Black Hills : 2023 Corporate Sustainability Report

RESILIENT. RELIABLE. READY.

s u s t a i n a b i l i t y r e p o r t

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CONTENTS

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INTRODUCTION LETTERS

ABOUT THIS

REPORT

SUSTAINABILITY STRATEGY

COMPANY

PROFILE

ENVIRONMENTAL STEWARDSHIP

SOCIAL

IMPACT

SUSTAINABLE GROWTH

CORPORATE GOVERNANCE

APPENDIX

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READY TO MAKE TOMORROW EVEN BETTER THAN TODAY     

1 INTRODUCTION 2 ABOUT THIS 3 LETTERSREPORT

For over 140 years, we've had the privilege of serving rural towns and growing cities across our service territory. We've championed these communities and evolved our organization by never losing sight of our responsibility to provide safe, reliable and cost- effective energy.

Today, we proudly serve 1.34 million customers in eight states, remaining mindful of our broader environmental, economic and social impacts on all our stakeholders. Our mission of improving life with energy means we must be ready to make tomorrow even better than today. We strongly believe that multiple energy sources, working together, will provide the solutions for a cleaner and resilient energy future. 

We're proud that we've reduced our electric utilities' greenhouse gas emissions intensity by nearly one-third since 2005 and we're well on our way to achieving our reduction goals of 40% by 2030 and 70% by 2040. Additionally, we've reduced reported natural gas distribution system emissions by 27% since 2022. We accomplished this by replacing unprotected steel pipelines, reducing transfer station leaks and realizing data integrity improvements - making considerable progress towards our 2035 net zero target.

Our winning aspiration is to be the trusted energy partner across our growing footprint. Our commitment to our customers fuels this aspiration. In 2023, our economic impact totaled nearly $1.35 billion, with $6.1 million in community support. That included $1.6 million in support of hometown charities, contributions and sponsorships to nonprofits, United Way, energy assistance, in-kind donations, scholarships and investments in the planting of trees throughout our communities.

We know that our continued support of our communities helps attract investment, stimulate innovation and create jobs that all contribute to the stability and growth of the cities, towns and businesses we live and work in every day. Giving back is part of our culture, as shown by our nearly 2,900 employees who contributed $495,000 to more than 45 United Way organizations across our service territory, which was matched at 25% by our corporate foundation.

It's our nearly 2,900 coworkers who ultimately make it possible to deliver upon our mission and winning aspiration. Whether by working safely every day, weathering the storm to keep energy flowing or finding creative solutions to help a customer, our team is the lifeblood of this organization. We remain focused on retaining and attracting a talented, engaged and thriving organization that is people-powered and purpose driven.

In sharing our 2023 Corporate Sustainability Report, we ask that you join us as we work to make tomorrow better than today. We take great pride in delivering safe, reliable, cost-effective and cleaner energy solutions and we thank you for your continued interest in Black Hills Energy as we progress along our journey.

Sincerely,

Linden "Linn" R. Evans

President and CEO

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MAKING STRIDES IN SUSTAINABILITY

1 INTRODUCTION 2 ABOUT LETTERSREPORT

As we close the chapter on 2023, it's natural to reflect on progress and the accomplishments of the last year. As you'll see from this report, there were many, and we're proud to share these updates with you. However, looking back will not get us where we need to go and so we're committed to also providing transparency in the road ahead.

We're four years out from establishing our electric utility emission intensity goals of reaching a 40% reduction by 2030 and 70% by 2040, and two years post announcing our natural gas distribution system target of net zero by 2035. We'll have many decisions to make and work to do, but we're well positioned to achieve our goals and proud of the progress we've made to advance our overall sustainability strategy.

Progress comes in many forms, some as large projects and exciting innovations, while others look more like the steady, small improvements to run a reliable, safe and effective energy delivery system made by our team every day. No matter which forms they take, this progress wouldn't be possible without the coordinated efforts of teams across our company and strong partnerships with our many stakeholders.

Highlights from 2023 included:

• We're transitioning to a cleaner energy future through the addition of low or zero-carbon generation sources. Our Colorado Clean Energy Plan proposes to add 400 MW of renewable energy and battery storage, which will achieve an 89% reduction in GHG emissions by 2030.
• Through natural gas pipe replacement, reductions in transfer station leaks and data integrity improvements, we've reduced reported natural gas distribution system GHG emissions by 27% since 2022. This is significant progress towards our net zero by 2035 target and a continued benefit to the safety and reliability of our natural gas system.

• The launch and expansion of Green Forward, our voluntary renewable natural gas attribute and carbon offset program, provides customers with a cost-effective path to offset up to 100% or more of the emissions associated with their own natural gas carbon footprint. Green Forward is now available to eligible residential and commercial customers in all six of our natural gas utilities.
• Innovative partnerships are key to creating sustainable solutions. We're proud to have received a Wyoming Energy Authority grant along with Babcock & Wilcox to partner on a first-of-its kind pilot hydrogen plant, which will convert coal to clean hydrogen at our Gillette, Wyoming, energy complex.

