Environmental Responsibility
We are committed to being good stewards of the environment
Our Environmental Commitment
Our values guide our business and being good stewards of the environment is fundamental to everything we do. We are committed to serving our customers with safe, reliable and affordable energy in a manner that minimizes our impact on the environment and safeguards our natural resources. We do this because it’s the right thing to do - for our children and for the generations to come.
Our environmental commitment encompasses a solid foundation of regulatory compliance and leadership accountability driven by our board of directors and senior management team. It also includes a comprehensive environmental management system to track performance so we can ensure we are doing what is right and ensure compliance with all applicable state and federal regulations.
Responsible Operations – Electric Utilities and Generating Facilities
We operate electric utilities in Colorado, South Dakota and Wyoming, serving approximately 212,000 electric customers in Colorado, Montana, South Dakota and Wyoming with 939 MW of generation and 8,858 miles of electric transmission and distribution lines. Our electric utilities consistently deliver industry top quartile reliability performance for all U.S. utilities and have done so for the past 12 years.
Protecting Air Quality
We produce energy using a balanced mix of generation sources which include: modern baseload coal-fired power plants equipped with some of the most technologically advanced pollution controls in the country; advanced, state-of-the-art natural gas-fired generating plants; and cost-effective renewable energy resources. Together, these resources ensure energy reliability and affordability while minimizing the impact of our operations on the environment.
Over the past eight years, we've been a leader in modernizing our electric generating fleet by retiring aging coal plants and constructing new natural gas and renewable energy resources, including wind facilities. We’ve nearly doubled the generating capacity of our system during this period while significantly reducing greenhouse gas emissions from the energy we produce. From 2011 to 2018, we reduced carbon emissions by 25 percent and reduced nitrogen oxide and sulfur dioxide emissions by more than 50 percent.
Shutdown Logic: To reduce the risk of short-term air quality emission exceedances, Black Hills developed an innovative software program, “Shutdown Logic,” which automatically shuts down each of our coal and natural gas-fired generating units if they approach the unit’s permitted emission limit. This technology, coupled with improved plant maintenance, has virtually eliminated air permit exceedances from our generating units, while continuing to sustain high plant availability at each of our units. The graph above illustrates the air quality performance of our coal-fired generating units at our Neil Simpson Complex in Wyoming.
Colorado Electric
Over the past seven years, we’ve added more than 500 megawatts (MW) of new power generation in Southern Colorado to meet our customers’ energy needs while complying with state and federal environmental mandates. Today, our Southern Colorado energy system is one of the newest and cleanest in the nation, fueled entirely by natural gas and renewable energy.
Clean Energy Options
Cost-effective renewable energy sources are an increasingly important part of our balanced mix of generation resources. It represents a growing interest and expectation of our customers as well.
- Colorado - We have 89 MW of installed wind energy capacity at our Busch Ranch and Peak View wind facilities in Southern Colorado and will add 60 MW of new wind capacity by the end of 2019 with the construction of the $71 million Busch Ranch II wind farm. This additional renewable energy on our Colorado system will help meet the City of Pueblo’s stated intention of providing its citizens more energy from renewable generating resources and achieve the policy objectives of Colorado's Renewable Energy Standard - a state mandate calling for 30 percent of customers' electricity consumption to come from renewable energy resources by 2020. We will meet this requirement in 2019.
- Wyoming - We have 60 MW of wind energy on our Wyoming system available through long-term power purchase agreements at the Happy Jack and Silver Sage wind farms. Under a separate intercompany agreement, our Wyoming utility sells 50 percent of the Happy Jack wind farm's output to our electric utility in South Dakota.
