SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
Form 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
THE SECURITIES EXCHANGE ACT OF 1934
Date of Report: August 16, 1994
BLACK HILLS CORPORATION
State of South Dakota File Number 1-7978 IRS Number 46-0111677
625 Ninth Street
Rapid City, South Dakota 57709
Registrant's telephone number (605) 348-1700
<PAGE>
Item 5. Other Events
The Registrant announced that its coal mining subsidiary, Wyodak
Resources Development Corp., has announced the formation of a subsidiary,
WYGEN, Inc., a Wyoming corporation.
WYGEN, Inc. is an exempt wholesale generator (EWG) as authorized by
the Energy Policy Act of 1992 and will engage exclusively in the business
of owning or operating, or both owning and operating eligible electric
generating facilities and selling electric energy at wholesale.
To successfully construct and operate an EWG project, long-term
electric power sale contracts are required to obtain the necessary
nonrecourse financing. WYGEN, Inc. has not obtained any long-term power
sale contracts but, in order to be in a position to timely compete for such
sales, has determined to obtain an air quality permit to construct the
WYGEN Plant, an 80 MW mine-mouth, coal-fired electric generating plant, to
be constructed next to Neil Simpson Unit #2, an identical plant being
constructed by the Registrant near Gillette, Wyoming.
Construction of the WYGEN Plant will not commence and WYGEN, Inc. will
not incur substantial costs until and unless long-term power sale contracts
are obtained, justifying the construction.
Attached is the news release of the Registrant and is made a part
hereof by express reference.
Item 7(c) Exhibits
Exhibit 99 Black Hills Corporation News Release
announcing the formation of a new
subsidiary named WYGEN, an exempt
wholesale generator.
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by
the undersigned hereunto duly authorized.
BLACK HILLS CORPORATION
By /s/DALE E. CLEMENT
Dale E. Clement, Senior Vice
President - Finance
Dated: August 16, 1994
Exhibit 99
BLACK HILLS CORPORATION
P.O. BOX 1400, 625 NINTH STREET
RAPID CITY, SOUTH DAKOTA 57709
(605) 348-1700
NYSE SYMBOL - BKH
NEWS RELEASE
For Information Contact
Dan Landguth
Chairman and CEO
Barbara Thirstrup
Manager, Governmental
and Public Affairs
Release Date:
August 16, 1994
Black Hills Corporation Forms Power Generation Subsidiary
Rapid City, S.D. - Dan Landguth, Chief Executive Officer of
Black Hills Corporation, announced today that WYGEN, Inc., a
newly-formed Wyoming corporation, intends to seek an air quality
permit to construct the Wygen Plant, an 80 MW coal-fired electric
generating plant. The Wygen Plant would be constructed next to
Neil Simpson Unit #2, a mine-mouth power plant now under
construction by Black Hills Power and Light Company near
Gillette, Wyoming.
WYGEN has engaged Black and Veatch, engineers from Kansas
City who designed and are constructing NS #2, to furnish WYGEN
the necessary engineering assistance. The Wygen Plant is expected
to be substantially identical to the Neil Simpson #2 Plant.
- more -
WYGEN is a subsidiary of Wyodak Resources Development Corp.,
a coal mining company, which is in turn a subsidiary to Black
Hills Corporation, a diversified energy company, all
headquartered in Rapid City.
Landguth explained that before financing for the plant can
be obtained and construction can begin, WYGEN must obtain long-
term contracts for the sale of the power from the plant. He
stated that WYGEN intends to aggressively seek those contracts,
but until contracts justifying the financing of the plant are
obtained, WYGEN will not acquire any property or begin
construction. WYGEN will seek nonrecourse debt financing without
any guarantee of either Wyodak Resources or Black Hills
Corporation.
Landguth further explained that WYGEN will engage
exclusively in the business of owning or operating electric
generating plants to sell electric power to electric utilities at
wholesale only, but WYGEN will not sell power to its affiliate,
Black Hills Power and Light Company. WYGEN is an exempt wholesale
generator as authorized by the Energy Policy Act enacted by
Congress in 1992.
Landguth stated that electric rates paid by customers of
Black Hills Power and Light Company would not be adversely
affected by the construction and operation of the Wygen Plant;
but because of operating Neil Simpson Unit #2 and the Wygen Plant
through the use of common facilities, Black Hills would expect to
realize efficiencies in the operation of NS #2, thereby
reflecting lower costs to BHP's customers.
- more -
Landguth can give no assurances that WYGEN can obtain the
necessary power sale contracts to allow the construction of the
Wygen Plant. However, he stated, by working with the same
contractors, architects, and engineers designing and building NS
#2, WYGEN should realize efficiencies resulting in an all-in cost
of the Wygen Plant, which along with economically-priced coal
available on site, allows WYGEN to compete effectively for long-
term power sales. He explained that the wholesale power market
has become very competitive, with electric utilities, independent
power producers, and middle-man brokers all engaging in the
market.
Landguth stated that because of the period of time required
to permit power plants, he felt it necessary to begin the
permitting process so that WYGEN will be in a position to submit
timely proposals to electric utilities requiring long-term power
commitments.
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