Black Hills Power, a South Dakota utility with offices in Denver, filed papers Tuesday to shut down three aging coal-fired power plants in Wyoming and build a new natural gas-powered plant in Cheyenne – the first of its kind in the coal-dominated state.
According to the Casper Star Tribune, Black Hills is making the $237 million move in anticipation of U.S. Environmental Protection Agency (EPA) rules regulating mercury and carbon dioxide (CO2) emissions from coal-fired power plants. About 90 percent of the electricity generated in Wyoming comes from coal, which is abundant and cheap in the Powder River Basin.
But an official for Cheyenne Light, Fuel & Power, which is partnering with Black Hills on the new gas plant, expressed concern about getting federal permits for a new coal-fired power plant. Natural gas burns about 50 percent cleaner than coal, according to the EPA, and CO2 is the main component of greenhouse gases widely believed by most scientists to be causing global warming.
Black Hills Power Vice President for Operations Chuck Loomis told the Star Tribune that, if approved by state regulators, the company will begin construction on the new 132-megawatt gas-powered plant in 2012 and hopefully have it up and running in 2014.
“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 told the paper.
Black Hills Energy supplies electricity to about 94,000 customers in southeastern Colorado. It’s the only other publicly traded utility in the state besides the dominant Minnesota-based Xcel Energy, which is shutting down numerous coal-fired power plants along the Front Range and converting some to natural gas and renewable sources.
But with the shift away from coal mandated by Colorado’s Clean Air, Clean Jobs Act, environmental groups are increasingly concerned about the impacts to air and water quality from a surging natural gas industry in the state.
Many citizens’ groups and conservation advocates in Colorado are looking to Gov. John Hickenlooper to strengthen oil and gas drilling regulations in the state.