity derivatives - Gas Utilities
Total

Liabilities:

Commodity derivatives - Gas Utilities
Total

$
$

—
— $

5,407
5,407

—
— $

11,455
11,455

$
$

—
— $

(4,290) $
(4,290) $

1,117
1,117

(4,837) $
(4,837) $

6,618
6,618

(a)

As of December 31, 2022, $4.3 million of our commodity derivative gross assets and $4.8 million of our commodity derivative gross
liabilities, as well as related gross collateral amounts, were subject to master netting agreements.

10-K| FORM 10-K

As of December 31, 2021

Level 1

Level 2

Level 3

Cash Collateral
and Counterparty
Netting (a)

Total

Assets:

Commodity derivatives - Gas Utilities
Total

Liabilities:

Commodity derivatives - Gas Utilities
Total

$
$

—
— $

7,569
7,569

— $
— $

3,273
3,273

$
$

— $
— $

(2,374) $
(2,374) $

5,195
5,195

(1,814) $
(1,814) $

1,459
1,459

(a)

As of December 31, 2021, $2.4 million of our commodity derivative assets and $1.8 million of our commodity derivative liabilities, as well
as related gross collateral amounts, were subject to master netting agreements.

Pension and Postretirement Plan Assets

A discussion of the fair value of our Pension and Postretirement Plan assets is included in Note 13.

Other Fair Value Measurements

The carrying amount of cash and cash equivalents, restricted cash and equivalents and short-term borrowings approximates fair
value due to their liquid or short-term nature. Cash, cash equivalents and restricted cash are classified in Level 1 in the fair value
hierarchy. Notes payable consist of commercial paper borrowings and are not traded on an exchange; therefore, they are
classified as Level 2 in the fair value hierarchy.

The following table presents the carrying amounts and fair values of financial instruments not recorded at fair value on the
Consolidated Balance Sheets at December 31 (in thousands):

Long-term debt, including current maturities (a)

4,132,340

3,760,848

4,126,923

4,570,619

(a)

Long-term debt is valued based on observable inputs available either directly or indirectly for similar liabilities in active markets and
therefore is classified in Level 2 in the fair value hierarchy. Carrying amount of long-term debt is net of deferred financing costs.

2022

Carrying
Amount

Fair Value

2021

Carrying
Amount

Fair Value

10-KFORM 10-K |(11)

OTHER COMPREHENSIVE INCOME

We record deferred gains (losses) in AOCI related to interest rate swaps designated as cash flow hedges, commodity contracts
designated as cash flow hedges and the amortization of components of our defined benefit plans. Deferred gains (losses) for our
commodity contracts designated as cash flow hedges are recognized in earnings upon settlement, while deferred gains (losses)
related to our interest rate swaps are recognized in earnings as they are amortized.

The following table details reclassifications out of AOCI and into Net income. The amounts in parentheses below indicate
decreases to Net income in the Consolidated Statements of Income for the period, net of tax (in thousands):

Location on the Consolidated
Statements of Income

Amount Reclassified from AOCI
December 31, 2022 December 31, 2021

Gains and (losses) on cash flow hedges:

Interest rate swaps

Commodity contracts

Interest expense
Fuel, purchased power and cost of
natural gas sold

Income tax

Income tax benefit (expense)

Total reclassification adjustments related to
cash flow hedges, net of tax

Amortization of components of defined
benefit plans:

Prior service cost

Operations and maintenance

Actuarial gain (loss)

Operations and maintenance

Income tax

Income tax benefit (expense)

Total reclassification adjustments related to
defined benefit plans, net of tax

Total reclassifications

(2,850) $

(2,851)

2,708
(142)
58

(84) $

(751)
(658)
198

(460) $

(544) $

2,051
(800)
175

(625)

(2,391)
(2,293)
638

(1,655)

(2,280)

Balances by classification included within AOCI, net of tax on the accompanying Consolidated Balance Sheets were as follows
(in thousands):

As of December 31, 2021
Other comprehensive income (loss)

before reclassifications

Amounts reclassified from AOCI
As of December 31, 2022

As of December 31, 2020
Other comprehensive income (loss)

before reclassifications

Amounts reclassified from AOCI
As of December 31, 2021

Derivatives Designated as
Cash Flow Hedges

Interest Rate
Swaps

Commodity
Derivatives

Employee
Benefit Plans

Total

(10,384) $

1,476

(11,176) $

(20,084)

—
2,129
(8,255) $

(631)
(2,045)
(1,200) $

4,604
460
(6,112) $

3,973
544
(15,567)

Derivatives Designated as
Cash Flow Hedges

Interest Rate
Swaps

Commodity
Derivatives

Employee
Benefit Plans

Total

(12,558) $

(14,790) $

(27,346)

—
2,174
(10,384) $

3,023
(1,549)
1,476

1,959
1,655
(11,176) $

4,982
2,280
(20,084)

10-K| FORM 10-K(12)

VARIABLE INTEREST ENTITY

Black Hills Colorado IPP owns and operates a 200 MW, combined-cycle natural gas generating facility located in Pueblo,
Colorado. In 2016, Black Hills Electric Generation sold a 49.9%, non-controlling interest in Black Hills Colorado IPP to a third-
party buyer. Black Hills Electric Generation is the operator of the facility, which is contracted to provide capacity and energy
through 2031 to Colorado Electric.

The accounting for a partial sale of a subsidiary in which control is maintained and the subsidiary continues to be consolidated is
specified under ASC 810, Consolidation. The partial sale is required to be recorded as an equity transaction with no resulting
gain or loss on the sale. GAAP requires that non-controlling interests in subsidiaries and affiliates be reported in the equity
section of a company’s balance sheet.

Net income available for common stock for the years ended December 31, 2022, 2021 and 2020 was reduced by $12 million,
$15 million, and $15 million, respectively, attributable to this non-controlling interest. The net income allocable to the non-
controlling interest holder is based on ownership interest with the exception of certain agreed upon adjustments. Distributions of
net income attributable to this non-controlling interest are due within 30 days following the end of a quarter but may be withheld
as necessary by Black Hills Electric Generation.

Black Hills Colorado IPP has been determined to be a VIE in which the Company has a variable interest. Black Hills Electric
Generation has been determined to be the primary beneficiary of the VIE as Black Hills Electric Generation is the operator and
manager of the generation facility and, as such, has the power to direct the activities that most significantly impact Black Hills
Colorado IPP’s economic performance. Black Hills Electric Generation, as the primary beneficiary, continues to consolidate
Black Hills Colorado IPP. Black Hills Colorado IPP has not received financial or other support from the Company outside of pre-
existing contractual arrangements during the reporting period. Black Hills Colorado IPP does not have any debt and its cash
flows from operations are sufficient to support its ongoing operations.

We have recorded the following assets and liabilities on our Consolidated Balance Sheets related to the VIE described above as
of December 31 (in thousands):

Assets:

Current assets
Property, plant and equipment of variable interest entities, net

Liabilities:

Current liabilities

(13)

EMPLOYEE BENEFIT PLANS

Defined Contribution Plans

2022

2021

$
$

12,761
178,761

5,394

$
$

13,220
189,079

5,841

We sponsor a 401(k) retirement savings plan (the 401(k) Plan). Participants in the 401(k) Plan may elect to invest a portion of
their eligible compensation in the 401(k) Plan up to the maximum amounts established by the IRS. The 401(k) Plan provides
employees the opportunity to invest up to 50% of their eligible compensation on a pre-tax or after-tax basis.

The 401(k) Plan provides a Company matching contribution for all eligible participants. Certain eligible participants who are not
currently accruing a benefit in the Pension Plan also receive a Company retirement contribution based on the participant’s age
and years of service. Vesting of all Company and matching contributions occurs at 20% per year with 100% vesting when the
participant has 5 years of service with the Company.

Defined Benefit Pension Plan

We have one defined benefit pension plan, the Black Hills Retirement Plan (Pension Plan). The Pension Plan covers certain
eligible employees of the Company. The benefits for the Pension Plan are based on years of service and calculations of average
earnings during a specific time period prior to retirement. The Pension Plan is closed to new employees and frozen for certain
employees who did not meet age and service-based criteria.

The Pension Plan assets are held in a Master Trust. Our Board of Directors has approved the Pension Plan’s investment policy.
The objective of the investment policy is to manage assets in such a way that will allow the eventual settlement of our obligations
to the Pension Plan’s beneficiaries. To meet this objective, our pension assets are managed by an outside adviser using a
portfolio strategy that will provide liquidity to meet the Pension Plan’s benefit payment obligations. The Pension Plan’s assets
consist primarily of equity, fixed income and hedged investments.

