RESILIENT. RELIABLE. READY.

SUSTAINABILITY

REPORT 2022

CONTENTS1 INTRODUCTION

LETTERS

ABOUT THIS

2 REPORT

3

SUSTAINABILITY

STRATEGY

4

5

6

7

8

9

COMPANY

PROFILE

ENVIRONMENTAL STEWARDSHIP

SOCIAL

IMPACT

SUSTAINABLE GROWTH

CORPORATE GOVERNANCE

APPENDIX

RESILIENT. RELIABLE. READY.

1 INTRODUCTION 2 ABOUT LETTERSREPORT

Nearly seven generations have relied on us for almost 140 years, both in good times and challenging ones. We're the backbone of hundreds of small towns and growing cities, providing the energy to support families and businesses across our eight-state footprint. Building on this legacy of service, we remain focused on meeting the energy needs of our more than 1.33 million customers, while being mindful of our business' broader economic, social and environmental impacts.

Now more than ever, our ability to remain resilient, reliable and ready drives us to meet the needs of our customers today and in the future. These three words are emblematic of the unwavering commitment our 3,000 Black Hills Energy team members have to provide the safe, reliable, and cost-effective electricity and natural gas our customers depend on, and to do so in a sustainable way.

And so, it's a privilege to share our 2022 Corporate Sustainability Report, which details our environmental, social and governance achievements and progress. In addition, it provides transparency and insight into how we are evolving our business today to provide a cleaner energy future.

We are resilient and reliable

The reliability and resiliency of our infrastructure are more critical than ever, with growing customer demand, the ongoing clean energy transition and an increasingly global energy market. Resiliency and reliability go hand-in-hand with safety, especially in the cold weather climates our company serves, and our priority is keeping our customers comfortable and safe. We are proud to provide industry-leading electric reliability to our customers, and we will continue to focus on a diversified energy mix to maintain resiliency through extreme weather events.

We are ready

Black Hills Energy is ready to create a better tomorrow. We have set challenging yet realistic goals for delivering cleaner energy. We've reduced our electric utilities' greenhouse gas emissions intensity by one-third since 2005 and have a clear path to achieve

our reduction goals of 40% by 2030 and 70% by 2040.

Last year, we increased our gas distribution utilities emissions target to Net Zero by 2035. We will achieve our Net Zero target through ongoing infrastructure investment, damage prevention and integration of low carbon fuels.

Transitioning to cleaner energy requires consideration of not only reliability and reliance, but also customer costs. We understand the impact rising costs - from groceries to gasoline - have on our customers and how they can affect a family budget. We keep customer impacts top of mind when planning the programs intended to add value to the communities we serve, balancing long-term benefits with near-term impacts.

In 2022, our community support totaled $6.1 million. That included $1.6 million in support of hometown charities and nearly $1.7 million of support to economic development organizations working to strengthen our communities. Part of that assistance also came from our employees, who contributed $604,000

to more than 50 United Way organizations across our service territory, which was matched at 25% by our corporate foundation. Employees also gave $380,000 to Black Hills Cares, our in-house program that provides financial assistance to customers in need, which we matched dollar-for-dollar.

As you read this report, you'll learn more about us, our commitment to sustainability, and our efforts to make a positive impact in everything we do to make tomorrow even better than today. We are very proud of the accomplishments we've made to advance a cleaner energy future and we are excited to continue to share our sustainability journey with you.

Sincerely,

Linden "Linn" R. Evans

President and CEO

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SUSTAINABILITY AT BLACK HILLS ENERGY

1 INTRODUCTION 2 ABOUT LETTERSREPORT

A responsible energy transition requires hard work, persistence and excellent long-term planning. As Linn's letter shared, Black Hills Energy is resilient, reliable and ready.

Just three years out from setting our electric utility emission intensity goals to reach a 40% reduction by 2030 and 70% by 2040, and one year past announcing our natural gas distribution system target of net zero by 2035, we know we're still in the early stages of our journey. We'll have many decisions and work to accomplish in the future, but we're proud of the steps we take every day and the progress we've made over the last year to advance our sustainability strategy. Our people-centered approach focuses on:

Investing in a reliable, resilient and cleaner electric grid.

  • Over the last year, we've progressed on our preferred resource plans and currently plan to add 520 MW of new renewable energy and battery storage by 2030. The 80 MW Fall River Solar project is also scheduled to come into service in 2023.
  • In addition to renewable energy, we're continually evaluating ways to utilize reliable baseload energy in new and lower carbon ways. Last year, we completed a hydrogen blending feasibility study for our Cheyenne Prairie natural gas generation facility and are now working on a feasibility analysis for a coal to hydrogen project.
  • To expand access to renewable energy resources and provide long-term price stability for our customers' growing energy needs, we're investing in transmission opportunities. Our 260-mile transmission project, Ready Wyoming, received a certificate of public convenience and necessity last year and is scheduled to begin construction in 2023.

Advancing the sustainable use of the natural gas system and low carbon fuels.

  • In 2022, we successfully filed and received approval for Green Forward, a voluntary renewable natural gas (RNG) attribute and carbon offset program, providing customers with a cost- effective path to offset up to 100% or more of the emissions associated with their own natural gas carbon footprint.
  • To further leverage our experience building RNG interconnections, we also established a new, non- regulated business, Black Hills Energy Renewable Resources. This new business helps drive company growth by investing capital into infrastructure that provides a pathway for RNG to get to the market.
  • Our damage prevention strategy continues to advance, now using measures like artificial intelligence to predict risks before they happen. By operating a highly efficient gas system, we're improving system safety and reducing emissions.

Thank you for your interest in Black Hills Energy and our progress in sustainability. We're committed to reliably and cost-effectively moving to cleaner energy, driving long-term growth for our company and communities, and delivering for our stakeholders for years to come.

Sincerely,

Katie Fleming

Chief Sustainability Officer

Director of Strategic Planning and Communications

THIS 3 STRATEGYSUSTAINABILITY 4 PROFILECOMPANY 5 STEWARDSHIPENVIRONMENTAL 6 IMPACTSOCIAL 7 GROWTHSUSTAINABLE 8 CORPORATEGOVERNANCE 9 APPENDIX

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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.

Reporting framework

This report was developed using guidance from the Edison Electric Institute (EEI) and the American Gas Association (AGA) ESG quantitative 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 www.blackhillsenergy.com/sustainability:

Additional information

Several of Black Hills Corporation'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 Corporation 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 at www.blackhillsenergy.com/sustainability. Additional financial information is posted at ir.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 investorrelations@blackhillscorp.com. 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 2022 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.

1 INTRODUCTION 2 ABOUT THIS 3 SUSTAINABILITY 4 COMPANY 5 ENVIRONMENTAL 6 SOCIAL 7 SUSTAINABLE 8 CORPORATE 9 APPENDIX

LETTERSREPORTSTRATEGYPROFILE STEWARDSHIP IMPACT GROWTHGOVERNANCE

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Attachments

Disclaimer

Black Hills Corporation published this content on 30 June 2023 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 30 June 2023 21:53:19 UTC.