Black Hills Corp. Completes Sale of Seven Independent Power Plants
RAPID CITY, S.D., - Black Hills Corp. today announced it has completed the $840 million sale of seven independent power production gas-fired plants to affiliates of Hastings Funds Management and IIF BH Investment, a subsidiary of an investment entity advised by JPMorgan Asset Management.
The net proceeds from this IPP sale are expected to eliminate Black Hills’ need to issue equity to finance the pending acquisition of Aquila’s electric utility in Colorado and four natural gas utilities in Colorado, Iowa, Kansas and Nebraska.
“Our sale process was comprehensive, and we believe this sale of select IPP assets produced excellent value for our shareholders,” said David R. Emery, chairman, president and chief executive officer for Black Hills Corp.
“We will remain an active participant in the IPP business. We excel in planning, permitting, constructing and operating reliable and efficient power plants. The latest demonstration of our capabilities is the Valencia facility, a 149 megawatt gas-fired power plant in New Mexico, which went into operation ahead of schedule and below budget on May 30.
“In addition, our expert power generation staff will focus on the ongoing construction of the Wygen III power plant near Gillette, Wyo., for our regulated electric utility, Black Hills Power. After the close of the Aquila utility acquisition, and with Colorado Public Utilities Commission approval, we also intend to pursue the permitting and construction of generating facilities to serve our Colorado electric utility customers.”
The IPP sale received regulatory approval from the Federal Energy Regulatory Commission, antitrust clearance under the Hart-Scott-Rodino Act, and completion of a federal review by the Committee on Foreign Investment in the United States.
This sale completed a process that began when the company announced in October 2007 that its board of directors had approved a strategic review, including potential divestiture, of some of its independent power production plants located throughout the western United States. Following a multi-month strategic review and auction process, the company announced in April 2008 it had entered into a definitive agreement with affiliates of Hastings and IIF to sell the seven IPPs with a total capacity of 974 megawatts.
The following power plants were included in the sale: Asset (State) Capacity (net megawatts) Fountain Valley (Colorado) 240 Las Vegas II (Nevada) 224 Valencia (New Mexico) 149 Arapahoe (Colorado) 130 Harbor Cogeneration (California) 98 Valmont (Colorado) 80 Las Vegas I (Nevada) 53 Total 974
The following power plants remain with the company in the power generation business segment of our non-regulated energy business unit after the sale:
Asset (State) Capacity (net megawatts) Wygen I (Wyoming)* 90 Gillette Combustion Turbine (Wyoming) 40 Ontario Cogeneration (California) 12 Rupert and Glenns Ferry Cogeneration (Idaho)** 11 Power fund investments (various locations) 5 Total 158 * Mine-mouth coal-fired baseload generation ** Capacity represents the Company’s 50 percent interest in the two power plants
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