Black Hills Corp. and NorthWestern Energy on Aug. 19 announced that each company’s board of directors has unanimously approved a definitive agreement to combine in a merger.
Black Hills is based in Rapid City, South Dakota, and serves 1.35 million natural gas and electric utility customers in eight states: Arkansas, Colorado, Iowa, Kansas, Montana, Nebraska, South Dakota and Wyoming.
NorthWestern Energy provides electricity and/or natural gas to approximately 800,000 customers in Montana, South Dakota, Nebraska, and Yellowstone National Park.
The combined company will serve approximately 2.1 million customers across eight contiguous states -- Arkansas, Colorado, Iowa, Kansas, Montana, Nebraska, South Dakota, and Wyoming.
Its electric utility will serve approximately 700,000 customers and operate approximately 38,000 miles of electric lines and approximately 2.9 gigawatts of owned generation capacity fueled by a mix of thermal, hydro, and wind. Its natural gas utility will serve approximately 1.4 million customers and operate approximately 59,000 miles of natural gas lines.
Over time, this increased scale is expected to drive operating and cost efficiencies across the combined enterprise.
The deal also doubles rate bases and provides increased investment opportunities to meet rising energy demand, while ensuring competitive rates.
The combination will double the size of each company’s rate base to a total of approximately $11.4 billion, with approximately $7.0 billion and $4.4 billion for electric and natural gas, respectively. Combined, the companies’ current investment plans from 2025 to 2029 exceed $7 billion and will be focused on building new electric and natural gas critical infrastructure to meet rising energy demand and advancing energy resilience in the regions where the combined company operates, while ensuring long-term competitive rates for customers.
This level of investment is expected to increase following the combination as the combined company leverages its enhanced resources to make strategic investments that foster economic development in its expansive territories, including addressing the growing demand from data centers, a news release said.
The transaction is expected to close in 12 to 15 months, subject to customary closing conditions, clearance under the Hart-Scott Rodino Act, approval from each company's shareholders, and regulatory approvals, including approval from commissions in the three states in which both companies operate (Montana, Nebraska, South Dakota) and in Arkansas if required, as well as the Federal Energy Regulatory Commission.
