Black Hills Corp. Utility to Purchase 60-Megawatt Peak View Wind Project

Source Press Release
Company Black Hills Corp 
Tags Asset Deals, Deals, Renewable Energy, Power
Date November 02, 2016

Black Hills Corp. (NYSE: BKH) today announced that subsidiary Black Hills Energy - Colorado Electric has received approval from the Colorado Public Utilities Commission to purchase a 60-megawatt wind project to be constructed in southern Colorado. The estimated cost of the project is $109 million, including taxes, transmission infrastructure and interconnection costs.

Black Hills Energy selected the Peak View Wind Project through a competitive solicitation process. The wind project will be built approximately 30 miles south of Pueblo, Colorado, in Huerfano and Las Animas counties. In addition to commission approval, Black Hills Energy has executed a build-transfer agreement with Invenergy Wind Development Colorado, LLC. The project will be completed in late 2016 and will be operated as a utility-owned asset.

This project is not subject to a general rate case for the first ten years of operation. Black Hills Energy will recover its investments through customer billing adjustment clauses during that time. The revenue requirement was determined using the most recent commission-authorized capital structure, including a return on equity of 9.83 percent, and a capital structure of 49.83 percent equity and 50.17 percent debt.

"The wind project's site was chosen for its cost competitiveness, high-potential wind resources and proximity to our existing transmission system," said Linn Evans, Black Hills Corp.'s president and COO of utilities. "We provide safe, reliable energy at a fair rate to customers while providing a good rate of return for our shareholders. The Peak View Wind Project will help meet each of those priorities."

"Colorado has a wealth of renewable resources and is an incredibly important market for us," said Mick Baird, Invenergy's Vice President of Business Development in the Western Region. "Peak View will provide long-term, clean renewable energy to Colorado customers and we're pleased Black Hills Energy wants to take ownership of this great project."

Black Hills determined through extensive due diligence that the wind project was the most cost-effective solution to meet customer energy needs while helping the company to comply with Colorado's renewable energy requirement that 30 percent of its electricity come from renewable resources by 2020.

Source: EvaluateEnergy® ©2019 EvaluateEnergy Ltd