Renewable Ready
Customer demand for renewable energy is on the rise, particularly among our large business customers in South Dakota and Wyoming, many of which have sustainability goals. As a solution, we introduced a new, innovative tariff program in 2018 known as "Renewable Ready." As proposed, the Renewable Ready Service Tariff would provide large commercial and industrial customers and government agencies in South Dakota and Wyoming the option of purchasing utility-scale renewable energy resources through long-term subscriptions for up to 100 percent of participants' energy needs. To establish a dedicated energy supply for the Renewable Ready program, we submitted a Certificate of Public Convenience and Necessity with Wyoming regulators in late 2018 to construct a new, 40 MW wind energy generating facility near Cheyenne - the Corriedale Wind Energy Project. If approved, the $57 million wind project is expected to be placed into service in the fall of 2020.
Coal Ash Management
Our coal-fired generating plants are located at our energy complex in northeastern Wyoming and fueled by coal produced at our adjacent Wyodak mine. This efficient, mine-mouth operation produces cost-effective fuel for our generating units, creating savings for our customers. Coal ash is a by-product of the process of converting coal to energy. Black Hills uses 100 percent of its coal ash for backfill reclamation activities at the Wyodak mine in areas previously mined. This use and reclamation plan was approved by the State of Wyoming and the Office of Surface Mining Reclamation and Enforcement.
Wyodak Mine Land Reclamation
In 2018, the Wyoming Department of Environmental Quality and the Office of Surface Mining Reclamation and Enforcement approved the Phase III bond release of the 582-acre South Pit of the Wyodak mine, marking the completion of mine reclamation activities and the full restoration of the land to grazing land, its pre-mine land use. Reclamation activities included shrub and tree establishment, surface ground water restoration and wildlife use including mule deer, antelope, Canadian geese and Blue Heron, and other migratory birds.
Water Management
We have a long and successful track record of environmental leadership and innovation in our utility operations, starting with our pioneering efforts in 1969 to use industrial air-cooled condensing technology as an alternative to water-cooled condensing technology at our energy complex in the northeastern corner of Wyoming. This has allowed us to save millions of gallons of water per year, vitally important in an arid region with limited water resources.
Avian Protection
We are a leader among energy companies in our Avian Protection Plans due to our comprehensive planning and mitigation strategies to encompass all areas of our operations. For decades, we have constructed nesting platforms and boxes, retrofitted or modified power poles to avian-safe standards and installed netting and other measures to mitigate risks to protected, threatened or endangered species. We carefully evaluate impacts to birds and other wildlife in the siting, design and construction of new wind facilities and projects to modernize our energy infrastructure. Black Hills employees are trained to comply with federal avian protection laws and reporting requirements associated with injured or dead birds. We have a history of successful collaboration with state and federal entities to relocate nesting avian species from powerline structures to manmade platforms, reducing the risks for bird collisions and electrocution, outages and fire hazards.
Responsible Operations - Natural Gas Utilities
Our natural gas utility operations serve approximately 1,054,000 customers in Arkansas, Colorado, Iowa, Kansas, Nebraska and Wyoming through 46,000 miles of transmission, distribution and service pipelines and natural gas storage fields. We are committed to ensuring the safe, reliable delivery of natural gas to our customers’ homes and businesses and the communities we serve. To do so, we consistently invest in maintaining, replacing and upgrading our critical infrastructure, activities which lead to improved efficiency and positive environmental benefits.
Methane Control Strategy
We have developed a programmatic approach with which to assess our natural gas pipeline system for risk and prioritize the replacement and upgrading of pipeline in high consequence areas. This approach enhances the safety and reliability of our gas system as it proactively replaces vintage and at-risk materials which support the reduction and elimination of methane emissions from our natural gas infrastructure.
Our methane emissions control strategy includes:
- Pipelines - a multi-year capital investment plan to replace aging infrastructure and eliminate higher methane-emitting cast iron, unprotected steel, obsolete plastic and above-ground pipeline from our natural gas pipeline system. Since 2011, we have added 2,548 miles of new protected steel and plastic natural gas pipeline to our system, while at the same time, reducing overall greenhouse gas emissions by 10,058 tons.