Thank you for taking time to read about this past year's strides in sustainability and for being a stakeholder in our shared future. We strive to be better every day and make positive, viable impacts for our stakeholders, communities, company and the environment. By doing so, we know we can deliver on our mission to improve life with energy.

Sincerely,

Katie Fleming

Chief Sustainability Officer

Director of Strategic Planning and Communications

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ABOUT THIS

REPORT

Our corporate sustainability report provides insight and transparency into the environmental, social and economic impacts of Black Hills Energy. This voluntary report is informed by sustainability reporting guidelines and strives to provide relevant insights into our business and how we view sustainability.

Black Hills Energy is driving progress toward the United Nations (UN) Sustainable Development Goals (SDGs) within our company and the communities we serve. Throughout this report, we have mapped our business activities to the SDGs based on direct and indirect impact within our company and in the communities we serve.

Reporting framework

This report was developed using guidance from the Edison Electric Institute (EEI) and the American Gas Association (AGA) Environmental, Social and Governance (ESG) qualitative disclosure and the Global Reporting Initiative (GRI). In addition to our corporate sustainability report, we also disclose through the following ESG frameworks, which can be found at

blackhillsenergy.com/sustainability:

• EEI quantitative report
• AGA quantitative report
• Natural Gas Sustainability Initiative (NGSI) protocol
• Sustainability Accounting Standards Board (SASB)
• Task force on Climate Related Financial Disclosures (TCFD)

Additional information

Several of Black Hills Corp.'s subsidiaries do business as Black Hills Energy. As this trade name is the commonly recognized name by many of our customers and shareholders, Black Hills Energy and Black Hills Corp. are used interchangeably throughout this report for ease of reference. Please note, the data supporting the disclosures contained in this report is representative of all subsidiary companies, not just those subsidiaries who operate under the trade name.

Black Hills Energy is committed to sharing information about our business and operations that we know is important to our stakeholders. We have issued new and updated reports, which can be found atblackhillsenergy.com/sustainability. Additional financial information is posted atir.blackhillscorp.com.

We welcome your feedback

As you review our corporate sustainability report, we encourage you to provide us feedback. Please send any comments to [e-mail]. Thank you.

Forward-looking statements

This report includes "forward-looking statements" as defined by the Securities and Exchange Commission, or SEC. We make these forward-looking statements in reliance on the safe harbor protections provided under the Private Securities Litigation Reform Act of 1995. All statements, other than statements of historical facts, included in this report that address activities, events or developments that we expect, believe or anticipate will or may occur in the future, are forward-looking statements, which are subject to various risks and uncertainties. Factors that could cause actual results to differ from those in the forward-looking statements may accompany the statements themselves.

These forward-looking statements are based on assumptions which we believe are reasonable based on current expectations and projections about future events and industry conditions and trends affecting our business. Our business and any offering may be influenced by many factors that are difficult to predict, involve uncertainties that may materially affect actual results and are often beyond our ability to control. These factors include, but are not limited to, our ability to deliver safe, reliable and cost-effective energy to our customers.

Whether actual results and developments will conform to our expectations and predictions is subject to a number of risks and uncertainties that, among other things, could cause actual results to differ materially from those contained in the forward- looking statements, including without limitation, the risk factors described in Items 1A of our 2023 Annual Reporton Form10-Kand other reports that we file with the SEC from time to time.

New factors that could cause actual results to differ materially from those described in forward-looking statements emerge from time to time, and it is not possible for us to predict all such factors, or the extent to which any such factor or combination of factors may cause actual results to differ from those contained in any forward-looking statement. We assume no obligation to update publicly any such forward-looking statements, whether as a result of new information, future events or otherwise.

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SUSTAINABILITY STRATEGY

We are excited to announce significant advancements in our decarbonization journey. We have continued to achieve progress toward our goal to reduce electric utility greenhouse gas

ELECTRIC EMISSIONS	NATURAL GAS EMISSIONS
40% by 2030
Net Zero by 2035
70% by 2040

Goals and progress

We've reduced electric utility emissions by nearly one-third since 2005 through the addition of renewables and natural gas and retirement of aging coal plants. Our natural gas utility reported emissions have reduced 27% since 2022, making significant progress towards our net zero by 2035 target.

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emission intensity 40% by 2030 and 70% by 2040, as well as our natural gas utility goal to be net zero for our distribution system by 2035.

Commitment to sustainability

At Black Hills Energy, our mission of improving life with energy means we must be ready to make tomorrow even better than today. That's why we are committed to creating a cleaner energy future that builds upon our responsibility to provide safe, reliable and cost-effective energy that improves our customers' lives. By investing in the success of our employees, continual innovation, thoughtful utilization of resources and keeping people at the core of our decision making, we are dedicated to the sustainability of our company, communities and planet.

