Black Hills to suspend coal units before retiring them

Black Hills Corp. (NYSE: BKH) said Aug. 6 that utility subsidiaries Black Hills Energy-Colorado Electric and Black Hills Power are suspending operations at some of the company’s older coal-fired and natural-gas-fired facilities this year.

Colorado Electric’s W.N. Clark coal-fired power plant in Cañon City, Colo. and natural-gas-fired steam units 5 and 6 in Pueblo, Colo. are set to suspend operations at the end of the year. Black Hills Power’s coal-fired unit at the Ben French plant in Rapid City, S.D., is scheduled to suspend operations on Aug. 31. Suspension of operations requires the units to be available to generate electricity during peak demand periods.

“We are committed to providing our customers with reliable and low-cost energy,” said David Emery, chairman, president and CEO of BHC. “After a thorough analysis of new environmental regulations, coupled with changing market and operating conditions, we identified an opportunity to make changes to our resource portfolio by suspending operations at some of our older generating facilities in advance of permanently retiring those plants.”

To comply with environmental standards, including new U.S. Environmental Protection Agency regulations and Colorado’s Clean Air-Clean Jobs Act, Black Hills Power and Black Hills Energy–Colorado Electric plan to permanently retire 124 MW of coal-fired facilities in Colorado, South Dakota, and Wyoming. Retrofitting the facilities with the emissions controls to meet current regulations is not economical. The plants to be retired and projected retirement dates include:

  • the 42-MW coal-fired W.N. Clark plant on Dec. 31, 2013;
  • the 25-MW coal-fired unit at the Ben French power plant, as well as the 34.5 MW Osage and 22 MW Neil Simpson 1 coal-fired plants on March 21, 2014.

On July 30, Black Hills Energy–Colorado Electric filed a new electric resource plan with the Colorado Public Utilities Commission to address customers’ energy needs during the next six years. After a thorough analysis of available options, and considering the Colorado PUC’s denial of the company’s 2011 request to construct an 88-MW natural-gas-fired turbine, Black Hills Energy–Colorado Electric proposed building a 40-MW simple-cycle, natural-gas-fired turbine, which would begin operating in 2016, to replace the electricity produced by W.N. Clark.

On July 31, Black Hills Power received certificate of public convenience and necessity approval to build the Cheyenne Prairie Generating Station, a new natural-gas-fired generating plant. The new facility will account for the capacity deficit from the three coal-fired plants Black Hills Power is retiring. The new plant will be jointly owned with Black Hills Power’s sister utility, Cheyenne Light, Fuel & Power in Cheyenne, Wyo., allowing Black Hills Power to share capital costs. The new facility will begin operating in late 2014.

About Barry Cassell 20414 Articles
Barry Cassell is Chief Analyst for GenerationHub covering coal and emission controls issues, projects and policy. He has covered the coal and power generation industry for more than 24 years, beginning in November 2011 at GenerationHub and prior to that as editor of SNL Energy’s Coal Report. He was formerly with Coal Outlook for 15 years as the publication’s editor and contributing writer, and prior to that he was editor of Coal & Synfuels Technology and associate editor of The Energy Report. He has a bachelor’s degree from Central Michigan University.