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Work Begins on Cheyenne Prairie Generating Station

Once completed, the station will provide electricity for approximately 39,000 Cheyenne Light, Fuel and Power customers.

Thu December 12, 2013 - West Edition
Lori Lovely

Construction has begun on the Cheyenne Prairie Generating Station in Cheyenne, Wyo. Five miles southeast of downtown Cheyenne, within city limits, the new plant will contain three natural gas-fired combustion turbines with a capacity of 132-megawatts and will include a simple-cycle combustion turbine unit that will be wholly owned by Cheyenne Light, as well as a 95-MW combined-cycle unit that will be jointly owned by Cheyenne Light and Black Hills Power.

Once completed, it will provide electricity for approximately 39,000 Cheyenne Light, Fuel and Power customers and for 68,000 customers of Black Hills Power, both of which are subsidiaries of Black Hills Corp.

The plant will take up only 40 acres of the 276-acre site, leaving a buffer zone around the facility. The location along Interstate 80 west of Campstool Road was chosen because land was available and because of the proximity of a water source that can support the plant, according to Donna Beaman, manager of energy services with Cheyenne Light. Most of the water used by the plant will be treated wastewater from the city-owned Dry Creek Water Reclamation Facility next door.

Meeting Demand

and Regulation

Driving the project is Cheyenne’s growth and aging facilities. Cheyenne Light is responding to an increase in economic development in the area and the need to replace a 40-megawatt power supply agreement that ends in 2014.

In addition, Black Hills Power will replace three small coal-fired facilities that will close by March 2014, in compliance with Environmental Protection Agency emissions rules. The 82-megawatt plants were built in the 1950s and 1960s in Rapid City, S.D., Gillette and Osage. Because they cannot be economically retrofitted to meet new EPA air emissions regulations, they must be retired.

The new plant will meet or exceed all EPA standards.

“This plant is an example of how our company continues to safely and reliably support increasing demand for electricity and provide solutions to our customers’ evolving energy needs,” said David R. Emery, Black Hills Corp.’s chairman, president and chief executive officer.

Cost Benefits

The Cheyenne Prairie Generating Station will provide substantial benefits to Cheyenne Light’s and Black Hills Power’s customers and communities, said Cheyenne Light Spokeswoman Sharon Fain. “The new generating facility will generate enough reliable, cost-effective electricity to serve up to 100,000 typical homes and protect customers from energy cost volatility. Additionally, the shared resources result in cost savings to the customers of both utilities.”

“It’s much more economical [than two separate sites],” Emery said. Shared use will reduce costs to customers by saving money and increasing efficiency.

The new generation also is a more cost-efficient option to successfully meet the long-term energy needs and address increasingly stringent clean-air regulations.

The $222 million cost of the project, which is jointly funded by the two utilities, is less than the original $237 million price tag because utility officials are currently recovering financing costs during construction of the new Cheyenne Prairie Generating Station to reduce the overall construction costs for customers, according to Fain.

“Construction financing costs are usually added to the total project cost, and customers pay those costs through higher rates over the life of the plant. This time, customers are paying the financing costs through small quarterly rate increases during construction. Customers will actually pay lower rates over the life of the plant.”

Flipping the Switch

In addition to providing a reliable, long-term source of electricity, the new power plant also will provide jobs. Estimates of the number of workers onsite at peak range from 300-340, but Fain said that as of mid-November, site staff numbered approximately 180. Once construction is complete and commercial operation of the power plant begins, Emery said 10 to 12 full-time employees will be required to operate the plant on an ongoing basis.

According to Mark Stege, vice president of operations of Cheyenne Light, the plant is scheduled to be placed into service during the fourth quarter of 2014.

Weather has caused the construction schedule to be adjusted in order to compensate for delays due to a “very wet late summer and early fall,” Fain said. She added that a “major rain event” in September was the most exceptional challenge the project has faced to date. Nevertheless, she said, “The project remains on schedule in spite of this recent challenge.”

By November, all three General Electric combustion turbines had been delivered and set on their foundations. About 90 percent of the underground utilities were installed, and the mechanical construction, gas pipeline construction, and switchyard installation contracts were awarded.

“We are using multiple contracts to execute the project,” Fain said. Some of the contractors currently participating in the project include: Reiman Corporation (Cheyenne) — road improvements; Brasfield & Gorrie (Birmingham, Ala.) — site work, foundation work and underground piping and electrical; FCI Constructors Inc. (Cheyenne) — pre-engineered metal buildings; Advance Tank Construction (ATC) (Windsor, Colo.) – field-fabricated water storage tanks; Addison Construction Co. (Cheyenne) — switchyard construction; Northern Pipeline Construction Company (Phoenix, Ariz.) — gas pipeline construction; the Industrial Company Wyoming Inc. (Casper, Wyo.) — mechanical construction; and MMR Constructors Inc. (Baton Rouge, La.) — general electrical construction.

The major construction contracts include civil (concrete foundations and underground utilities), mechanical (above-ground equipment installation, piping and structural steel), and electrical (cable, conduit and raceway/cable tray).

Major equipment on the project includes three natural gas-fired combustion turbine/generators manufactured by General Electric, one steam turbine/generator manufactured by Siemens, two heat recovery steam generators manufactured by Nooter Ericksen, and two generator step-up transformers manufactured by General Electric.

“The project is using modular equipment to a large extent [in order] to reduce field installation effort,” Fain noted.

Lasting Benefits

In addition to providing additional power and more jobs, the plant is expected to add in excess of $14 million to the area’s tax base during construction, according to Stege.

Randy Bruns, president of Cheyenne LEADS, the economic development arm of Laramie County, believes it has potential to add even more.

“That is a powerful statement of optimism about our future when a company commits that kind of investment based on future needs.”

Explaining that much of what his organization does is “predicated on the companies we’re recruiting having access to relatively inexpensive and extremely reliable power,” he hinted that this could fuel further economic growth.

Cheyenne Mayor Rick Kaysen seemed to concur when he said that construction means corporate America is optimistic about the region.

Optimism certainly permeates the area.

“It’s hard to imagine that only seven months ago, we broke ground on the site,” said Stege. “The rapid progress at the job site means the Cheyenne Prairie Generating Station will be ready to serve our customers by the fourth quarter of 2014.”

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