RAPID CITY, S.D. (AP) - Before Black Hills Corporation went on an acquisition frenzy, buying up other power companies both big and small at a steady clip, it was for more than a century a small but stable regional player in the American energy industry.
Kelly Wrede remembers when traveling as part of her job with the old Black Hills Power & Light Co. meant a trip to Lead, or maybe over to Gillette, Wyoming.
“I remember when I started, we had right around 400 employees, maybe a little over that,” said Wrede, a 25-year employee who grew up in Lemmon and attended college at Northern State University in Aberdeen.
“We were that small Black Hills Power & Light Co. that had some power generation and a small oil and gas company. We had a trucking company in the Black Hills and a coal mine in Wyoming,” she said.
Wrede was then part of a regional company that flickered to life in 1883 as the Black Hills Electric Light Co. with a few illuminated incandescent light bulbs in Deadwood, the Rapid City Journal (https://bit.ly/22P7pVR ) reported.
But now, after a major acquisition spree spanning roughly a decade, Black Hills Corporation has grown into major oil, natural gas and electrical utility serving 1.2 million customers in eight states with a total workforce of almost 3,000 employees.
Of that long history, the last dozen years has seen the most phenomenal growth for the parent company and its gas and electric utility subsidiary, Black Hills Power, which recently was re-branded as Black Hills Energy.
Among Black Hills Corporation’s biggest purchases are a July 2008 deal to buy 45 gas and electric utilities in Colorado, Kansas, Nebraska and Iowa from Aquila for $940 million. The purchase increased the company’s customer base from 137,000 to 753,000 and increased its employee base from 916 to 2,000.
Then in January of this year, Black Hills Corporation finalized the purchase of the holdings of SourceGas and its 429,000 customers in Arkansas, Colorado, Nebraska and Wyoming for $1.89 billion increasing the company’s customer base to more than 1.2 million in 800 communities in eight states, including Arkansas, and increasing the total number of employees to about 3,000.
“It’s been a pretty wild decade,” said Black Hills Corporation chairman and CEO David R. Emery, who has shepherded the aggressive growth strategy that he believes gives the company more stability and strength.
“At the end of 2004 we only had 62,000 customers in basically western South Dakota, a little sliver in Northeast Wyoming and a little sliver of southeastern Montana.”
He was named president and chief operating officer of the company’s retail business segment from 2003 to 2004 and became president, chairman and CEO in 2005.
“Growing up, I never thought I’d come to work here,” Emery said. “Funny how it works out sometimes.”
Emery said the company also recognized the need to grow to keep up with governmental pressures to phase out coal-fired generation plants in favor of more environmentally-favorable energy sources, natural gas, wind and solar.
In the past four years, all newly built power generating plants have been either gas-fired or wind-powered, he said. Last year the company dismantled the old coal-fired Ben French Station in northwest Rapid City.
“We’ve added almost a billion dollars in generation in the last four or five years, either gas or wind,” he said. “You simply can’t permit a coal-fired power plant under current regulations.”
Black Hills Corporation is also consolidating its Rapid City workforce at a new $70 million headquarters complex, now under construction at the intersection of U.S. Highway 16 South and Catron Boulevard in south Rapid City.
Emery said Black Hills Corporation’s growth mirrors the consolidation of the utility industry in general.
“Ten years ago, there were 120-130 shareholder-owned electric utilities in the United States. Today we’re down in the 60s,” he said.
“When we started this trend back in 2004, we recognized the need to grow in order to survive and thrive. Literally in order to survive you had to grow and grow profitably,” said Emery, a third-generation employee of the company.
His grandfather was an electrician and mechanic in the old Black Hills Power & Light plant, located in the Gap in Rapid City.
His father, Jim, started with the accounting department in Rapid City, then became a district manager in Hot Springs and Custer serving the southern Black Hills and southeast Wyoming. Jim Emery also served in the South Dakota state legislature for several years.
David Emery was a petroleum engineer living and working in Texas, before returning to become vice-president of fuel resources from 1997 to 2003.
Right now, more than 550 local employees are spread out at five locations in Rapid City, including a multistory building on Ninth Street downtown that will be sold once the new complex is complete. The company expects to move into the new facility in the fall of 2017.
“We’re proud of what we’ve done and what the future holds for our company. That bodes well for Rapid City. Once that headquarters building goes up there, we’ll be able to add and expand and stay in that complex. We’ll have two wings and (can) add another wing if we want to,” Emery said.
Local and state economic officials are also thrilled to see Black Hills Corporation solidify its roots in western South Dakota.
Ben Snow, president of the Rapid City Economic Development Partnership, said Black Hills Corporation’s new headquarters complex will remake a key entry and exit point into Rapid City. There, it will join a new residential, commercial and professional office complex Buffalo Crossing, being built by developer Hani Shafai and Dream Design International, and the current reconstruction of the Mount Rushmore Road corridor, Rapid City’s southern gateway.
“Just imagine what type of positive impression we’ll leave with tourists traveling from Rapid City to Mount Rushmore,” Snow said.
“They’ll be saying, ’Wow, this place is really changing’ and it’s legit for a business climate,” Snow said. “That helps change Rapid City’s brand going forward.”
Pat Costello, commissioner of the Governor’s Office of Economic Development in Pierre, said the state’s favorable business climate made it easier for Black Hills Corporation to stay in western South Dakota, despite the majority of their customers being spread out over eight states.
“This sends the right message that the business environment in South Dakota is very good. They’re making a conscious decision to spend millions and millions of dollars to invest into their company in Rapid City and they plan to be there for a long time. We’re grateful for their decision,” Costello said.
Wrede still works close to home, but her travel opportunities, as a director in the corporate technology services department, have expanded along with the company’s growth.
She recently traveled to Arkansas to meet with the company’s newest employees coming on board after the SourceGas purchase.
“It’s been so much fun to meet these people, and it’s interesting to see that we have a lot of the same culture and just a good work ethic. I think we’ve been very fortunate there,” Wrede said.
She works for a very large company now, but she hopes staying in western South Dakota will mean maintaining a small-town feel.
“I’m hoping we can maintain that (small company) culture when we get into the new building,” Wrede said.
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Information from: Rapid City Journal, https://www.rapidcityjournal.com
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