We have various PPAs and transmission service agreements, which extend to 2044, 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:


	PPAs (a)		Transmission Services Agreements		Natural gas supply, transportation and storage agreements
	(in millions)
Future commitments for the year ending December 31,
2025	$	—	$	12.3	$	193.8
2026		—		—		171.2
2027		—		—		136.5
2028		—		—		86.6
2029		—		—		23.0
Thereafter		—		—		109.0
Total future commitments	$	—	$	12.3	$	720.1

____________________

(a)

This schedule does not reflect renewable energy PPA future obligations since these agreements vary based on weather conditions.

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 31 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.

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 31 years. Lease revenue was not material for the years ended December 31, 2024, 2023, and 2022.

As of December 31, 2024, scheduled maturities of operating lease payments to be received in future years were as follows:


	Operating Leases
	(in millions)
2025	$	2.1
2026		3.1
2027		1.8
2028		1.8
2029		1.8
Thereafter		48.4
Total lease receivables	$	59.0

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.

For our Pueblo Airport Generation site, we posted a bond 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.

In 2008, we acquired whole and partial liabilities for former manufactured gas plant 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 $1.5 million recorded in Other assets, non-current on our Consolidated Balance Sheets, which will be used to help offset remediation costs.

In 2024, we increased our Iowa manufactured gas plant site remediation cost estimate by $7.4 million based on recent site investigations and remediation work completed, which resulted in a corresponding increase in our Accrued liabilities and Regulatory assets. As of December 31, 2024, we had an Accrued liability of $9.7 million and a Regulatory asset of $10.7 million on our Consolidated Balance Sheets for the remediation of the manufactured gas plant site in Iowa. See Note 2 for additional information.

As of December 31, 2024, we had $0.6 million accrued for remediation of the manufactured gas plant sites in Nebraska, which are included in Other deferred credits and other liabilities on our Consolidated Balance Sheets.

The remediation cost estimates could change materially due to results of further investigations, actions of environmental agencies, or the financial viability of other responsible parties.

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.

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 appealed this verdict to the Colorado Court of Appeals. On October 19, 2023, the Appellate Court reversed and remanded the case with directions limiting any retrial to the narrow issue of whether there was improper interference with the prospective conveyance of the concession. We continue to believe this lawsuit has no merit and will vigorously defend it. At this time, we do not believe any losses from this matter will have a material impact on our financial position, results of operations and cash flows.

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.

In June 2024, we entered into an agreement with a third party to sell our 2023 generated PTCs. In January 2025, we entered into a similar agreement with the same third party to sell our 2024 generated PTCs. In each of these agreements, we provided indemnifications associated with the proceeds for PTCs transferred to the third party in the event of an adverse interpretation of tax law, including whether the related tax credits meet the qualification requirements. Additionally, in our agreement for the sale of our 2024 generated PTCs, we provided indemnifications in the event of a change in tax law. We believe the likelihood of having to make any material cash payments under these indemnifications is remote. See Note 15 for additional information.

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.

We had the following guarantees in place as of:


	Maximum Exposure at
Nature of Guarantee	December 31, 2024
	(in millions)
Indemnification for reclamation/surety bonds	$	75.6
Guarantees supporting business transactions		499.8
Total guarantees	$	575.4