10-KFORM 10-K |
The expected rate of return on the Pension Plan assets is determined by reviewing the historical and expected returns of both
equity and fixed income markets, taking into account asset allocation, the correlation between asset class returns and the mix of
active and passive investments. The Pension Plan utilizes a dynamic asset allocation where the target range to return-seeking
and liability-hedging assets is determined based on the funded status of the Plan. As of December 31, 2022, the expected rate
of return on pension plan assets was based on the targeted asset allocation range of 20% to 28% return-seeking assets and
72% to 80% liability-hedging assets.

Our Pension Plan is funded in compliance with the federal government’s funding requirements.

Plan Assets

The percentages of total plan asset by investment category for our Pension Plan at December 31 were as follows:

Return-seeking Assets
Equity
Real estate
Fixed income
Hedge funds

Total

Liability-hedging Assets
Fixed income
Cash

Total

Total Assets

2022
14%
7%
2%
3%
26%

2022
72%
2%
74%

100%

2021
15%
7%
3%
3%
28%

2021
71%
1%
72%

100%

Supplemental Non-qualified Defined Benefit Plans

We have various supplemental retirement plans for key executives of the Company. The plans are non-qualified defined benefit
and defined contribution plans (Supplemental Plans). The Supplemental Plans are subject to various vesting schedules and are
funded on a cash basis as benefits are paid.

Non-pension Defined Benefit Postretirement Healthcare Plan

BHC sponsors a retiree healthcare plan (Healthcare Plan) for employees who meet certain age and service requirements at
retirement. Healthcare Plan benefits are subject to premiums, deductibles, co-payment provisions and other limitations. A portion
of the Healthcare Plan for participating business units are pre-funded via VEBA trusts. Pre-65 retirees as well as a grandfathered
group of post-65 retirees receive their retiree medical benefits through the Black Hills self-insured retiree medical plans.

Healthcare coverage for post-65 Medicare-eligible retirees is provided through an individual market healthcare exchange.
We fund the Healthcare Plan on a cash basis as benefits are paid. The Healthcare Plan provides for partial pre-funding via
VEBA trusts. Assets related to this pre-funding are held in trust and are for the benefit of the union and non-union employees
located in the states of Arkansas, Iowa and Kansas. We do not pre-fund the Healthcare Plan for those employees outside
Arkansas, Iowa and Kansas.

Plan Contributions

Contributions to the Pension Plan are cash contributions made directly to the Master Trust. Healthcare and Supplemental Plan
contributions are made in the form of benefit payments. Healthcare benefits include company and participant paid premiums.

Contributions for the years ended December 31 were as follows (in thousands):

Defined Contribution Plan
Company retirement contributions
Company matching contributions

Defined Benefit Plans
Defined Benefit Pension Plan
Non-Pension Defined Benefit Postretirement Healthcare Plan
Supplemental Non-Qualified Defined Benefit Plans

2022

2021

$
$

$
$
$

11,885
16,187

2022

-
6,131
3,061

$
$

$
$
$

11,332
15,938

2021

-
6,432
2,576

We do not have any required contributions to our Pension Plan in 2023 and do not intend to make any contributions.

10-K| FORM 10-K
Fair Value Measurements

The following tables set forth, by level within the fair value hierarchy, the assets that were accounted for at fair value on a
recurring basis (in thousands):

Pension Plan

December 31, 2022

Common Collective Trust - Cash and Cash
Equivalents
Common Collective Trust - Equity
Common Collective Trust - Fixed Income
Common Collective Trust - Real Estate
Hedge Funds
Total investments measured at fair value

Pension Plan

Level 1

Level 2

Level 3

Total
Investments
Measured at
Fair Value

-
-
-
-
-
-

6,374
45,087
242,025
-
-
$ 293,486

-
-
-
-
-
-

6,374
45,087
242,025
-
-
293,486

December 31, 2021

Level 1

Level 2

Level 3

Total
Investments
Measured at
Fair Value

-
-
-
-
-
-

6,009
70,262
339,219
-
-
415,490

-
-
-
-
-
-

6,009
70,262
339,219
-
-
415,490

NAV (a)

-
-
-
21,572
8,084
$ 29,656

Total
Investments

6,374
45,087
242,025
21,572
8,084
323,142

NAV (a)

-
-
-
30,407
12,490
$ 42,897

Total
Investments

6,009
70,262
339,219
30,407
12,490
458,387

(a)

Certain investments that are measured at fair value using NAV per share (or its equivalent) for practical expedient have not been
classified in the fair value hierarchy. The fair value amounts presented in these tables for these investments are intended to permit
reconciliation of the fair value hierarchy to the amounts presented in the reconciliation of changes in the plan’s benefit obligations and fair
value of plan assets above.

Non-pension Defined Benefit Postretirement
Healthcare Plan

December 31, 2022

Level 1

Level 2

Level 3

Total
Investments
Measured at
Fair Value

Cash and Cash Equivalents
Total investments measured at fair value

$
$

7,752
7,752

$
$

-
-

$
$

-
-

$
$

7,752
7,752

Non-pension Defined Benefit Postretirement
Healthcare Plan

December 31, 2021

Cash and Cash Equivalents
Total investments measured at fair value

$
$

7,972
7,972

$
$

-
-

$
$

-
-

$
$

7,972
7,972

Level 1

Level 2

Level 3

Total
Investments
Measured at
Fair Value

Total
Investments
7,752
$
7,752
$

Total
Investments
7,972
$
7,972
$

10-KFORM 10-K |Additional information about assets of the benefit plans, including methods and assumptions used to estimate the fair value of
these assets, is as follows:

Pension Plan

Common Collective Trust Funds: These funds are valued based upon the redemption price of units held by the Pension Plan,
which is based on the current fair value of the common collective trust funds’ underlying assets. Unit values are determined by
the financial institution sponsoring such funds by dividing the fund’s net assets at fair value by its units outstanding at the
valuation dates. The Pension Plan’s investments in common collective trust funds, with the exception of shares of the common
collective trust-real estate are categorized as Level 2.

The following investments are measured at NAV and are not classified in the fair value hierarchy, in accordance with accounting
guidance:

Common Collective Trust-Real Estate Funds: These funds are valued based on various factors of the underlying real estate
properties, including market rent, market rent growth, occupancy levels, etc. As part of the trustee’s valuation process,
properties are externally appraised generally on an annual basis. The appraisals are conducted by reputable independent
appraisal firms and signed by appraisers that are members of the Appraisal Institute, with professional designation of
Member, Appraisal Institute. All external appraisals are performed in accordance with the Uniform Standards of Professional
Appraisal Practices. We receive monthly statements from the trustee, along with the annual schedule of investments and
rely on these reports for pricing the units of the fund.

Hedge Funds: These funds represent investments in other investment funds that seek a return utilizing a number of diverse
investment strategies. The strategies, when combined, aim to reduce volatility and risk while attempting to deliver positive
returns under all market conditions. Amounts are reported on a one-month lag. The fair value of hedge funds is determined
using net asset value per share based on the fair value of the hedge fund’s underlying investments. 10% of the shares may
be redeemed at the end of each month with a 15-day notice and full redemptions are available at the end of each quarter
with 60-day notice and is limited to a percentage of the total net assets value of the fund. The net asset values are based on
the fair value of each fund’s underlying investments. There are no unfunded commitments related to these hedge funds.

Non-pension Defined Benefit Postretirement Healthcare Plan

Cash and Cash Equivalents: This represents an investment in Northern Institutional Government Assets Portfolio, which is a
government money market fund. As shares held reflect quoted prices in an active market, they are categorized as Level 1.

Other Plan Information

The following tables provide a reconciliation of the employee benefit plan obligations and fair value of employee benefit plan
assets, amounts recognized in the Consolidated Balance Sheets, accumulated benefit obligation, and reconciliation of
components of the net periodic expense and elements of AOCI (in thousands):

Employee Benefit Plan Obligations

As of December 31,
Change in benefit obligation:
Projected benefit obligation at
beginning of year
Service cost (a)
Interest cost
Actuarial (gain) loss
Amendments
Benefits paid
Plan participants’ contributions
Projected benefit obligation at
end of year

Defined Benefit Pension
Plan

Supplemental Non-
qualified Defined
Benefit Plans

Non-pension Defined
Benefit Postretirement
Healthcare Plan

2022

2021

2022

2021

2022

2021

478,262
3,927
10,819
(97,960)
-
(36,663)
-

514,008
5,038
9,313
(14,037)
(561)
(35,499)
-

55,260
(801)
834
(7,007)
-
(3,061)
-

55,054
3,149
706
(1,073)
-
(2,576)
-

63,484
1,968
1,285
(12,300)
-
(6,131)
1,419

70,238
2,237
1,058
(5,165)
-
(6,432)
1,548

358,385

478,262

45,225

55,260

49,725

63,484

10-K| FORM 10-KFair Value Employee Benefit Plan Assets

Defined Benefit
Pension Plan

2022

2021

Supplemental Non-
qualified Defined
Benefit Plans

2022

2021

Non-pension Defined
Benefit Postretirement
Healthcare Plan (a)
2021
2022

458,387
(98,585)
-
-
(36,661)
323,141

473,721
20,165
-
-
(35,499)
458,387

-
-
3,061
-
(3,061)
-

-
-
2,576
-
(2,576)
-

7,972
4
4,488
1,419
(6,131)
7,752

8,165
(35)
4,726
1,548
(6,432)
7,972

As of December 31,
Change in fair value of plan
assets:
Beginning fair value of plan
assets
Investment income (loss)
Employer contributions
Retiree contributions
Benefits paid
Ending fair value of plan assets

(a)

Assets of VEBA trusts.

