For Information Contact:
Mark T. Thies, Executive
Vice President; Dale
T. Jahr, Director, Investor Relations
RAPID CITY, SD—August 22, 2005—Black
Hills Corporation (NYSE:BKH) announced today that final
project specifications are completed and that construction
of the Wygen II power plant will begin in September 2005.
On August 17, 2005, the Wyoming Public Service
Commission issued a Certificate of Public Convenience and
Necessity for the 90-megawatt baseload coal-fired power
plant. That permit was the final regulatory approval required
before construction could commence. The Company previously
obtained from the Wyoming Department of Environmental Quality
an air quality permit and an industrial siting permit.
Wygen II is expected to be a regulated asset
of the Company’s subsidiary, Cheyenne Light, Fuel &
Power. It will be sited at the Company’s Wyodak coal
mine and energy complex near Gillette, Wyoming. The facility
is expected to cost approximately $169 million, including
interim financing costs during construction. Wygen II would
be the fifth coal-fired power plant located at Wyodak. Two
natural gas-fired combustion turbine peaking power plants
also reside at the Wyodak site.
David R. Emery, Chairman, President and Chief
Executive Officer of Black Hills Corporation, said, “We
are excited to proceed with this power plant project. Wygen
II is the third power plant of its size and configuration
at Wyodak. Its design is proven to be both efficient and
reliable. This power plant is expected to be in commercial
operation in early 2008 to serve power to our customers
at Cheyenne Light.” Presently, power is provided by
Public Service Company of Colorado, a subsidiary of Xcel
Energy Inc. (NYSE:XEL) under an all-requirements contract,
which expires December 31, 2007.
“This project also extends our Company’s
long history of adding value to the Wyoming economy,”
Emery said. “Since the 1940s, we have converted Wyoming
mineral resources into electricity for Wyoming customers
and beyond. The construction phase will employ several hundred
workers, many of whom will be Wyoming residents. When in
operation, Wygen II will provide permanent staff positions
and also support a host of other energy-related jobs.”
Emery added, “Wygen II will utilize the
latest available emissions control technology, assuring
that this power plant, like its replicate, Wygen, will be
among the cleanest coal-fired plants in the world. Moreover,
it will be one of the first applications of mercury abatement
processes in the United States.”
ABOUT BLACK HILLS CORPORATION
Black Hills Corporation is a diversified energy company.
Black Hills Energy, our wholesale energy business unit,
generates electricity, produces natural gas, oil and coal,
and markets energy. Our retail businesses are Black Hills
Power, an electric utility serving western South Dakota,
northeastern Wyoming and southeastern Montana; and Cheyenne
Light, Fuel & Power, an electric and gas distribution
utility serving the Cheyenne, Wyoming vicinity. More information
is available at our Internet web site: www.blackhillscorp.com.
CAUTION REGARDING FORWARD-LOOKING STATEMENTS
Some of the statements in this release include “forward-looking
statements” as defined by the Securities and Exchange
Commission, or SEC. We make these forward-looking statements
in reliance on the safe harbor protections provided under
the Private Securities Litigation Reform Act of 1995. All
statements, other than statements of historical facts, included
in this Form 10-Q that address activities, events or developments
that we expect, believe or anticipate will or may occur
in the future are forward-looking statements. These forward-looking
statements are based on assumptions which we believe are
reasonable based on current expectations and projections
about future events and industry conditions and trends affecting
our business. However, whether actual results and developments
will conform to our expectations and predictions is subject
to a number of risks and uncertainties that, among other
things, could cause actual results to differ materially
from those contained in the forward-looking statements,
including the risk factors described in Items 1 and 2 of
our 2004 Annual Report on Form 10-K and in Item 2 of Part
I of our quarterly report on Form 10-Q filed with the SEC,
and the following:
-
The amount and timing of capital deployment
in new investment opportunities or for the repurchase
of debt or stock;
-
The volumes of our production from oil
and gas development properties, which may be dependent
upon issuance by federal, state, and tribal governments,
or agencies thereof, of drilling, environmental and other
permits, and the availability of specialized contractors,
work force, and equipment;
-
The extent of our success in connecting
natural gas supplies to gathering, processing and pipeline
systems;
-
Our ability to successfully integrate
CLF&P into our operations;
-
Unfavorable rulings in the rate cases
filed by CLF&P with the WPSC and in the periodic applications
to recover costs for fuel and purchased power;
-
Changes in business and financial reporting
practices arising from the repeal of the Public Utilities
Holding Company Act and other provisions of the recently
enacted Energy Policy Act of 2005;
-
Our ability to remedy any deficiencies
that may be identified in the periodic review of our internal
controls;
-
The timing and extent of changes in energy-related
and commodity prices, interest rates, energy and commodity
supply or volume, the cost of transportation of commodities,
and demand for our services, all of which can affect our
earnings, liquidity position and the underlying value
of our assets;
-
The timing and extent of scheduled and
unscheduled outages of power generation facilities;
-
General economic and political conditions,
including tax rates or policies and inflation rates;
-
Our use of derivative financial instruments
to hedge commodity, currency exchange rate and interest
rate risks;
-
The creditworthiness of counterparties
to trading and other transactions, and defaults on amounts
due from counterparties;
-
The amount of collateral required to be
posted from time to time in our transactions;
-
Changes in or compliance with laws and
regulations, particularly those relating to taxation,
safety and protection of the environment;
-
Changes in state laws or regulations that
could cause us to curtail our independent power production;
-
Weather and other natural phenomena;
-
Industry and market changes, including
the impact of consolidations and changes in competition;
-
The effect of accounting policies issued
periodically by accounting standard-setting bodies;
-
The cost and effects on our business,
including insurance, resulting from terrorist actions
or responses to such actions;
-
Capital market conditions, which may affect
our ability to raise capital on favorable terms;
-
Price risk due to marketable securities
held as investments in benefit plans;
-
Obtaining adequate cost recovery for our
retail operations through regulatory proceedings; and
-
Other factors discussed from time to time
in our other filings with the SEC.
