By Denver Business Journal

Energy company Black Hills Corp. says its Colorado subsidiaries have begun construction of twin gas-fired power projects in Pueblo after receiving a state air permit for the projects.

Rapid City, S.D.-based Black Hills (NYSE: BKH), which has a regional office on Golden, said the state Department of Public Health and Environment issued the permit to its subsidiaries, Black Hills Energy-Colorado Electric and Black Hills Colorado IPP.

Black Hills hopes to have the Black Hills Pueblo Airport Generation Station ready for operation by the end of 2011. The plants will serve 93,300 southern Colorado customers of Black Hills Energy-Colorado Electric, the company said.

The company previously said the plants will generate about 200 megawatts of power and cost $240 million to $265 million to build.

"We are on track to have both plants ready for commercial operation by the end of 2011 as planned," Black Hills chairman, president and CEO David Emery said in a statement Thursday. "Most of the major equipment for the projects has been purchased, contracts have been awarded for the construction of water and gas lines, a water supply agreement has been executed, the annexation agreement has been approved by the City of Pueblo and the process to select the remaining contractors is well underway."

Construction of the plants will create up to 400 local jobs, and plant operation will involved 15 to 20 jobs, Black Hills said.

Black Hills' power-utility business serves 763,300 natural gas and electricity customers in Colorado, Iowa, Kansas, Montana, Nebraska, South Dakota and Wyoming. It also generates wholesale electricity and produces natural gas, oil and coal.

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