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Black Hills Power And Cheyenne Light, Fuel & Power Seek Approval To Build New Generation Facility

Stocks in this article: BKH

RAPID CITY, S.D., Nov. 1, 2011 /PRNewswire/ -- Black Hills Corp. (NYSE: BKH) utility subsidiaries Black Hills Power and Cheyenne Light, Fuel & Power announced today that they have filed for a certificate of public convenience and necessity with the Wyoming Public Service Commission to construct and operate a new $237 million natural-gas-fired electric generation facility within Cheyenne city limits. The proposed facility will include one simple-cycle combustion turbine unit with a net capacity of approximately 37 megawatts that will be wholly owned by Cheyenne Light. It will also include one combined-cycle unit with a net capacity of approximately 95 megawatts that will be jointly owned by Cheyenne Light and Black Hills Power, with Cheyenne Light owning 40 megawatts and Black Hills Power owning 55 megawatts.

"This joint project represents a win-win for our customers in the Black Hills area and Cheyenne," said David R. Emery, chairman, president and chief executive officer. "Black Hills Power must plan for future compliance as federal environmental regulatory requirements will impact some of our older coal-fired generating facilities, and Cheyenne Light must prepare for the growing electricity demand. This jointly owned generation facility allows each utility to cost-effectively serve the changing electricity needs of our customers."

If approved by the Wyoming Public Service Commission, construction would begin in 2012, and the facility would begin serving customers in 2014.

Cheyenne Light had previously filed a CPCN with the Wyoming Public Service Commission in August to construct three simple-cycle combustion turbine units with a total gross capacity of 120 megawatts at an estimated cost of $158 million. This application is being withdrawn and replaced with the joint application described in this release. After Cheyenne Light filed its original CPCN in August, Black Hills Power completed its resource plan, which forecasted the future electricity needs of its customers and determined the most cost-effective generation resources to meet those needs. Modifying Cheyenne Light's planned generation facility to also meet the needs of Black Hills Power provides a cost-effective means to meet the needs of both utilities.

The combined-cycle and simple-cycle turbines will be fueled by natural gas, which will position Black Hills Power and Cheyenne Light to meet current and future U.S. Environmental Protection Agency emission regulations and policies and diversify Black Hills Power's and Cheyenne Light's generation portfolios. Additionally, both units are capable of backing up intermittent renewable generation resources, such as wind, as needed in the future.

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