Black Hills readies new coal shutdown plan in Colorado

On Aug. 6, Black Hills Power and Colorado Electric announced plans to suspend plant operations at some of their older coal-fired and natural gas-fired facilities, parent Black Hills Corp. noted in its Nov. 8 Form 10-Q statement.

Those planned suspensions, with capacities and fuels mentioned, cover:

  • Osage, Black Hills Power, 34.5 MW, coal, suspended October 2010, retire March 21, 2014;
  • Ben French, Black Hills Power, 25 MW, coal, suspended August 2012, retire March 21, 2014;
  • Neil Simpson I, Black Hills Power, 21.8 MW, coal, no suspend date, retire March 21, 2014;
  • W.N. Clark, Colorado Electric, 40 MW, coal, suspend Dec. 31, 2012, retire Dec. 31, 2013;
  • Pueblo Unit 5, Colorado Electric, 9 MW, gas, suspend Dec. 31, 2012, retirement date not decided yet; and
  • Pueblo Unit 6, Colorado Electric, 20 MW, gas, suspend Dec. 31, 2013, retirement date to be determined.

On July 30, Colorado Electric filed its Electric Resource Plan with the Colorado Public Utilities Commission seeking to develop and own replacement capacity for the retirement of the coal-fired W.N. Clark plant, which must be retired under the Colorado Clean Air–Clean Jobs Act. The CPUC dismissed the initial filing and directed Colorado Electric to re-file an Energy Resource Plan by Jan. 18, 2013, in order to address alternatives for the replacement capacity of W.N. Clark, as well as the retirement of Pueblo 5 and 6. The CPUC also directed Colorado Electric to request a certificate of public convenience and necessity for any replacement capacity that Colorado Electric seeks to develop and own.

Besides coal-fired capacity, Black Hills also has coal mining operations. In the first nine months of this year, income from continuing operations for the Coal Mining segment was $3.9m, compared to a loss from continuing operations of $1.1m for the same period in 2011. Revenue decreased primarily due to a 23% decrease in tons sold. This decrease was due to the December 2011 expiration of an unprofitable train loadout contract, which represented about 29% of tons sold in 2011. Also, tons sold decreased due to a planned and unplanned outages at Neil Simpson II and a planned and extended outage at the Wygen II facility partially offset by increased tons sold to the Wyodak plant that experienced an outage in 2011. About 50% of the company’s current coal production is sold under contracts that include price adjustments based on actual mining cost increases.

The Utilities Group of Black Hills consists of the Electric and Gas Utilities segments. The Electric Utilities segment generates, transmits and distributes electricity to approximately 201,500 customers in South Dakota, Wyoming, Colorado and Montana; and also distributes natural gas to about 34,800 Cheyenne Light customers in Wyoming. The Non-regulated Energy Group consists of Power Generation, Coal Mining and Oil and Gas segments. The Coal Mining segment produces coal at a mine in the Powder River Basin near Gillette, Wyo. and sells the coal primarily to on-site, minemouth power generation facilities.

The mine, called Wyodak, is listed with the U.S. Mine Safety and Health Administration under Wyodak Resources Development. MSHA data shows that it produced 3.2 million tons in the first nine months of this year, well off a pace that saw output of 5.7 million tons in all of 2011.

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.