Related-Party Transactions:

6 Months Ended

Jun. 30, 2019

RELATED-PARTY TRANSACTIONS

Dividend to Parent

We did not record any dividends for the six months ended June 30, 2019. We recorded non-cash dividends to our Parent of $26 million and decreased the utility Money pool note receivable by $26 million for the six months ended June 30, 2018.

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:



	June 30, 2019		December 31, 2018
Accounts receivable from affiliates	$	5,102	$	8,119
Accounts payable to affiliates	$	24,737	$	25,804

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 June 30, 2019, the average cost of borrowing under the Utility Money Pool was 2.78%.

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

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



	Three Months Ended June 30,						Six Months Ended June 30,
	2019			2018			2019			2018
Net interest income (expense)	$	(198	)	$	(96	)	$	(471	)	$	(132	)

Notes payable to Parent

(a) Note bears interest at 4.51%, expires December 31, 2019, and is eligible for annual renewal. Interest payable related to this note was $0.2 million as of June 30, 2019.

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



	Three Months Ended June 30,				Six Months Ended June 30,
	2019		2018		2019		2018
Revenue:
Energy sold to Cheyenne Light	$	340	$	501	$	914	$	1,204
Rent from electric properties	$	895	$	908	$	1,791	$	1,817
Horizon Point shared facility revenues	$	3,006	$	2,783	$	6,013	$	5,552

Fuel and purchased power:
Purchases of coal from WRDC	$	3,216	$	4,249	$	7,873	$	8,316
Purchase of excess energy from Cheyenne Light	$	41	$	82	$	173	$	168
Purchase of renewable wind energy from Cheyenne Light - Happy Jack	$	342	$	381	$	877	$	1,022
Purchase of renewable wind energy from Cheyenne Light - Silver Sage	$	611	$	696	$	1,594	$	1,789
Gas transportation service agreement with Cheyenne Light for firm and interruptible gas transportation	$	75	$	96	$	151	$	192

Operations and maintenance:
Corporate support services and fees from Black Hills Service Company ^(a)	$	9,451	$	7,604	$	19,642	$	15,210
Wygen III ground lease with WRDC	$	247	$	241	$	493	$	481

(a) Increase in 2019 was primarily due to higher outside service expenses and higher employee costs driven by labor and benefits.

June 30, 2019

December 31, 2018

Money pool notes payable

BLACK HILLS POWER INC 10-Q