- Services – a multi-year capital investment plan to replace aging natural gas regulators and valves constructed of higher methane-emitting materials such as unprotected steel and obsolete plastic. Since 2011, we increased the number of natural gas services (valves and regulators) by over 101,000 devices, while also reducing greenhouse gas emissions by 4,867 tons.
Former Manufactured Gas Plants (FMGP)
Former Manufactured Gas Plants (FMGPs) operated from the 1890s to the 1940s, before natural gas was available as an energy source. These plants used coal and oil to produce gas for lighting, heating and cooking, and created a by-product, waste coal tar, which was typically buried on-site at the FMGP or left in underground tanks at the site. Waste coal tar from FMGPs is a regulated hazardous substance today and subject to remediation. Starting with the Aquila acquisition in 2008, Black Hills has managed seven FMGP sites in: Nebraska (Columbus, Norfolk, Blair, Plattsmouth, Beatrice); Iowa (Council Bluffs); and Kansas (Lawrence). All have been remediated with the exception of the Council Bluffs site, which is currently underway. With the SourceGas acquisition in 2016, we added three additional FMGP sites for potential mitigation located in: Nebraska (McCook and Scottsbluff); and Colorado (La Junta). We are currently working with Alliant Energy on the remediation of the McCook site and are in the investigation phase of mitigation for the Scottsbluff and La Junta sites.
Recycling
Recycling measures are implemented across our corporate footprint which includes designated universal waste collection sites to promote the recycling of common hazardous waste including batteries, pesticides, mercury-containing equipment and lamps. Additionally, scrap metal is recovered at facilities to be introduced as a raw material in the production of new goods through local vendors. Used oil from electrical service activities such as transformer maintenance is commonly accumulated in drums and recycled through an approved vendor.
Energy Efficiency and Conservation
We offer our customers a wide variety of programs and rebates to help them conserve energy and lower their energy costs. Black Hills provided $9 million in energy efficiency rebates in 2018 to residential and business customers, leading to annual energy savings of over 28 million kilowatt-hours of electricity and 397,000 dekatherms of natural gas - enough energy to power nearly 4,000 homes with electricity and 4,700 homes with natural gas for one year.*
*Assumes annual electricity usage of 7,800 KWh (650 kWh per month) and annual natural gas usage of 84 Dth (7 Dth per month).
DSM/Energy Efficiency Program Impact*
| Year | Spending (rounded) | Rebates paid to customers (rounded) | Electricity savings (kWh) | Natural Gas savings (Dth) |
|---|---|---|---|---|
| 2018 | $21,800,000 | $9,000,000 | 28,200,000 | 397,000 |
| 2017 | $21,000,000 | $10,000,000 | 28,849,000 | 339,000 |
| 2016 | $20,000,000 | $10,000,000 | 26,790,000 | 377,000 |
| *DSM/Energy Efficiency programs are funded by a surcharge on customers' bills depending on the conditions set forth by state public utilities commissions. | ||||
2018 DSM/Energy Efficiency Program Impact by State
| State | Spending (rounded) | Rebates paid to customers (rounded) | Electricity savings (kWh) | Natural Gas savings (Dth) |
|---|---|---|---|---|
|
Arkansas |
$3,200,000 |
$1,500,000 |
N/A |
126,000 |
|
Colorado |
$8,850,000 |
$2,800,000 |
19,000,000 |
137,000 |
|
Iowa |
$7,500,000 |
$3,600,000 |
N/A |
123,000 |
|
South Dakota* |
$800,000 |
$400,000 |
4,200,000 |
N/A |
|
Wyoming |
$1,450,000 |
$880,000 |
5,000,000 |
11,100 |
|
TOTAL |
$21,800,000 |
$9,180,000 |
28,200,000 |
397,100 |
| *Program data for period Sept. 1, 2016 through Aug. 31, 2018. | ||||