Black Hills seeks okay to sell part ownership of 200-MW gas plant in Colorado

Black Hills Colorado IPP LLC on Feb. 17 asked the Federal Energy Regulatory Commission for authorization of the sale by Black Hills Electric Generation LLC of 49.9% of Black Hills Generation’s membership interest in the applicant to AIA Colchis LLC.

Black Hills Colorado IPP owns and operates a 200-MW (nameplate) gas-fired plant in Pueblo, Colorado, which includes two separate, 100-MW combined cycle gas-fired units and associated interconnection facilities at the Pueblo Airport Generation Station. The applicant has market-based rate authority and currently sells all of the capacity and energy output of the facility to affiliate Black Hills/Colorado Electric Utility Co. LP under a long-term power purchase agreement that has been reviewed and authorized by the commission. 

The company requested that the commission provide for a 21-day comment period and further requested the issuance of an order approving the transaction no later than April 1.

Black Hills Colorado IPP is a wholly-owned indirect subsidiary of Black Hills Corp. (NYSE: BKH). It was created to develop, own and operate these two combined cycle gas-fired units and associated interconnection facilities in Pueblo. It developed the facility after being selected by Black Hills/Colorado Electric as the lowest cost bidder through a competitive solicitation process authorized by the Colorado Public Utility Commission and overseen by an independent evaluator.

The applicant sells the entire capacity and energy from the facility on a unit-contingent basis pursuant to a power purchase agreement with its regulated transmission and distribution utility affiliate Black Hills/Colorado Electric for a term extending through Dec. 31, 2031.

One-hundred percent of the membership interests in the applicant are currently held by Black Hills Generation. Black Hills Generation is a wholly-owned direct subsidiary of Black Hills Non-Regulated Holdings LLC. Black Hills Generation is an intermediate holding company that directly and wholly owns two FERC-jurisdictional entities: the applicant; and Black Hills Wyoming LLC, which owns a 76.5% interest in the Wygen I facility near Gillette, Wyoming. Black Hills Wyoming’s ownership in Wygen I corresponds to 68.9 MW of generating capacity.

The buyer, AIA Colchis, is a special purpose entity formed for the purpose of investing in energy infrastructure projects. Beneficial interests in AIA Colchis are ultimately held by these upstream entities: 0.3904% by arGo Energy North America MM LLC; 48.8048% by the California State Teachers Retirement System (CalSTRS); 48.8048% by Sogra Investments Holdings B.V., a special purpose vehicle controlled by APG Asset Management N.V., a Dutch corporation; and a  2% passive interest held by a U.S. private equity fund that is not affiliated with any of these other investors.

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.