Independent power generation capacity to exceed 1,000 MW in 2003
RAPID CITY, S.D., July 24, 2001 — Black Hills Energy Capital, Inc., the independent power subsidiary of Black Hills Corporation, today announced the signing of a definitive agreement to purchase a 273 MW gas-fired power generation complex located in North Las Vegas, Nev. from Enron North America, a wholly-owned subsidiary of Enron Corp. The transaction is expected to close in the third quarter of 2001.
Expansion of the present 51 MW co-generation site near Las Vegas is now under way. Construction of a new combined cycle generation facility adjacent to the existing plant will add approximately 222 MW of capacity to the existing plant site. The new generation is expected to phase in operations in the third quarter of 2002. The facility will feature LM-6000 gas-fired turbine technology comparable to Company facilities in Colorado and Wyoming. The Company has initiated discussions with several banks and expects to finance the project primarily with non-recourse debt.
As part of the transaction, the Company also has secured long-term contracts for the output of the facility. Nearly all of the capacity and energy produced by the existing 51 MW plant is under contract through 2024 with the remainder being merchant power. The power of the planned 222 MW combined-cycle plant is sold under a 15-year contract. The contract requires the purchaser to provide fuel to the power plant when the plant is dispatched.
Daniel P. Landguth, Chairman and CEO of Black Hills Corporation, said, “The execution of our independent energy growth agenda advanced a great deal with today’s announcement. This project, combined with our other power plants in operation and under construction, gets us to our corporate goal of 1,000 MW of independent power production by 2003.
“We are very excited about our entry into the Nevada market,” Landguth continued. “This site is a logical extension of our western presence and an excellent strategic fit for us. We are competitively positioned to deliver both low-cost, base-load coal-fired power and state-of-the-art, efficient gas-fired intermediate and peak power throughout the West. Our IPP agenda has the opportunity for significant growth. We have fuel-diverse generation assets with considerable site expansion potential. By pursuing long-term contracts for our power, we can foster revenue and earnings stability well into the future.”
Black Hills Corporation ( http://www.blackhillscorp.com ) is a diverse energy and communications company with three business units: Black Hills Energy Ventures, the Company’s independent energy unit, which generates electricity and produces and markets natural gas, oil and coal; 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.