Black Hills Corp. will build and begin operating a natural gas–fired power plant in Wyoming and shutter three aging coal plants in the state by 2014 as part of a “future compliance” plan to meet growing power demand as federal environmental rules go into effect.

The South Dakota–based company’s subsidiaries Black Hills Power and Cheyenne Light, Fuel & Power last week filed for a certificate of public convenience and necessity (CPCN) with the Wyoming Public Service Commission to construct and operate the new $237 million natural gas–fired electric generation facility within Cheyenne city limits.

The proposed facility will include a simple-cycle combustion turbine unit with a net capacity of approximately 37 MW that will be wholly owned by Cheyenne Light. It will also include one combined-cycle unit with a net capacity of approximately 95 MW that will be jointly owned by Cheyenne Light and Black Hills Power, with Cheyenne Light owning 40 MW and Black Hills Power owning 55 MW. Construction could begin next year.

A Coal Haven

Wyoming is the nation’s top coal producer, and it generates more than 90% of its power from coal (the remainder comes from wind, hydro, and just 1.1% from natural gas). The new project looked ahead and represented “a win-win for our customers in the Black Hills area and Cheyenne,” said David R. Emery, Black Hills Corp. chairman, president, and CEO. “Black Hills Power must plan for future compliance as federal environmental regulatory requirements will impact some of our older coal-fired generating facilities, and Cheyenne Light must prepare for the growing electricity demand.”

Cheyenne Light had previously filed a CPCN with state regulators in August to build three simple-cycle combustion turbine units with a total gross capacity of 120 MW. The application for that $158 million project was withdrawn and replaced with the joint application for the new gas-fired facility planned three miles east of downtown Cheyenne and south of Interstate 80.

The decision was made in light of Black Hill’s newly completed resource plan, which forecast future power needs of the region and determined the most cost-effective way to meet them. “Modifying Cheyenne Light’s planned generation facility to also meet the needs of Black Hills Power provides a cost-effective means to meet the needs of both utilities,” the company said.

Closing Coal Plants

Black Hills also plans to shut down three coal plants that are at least 40 years old by 2014, Chuck Loomis, Black Hills Power’s vice president for operations, told the Casper Star-Tribune last week. Those plants are the Neil Simpson 1 plant near Gillette, Wyo.; the Osage plant near Osage, Wyo.; and the Ben French Plant in Rapid City, S.D.

Black Hills in April 2010 put into commission the newly constructed 100-MW coal-fired Wygen 3 unit several months earlier than expected—the first built in Wyoming since 2008. The plant cost about $247 million—a little more than has been projected for the new, planned 132-MW natural gas plant.

Sources: POWERnews, Black Hills, Casper Star-Tribune