273 MW facility has long-term power contracts and fuel protection
RAPID CITY, S.D., Sept. 6, 2001 — Black Hills Energy Ventures, the independent energy subsidiary of Black Hills Corporation, today announced the completion of its acquisition from Enron North America, a wholly-owned subsidiary of Enron Corporation, of a 273 MW gas-fired co-generation power plant project located northeast of Las Vegas, Nev.
The facility currently has a 51 MW co-generation power plant in operation. Most of the power from that facility is under a long-term contract expiring in 2024. The Company has sold 50% of this power plant to another party. The project also has a 222 MW combined-cycle expansion under way, which is 100%-owned by the Company. The facility is scheduled to be fully operational in the third quarter of 2002 and will utilize state-of-the-art LM-6000 technology. The power of the expansion is also under a long-term contract which expires in 2017. This contract for the expansion requires the purchaser to provide fuel to the power plant when it is dispatched. The cost for the entire facility is expected to be approximately $330 million and the Company is in the process of obtaining long-term financing, which primarily will be non-recourse project debt.
Daniel P. Landguth, Chairman and CEO of Black Hills Corporation, said, “This project achieves several corporate objectives. First, by linking the facility to long-term contracts and fuel provision requirements, we minimize our risk exposure while securing significant recurring revenue and earnings streams. Second, the location is consistent with our desire to have generation assets in Western markets with growth potential. Finally, this power project — our largest to date — puts us on target to reach our goal of 1,000 MW of independent power capacity by 2003.
“We are successfully executing our independent power strategic agenda,” Landguth continued. “Our power capacity has increased 140% to 600 MW with two new plants and two plant expansions becoming operational over the spring and summer. Almost all of our power plants possess long-term contracts.” Landguth concluded, “We are developing a strong generation portfolio without subjecting our earnings to market volatility.”
Black Hills Energy Ventures is the independent energy business group of Black Hills Corporation. Employing an integrated energy business approach, Energy Ventures is involved in power generation, the production of coal, oil and natural gas, and fuel marketing. Black Hills Corporation ( http://www.blackhillscorp.com ) has two other business groups as well: Black Hills Power, an electric utility serving western South Dakota, northeastern Wyoming and southeastern Montana; and Black Hills FiberCom, a broadband communications company offering bundled telephone, high speed Internet and cable entertainment services.