Black Hills working at Colorado commission on new power projects

Black Hills Corp. (NYSE: BKH) reported Nov. 4 in its third quarter earnings statement that it is making progress on several power production fronts, including at its in-construction, gas-fired Cheyenne Prairie power plant.

Income from continuing operations at Black Hills, as adjusted, was $21.1m in the third quarter, compared with $18.7m for the same period in 2012.

“Our businesses continued to perform well in the third quarter, meeting our strong earnings growth expectations,” said David Emery, chairman, president and CEO of Black Hills Corp. “Adjusted earnings per share increased 12 percent compared to the same period in the prior year, reflecting higher earnings at our electric utilities, power generation and coal mining segments combined with lower interest expense.”

He added: “We made excellent progress on two key growth initiatives during the quarter. Construction is well underway for the $222 million, 132 megawatt Cheyenne Prairie Generating Station in Cheyenne, Wyo. This project will meet our customers’ growing demand for electricity at Cheyenne Light and replace generating capacity at Black Hills Power that is being closed due to U.S. Environmental Protection Agency regulations.”

Black Hills Corp. highlights, recent regulatory filings and updates, and other events include:

  • On Oct. 16, the Colorado Public Utilities Commission denied Colorado Electric‘s application for approval to acquire up to 30 MW of wind energy. This wind energy solicitation and related requests for proposal were reviewed by an independent evaluator who verified that Black Hills’ Power Generation segment’s bid was the lowest cost to customers. The commission stated its preference to consider renewable energy needs in Colorado Electric’s upcoming Electric Resource Plan hearings scheduled for Nov. 12-15.
  • On Sept. 17, the South Dakota Public Utilities Commission approved Black Hills Power’s request for a construction financing rider effective April 1 for the Cheyenne Prairie station in lieu of the typical allowance for funds used during construction. The rider allows Black Hills Power to recover financing costs during the construction period on its approximately 40% share of the total project cost that relates to South Dakota customers, reducing overall capital costs of the project.
  • On April 30, Colorado Electric filed its Electric Resource Plan with the Colorado commission, addressing projected resource needs through 2019. The plan identified a 40-MW, simple-cycle, natural gas-fired turbine as the replacement capacity for the retirement of the coal-fired, 42-MW W.N. Clark power plant. A certificate of public convenience and necessity application was submitted to the commission requesting approval for this new capacity. The resource plan also recommended the retirement of the natural gas-fired Pueblo Units 5 and 6 by Dec. 31, 2013. A certificate of public convenience and necessity application was also submitted to the commission seeking approval to retire these plants. A hearing with the commission is scheduled for Nov. 12-15 regarding the resource plan and the two requested certificates.
  • On April 8, construction and infrastructure work commenced on the 132-MW Cheyenne Prairie plant. Project costs for plant construction and associated transmission are estimated at $222m. Construction is expected to be completed by the fourth quarter of 2014. The project is currently on schedule and within budget.

Black Hills Corp. is a growth-oriented, vertically-integrated company based in Rapid City, S.D. The company serves 769,000 natural gas and electric utility customers in Colorado, Iowa, Kansas, Montana, Nebraska, South Dakota and Wyoming. The company generates wholesale electricity, and produces natural gas, crude oil and coal. 

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.