Black Hills (BKH) risk factors, FY2024 10-K

STRATEGIC RISK

1. 01Our continued success is dependent on execution of our business plan and growth strategy, including our capital investment program

REGULATORY, LEGISLATIVE, AND LEGAL RISKS

1. 02We may be subject to unfavorable or untimely federal and state regulatory outcomes
2. 03Municipal governments may seek to limit or deny our franchise privileges
3. 04Our 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
4. 05Legislative and regulatory requirements may result in compliance penalties
5. 06Changes in Federal income tax policy or our inability to use or generate tax credits may adversely affect our financial condition, results of operations, and cash flows, as well as our credit ratings
6. 07Failure to attract and retain an appropriately qualified and engaged workforce could have a negative impact on our operations and long-term business strategy
7. 08Liability from fires could have a negative impact on our operations or financial performance, and our protocols may not prevent such liability
8. 09Supply chain challenges could negatively impact our operations
9. 10Cybersecurity incidents, terrorism, or other malicious acts targeting our key technology systems could disrupt our operations, lead to a loss or misuse of confidential and proprietary information, or cause reputational or other harm
10. 11Operating hazards. Operating hazards such as leaks, mechanical problems and accidents, including fires or explosions, could impact employee and public safety, reliability, and customer confidence
11. 12Equipment and processes. Breakdown or failure of equipment or processes, unavailability, or increased cost of equipment, and performance below expected levels of output or efficiency
12. 13Operational limitations. Operational limitations imposed by environmental and other regulatory requirements and contractual agreements, including those that restrict the timing of generation plant scheduled outages
13. 14Public opposition. Opposition by members of public or special-interest groups could negatively impact our ability to operate our businesses
14. 15The 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
15. 16Our 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
16. 17If 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

FINANCIAL RISKS

1. 18A sub-investment grade credit rating could impact our ability to access capital markets
2. 19We may be unable to obtain financing on reasonable terms needed to refinance debt, fund planned capital expenditures or otherwise execute our operating strategy
3. 20We 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
4. 21Costs associated with our healthcare plans and other benefits could increase significantly
5. 22We 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
6. 23Market performance or changes in key valuation assumptions could require us to make significant unplanned contributions to our pension plan and other retiree benefit plans
7. 24Our use of derivative financial instruments as hedges against commodity prices and financial market risks could result in material financial losses