In 2012, we froze our Pension Plan and closed it to new participants. Since then, we have implemented various de-risking
strategies including lump sum buyouts, the purchase of annuities and the reduction of return-seeking assets over time to a more
liability-hedged portfolio. As a result, capital markets volatility had a limited impact to our unfunded status.

Amounts Recognized in the Consolidated Balance Sheets

As of December 31,
Regulatory assets
Current liabilities
Non-current assets
Non-current liabilities
Regulatory liabilities

Defined Benefit
Pension Plan

2022

2021

Supplemental
Non-qualified Defined
Benefit Plans

2022

2021

Non-pension Defined
Benefit Postretirement
Healthcare Plan

2022

2021

$
$
$
$
$

78,654
-
-
35,243
2,804

$
$
$
$
$

67,403
-
-
19,872
3,830

$
$
$
$
$

-
2,231
-
42,994
-

$
$
$
$
$

-
2,156
-
53,104
-

$
$
$
$
$

3,788
4,427
959
38,505
6,198

$
$
$
$
$

11,660
4,584
-
50,949
2,447

Accumulated Benefit Obligation

As of December 31,
Accumulated Benefit
Obligation

Defined Benefit
Pension Plan

2022

2021

Supplemental
Non-qualified Defined
Benefit Plans

2022

2021

Non-pension Defined
Benefit Postretirement
Healthcare Plan

2022

2021

350,187

466,505

45,225

55,260

49,725

63,484

Components of Net Periodic Expense

Defined Benefit
Pension Plan

Supplemental
Non-qualified Defined Benefit
Plans

Non-pension Defined Benefit
Postretirement Healthcare Plan

For the years ended
December 31,
Service cost
Interest cost
Expected return on
assets
Net amortization of
prior service cost
Recognized net
actuarial loss (gain)
Net periodic expense

2022

3,927
10,819

2021

5,038
9,313

2020

5,411
13,426

2022

2021

2020

2022

2021

2020

(801) $
834

3,149
706

1,579
1,099

1,968
1,285

2,237
1,058

2,056
1,649

(18,523)

(20,876)

(22,591)

(68)

(125)

(289)

(136)

(434)

(182)

(546)

6,092
2,247

7,315
790

8,372
4,618

276
309

1,754
5,609

1,702
4,382

64
2,903

466
3,191

20
2,997

Service costs are recorded in Operations and maintenance expense while nonservice costs were recorded in Other expense on
the Consolidated Statements of Income.

10-KFORM 10-K |Actuarial gains and losses are amortized using a straight-line method over the average remaining service period of active plan
participants or over the average remaining lifetime of the remaining plan participants if the plan is viewed as “all or almost all”
inactive participants.

AOCI Amounts (After-Tax)

As of December 31,
Net (gain) loss
Prior service cost (gain)
Total amounts included in AOCI, after-tax not yet
recognized as components of net periodic expense

Defined Benefit
Pension Plan

Supplemental
Non-qualified
Defined Benefit
Plans

2022
$ 5,179
(39)

2021
$ 4,398
(46)

2022
$ 1,565
-

2021
$ 7,159
-

Non-pension
Defined Benefit
Postretirement
Healthcare Plan
2021
2022

(667) $
74

(308)
(27)

$ 5,140

$ 4,352

$ 1,565

$ 7,159

(593) $

(335)

Assumptions

Weighted-average
assumptions used to
determine benefit
obligations:
Discount rate
Rate of increase in
compensation levels

Weighted-average
assumptions used to
determine net periodic
benefit cost for plan year:
Discount rate (a)
Expected long-term rate of
return on assets (b)
Rate of increase in
compensation levels

Defined Benefit
Pension Plan

Supplemental
Non-qualified Defined Benefit
Plans

Non-pension Defined Benefit
Postretirement Healthcare
Plan

2022

2021

2020

2022

2021

2020

2022

2021

2020

5.17%

2.88%

2.56%

5.13%

2.77%

2.41%

5.14%

2.79%

2.41%

3.06%

3.08%

3.34%

—

5.00%

N/A

Defined Benefit
Pension Plan

Supplemental
Non-qualified Defined Benefit
Plans

Non-pension Defined Benefit
Postretirement Healthcare Plan

2022

2021

2020

2022

2021

2020

2022

2021

2020

2.88%

2.56%

3.27%

2.77%

2.41%

3.14%

2.79%

2.41%

3.15%

4.25%

4.50%

5.25%

3.08%

3.34%

3.49%

N/A

—

N/A

1.70%

1.80%

2.35%

5.00%

N/A

(a)
(b)

The estimated discount rate for the Defined Benefit Pension Plan is 5.2% for the calculation of the 2023 net periodic pension costs.
The expected rate of return on plan assets for the Defined Benefit Pension Plan is 6.0% for the calculation of the 2023 net periodic
pension cost.

The healthcare benefit obligation at December 31 was determined as follows:

Trend Rate - Medical

Pre-65 for next year - All Plans
Pre-65 Ultimate trend rate - Black Hills Corp
Trend Year

Post-65 for next year - All Plans
Post-65 Ultimate trend rate - Black Hills Corp
Trend Year

2022

2021

7.00%
4.50%
2031

6.00%
4.50%
2031

6.05%
4.50%
2030

5.10%
4.50%
2030

10-K| FORM 10-KThe following benefit payments to employees, which reflect future service, are expected to be paid (in thousands):

2023
2024
2025
2026
2027
2028 -2032

Defined Benefit
Pension Plan

$
$
$
$
$
$

26,889
26,882
27,870
28,182
28,166
140,416

Supplemental
Non-qualified
Defined
Benefit Plans
2,231
$
2,417
$
2,764
$
2,790
$
2,727
$
12,184
$

Non-pension
Defined Benefit
Postretirement
Healthcare Plan
5,600
$
5,313
$
5,022
$
4,883
$
4,769
$
21,147
$

(14)

SHARE-BASED COMPENSATION PLANS

On April 26, 2022, our shareholders approved the Amended and Restated 2015 Omnibus Incentive Plan (the "Amended Plan"),
which was adopted by our Board of Directors and became effective on February 24, 2022. The Amended Plan increased the
number of shares available for issuance under the 2015 Plan from 1,200,000 to a total of 2,900,000. The Amended Plan allows
for the granting of stock, restricted stock, restricted stock units, stock options, performance shares and performance share units.
We had 2,213,716 shares available to grant at December 31, 2022.

Compensation expense is determined using the grant date fair value estimated in accordance with the provisions of accounting
standards for stock compensation and is recognized over the vesting periods of the individual awards. As of December 31, 2022,
total unrecognized compensation expense related to non-vested stock awards was approximately $12 million and is expected to
be recognized over a weighted-average period of 1.7 years. Stock-based compensation expense, which is included in
Operations and maintenance on the accompanying Consolidated Statements of Income, was as follows for the years ended
December 31 (in thousands):

Stock-based compensation expense

Restricted Stock

2022

2021

2020

8,551

9,655

5,373

The fair value of restricted stock and restricted stock unit awards equals the market price of our stock on the date of grant.

The shares carry a restriction on the ability to sell the shares until the shares vest. The shares substantially vest over three
years, contingent on continued employment. Compensation expense related to the awards is recognized over the vesting period.

A summary of the status of the restricted stock and restricted stock units at December 31, 2022, was as follows:

Balance at January 1, 2022

Granted
Vested
Forfeited

Balance at December 31, 2022

Weighted-Average
Grant Date Fair
Value

Restricted Stock
(in thousands)

219
70
(94)
(16)
179

67.64
69.03
69.64
66.03
67.23

The weighted-average grant-date fair value of restricted stock granted, and the total fair value of shares vested during the years
ended December 31, were as follows:

2022
2021
2020

Weighted-Average
Grant Date Fair
Value

Total Fair Value of
Shares Vested
(in thousands)

$
$
$

69.03
65.64
69.49

$
$
$

6,436
5,400
6,722

As of December 31, 2022, there was $7.5 million of unrecognized compensation expense related to non-vested restricted stock
that is expected to be recognized over a weighted-average period of 1.7 years.

10-KFORM 10-K |
Performance Share Plan

Prior to 2021, certain officers of the Company and its subsidiaries became participants in a market-based performance share
award plan. Performance shares are awarded based on our total shareholder return over designated performance periods as
measured against a selected peer group. In addition, certain stock price performance must be achieved for a payout to occur.
The final value of the performance shares will vary according to the number of shares of common stock that are ultimately
granted based upon the actual level of attainment of the performance criteria.

