Decade of the 70's
In February 1976, a two-for-one common stock split was declared. Also, during May, the Wyodak Plant interim construction financing was completed with 15 major banks in the United States. Permanent financing for the plant was being sought in the form of a leveraged lease. By action of the stockholders, eliminating their preemptive rights made it possible to proceed with a very successful offering of 250,000 shares of common stock. The Company anticipated the sale of $14 million of tax exempt pollution control bonds in early 1977 for equipment to be installed on the four generating plants.
The Company was preparing for a filing with the Public Utilities Commission of South Dakota requesting additional electric revenue to meet increased costs of capital investments and increased expenses. Rates approved by the Commission the past year allowed approximately 55 percent of the increase which the application requested. The ratchet provision in the Small General Service and General Service Electric rates in South Dakota, was eliminated by the Public Utilities Commission.
In 1976, it became more evident that the customers were showing an increased interest in all aspects of the electric industry. Because of higher rates, they wanted to know more about the Company and individual utilization of electric energy. The staff of the Company continued to present new public programs, showing customers how to make efficient use of electricity, peak sharing recommendations, conservation efforts and utilization of new products, and the economic situation which necessitated rate increases. The Power Use Department concentrated their efforts on the commercial class of customers. District Office personnel were on the front line with the customer, taking care of the many questions and inquiries about their electric service and what was happening. Managers and clerks in the district offices never gave up on the need to be courteous and helpful in their dealings with the customers.
By 1976 the estimated cost of the Wyodak Plant was increased to $235 million, up $10 million over the previous year's estimate.
Wyodak Resources Development Corp. on May 12, 1976, purchased from Homestake Mining Company certain real property interests including the fee title of Homestake to land overlying coal deposits controlled by Wyodak. Wyodak agreed to pay Homestake an aggregate principal sum of $4.4 million, which sum was represented by a ten-year promissory note to bear interest at the rate of 10 percent per annum. On May 13, Wyodak then sold to Kerr-McGee Coal Corporation for a cash consideration of $2.6 million, that portion of the land purchased from Homestake other than the land overlying coal deposits controlled by Kerr-McGee together with an undivided one-half interest in the real property purchased from Homestake other than the land overlying coal deposits controlled by Wyodak. As a result of these transactions, the adverse claim of Homestake against Wyodak's right to mine its coal deposits under the Home stake land and the expected objection by Homestake to Wyodak's application for a state mining permit had been eliminated. Wyodak then had under lease approximately 132 million tons of coal underlying land which Wyodak either owns or has acquired the right to mine from the surface owner.
Among the primary goals in 1977 were continuing efforts to create consumer and employee understanding of the economics which have forced electric rates to increase and to provide sufficient information so customers can make energy conservation decisions. Innovative programs were developed and presented through numerous public appearances, news media promotions, individual counseling and specially produced television specials dealing with off peak use, energy conservation, and rates. Company-wide employee meetings were held to develop understanding of the Company, electric industry, and consumer problems. The stronger link with employees resulted in improved answers to public questions.
Electric precipitators were installed on the Company's four existing plants at a cost of $14.4 million. They were designed to allow the Company to meet air quality standards.
The Public Service Commission of Wyoming entered its order in January of 1977 authorizing the Company to place into effect revised rate schedules which will produce additional revenues of approximately $265,000, a 16 percent increase. The PSC of Montana entered its order in January, 1977, authorizing the Company to place into effect revised rate schedules which will produce additional revenues of approximately $165,000 (27 percent increase).
The Company expected to file applications for a further rate adjustment in electric rates in South Dakota in March and in Montana and Wyoming during April. These continuing rate proceedings are the result of major expenditures for equipment to comply with environmental laws and regulations and increased costs for material, labor, and major construction.
In April and June of 1977 the Company raised $14.3 million through the sale of Pollution Control and Industrial Development Revenue Bonds. The bonds were financed at a rate of 6.625 percent on $9.9 million and 6.85 percent on $4.4 million.
The Public Utilities Commission of South Dakota approved a $3.8 million revenue increase for customers in South Dakota in September 1977. Application was filed in March of 1977. Public hearings were scheduled before the Wyoming PSC and Montana PSC.
Wyodak Resources Development Corp. received approval of its Mining Plan from the state of Wyoming. The Mining Plan covers the total reserves of approximately 178 million tons of coal. Wyodak Resources has both state and federal approval of its Mining Plan for the south portion of the coal reserves. The final federal approval for the North portion of the coal reserves had passed the federal staff review and was currently awaiting final clearing through the office of the Secretary of the Interior in Washington.
A Dividend Reinvestment Stock Purchase Plan for shareholders was adopted by the Board of Directors at the December 1977 meeting.
The Wyoming PSC approved a revenue increase of approximately $440,000 which became effective on October 1, 1977. An order from Montana PSC was expected soon. Wyoming and South Dakota Commissions approved a fuel adjustment provision that would protect revenue to pay for increasing fuel costs.
Authorization by the Board of Directors was granted to increase the membership of the Company Board of Directors from seven to nine members. Appointed were Lucile Aldrich, a housewife and active community worker, and John Howard, President and General Manager of Black Hills Packing Company. Mr. Jarvis Davenport, Director Emeritus, passed away September 25, 1977. He had provided 35 years of leadership to the Company. Barry D. Wilson was elected Treasurer and Controller.
Many conflicting interests around the subject of energy were combining to create confusion, frustration and significant problems. A few of the issues include inflation, environmental concerns, conservation, rate design, production technology, regulatory procedures and political philosophies. Throughout the history of the industry, unit costs had been declining and now that costs were increasing for reasons beyond the control of the industry, all kinds of special interest groups wanted to involve themselves in the decision making process. The National Energy Act debate being held in Washington showed the need for better understanding.