ESG strategy and management

Black Hills Energy is continuously strengthening our sustainability strategy. 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 of directors oversees ESG, with management leadership from our CEO and executive ESG Steering Committee, our dedicated ESG and sustainability department and our cross-functional sustainability working group.

Risks and opportunities

We recognize the inherent role our business plays in the well-being of our planet and communities. Please see Black Hills Corp.'s 2023 Form10-Kand our Task Force onClimate-relatedFinancial Disclosuresfor a discussion on ESG risks and opportunities, including climate change, policy and regulatory developments, emerging technology and customer growth.

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STAKEHOLDER ENGAGEMENT

We value our stakeholders and the diverse perspectives they offer. We engage with our stakeholders in a variety of methods and frequencies to both share information and receive feedback. The table on the right outlines engagement channels by stakeholder group.

Our stakeholders include:	Engagement channels:
	• Websites	• Text messaging
	• Market research	• Social media
	• Customer feedback (surveys, online comments,	• Paid media placement
Customers	web chat, phone calls, email)	• Citizen advisory councils
	• Billings statements, inserts and messages	• Energy efficiency programs
	• Direct mail and letters	• Business account representatives
	• Emails
	• Support of community events and programs	• Ongoing dialogue
Communities	• First responder training	• Infrastructure project planning
	• Volunteerism
	• Company huddles	• Surveys
Employees	• Intranet	• Employee resource groups
• Training events	• Performance reviews
	• Team meetings	• Email newsletters
	• Total Rewards statements
	• Earnings calls and presentations	• Investor/industry conferences
Investors and shareholders	• Annual shareholders meeting	• Investor relations website
	• News releases	• Analyst meetings
Regulators	• Direct communication with staff/	• Regulatory filings
consumer councils	• Routine outreach
Local, state and federal government	• Franchise agreements	• Public meetings/hearings
Suppliers	• Supplier meetings and onboarding	• Code of Business Conduct
• Supplier portal communication	• Surveys
Banks and rating agencies	• Ongoing dialogue	• Quarterly updates
Non-governmental organizations	• Presentation at, and participation in,	• Direct outreach
organizations' meetings
Unions	• Annual benefit meetings	• Labor management meetings
• Ongoing dialogue

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ENVIRONMENTAL, SOCIAL

AND GOVERNANCE PRIORITIES

Based on our stakeholders' expectations and our company's needs, we have four ESG pillars that form the basis of our reporting strategy and business execution. Each section of this report explores topics in each pillar that are material to our stakeholders and company.

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ENVIRONMENTAL STEWARDSHIP

Creating a cleaner energy future that provides safe, reliable and cost-effective energy.

SOCIAL RESPONSIBILITY

Keeping people at the center of our decision making - our employees, customers and communities.

SUSTAINABLE

GROWTH

Delivering long-term value to our customers, communities and shareholders.

CORPORATE

GOVERNANCE

Developing and executing policies and principles that lay a strong groundwork for sustainable success.

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GROWTHGOVERNANCE

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COMPANY

PROFILE

Black Hills Corp. (NYSE: BKH) is 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 1.34 million electric and natural gas utility customers in 826 communities in Arkansas, Colorado, Iowa, Kansas, Montana, Nebraska, South Dakota and Wyoming. Employees partner to produce results that improve life with energy.

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Improving life with energy

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To be the energy partner of choice

We are composed of regulated natural gas and electric utilities which are supported by vertically integrated power generation and mining businesses. We operate one of the largest natural gas infrastructure systems in the country, across eight geographically diverse states.

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Agility

We embrace change and challenge ourselves to adapt quickly to opportunities.

Communication

Consistent, open and timely communication keeps us focused on our strategy and goals.

Creating Value

We are committed to creating exceptional value for our shareholders, employees, customers and the communities we serve … always.

Customer Service

We are committed to providing a superior customer experience every day.

Integrity

We hold ourselves to the highest standards based on a foundation of unquestionable ethics.

Leadership

Leadership is an attitude. Everyone must demonstrate the care and initiative to do things right.

Partnership

Our partnerships with shareholders, communities, regulators, customers and each other make us all stronger.

Respect

We respect each other. Our unique talents and diversity anchor a culture of success.

Safety

We commit to live and work safely every day.

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ABOUT US

Service territory map	Electric utility customers
Electric Utilities	Mine	COLORADO
Natural Gas Utilities	Power Generation	100,907 customers
Electric and	Wind Generation	SOUTH DAKOTA
Natural Gas Utilities	Company Headquarters	76,479 customers
	Renewable Natural Gas	WYOMING
	Interconnection
	44,954 customers

Natural gas utility customers

ARKANSAS

186,216 customers

COLORADO 211,155 customers

IOWA

163,281 customers

KANSAS

119,407 customers

NEBRASKA

302,167 customers

WYOMING

134,167 customers

					319
Communities
served
	119	133
100
			68				56
						29
				2
AR	CO	IA	KS	MT	NE	SD	WY

Customers are listed by state, rather than by state utility as referenced in Black Hills Corp.'s 2023 Form 10-K.

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