These performance awards are paid 50% in cash and 50% in common stock. The cash portion accrued is classified as a liability
and the stock portion is classified as equity. In the event of a change-in-control, performance awards are paid 100% in cash. If it
is determined that a change-in-control is probable, the equity portion of $1.4 million at December 31, 2022 would be reclassified
as a liability.

The outstanding performance periods at December 31, 2022 were as follows (shares in thousands):

Grant Date
January 1, 2020

Performance Period
January 1, 2020 - December 31, 2022

Target Grant
of Shares

Possible Payout Range of
Target

Minimum
0%

Maximum
200%

A summary of the status of the Performance Share Plan at December 31, 2022 was as follows:

Equity Portion

Liability Portion

Weighted-
Average Grant
Date

Fair Value (a)

68.14
—
—
68.72
81.42

Shares
(in
thousands)
36
—
—
(18)
18

Weighted-
Average Fair
Value at
December 31,
2022

32.74

Performance Shares balance at beginning of period

Granted
Forfeited
Vested

Performance Shares balance at end of period

(a)

The grant date fair values for the performance shares granted in 2020 were determined by Monte Carlo simulation using a blended
volatility of 18%, comprised of 50% historical volatility and 50% implied volatility and the average risk-free interest rate of the three-year
United States Treasury security rate in effect as of the grant date.

The weighted-average grant-date fair value of performance share awards granted was as follows in the years ended:

December 31, 2020

Performance plan payouts have been as follows (in thousands):

Weighted Average
Grant Date Fair
Value

81.42

Performance Period
January 1, 2019 to December 31, 2021
January 1, 2018 to December 31, 2020
January 1, 2017 to December 31, 2019

Year Paid
2022
2021
2020

Stock
Issued

Cash Paid
519
$
1,647
$
1,100
$

$
$
$

8
28
14

Total
Intrinsic
Value

1,038
3,294
2,199

On January 25, 2023, the Compensation Committee of our Board of Directors determined that the Company’s total shareholder
return for the January 1, 2020 to December 31, 2022 performance period was at the 26th percentile of its peer group and
confirmed a payout equal to 27% of target shares, valued at $0.7 million. The payout was fully accrued at December 31, 2022.

100

10-K| FORM 10-K
Performance Share Units

Beginning in 2021, certain officers of the Company, and its subsidiaries, were granted performance share units which have a
three-year vesting period, do not have voting rights until vested, and are subject to three specified conditions. A market condition
of relative total shareholder return, and two equally weighted performance metrics of average earnings per share and the
average cost to serve. The units are paid 100% in common stock should conditions be met and can range from 0% to 200% of
the target award. Dividend equivalents are accrued during the vesting period and paid out based on the final number of shares
awarded. In the event of participant’s death or retirement at age 55 or older, shares awarded vest on a pro-rata basis over the
three-year period.

Performance Share Units - Market Condition

The fair value of each share unit is based on the Company’s closing price at December 31 of the year prior to the award and a
Monte Carlo simulation. The Monte Carlo simulation is used to estimate expected share payout based on the Company’s TSR
for a three-year performance period relative to the designated peer group beginning January 1 of the award year.

Fair value of share units award
Three-year risk-free rate
Black Hills Corporation’s common stock volatility
Volatility range for the peer group

Performance Share Units - Performance Condition

2022
74.48
0.97%
30%
22-67%

2021
64.97
0.17%
33%
25-76%

A performance condition share unit vests at the end of the three-year performance period if the specified performance conditions
are achieved. The conditions are based on the Company’s average earnings per share and the average cost to serve. The
grant-date fair value for an individual outcome of a performance condition is determined by the closing common share price on
the grant date.

The following table summarizes the performance share unit activity for the year ended December 31, 2022:

Nonvested at January 1, 2022
Granted
Nonvested at December 31, 2022

Performance Share Units -
Market Condition

Performance Share Units -
Performance Condition

Weighted-
Average Fair
Value per Share
Unit

Share Units

Weighted-
Average Fair
Value per Share
Unit

Share Units

32,903
35,571
68,474

64.97
74.48
69.91

21,948
23,718
45,666

61.45
70.57
66.19

As of December 31, 2022, there was $4.1 million of unrecognized compensation expense related to outstanding performance
share/unit plans that is expected to be recognized over a weighted-average period of 1.7 years.

101

10-KFORM 10-K |(15)

INCOME TAXES

Winter Storm Uri

As discussed in Note 2 above, our Utilities received final commission approval for all of our Winter Storm Uri cost recovery
applications, which will allow full recovery of our $546 million of incremental fuel, purchased power and natural gas costs. We will
recover these costs from customers over several years, which will increase our taxable income on our tax returns by the
amounts collected for each respective year. The incremental costs from Winter Storm Uri were deductible in our 2021 tax return
and created a net deferred tax liability, which had balances as of December 31, 2022 and 2021 of $85 million and $124 million,
respectively. The deferred tax liability is reversed with the same timing as the costs are recovered from our customers.

The income tax deduction recognized from Winter Storm Uri created a $509 million NOL in our 2021 federal income tax return
and a $375 million NOL in our state income tax returns. Our federal NOL carryforwards related to Winter Storm Uri and other
recent adjustments no longer expire due to the TCJA; however, our state NOL carryforwards expire at various dates from 2023
to 2041. We do not anticipate material changes to our valuation allowance against the state NOL carryforwards from Winter
Storm Uri. Therefore, we did not record an additional valuation allowance against the state NOL carryforwards as of December
31, 2022 and 2021.

TCJA

On December 22, 2017, the U.S. government enacted comprehensive tax legislation commonly referred to as the TCJA. The
TCJA reduced the U.S. federal corporate tax rate from 35% to 21%. As such, the Company remeasured the deferred income
taxes at the 21% federal tax rate as of December 31, 2017. The entities subject to regulatory construct have made their best
estimate regarding the probability of settlements of net regulatory liabilities established pursuant to the TCJA. The amount of the
settlements may change based on decisions and actions by the federal and state utility commissions, which could have a
material impact on the Company’s future results of operations, cash flows or financial position. A majority of the excess deferred
taxes are subject to the average rate assumption method, as prescribed by the IRS, and will generally be amortized as a
reduction of customer rates over the remaining lives of the related assets. For the years ended December 31, 2022, 2021 and
2020, respectively, the Company has amortized, or provided bill credits for, $11 million, $23 million and $13 million of the
regulatory liability. The portion that was eligible for amortization under the average rate assumption method in 2021 but is
awaiting resolution of the treatment of these amounts in future regulatory proceedings has not been recognized and may be
refunded in customer rates at any time in accordance with the resolution of pending or future regulatory proceedings.

Beginning in 2022, the TJCA modified IRC 174 which changes how taxpayers account for research and development costs.
After the IRC 174 modification, taxpayers must amortize specified research and experimental expenditures performed in the
United States ratably over five years instead of deducting research and experimental expenditures. This modification did not
have a material impact for the year ended December 31, 2022.

Income Tax Expense (Benefit)

Income tax expense (benefit) from continuing operations for the years ended December 31 was (in thousands):

Current:

Federal
State

Current income tax (benefit)

Deferred:
Federal
State

Deferred income tax expense

2022

2021

2020

(467) $

80
(387)

574
(666)
(92)

23,205
2,387
25,592

2,170
5,091
7,261

(6,020)
847
(5,173)

35,672
2,419
38,091

Income tax expense

25,205

7,169

32,918

102

10-K| FORM 10-KEffective Tax Rates

The effective tax rate differs from the federal statutory rate for the years ended December 31, as follows:

Federal statutory rate

State income tax (net of federal tax effect) (a)
Non-controlling interest (b)
Tax credits
Flow-through adjustments (c)
Uncertain Tax Benefits
Valuation Allowance
Other tax differences
Amortization of excess deferred income tax expense (d)
TCJA bill credits (e)

Effective Tax Rate

2022

2021

2020

21.0%
0.5
(0.9)
(7.7)
(1.4)
—
—
(0.1)
(2.5)
(0.4)
8.5%

21.0%
1.2
(1.2)
(8.4)
(3.2)
0.3
—
(0.2)
(3.1)
(3.6)
2.8%

21.0%
2.4
(1.2)
(9.2)
(1.6)
1.5
0.7
0.6
(2.3)
—
11.9%

(a)

(b)

(c)

(d)
(e)

The state effective tax rate contains the tax expense attributable to multiple statutory state rate reductions in the Company's state
jurisdictions.
The effective tax rate reflects the income attributable to the non-controlling interest in Black Hills Colorado IPP for which a tax provision
was not recorded.
Flow-through adjustments related primarily to accounting method changes for tax purposes that allow us to take a current tax deduction
for repair costs, certain indirect costs and gain deferral. We recorded a deferred income tax liability in recognition of the temporary
difference created between book and tax treatment and flowed the tax benefit through to tax expense. A regulatory asset was established
to reflect the recovery of future increases in taxes payable from customers as the temporary differences reverse. As a result of this
regulatory treatment, we continue to record tax benefits consistent with the flow-through method.
Primarily TCJA - see above.
Primarily related to one-time bill credits of TCJA benefits which were delivered to Colorado Electric and Nebraska Gas customers in 2021.
These bill credits, which resulted in a reduction in revenue, were offset by a reduction in income tax expense and resulted in a minimal
impact to Net income for the year ended December 31, 2021.

