Black Hills Energy Capital, Inc., the independent powersubsidiary of Black Hills Corp., says it has signed a definitiveagreement to purchase a 240 MW gas-fired turbine generationfacility located near Colorado Springs, CO, from Enron NorthAmerica.

The purchase of the Fountain Valley facility is expected toclose around March 31. It features six LM-6000 simple-cycle,gas-fired turbines, a technology identical to existing companyfacilities in Colorado and Wyoming. All necessary permitting hasbeen approved and the plant is expected to phase in its generationcapacity beginning in July 2001. Black Hills Energy also announcedthat it has obtained an 11-year contract with Public Service ofColorado to utilize the plant for peaking purposes. The contract isa tolling arrangement in which the company assumes no fuel costs.

Black Hills also plans to have a 30 MW combined cycle upgradeoperating at its Harbor power plant near Long Beach, CA in thesecond quarter.

Previously, the company announced four other generation projectscurrently under construction in Colorado and Wyoming, totalingapproximately 220 MW net nameplate generation capacity. Theseprojects include 40 MW gas-fired turbine expansions at both theValmont, CO, and Wyodak, WY, sites (expected to be operational inmid-2001), a 50 MW combined cycle expansion at Arapahoe, CO(expected mid-2002), and a 90 MW coal-fired plant at Wyodak(expected mid-2003). The two projects announced Friday would addanother 250 MW net capacity to Black Hills’ independent power assetbase.

“In 2001, our independent generation capacity will more thandouble, and existing construction projects will nearly triplegeneration over the next 2 ½ years,” said Daniel P.Landguth, Black Hills chairman. “These projects accomplish severalstrategic objectives as we advance our independent energy agenda.First, the Colorado Springs facility is in a growth market withexpansion opportunities. Second, its location is ideally situatedto serve other territories in southwestern states in the future.Third, the project is of limited financial risk because it tiesinto a long-term, identifiable revenue stream. Our businessrelationship with Public Service of Colorado is growing andmutually beneficial.

“We see significant potential at the Fountain Valley site,”Landguth said. “This advantageous location could develop into oursouthern Rockies energy center that integrates our expanding gasgeneration with our nearby fuel production and marketing activitiesand complements our coal-fired generation in Wyoming. Regarding theSouthern California project, we are adding a modest amount ofgeneration capacity in an energy-short location in a timely manner.We are pleased to deliver more power to that market.”

The South Dakota-based corporation includes Black Hills EnergyVentures, an independent energy unit that generates electricity andproduces and markets natural gas, oil and coal; Black Hills Power,an electric utility serving parts of South Dakota, Wyoming andMontana; and Black Hills FiberCom, a broadband communicationscompany offering bundled telephone, high speed Internet and cableentertainment services.

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