Black Hills Corp. completed the sale of a 49 percent interest in a 200 MW natural gas-fired power plant in Colorado for $215 million and began construction of the Teckla to Rapid City 230-kV transmission line during 1Q16, David Emery, chairman and CEO, said May 4.
Also during 1Q16, Black Hills completed the purchase of SourceGas Holdings, which operates gas utilities in four states and an interstate gas pipeline in Colorado, Emery said during Black Hills’ 1Q16 earnings call.
SourceGas utilities, along with Black Hills Power, Cheyenne Light, Fuel and Power and other Black Hills utilities are being rebranded as Black Hills Energy, Emery said during the call.
“All electric and natural gas utilities now operate under the Black Hills Energy name,” the parent company said in its May 3 earnings statement.
The $54 million Teckla to Rapid City transmission line is a 144-mile line from northeast Wyoming to Rapid City, S.D., which would stretch from the Teckla substation in Wyoming to the existing Osage substation and end at the Lange substation in Rapid City.
Construction of the line began in the first quarter and “we expect that line to be in service in the third quarter,” Emery said during the earnings call.
Other transmission investments include a $18 million expansion of the King Ranch substation and associated 115-kV transmission lines in Wyoming, Black Hills noted in its 1Q16 earnings presentation.
As TransmissionHub reported, that project is being developed to meet the needs of new data centers being added by Microsoft, with Microsoft agreeing to pay for the facilities through a fixed monthly fee for 15 years, according to the application filed with the Wyoming Public Service Commission.
Black Hills sold its 49 percent interest in the 200 MW Colorado IPP power plant in Pueblo, Colo., for $215 million, and the company will continue to be a majority owner and operator of the facility, Emery said. Black Hills received several inquiries from parties as it sought a buyer for the minority interest in the plant, which has a long-term contract to sell the output to Black Hills’ Colorado Electric, he noted.
The company built the project for $260 million and placed it in service in 2012, and sold the 49 percent interest for $215 million, with the proceeds used to reduce debt, Emery said during the call.
As GenerationHub reported, FERC in late March approved the sale to AIA Colchis. AIA Colchis is a special purpose entity formed for the purpose of investing in energy infrastructure projects, with interests held by arGo Energy North America MM, the California State Teachers Retirement System, Sogra Investments Holdings B.V., and a 2 percent passive interest is held by a U.S. private equity fund that is not affiliated with any of those other investors.