Deferred Tax Assets and Liabilities

The temporary differences, which gave rise to the net deferred tax liability, for the years ended December 31 were as follows (in
thousands):

Deferred tax assets:

Regulatory liabilities
State tax credits
Federal NOL
State NOL
Partnership
Credit Carryovers
Other deferred tax assets
Less: Valuation allowance

Total deferred tax assets

Deferred tax liabilities:

Accelerated depreciation, amortization and other property-related differences
Regulatory assets
Goodwill
State deferred tax liability
Other deferred tax liabilities

Total deferred tax liabilities

Net deferred tax liability

2022

2021

74,728
22,817
191,992
23,031
12,755
90,881
45,407
(15,476)
446,135

(645,762)
(94,433)
(57,884)
(98,200)
(58,797)
(955,076)

77,099
23,342
227,535
33,639
13,395
68,646
31,996
(14,719)
460,933

(597,284)
(124,582)
(45,471)
(109,136)
(49,848)
(926,321)

(508,941)

(465,388)

103

10-KFORM 10-K |Net Operating Loss and Tax Credit Carryforwards

At December 31, 2022, we have federal NOL and state NOL and tax credit carryforwards that will expire at various dates as
follows (in thousands):

Federal NOL Carryforward
Federal NOL Carryforward

State NOL Carryforward (a)
State Tax Credit Carryforward

Amounts

330,085
584,161

408,269
22,817

$
$

Expiration Dates
2023 to 2037
No expiration

2023 to 2041
2023 to 2041

(a)

The carryforward balance is reflected on the basis of apportioned tax losses to jurisdictions imposing state income taxes.

As of December 31, 2022, we had a $1.1 million valuation allowance against the state NOL carryforwards. Our 2022 analysis of
the ability to utilize such NOLs resulted in no increase in the valuation allowance. If the valuation allowance is adjusted due to
higher or lower than anticipated utilization of the NOLs, the offsetting amount will affect tax expense.

As of December 31, 2022, we had a $14 million valuation allowance against the state ITC carryforwards. Our 2022 analysis of
the ability to utilize such ITC resulted in a $0.8 million increase in the valuation allowance, which resulted in an increase to tax
expense of $0.6 million. The remaining $0.2 million increase is attributable to our regulated business and is being accounted for
under the deferral method whereby the credits are amortized to expense over the estimated useful life of the underlying asset
that generated the credit. The valuation allowance adjustment was primarily attributable to expiring state ITC credits.

Unrecognized Tax Benefits

The following table reconciles the total amounts of unrecognized tax benefits, without interest, at the beginning and end of the
period included in Other deferred credits and other liabilities on the accompanying Consolidated Balance Sheets (in thousands):

Changes in Uncertain Tax Positions:

Beginning balance
Additions for prior year tax positions
Reductions for prior year tax positions
Additions for current year tax positions

Ending balance

2022

2021

2020

10,554
7
(773)
2,097
11,885

8,383
448
(732)
2,455
10,554

4,165
3,788
(1,313)
1,743
8,383

The total amount of unrecognized tax benefits that, if recognized, would impact the effective tax rate is approximately $5.7
million.

We recognized no interest expense associated with income taxes for the years ended December 31, 2022, 2021 and 2020. We
had no accrued interest (before tax effect) associated with income taxes at December 31, 2022 and 2021.

The Company is subject to federal income tax as well as income tax in various state and local jurisdictions.

As of December 31, 2022, we do not have any tax positions for which it is reasonably possible that the total amount of
unrecognized tax benefits will significantly increase or decrease on or before December 31, 2023.

104

10-K| FORM 10-K(16)

BUSINESS SEGMENT INFORMATION

Our Chief Executive Officer, who is considered to be our CODM, reviews financial information presented on an operating
segment basis for purposes of making decisions, allocating resources and assessing financial performance. Our operating
segments are based on our method of internal reporting, which is generally segregated by differences in products and services.
All of our operations and assets are located within the United States.

Our Electric Utilities segment includes the operating results of the regulated electric utility operations of Colorado Electric, South
Dakota Electric, and Wyoming Electric, which supply regulated electric utility services to areas in Colorado, Montana, South
Dakota and Wyoming. We also own and operate non-regulated power generation and mining businesses that are vertically
integrated with our Electric Utilities.

Our Gas Utilities segment consists of the operating results of our regulated natural gas utility subsidiaries in Arkansas, Colorado,
Iowa, Kansas, Nebraska and Wyoming.

Corporate and Other represents certain unallocated expenses for administrative activities that support our operating segments.
Corporate and Other also includes business development activities that are not part of our operating segments.

Our CODM assesses the performance of our operating segments based on operating income. Our operating segments are
equivalent to our reportable segments.

Segment information was as follows (in thousands):

Year ended December 31, 2022

Revenue -

Contracts with customers
Other revenues

Inter-company operating revenue -

Contracts with customers
Other revenues

Total revenue

Fuel, purchased power and cost of natural
gas sold
Operations and maintenance, including
taxes
Depreciation, depletion and amortization

Operating income (loss)

Interest expense, net
Impairment of investment
Other income (expense), net
Income tax benefit (expense)

Net income

Net income attributable to non-controlling
interest

Net income available for common stock

Consolidating Income Statement

Electric
Utilities

Gas Utilities

Corporate

Inter-
Company
Eliminations

Total

882,899
5,548
888,447

11,715
—
11,715
900,162

1,659,957
3,412
1,663,369

— $
—
—

2,542,856
8,960
2,551,816

5,292
429
5,721
1,669,090

538
368,201
368,739
368,739

(17,545)
(368,630)
(386,175)
(386,175)

—
—
—
2,551,816

266,284

965,108

(11)

(831)

1,230,550

283,654
135,966
214,258

345,143
114,679
244,160

309,773
26,964
32,013

(323,457)
(26,700)
(35,187) $

615,113
250,909
455,244

(160,989)
—
1,708
(25,205)
270,758

(12,371)
258,387

105

10-KFORM 10-K |Electric
Utilities

825,404
5,336
830,740

11,518
—
11,518
842,258

Consolidating Income Statement
Inter-
Company
Eliminations

Corporate

Gas Utilities

1,105,430
12,932
1,118,362

— $
—
—

6,110
393
6,503
1,124,865

196
356,151
356,347
356,347

(17,824)
(356,544)
(374,368)
(374,368)

Total

1,930,834
18,268
1,949,102

—
—
—
1,949,102

248,018

494,738

(918)

741,934

260,036
131,528
202,676

314,810
104,160
211,157

293,265
26,838
36,148

(306,325)
(26,573)
(40,552) $

561,786
235,953
409,429

(152,404)
—
1,404
(7,169)
251,260

(14,516)
236,744

Total

1,680,804
16,137
1,696,941

—
—
—
1,696,941

Consolidating Income Statement

Electric
Utilities

Gas Utilities

Corporate

Inter-
Company
Eliminations

721,108
6,175
727,283

11,574
—
11,574
738,857

959,696
9,962
969,658

4,724
288
5,012
974,670

— $
—
—

167
352,976
353,143
353,143

(16,465)
(353,264)
(369,729)
(369,729)

138,572

354,645

(896)

492,404

265,679
123,632
210,974

303,577
100,559
215,889

284,501
25,150
43,409

(301,980)
(24,884)
(41,969) $

551,777
224,457
428,303

(143,470)
(6,859)
(2,293)
(32,918)
242,763

(15,155)
227,608

Year ended December 31, 2021

Revenue -

Contracts with customers
Other revenues

Inter-company operating revenue -

Contracts with customers
Other revenues

Total revenue

Fuel, purchased power and cost of natural
gas sold
Operations and maintenance, including
taxes
Depreciation, depletion and amortization

Operating income (loss)

Interest expense, net
Impairment of investment
Other income (expense), net
Income tax benefit (expense)

Net income

Net income attributable to non-controlling
interest

Net income available for common stock

Year ended December 31, 2020

Revenue -

Contracts with customers
Other revenues

Inter-company operating revenue -

Contracts with customers
Other revenues

Total revenue

Fuel, purchased power and cost of natural
gas sold
Operations and maintenance, including
taxes
Depreciation, depletion and amortization

Operating income (loss)

Interest expense, net
Impairment of investment
Other income (expense), net
Income tax benefit (expense)

Net income

Net income attributable to non-controlling
interest

Net income available for common stock

106

10-K| FORM 10-K

Total Assets (net of intercompany eliminations) as of December 31,

Electric Utilities
Gas Utilities
Corporate and Other

Total assets

2022

3,929,721
5,578,282
110,227
9,618,230

2021

3,796,662
5,246,370
88,864
9,131,896

Capital Expenditures (a) for the years ended December 31,

2022

2021

2020

Electric Utilities
Gas Utilities
Corporate and Other
Total capital expenditures

243,133
349,438
5,097
597,668

285,770
383,320
10,500
679,590

288,683
449,209
17,500
755,392

(a)

Includes accruals for property, plant and equipment as disclosed in the Supplemental Cash Flow Information to the Consolidated
Statement of Cash Flows.

