Black Hills Corp. announced that utility subsidiary Cheyenne Light, Fuel and Power Co., doing business as Black Hills Energy, and power generation subsidiary Black Hills Wyoming received approval of their joint application for a proposed 60-megawatt power purchase agreement from the Federal Energy Regulatory Commission (FERC).

Under the agreement, Black Hills Wyoming will continue to deliver 60 megawatts of base-load capacity and energy to Cheyenne Light from its Wygen I power plant. The new agreement will commence on January 1, 2022, replacing the existing power purchase agreement, and will continue for 11 years, ending December 31, 2032. The Wygen I power plant is located near Gillette in northeast Wyoming and is a mine-mouth operation with the adjacent mining complex.

“This new contract will provide critical capacity for our Wyoming electric utility,” Black Hills President and CEO Linn Evans said. “The Wygen I power plant is an extremely reliable, low-cost source of electric base-load capacity and energy for Cheyenne Light and is the best long-term choice to cost-effectively meet our customers’ current and future needs.”

“The FERC approval allows the Wygen I power plant to continue serving our Wyoming electric utility customers with stable, low-cost, base-load energy afforded by mine-mouth logistics and a low-cost, local Wyoming energy resource,” Evans said. “These operations will also help maintain stable, long-term mining and plant operations jobs within Wyoming.”