PUEBLO, Colo., Dec. 16, 2011 /PRNewswire/ -- Black Hills Corp. (NYSE:BKH) utility subsidiary Black Hills Energy – Colorado Electric announced plans today to respond to an administrative law judge's initial recommendation to the Colorado Public Utilities Commission to deny the utility's request for a certificate of public convenience and necessity. Black Hills Energy is seeking approval to construct an LMS100 natural-gas-fired turbine to replace its W.N. Clark facility being retired in compliance with the Colorado Clean Air – Clean Jobs Act, also known as House Bill 1365.
On March 14, 2011, Black Hills Energy filed an application for a CPCN to construct the 88 megawatt LMS100 natural-gas-fired turbine in accordance with the order issued by the Colorado PUC on Dec. 15, 2010. The Colorado PUC's order also approved the retirement of the company's coal-fired W.N. Clark facility and granted a "presumption of need" for 42 MW to replace the Clark capacity, which the utility has the right to own as granted by the Clean Air – Clean Jobs Act.
On Oct. 4, 2011, Black Hills Energy filed a settlement agreement reached with the Colorado Office of Consumer Counsel, Board of Water Works of Pueblo, Fountain Valley Authority, Noble Energy, Inc. and EnCana Oil & Gas, Inc. to construct and operate the LMS100 and own 42 MW of the turbine's output. The remaining 46 MW of capacity would be competitively sold to a third party, and a seven-year purchase power agreement would be executed whereby Black Hills Energy would use the sold capacity to serve its approximately 94,000 customers in southern Colorado. After seven years, Black Hills Energy would purchase the 46 MW and acquire full ownership of the turbine. A hearing on the settlement was held on Oct. 25, 2011.If the Colorado PUC adopts the administrative law judge's recommended decision, the settlement would be rejected, and the utility's application would be denied. Black Hills Energy plans to file a response to the recommended decision in early January, consistent with the commission's rules and orders regarding taking exception to the recommended decision.