Black Hills Power to collaborate with Cheyenne Light, Fuel & Power on new gas-fired power plant in Cheyenne, Wyoming; planned size of plant up to 132 MW, from previously announced 120 MW, estimated cost at US$158M

Graziela Medina Shepnick

CHEYENNE, Wyoming , November 2, 2011 (Associated Press) – A second utility company is teaming up with Cheyenne Light, Fuel & Power on previously announced plans to build a gas-fired power plant in Cheyenne.

Black Hills Power will collaborate on the project while it prepares to close three older coal-fired power plants over the next couple of years, the company announced Tuesday.

Meanwhile, the planned size of the plant has increased from 120 to 132 megawatts and the estimated cost is up from $158 million to $237 million.

Black Hills Power and Cheyenne Light, Fuel & Power are both subsidiaries of Rapid City, S.D.-based Black Hills Corp. The Casper Star-Tribune reports (http://bit.ly/uc9gvf ) that construction could begin as soon as next year with Wyoming Public Service Commission approval.

The power plant would be built on the east side of Cheyenne.

Cheyenne Light applied to state regulators in August to build a smaller, less complex natural gas plant to feed the city's growing demand for electricity.

Black Hills Power then decided to join with Cheyenne Light to compensate for the planned closure of its coal-fired power plants, said Chuck Loomis, Black Hills vice president for operations.

"It was our determination that joining with Cheyenne Light, Fuel, and Power for constructing a combined cycle unit in Cheyenne was our best option," Loomis said.

The Neil Simpson One plant near Gillette, the Osage plant near Osage and the Ben French Plant in Rapid City, S.D., are scheduled to be shut down by 2014, when new U.S. Environmental Protection Agency regulations that limit mercury and carbon monoxide emissions from smaller power plants take effect.

The new plans call for one simple-cycle 37-megawatt generator built and owned entirely by Cheyenne Light. A second combined-cycle unit that could generate up to 95 megawatts would be paid for and jointly owned by Cheyenne Light and Black Hills Power.

The plant would provide enough electricity to power about 90,000 homes.

Information from: Casper Star-Tribune - Casper, http://www.trib.com

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