Wygen Unit 3

Wygen Unit 3 is the fifth unit at the Neil Simpson Complex. Black Hills Corporation is the main owner of the facility, which went online in early April, 2010.

In March 2007, the state Department of Environmental Quality issued the final air permit for the project. In Oct. 2007, Black Hills Corporation submitted a permit application to the Industrial Siting Council. Black Hills began construction in March, 2008 after receiving its Certificate of Public Convenience and Necessity issued by the Wyoming Public Service Commission announced on March 20, 2008.

On April 9, 2009, Black Hills Corporation completed the sale of a 25 percent ownership interest in its Wygen III power generation facility to Montana-Dakota Utilities Company, part of MDU Resources Group. Montana-Dakota will pay 25 percent of the total cost to build Wygen III in exchange for 25 percent of the plant's output for the life of the plant.

On April 1, 2010 it was announced that the plant went officially online, several months earlier than expected. It was the first in the state of Wyoming to do so since 2008. The 100 MW plant will provide coal-fired electricity to approximately 70,000 residents in the states of South Dakota, Wyoming and Montana. The cost of the plant was $247 million.

Critics of the plant in neighboring South Dakota, where Black Hills Power is requesting a rate increase, argue that the power the plant will produce for their community is not worth the extra increase in utility rates. In all the utility is asking for a 26.6 percent increase, or a total of $32 million. Rates could rise by more than 33% if the increase is approved by the State's Public Utilities Commission. Black Hills Power will receive the majority of the power the plant produces.

In July 2010 the City of Gillette, Wyoming sold bonds to buy 25 percent of the Wygen Unit 3 power station. The bonds totaled approximately $75 million in revenue. Gillette buys about 58 percent of its electricity from Black Hills Power and Light, which operates the plant.

Project Details
Sponsor: Black Hills Corporation Location: Gillette, WY Capacity: 100 MW Type: Pulverized coal In service: 2010 Status: operating Cost: 225 Million

Financing

 * Bank of America
 * Wells Fargo

Citizen Activism
In January 2010, Montana-Dakota Utilities proposed a 25% overall rate hike due to the utility's investment in the plant, Wygen Unit 3, after an initial request of 30%. Citizens, particularly the Powder River Basin Resource Council, opposed the hike, as seen in this video.

In March 2010, MDU announced it had reached a settlement for an increase of 16 percent. The Wyoming Public Service Commission has until June 14 to rule on the settlement. In the price settlement, the parties agreed to stipulations including a lower return on equity of 10.9 percent, special provisions for irrigation customers, and a phased-in increase over three years "to mitigate the rate shock effect on customers," according to the agreement.

Black Hills Power has requested an 11.5 percent return on equity.

Citizen Groups

 * Powder River Basin Resource Council, Jill Morrison, jillm [at] powderriverbasin.org

Related SourceWatch Articles

 * Carbon Capture and Storage
 * Existing U.S. Coal Plants
 * US proposed coal plants (both active and cancelled)
 * Coal plants cancelled in 2007
 * Coal plants cancelled in 2008
 * Wyoming and coal
 * State-by-state guide to information on coal in the United States (or click on the map)