WY natural gas-fired power plant approved

Black Hills Corp. said that its subsidiaries Black Hills Power and Cheyenne Light, Fuel & Power received approval from the Wyoming Public Service Commission to construct and operate a USD 237M, 132MW natural gas-fired power plant in Wyoming.

The Cheyenne Prairie Generating Station will use a 37MW simple-cycle combustion turbine owned by Cheyenne Light and a 95MW combined-cycle combustion turbine to be jointly owned by Black Hills Power and Cheyenne Light. Construction is expected to begin in 2013, and the power plant is expected to begin operations in late 2014.

Black Hills Power will retire 82 MW of coal-fired generation in March 2014 to meet new federal air emissions regulations, while Cheyenne Light is preparing for an increase in electricity demand due to growing economic development and the need to replace a 40MW purchase power agreement that ends in 2014.

A stipulation and agreement among Black Hills Power, Cheyenne Light and the intervenor was filed with the Wyoming PSC. The settlement with the intervenor includes provisions for a construction work-in-progress (CWIP) rate rider. Use of the CWIP rider would provide Black Hills Power and Cheyenne Light an allowed rate of return during construction, thereby eliminating the usual allowance for funds used during construction, and reducing the total construction cost of USD 237M to USD 222M.

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