Black Hills to shutter some coal-fired plants

RAPID CITY, S.D. — Black Hills Corp. said Monday that its utilities will close some older coal-fired power plants because it would cost too much to bring them in compliance with new federal and state environmental regulations.

The company said its Colorado Electric subsidiary will idle a plant in Canon City, Colo., at the end of this year but keep it available for power-generation during peak demand until retiring the plant at the end of 2013.

Colorado Electric will also suspend operations at the end of 2012 for two units of a natural-gas-fired plant in Pueblo, Colo.

The Black Hills Power subsidiary will suspend operations Aug. 31 at a coal-fired unit in Rapid City, S.D., and retire the plant in March 2014. It also plans to retire plants near Gillette and Osage, Wyo., in March 2014.

Last month, Colorado Electric proposed building a natural gas-fired plant to open in 2016 and replace the power produced by the Canon City coal plant that will close at the end of next year.

The company said that also last month, Black Hills Power received approval to build a new gas-fired plant to replace the three coal-fired plants being shuttered. The new plant will be a joint venture with Cheyenne Light, Fuel & Power and begin operating in late 2014.

Coal power is being buffeted by competition from cheaper natural gas, which has led some utilities to switch from coal, and by tougher air-quality regulations.

The Environmental Protection Agency issued a rule last year aimed at reducing emissions of mercury and other toxic air pollution from coal-fired plants. The rule could force utilities to clean up or close hundreds of coal-fired plants. The EPA agreed recently to review how the rule affects new plants but says it won’t change the stricter standards for existing ones.