Basin Electric Power Cooperative
09/18/2026 | Press release | Distributed by Public on 09/18/2026 09:51
Material Impairments (Form 8-K)
Item 2.06 Material Impairments
On September 15, 2026, the Board of Directors (the "Board") of Dakota Gasification Company ("Dakota Gas"), a wholly owned subsidiary of Basin Electric Power Cooperative ("Basin Electric"), approved a 10-year financial forecast (the "forecast") for Dakota Gas. The forecast included projections that Dakota Gas may not continue its current commercial operations through 2047, the end of the previously estimated useful life of Dakota Gas's long-lived asset group, consisting primarily of property, plant, and equipment. The forecast and certain long-term cash flow projections estimated that Dakota Gas will not generate sufficient future cash flows to recover the carrying value of its property, plant and equipment.
Based on the Board's approval of the forecast, Basin Electric has determined that a material pre-tax non-cash impairment charge is required under U.S. generally accepted accounting principles for the fiscal quarter ending September 30, 2026. Basin Electric currently estimates that the charge will be approximately $400 million to $600 million for the fiscal quarter ending September 30, 2026. Basin Electric continues to complete its analysis and valuation procedures, and the actual amount of the impairment charge may differ, potentially materially, from this estimate. Basin Electric is seeking approval from the Rural Utilities Service for regulatory accounting treatment of the charge with a proposed recovery period of up to 20 years.
Basin Electric does not expect the impairment charge to result in material future cash expenditures or have a material effect on Basin Electric's results of operations, financial condition, cash flows or liquidity. In addition, Basin Electric does not expect that the impairment will have a material effect on the compliance by it or Dakota Gas with their respective financial covenants.
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