(17)

SUBSEQUENT EVENTS

Except as described in Note 2, there have been no events subsequent to December 31, 2022 which would require recognition in
the Consolidated Financial Statements or disclosures.

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL

DISCLOSURE

None.

ITEM 9A. CONTROLS AND PROCEDURES

Disclosure Controls and Procedures

Our Chief Executive Officer and Chief Financial Officer evaluated the effectiveness of our disclosure controls and procedures (as
defined in Rules 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934 (Exchange Act)) as of December 31, 2022.
Based on their evaluation, they have concluded that our disclosure controls and procedures are effective.

Our disclosure controls and procedures are designed to ensure that information required to be disclosed by us in the reports that
we file or submit under the Exchange Act, as amended, is recorded, processed, summarized and reported, within the time
periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our
management, including our Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions
regarding required disclosure.

Changes in Internal Control over Financial Reporting

During the quarter ended December 31, 2022, there were no changes in the Company’s internal control over financial reporting
(as defined in Rule 13a-15(f) under the Exchange Act) that have materially affected, or are reasonably likely to materially affect,
the Company’s internal control over financial reporting.

Management’s Report on Internal Control over Financial Reporting is presented on Page 56 of this Annual Report on Form 10-K.

ITEM 9B. OTHER INFORMATION

None.

ITEM 9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS

None.

PART III

ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

Information required under this item with respect to directors and information required by Items 401, 405, 406, 407(c)(3),
407(d)(4) and 407(d)(5) of Regulation S-K, is set forth in the Proxy Statement for our 2023 Annual Meeting of Shareholders,
which is incorporated herein by reference. Information about our Executive Officers is reported in Part 1 of this Annual Report on
Form 10-K.

107

10-KFORM 10-K |ITEM 11. EXECUTIVE COMPENSATION

Information required under this item is set forth in the Proxy Statement for our 2023 Annual Meeting of Shareholders, which is
incorporated herein by reference.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED

STOCKHOLDER MATTERS

Information regarding the security ownership of certain beneficial owners and management is set forth in the Proxy Statement for
our 2023 Annual Meeting of Shareholders, which is incorporated herein by reference.

EQUITY COMPENSATION PLAN INFORMATION

The following table includes information as of December 31, 2022 with respect to our equity compensation plans which includes
the Amended and Restated 2015 Omnibus Incentive Plan.

Plan category

Number of securities to be
issued upon exercise of
outstanding options,
warrants and rights

Weighted-average
exercise price of
outstanding options,
warrants and rights

(a)

(b)

Equity compensation plans
approved by security holders
Equity compensation plans not
approved by security holders

Total

255,588 (1) $

---

255,588

Number of securities
remaining available for
future issuance under
equity compensation plans
(excluding securities
reflected in column (a))
(c)

- (1) $

2,213,716 (2)

---

2,213,716

(1)

(2)

255,588 full value awards outstand as of December 31, 2022, comprised of restricted stock units, performance shares, short-term
incentive plan (STIP) units and Director common stock units. In addition, 163,387 shares of unvested restricted stock were outstanding as
of December 31, 2022, which are not included in the table above because they have already been issued. We do not have any
outstanding options, warrant or rights.
Shares available for issuance are from the 2015 Amended and Restated Omnibus Incentive Plan. The 2015 Amended and Restated
Omnibus Incentive Plan permits grant of stock options, stock appreciation rights, restricted stock, restricted stock units, performance
shares, performance units, cash-based awards and other stock-based awards.

108

10-K| FORM 10-KITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS AND DIRECTOR INDEPENDENCE

Information regarding certain relationships and related transactions and director independence is set forth in the Proxy
Statement for our 2023 Annual Meeting of Shareholders, which is incorporated herein by reference.

ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES

Information regarding principal accounting fees and services billed to us by our principal accountant, Deloitte & Touche LLP
(PCAOB ID No. 34) is set forth in the Proxy Statement for our 2023 Annual Meeting to Shareholders, which is incorporated
herein by reference.

PART IV

ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES

(a)

Documents filed as part of this report

Consolidated Financial Statements

Financial statements required under this item are included in Item 8 of Part II

Schedules

All other schedules have been omitted because of the absence of the conditions under which they are required or because the
required information is included in our consolidated financial statements and notes thereto. Consolidated valuation and qualifying
accounts are detailed within Note 1 of the Notes to the Consolidated Financial Statements in this Annual Report on Form 10-K.

Exhibits

Exhibits filed herewithin are designated by an asterisk (*). All exhibits not so designated are incorporated by reference to a prior
filing, as indicated. Items constituting a board of director or management compensatory plan are designated by a cross (†).

Exhibit
Number

Description

2.1

2.2

2.3

3.1

3.2

4.1

4.1.1

4.1.2

4.1.3

4.1.4

Purchase and Sale Agreement by and among Alinda Gas Delaware LLC, Alinda Infrastructure Fund I, L.P. and
Aircraft Services Corporation, as Sellers, and Black Hills Utility Holdings, Inc., as Buyer, dated as of July 12,
2015 (filed as Exhibit 2.1 to the Registrant’s Form 8-K filed on July 14, 2015).

First Amendment to Purchase and Sale Agreement effective December 10, 2015, by and among, Alinda Gas
Delaware LLC, Alinda Infrastructure Fund I, L.P. and Aircraft Services Corporation, as Sellers, and Black Hills
Utility Holdings, Inc., as Buyer (filed as Exhibit 2.2 to the Registrant’s Form 10-K for 2015).

Option Agreement, by and among, Aircraft Services Corporation, as ASC, SourceGas Holdings LLC, as the
Company and Black Hills Utility Holdings, Inc., as Buyer (filed as Exhibit 2.2 to the Registrant’s Form 8-K filed
on July 14, 2015).

Restated Articles of Incorporation of the Registrant (filed as Exhibit 3 to the Registrant’s Form 8-K filed on
February 5, 2018).

Amended and Restated Bylaws of the Registrant dated April 24, 2017 (filed as Exhibit 3 to the Registrant’s
Form 8-K filed on April 28, 2017).

Indenture dated as of May 21, 2003 between the Registrant and Wells Fargo Bank, National Association (as
successor to LaSalle Bank National Association), as Trustee (filed as Exhibit 4.1 to the Registrant’s Form 10-Q
for the quarterly period ended June 30, 2003).

First Supplemental Indenture dated as of May 21, 2003 (filed as Exhibit 4.2 to the Registrant’s Form 10-Q for
the quarterly period ended June 30, 2003).

Second Supplemental Indenture dated as of May 14, 2009 (filed as Exhibit 4 to the Registrant’s Form 8-K
filed on May 14, 2009).

Third Supplemental Indenture dated as of July 16, 2010 (filed as Exhibit 4 to Registrant’s Form 8-K filed on
July 15, 2010).

Fourth Supplemental Indenture dated as of November 19, 2013 (filed as Exhibit 4 to the Registrant’s Form 8-
K filed on November 18, 2013).

109

10-KFORM 10-K |4.1.5

4.1.6

4.1.7

4.1.8

4.1.9

4.1.10

4.2

4.2.1

4.2.2

4.2.3

4.3

4.3.1

4.3.2

4.4

4.5

10.1†

10.1.1†

10.1.2†

Fifth Supplemental Indenture dated as of January 13, 2016 (filed as Exhibit 4.1 to the Registrant’s Form 8-K
filed on January 13, 2016).

Sixth Supplemental Indenture dated as of August 19, 2016 (filed as Exhibit 4.1 to the Registrant’s Form 8-K
filed on August 19, 2016).

Seventh Supplemental Indenture dated as of August 17, 2018 (filed as Exhibit 4.2 to the Registrant’s Form 8-
K filed on August 17, 2018).

Eighth Supplemental Indenture dated as of October 3, 2019 (filed as Exhibit 4.1 to the Registrant’s Form 8-K
filed on October 4, 2019).

Ninth Supplemental Indenture dated as of June 17, 2020 (filed as Exhibit 4.1 to the Registrant’s Form 8-K
filed on June 17, 2020).

