As Vice President and General Manager of Power Delivery for Black Hills Corp., Mark Lux explains Black Hills Corp. was working against the clock to avoid an interruption to 94,000 customers in southern Colorado served by Black Hills Energy, a subsidiary of Black Hills Corp., based on a purchase power agreement that expired Dec. 31, 2011.
One of the company's largest service areas is Pueblo, where the company previously had received about 75 percent of its energy from Public Service Co. of Colorado
, a division of Xcel Energy
However, Xcel Energy
notified Black Hills Energy
in 2008 that it would not be renewing the power purchase agreement it had with the company, putting Black Hills Energy's
customers at risk.
says Black Hills Energy
filed an energy resource plan with the Colorado Public Utilities Commission
soon after Xcel's decision, and in March 2009, the commission approved plans to build up to 200 megawatts (MW) of electrical generation capacity.
Black Hills Corp.'s independent power provider subsidiary, Black Hills Colorado IPP, was selected as the winning bidder in a competitive solicitation process to build a portion of the new generation.
Black Hills Energy
signed a 20-year power purchase agreement with BHCI to secure the remaining energy needed to serve their utility customers when the Xcel contract expires, Lux
Even with a tight schedule and sometimes-challenging weather conditions, Lux
says Black Hills Corp.
was able to bring the Pueblo Airport Generation Station online in time for the end of the Xcel Energy agreement.
As of Jan. 1, 2012, the Black Hills Energy
utility-owned plant was supplying more than 180 MW of power to the 21 southern Colorado communities, including Pueblo
, that comprise Black Hills Energy's
says the success of the projects was due to strong teamwork, careful scheduling and the company's extensive experience.
Staying on Track
The Pueblo Airport Generation Station involved the installation of two Black Hills Energy
utility-owned General Electric LMS-100 natural gas-fired turbines and four Black Hills Colorado IPP-owned LM6000 natural gas turbines and two steam turbines, totaling 380 MW of generation capacity.
says the natural gas turbines are top-of-the-line when it comes to efficiency and emissions, and serve to regulate the intermittency of wind turbines that also supply power to the area.
The projects are located approximately five miles east of Pueblo, adjacent to Pueblo Memorial Airport.
Because of the length of time it took to receive approvals and permits from the Colorado Public Utilities Commission
, construction on the projects didn't begin until 2010, meaning Black Hills Corp.
had to adopt a "very aggressive schedule" to have the Pueblo Airport Generation Station completed and operational by the end of 2011, Lux
says the LMS-100 turbines were relatively new to the marketplace when the company purchased them from General Electric
Less than 30 of these turbines are in commercial operation worldwide so far, making the Pueblo Airport Generation Stations something of a living laboratory for this modern technology.
"Starting up new technology is always a challenge," Lux says, but he
notes that Black Hills Energy
worked closely with General Electric
, and the equipment is operating at 99 percent reliability.
One major component in the success of the Pueblo Airport Generation Station has been the approach Black Hills Corp. took in managing it.
says the company utilized multiple fixed-price contracts, essentially giving the company the role of the general contractor and providing it with greater control over budget and schedule.
says having the multiple fixed-price contracts provided the commercial terms to protect the schedule and budget risk for the company.
Thanks to the cooperation and hard work of the team, the Pueblo Airport Generation Station was operational on time.
Not only did the project meet its goal in terms of budget and schedule, but Lux
says it also achieved an equally important goal: zero lost-time accidents on the job site.
The history of Black Hills Corp.
has been one of innovation, according to Lux