Black Hills Energy Files Testimony With CO PUC With Recommendation to Comply With Clean Air, Clean Jobs Act

Retirement of W.N. Clark plant in Canon City, Colo. most economical option for customers

Oct 29, 2010, 19:14 ET from Black Hills Corp.

PUEBLO, Colo., Oct. 29 /PRNewswire/ -- Black Hills Corp. (NYSE: BKH) subsidiary Black Hills Energy – Colorado Electric today announced it has filed testimony with the Colorado Public Utilities Commission that included a proposal recommending retirement of its W.N. Clark generation station in Canon City, Colo., in order for the utility to comply with the Colorado Clean Air, Clean Jobs Act, also known as House Bill 1365.

Black Hills Energy – Colorado Electric made an initial filing with the Colorado PUC on Aug. 13, 2010, as required by House Bill 1365 that indicated the utility would be analyzing two options that would achieve the emissions reduction requirements, ensure adequate electricity for customers in southeastern Colorado and maintain the reliability of the utility's electric system. The Black Hills Energy – Colorado Electric plan indicated the utility was considering converting the more-than-50-year-old W.N. Clark to 100 percent woody biomass (wood pellets) by Dec. 31, 2017, or retiring W.N. Clark by Dec. 31, 2017, and replacing the facility with new utility-owned, gas-fired generation.

"Before House Bill 1365 went into law, Black Hills Energy – Colorado Electric had no plans or a need to retire or replace its coal-fired generation," said Christopher Burke, vice president of operations, Black Hills Energy – Colorado Electric. "However, with the current state legislation and other pending environmental regulations such as the EPA's 'Emission Standards for Hazardous Air Pollutants for Industrial and Commercial Boilers,' a conversion to biomass at our W.N. Clark plant is not an economical option for our customers, and as a consequence, we expect to retire the facility."

The Black Hills Energy – Colorado Electric recommendations filed in the testimony will be discussed as part of the Colorado PUC proceedings expected to occur in late November. Final details regarding the plans for the utility's W.N. Clark plant and replacement generation will be determined through the regulatory process.

HB1365 requires regulated utilities in the state of Colorado to reduce emissions from coal-fired power plants by replacing or repowering coal-fired generation with natural gas or other low-emitting energy resources. Specifically, the act requires all Colorado investor-owned utilities, including Black Hills Energy – Colorado Electric, to lower nitrous oxide emissions by a minimum of 70 percent on 50 percent of their coal-fired electric generating units in Colorado by the end of 2017. Black Hills Energy – Colorado Electric's current resource mix includes approximately 42 megawatts of electricity generated using coal as fuel at the W.N. Clark generating station in Canon City, Colo.

On April 29, 2010, the EPA published the proposed Emission Standards for Hazardous Air Pollutants for Industrial and Commercial Boilers, which seeks to impose limits on mercury, hydrogen chloride, carbon monoxide, particulate matter, dioxins and furans and other emissions. Final approval of the rule is expected on Jan. 16, 2011.

Black Hills/Colorado Electric Utility Company, LP d/b/a Black Hills Energy

Black Hills Energy serves 93,300 electric customers in 21 southeastern Colorado communities and was ranked No. 6 in Total Solar Watts per Customers in Solar Electric Power Association's 2009 Utility Solar Rankings report. Black Hills Energy is a subsidiary of Black Hills Corp. (NYSE: BKH).

Black Hills Corporation

Black Hills Corp. — a diversified energy company with a tradition of exemplary service and a vision to be the energy partner of choice — is based in Rapid City, S.D., with corporate offices in Denver, and Omaha, Neb. The company serves 763,300 natural gas and electric utility customers in Colorado, Iowa, Kansas, Montana, Nebraska, South Dakota and Wyoming. The company's non-regulated businesses generate wholesale electricity, produce natural gas, oil and coal, and market energy. Black Hills employees partner to produce results that improve life with energy. More information is available at www.blackhillscorp.com.

CAUTION REGARDING FORWARD-LOOKING STATEMENTS

This news release includes "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 news release that address activities, events or developments that we expect, believe or anticipate will or may occur in the future, including the statement that "current state legislation and other pending environmental regulations such as the EPA's 'Emission Standards for Hazardous Air Pollutants for Industrial and Commercial Boilers,' a conversion to biomass at our W.N. Clark plant is not an economical option for our customers, and as a consequence, we expect to retire the facility" 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 factors discussed above, the risk factors described in Item 1A of Part I of our 2009 Annual Report on Form 10-K filed with the SEC, and other reports that we file with the SEC from time to time.

New factors that could cause actual results to differ materially from those described in forward looking statements emerge from time-to-time, and it is not possible for us to predict all such factors, or the extent to which any such factor or combination of factors may cause actual results to differ from those contained in any forward-looking statement. We assume no obligation to update publicly any such forward-looking statements, whether as a result of new information, future events or otherwise.

SOURCE Black Hills Corp.



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