Tenth Supplemental Indenture dated as of August 26, 2021 (filed as Exhibit 4.1 to the Registrant’s Form 8-K
filed on August 26, 2021).

Restated and Amended Indenture of Mortgage and Deed of Trust of Black Hills Corporation (now called Black
Hills Power, Inc.) dated as of September 1, 1999 (filed as Exhibit 4.19 to the Registrant’s Post-Effective
Amendment No. 1 to the Registrant’s Registration Statement on Form S-3 (No. 333-150669)).

First Supplemental Indenture, dated as of August 13, 2002, between Black Hills Power, Inc. and The Bank of
New York Mellon (as successor to JPMorgan Chase Bank), as Trustee (filed as Exhibit 4.20 to the
Registrant’s Post-Effective Amendment No. 1 to the Registrant’s Registration Statement on Form S-3 (No.
333-150669)).

Second Supplemental Indenture, dated as of October 27, 2009, between Black Hills Power, Inc. and The
Bank of New York Mellon (filed as Exhibit 4.21 to the Registrant’s Post-Effective Amendment No. 2 to the
Registrant’s Registration Statement on Form S-3 (No. 333-150669)).

Third Supplemental Indenture, dated as of October 1, 2014, between Black Hills Power, Inc. and The Bank of
New York Mellon (filed as Exhibit 10.1 to the Registrant’s Form 8-K filed on October 2, 2014).

Restated Indenture of Mortgage, Deed of Trust, Security Agreement and Financing Statement, amended and
restated as of November 20, 2007, between Cheyenne Light, Fuel and Power Company and Wells Fargo
Bank, National Association (filed as Exhibit 10.2 to the Registrant’s Form 8-K filed on October 2, 2014).

First Supplemental Indenture, dated as of September 3, 2009, between Cheyenne Light, Fuel and Power
Company and Wells Fargo Bank, National Association (filed as Exhibit 10.3 to the Registrant’s Form 8-K filed
on October 2, 2014).

Second Supplemental Indenture, dated as of October 1, 2014, between Cheyenne Light, Fuel and Power
Company and Wells Fargo Bank, National Association (filed as Exhibit 10.4 to the Registrant’s Form 8-K filed
on October 2, 2014).

Form of Stock Certificate for Common Stock, Par Value $1.00 Per Share (filed as Exhibit 4.2 to the
Registrant’s Form 10-K for 2000).

Description of Securities (filed as Exhibit 4.5 to the Registrant's Form 10-K for 2019)

Amended and Restated Pension Equalization Plan of Black Hills Corporation dated November 6, 2001 (filed
as Exhibit 10.11 to the Registrant’s Form 10-K/A for 2001).

First Amendment to Pension Equalization Plan (filed as Exhibit 10.10 to the Registrant’s Form 10-K for
2002).

Grandfather Amendment to the Amended and Restated Pension Equalization Plan of Black Hills Corporation
(filed as Exhibit 10.2 to the Registrant’s Form 10-K for 2008).

10.2†

Restoration Plan of Black Hills Corporation (filed as Exhibit 10.5 to the Registrant’s Form 10-K for 2008).

10.2.1†

10.3†

10.3.1†

10.4*†

10.5†

10.5.1†

10.5.2†

First Amendment to the Restoration Plan of Black Hills Corporation dated July 24, 2011 (filed as Exhibit 10.2
to the Registrant’s Form 10-Q for the quarterly period ended June 30, 2011).

Black Hills Corporation Non-qualified Deferred Compensation Plan as Amended and Restated effective
January 1, 2011 (filed as Exhibit 10.4 to the Registrant’s Form 10-K for 2010).

First Amendment to the Black Hills Corporation Nonqualified Deferred Compensation Plan as Amended and
Restated effective January 1, 2011 (filed as Exhibit 10.5 to the Registrant’s Form 10-K for 2018).

Black Hills Corporation Post-2018 Nonqualified Deferred Compensation Plan.

Black Hills Corporation 2005 Omnibus Incentive Plan (”Omnibus Plan”) (filed as Appendix A to the Registrant’s
Proxy Statement filed April 13, 2005).

First Amendment to the Omnibus Plan (filed as Exhibit 10.11 to the Registrant’s Form 10-K for 2008).

Second Amendment to the Omnibus Plan (filed as Exhibit 10 to the Registrant’s Form 8-K filed on May 26,
2010).

110

10-K| FORM 10-K10.6*†

10.7†

10.8†

10.9†

10.10†

10.11†

10.12†

10.13†

10.14†

10.15†

10.16†

10.17*†

10.18*†

10.19†

10.19.1†

10.19.2†

10.19.3†

10.19.4†

10.19.5†

10.19.6†

10.20†

10.21

10.22

10.23

10.24

10.25

Black Hills Corporation Amended and Restated 2015 Omnibus Incentive Plan effective Janaury 24, 2023.

Form of Stock Option Agreement for Omnibus Plan effective for awards granted on or after January 1, 2014
(filed as Exhibit 10.7 to the Registrant’s Form 10-K for 2013).

Form of Stock Option Agreement effective for awards granted on or after April 28, 2015 (filed as Exhibit 10.8 to
Registrant’s Form 10-K for 2015).

Form of Restricted Stock Award Agreement for 2015 Omnibus Incentive Plan effective for awards granted on
or after April 28, 2015 (filed as Exhibit 10.10 to Registrant’s Form 10-K for 2015).

Form of Restricted Stock Award Agreement for 2015 Omnibus Incentive Plan effective for awards granted on
or after January 26, 2021. (filed as Exhibit 10.11 to the Registrant's Form 10-K for 2020)

Form of Restricted Stock Unit Award Agreement for 2015 Omnibus Plan effective for awards granted on or
after April 28, 2015 (filed as Exhibit 10.12 to the Registrant’s Form 10-K for 2015).

Form of Performance Share Award Agreement effective for awards granted on or after January 1, 2016 (filed
as Exhibit 10.6 to the Registrant’s Form 10-Q for the quarterly period ended March 31, 2016).

Form of Performance Share Award Agreement effective for awards granted on or after January 1, 2017 (filed
as Exhibit 10.12 to the Registrant's Form 10-K for 2019).

Form of Short-term Incentive Plan for Officers Award Agreement effective for awards granted on or after
January 1, 2021 (filed as Exhibit 10.16 to the Registrant's Form 10-K for 2020).

Form of Performance Unit Award Agreement for 2015 Omnibus Incentive Plan effective for awards granted on
or after January 1, 2021. (filed as Exhibit 10.17 to the Registrant's Form 10-K for 2020)

Form of Indemnification Agreement (filed as Exhibit 10.5 to the Registrant’s Form 8-K filed on September 3,
2004).

Change in Control Agreement dated November 15, 2022 between Black Hills Corporation and Linden R.
Evans.

Change in Control Agreements dated November 15, 2022 between Black Hills Corporation and its non-CEO
Senior Executive Officers.

Outside Directors Stock Based Compensation Plan as Amended and Restated effective January 1, 2009 (filed
as Exhibit 10.23 to the Registrant’s Form 10-K for 2008).

First Amendment to the Outside Directors Stock Based Compensation Plan effective January 1, 2011 (filed
as Exhibit 10.16 to the Registrant’s Form 10-K for 2010).

Second Amendment to the Outside Director’s Stock Based Compensation Plan effective January 1, 2013
(filed as Exhibit 10.15 to the Registrant’s Form 10-K for 2012).

Third Amendment to the Outside Director’s Stock Based Compensation Plan effective January 1, 2015 (filed
as Exhibit 10.16 to the Registrant’s Form 10-K for 2014).

Fourth Amendment to the Outside Director’s Stock Based Compensation Plan effective January 1, 2017
(filed as Exhibit 10.4 to the Registrant’s Form 10-Q for the quarterly period ended September 30, 2016).

Fifth Amendment to the Outside Director’s Stock Based Compensation Plan effective January 1, 2018 (filed
as Exhibit 10.16 to the Registrant’s Form 10-K for 2017).

Sixth Amendment to the Outside Director’s Stock Based Compensation Plan effective January 1, 2019 (filed
as Exhibit 10.18 to the Registrant’s Form 10-K for 2018).

Form of Non-Disclosure and Non-Solicitation Agreement for Certain Employees (filed as Exhibit 10.8 to the
Registrant’s Form 10-Q for the quarterly period ended March 31, 2016).

Equity Distribution Sales Agreement dated August 4, 2020 among Black Hills Corporation and the several
Agents named therein (filed as Exhibit 1.1 to the Registrant’s Form 8-K filed on August 4, 2020).

Fourth Amended and Restated Credit Agreement dated as of July 19, 2021 (relating to $750 million Revolving
Credit Facility), among Black Hills Corporation, as Borrower, the financial institutions party thereto, as Banks,
and U.S. Bank, National Association, as Administrative Agent (filed as Exhibit 10.1 to the Registrant’s Form 8-
K filed on July 19, 2021).

