Related-Party Transactions:

9 Months Ended

Sep. 30, 2018

RELATED-PARTY TRANSACTIONS

Non-Cash Dividend to Parent

We recorded non-cash dividends to our Parent of $36 million and $32 million for nine months ended September 30, 2018 and September 30, 2017, respectively, and changed the utility Money pool note by $36 million and $32 million for the nine months ended September 30, 2018 and September 30, 2017, respectively.

Receivables and Payables

We have accounts receivable and accounts payable balances related to transactions with other BHC subsidiaries. The balances were as follows (in thousands) as of:



	September 30, 2018		December 31, 2017
Accounts receivables from affiliates	$	6,373	$	5,664
Accounts payable to affiliates	$	22,939	$	25,653

Money Pool Notes Receivable and Notes Payable

We participate in the Utility Money Pool Agreement (the Agreement). Under the Agreement, we may borrow from the pool; however the Agreement restricts the pool from loaning funds to BHC or to any of BHC’s non-utility subsidiaries. The Agreement does not restrict us from paying dividends to BHC. Borrowings under the Agreement bear interest at the weighted average daily cost of our parent company’s external borrowings as defined under the Agreement, or if there are no external funds outstanding on that date, then the rate will be the daily one-month LIBOR plus 1.0%. At September 30, 2018, the average cost of borrowing under the Utility Money Pool was 2.60%.

We had the following balances with the Utility Money Pool (in thousands) as of:



	September 30, 2018		December 31, 2017
Money pool notes payable	$	13,888	$	13,397

Our net interest income (expense) relating to balances with the Utility Money Pool was as follows (in thousands):



	Three Months Ended September 30,					Nine Months Ended September 30,
	2018			2017		2018			2017
Net interest income (expense)	$	(75	)	$	53	$	(207	)	$	269

Other related party activity was as follows (in thousands):



	Three Months Ended September 30,				Nine Months Ended September 30,
	2018		2017		2018		2017
Revenue:
Energy sold to Cheyenne Light	$	311	$	361	$	1,515	$	1,866
Rent from electric properties	$	908	$	935	$	3,025	$	2,805
Horizon Point shared facility revenues	$	2,826	$	—	$	8,078	$	—

Fuel and purchased power:
Purchases of coal from WRDC	$	4,161	$	4,054	$	12,477	$	11,386
Purchase of excess energy from Cheyenne Light	$	193	$	208	$	361	$	324
Purchase of renewable wind energy from Cheyenne Light - Happy Jack	$	262	$	199	$	1,284	$	1,174
Purchase of renewable wind energy from Cheyenne Light - Silver Sage	$	582	$	351	$	2,371	$	2,007

Gas transportation service agreement:
Gas transportation service agreement with Cheyenne Light for firm and interruptible gas transportation	$	96	$	99	$	288	$	297

Corporate support:
Corporate support services and fees from Parent, Black Hills Service Company and Black Hills Utility Holdings ^(a)	$	9,836	$	6,626	$	25,046	$	20,346

____________________


(a)	The increase for the three and nine months ended September 30, 2018 is driven by Horizon Point shared facility expenses, higher allocation of employee costs and interest expense.

Horizon Point Agreement

We have a shared facility agreement among South Dakota Electric, Black Hills Service Company, and Black Hills Utility Holdings where there is a cost allocation for the use of the Horizon Point facility that is owned by South Dakota Electric. This cost allocation includes the recovery of and return on allocable property and recovery of incurred administrative service expenses for the operation and maintenance of the Horizon Point facility.

BLACK HILLS POWER INC 10-Q