Credit Agreement dated as of February 24, 2021 among Black Hills Corporation, as Borrower, the financial
institutions party thereto, as Banks, and U.S. Bank National Association, as Administrative Agent (filed as
Exhibit 10.1 to the Registrant’s Form 8–K filed on February 25, 2021).

Non-Employee Director Equity Compensation Plan effective January 1, 2022 (filed as Exhibit 10.25 to the
Registrant's Form 10-K filed on Februrary 15, 2022).

Form of Restricted Stock Unit Award Agreement (Non-Employee Director) effective for awards granted on or
after January 1, 2022 (filed as Exhibit 10.26 to the Registrant's Form 10-K filed on February 15, 2022).

111

10-KFORM 10-K |10.26

10.27

10.28*†

10.29*†

10.30*†

21*

23.1*

31.1*

31.2*

32.1*

32.2*

95*

101.INS*

Coal Leases between WRDC and the Federal Government
-Dated May 1, 1959 (filed as Exhibit 5(i) to the Registrant’s Form S-7, File No. 2-60755)
-Modified January 22, 1990 (filed as Exhibit 10(h) to the Registrant’s Form 10-K for 1989)
-Dated April 1, 1961 (filed as Exhibit 5(j) to the Registrant’s Form S-7, File No. 2-60755)
-Modified January 22, 1990 (filed as Exhibit 10(i) to Registrant’s Form 10-K for 1989)
-Dated October 1, 1965 (filed as Exhibit 5(k) to the Registrant’s Form S-7, File No. 2-60755)
-Modified January 22, 1990 (filed as Exhibit 10(j) to the Registrant’s Form 10-K for 1989).

Assignment of Mining Leases and Related Agreement effective May 27, 1997, between WRDC and Kerr-
McGee Coal Corporation (filed as Exhibit 10(u) to the Registrant’s Form 10-K for 1997).

Form of Short-term Incentive Plan Award Agreement for the Amended and Restated 2015 Omnibus Incentive
Plan effective for awards granted on or after January 1, 2023.

Form of Performance Unit Award Agreement for the Amended and Restated 2015 Omnibus Incentive Plan
effective for awards granted on or after January 1, 2023.

Form of Restricted Stock Award Agreement for the Amended and Restated 2015 Omnibus Incentive Plan
effective for awards granted on or after January 24, 2023.

List of Subsidiaries of Black Hills Corporation.

Consent of Independent Registered Public Accounting Firm.

Certification of Chief Executive Officer pursuant to Rule 13a - 14(a) of the Securities Exchange Act of 1934, as
adopted pursuant to Section 302 of the Sarbanes - Oxley Act of 2002.

Certification of Chief Financial Officer pursuant to Rule 13a - 14(a) of the Securities Exchange Act of 1934, as
adopted pursuant to Section 302 of the Sarbanes - Oxley Act of 2002.

Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section
906 of the Sarbanes-Oxley Act of 2002.

Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906
of the Sarbanes-Oxley Act of 2002.

Mine Safety and Health Administration Safety Data

Inline XBRL Instance Document - the instance document does not appear in the Interactive Data File because
its XBRL tags are embedded within the Inline XBRL document

101.SCH*

Inline XBRL Taxonomy Extension Schema Document

101.CAL*

Inline XBRL Taxonomy Extension Calculation Linkbase Document

101.DEF*

Inline XBRL Taxonomy Extension Definition Linkbase Document

101.LAB*

Inline XBRL Taxonomy Extension Label Linkbase Document

101.PRE*

Inline XBRL Taxonomy Extension Presentation Linkbase Document

104*

Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)

ITEM 16. FORM 10-K SUMMARY

None.

112

10-K| FORM 10-KPursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this
report to be signed on its behalf by the undersigned, thereunto duly authorized.

SIGNATURES

BLACK HILLS CORPORATION

By:

/S/ LINDEN R. EVANS

Linden R. Evans, President and Chief Executive Officer

Dated:

February 14, 2023

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons
on behalf of the Registrant and in the capacities and on the dates indicated.

/S/ STEVEN R. MILLS

Steven R. Mills

/S/ LINDEN R. EVANS

Linden R. Evans, President

and Chief Executive Officer

Director and

Chairman

Director and

Principal Executive Officer

February 14, 2023

/S/ RICHARD W. KINZLEY

Principal Financial and

February 14, 2023

Richard W. Kinzley, Senior Vice President

Accounting Officer

and Chief Financial Officer

/S/ BARRY M. GRANGER

Barry M. Granger

/S/ TONY A. JENSEN

Tony A. Jensen

Director

February 14, 2023

/S/ KATHLEEN S. MCALLISTER

Director

February 14, 2023

Kathleen S. McAllister

/S/ ROBERT P. OTTO

Robert P. Otto

Director

February 14, 2023

/S/ SCOTT M. PROCHAZKA

Director

February 14, 2023

Scott M. Prochazka

/S/ REBECCA B. ROBERTS

Director

February 14, 2023

Rebecca B. Roberts

/S/ MARK A. SCHOBER

Mark A. Schober

/S/ TERESA A. TAYLOR

Teresa A. Taylor

Director

February 14, 2023

113

10-KFORM 10-K |(This page has been left blank intentionally.)

114

10-K| FORM 10-KINVESTOR INFORMATION

Common Stock
Transfer Agent, Registrar &
Dividend Disbursing Agent
EQ Shareowner Services
P.O. Box 64854
St. Paul, MN 55164-0854
800-468-9716
www.shareowneronline.com

Senior Unsecured Notes
— Black Hills Corporation
Computershare Trust Company, N.A.
Corporate Trust
WF 8113
P.O. Box 1450
Minneapolis, MN 55485

First Mortgage Bonds
— Black Hills Power, Inc.
The Bank of New York Mellon
Corporate Trust, CF
101 Barclay 7 West
New York, NY 10286

First Mortgage Bonds
— Cheyenne Light,
Fuel & Power
Computershare Trust Company, N.A.
Corporate Trust
WF 8113
P.O. Box 1450
Minneapolis, MN 55485

Industrial Development
Revenue Bonds — Cheyenne
Light, Fuel & Power
Trustee & Paying Agent
Corporate Trust Services
US Bank National Association
EP-MN-WN3L
60 Livingston Avenue
St. Paul, MN 55107

Corporate Offices
Black Hills Corporation
P.O. Box 1400
7001 Mount Rushmore Road
Rapid City, SD 57709
605-721-1700
www.blackhillscorp.com

2023 Annual Meeting
The Annual Meeting of
Shareholders will be held at
Horizon Point, the Company’s
corporate headquarters at 7001
Mount Rushmore Road, Rapid
City, South Dakota, at 9:30 a.m.
local time on Tuesday, April 25,
2023. Prior to the meeting, formal
notice, proxy statement and proxy
will be mailed to shareholders.

Market for Equity Securities
The Company’s Common Stock
($1 par value) is traded on the
New York Stock Exchange.
Quotations for the Common Stock
are reported under the symbol
BKH. The continued interest
and support of equity owners
are appreciated. The Company
has declared Common Stock
dividends payable in each year
since its incorporation in 1941.
Regular quarterly dividends when
declared are normally payable on
March 1, June 1, September 1 and
December 1.

Internet Account Access
Registered shareholders
can access their accounts
electronically at
www.shareowneronline.com.
Shareowner Online allows
shareholders to view their
account balance, dividend
information, reinvestment details
and much more. The transfer
agent maintains stockholder
account access.

Direct Deposit of Dividends
We encourage you to consider
the direct deposit of your
dividends. With direct deposit,
your quarterly dividend payment
can be automatically transferred
on the dividend payment date
to the bank, savings and loan,

or credit union of your choice.
Direct deposit assures payments
are credited to shareholders’
accounts without delay. A form
is attached to your dividend
check where you can request
information about this method
of payment. Questions regarding
direct deposit should be directed
to EQ Shareowner Services.

Dividend Reinvestment and
Direct Stock Purchase Plan
A Dividend Reinvestment and
Direct Stock Purchase Plan
provides interested investors the
opportunity to purchase shares
of the Company’s Common Stock
and to reinvest all or a percentage
of their dividends. For complete
details, including enrollment,
contact the transfer agent,
EQ Shareowner Services.
Plan information is also available
at www.shareowneronline.com.

Website Access to Reports
The reports we file with the
Securities and Exchange
Commission are available free
of charge at our website www.
blackhillscorp.com as soon as
reasonably practicable after they
are filed. In addition, the charters
of our Audit, Governance and
Compensation Committees are
located on our website along
with our Code of Business
Conduct, Code of Ethics for
our Chief Executive Officer and
Senior Finance Officer, Corporate
Governance Guidelines of our
Board of Directors, and Policy for
Director Independence.

2022 Annual Report | Proxy Statement | Form 10-K | www.blackhillscorp.com