The Integrated Resource Plan (IRP) process and evaluation for Cheyenne Light Fuel and Power Company (Cheyenne Light) and Black Hills Power, Inc. (Black Hills Power) supports that forecasted future needs of both utilities will be best met through a balanced mix of generation resources, including coal, natural gas, solar, and wind. In addition, the preferred plan for each utility includes the continued investigation of adding battery storage to further diversify resource portfolios. Unlike prior IRPs submitted by the utilities, this IRP includes an analysis of the resource needs of Cheyenne Light individually, Black Hills Power individually, and a joint analysis of a combined load for the two utilities.
The goal of the IRP is to develop a preferred plan minimizing cost to customers, while mitigating customer risk, achieving generation and transmission adequacy, continuing the safe delivery of reliable energy, and meeting both environmental objectives and regulatory requirements.
Frequently Asked Questions
What is an Integrated Resource Plan?
Every three years, Black Hills Energy conducts a comprehensive planning process on behalf of its electric utilities, Cheyenne Light, Fuel and Power and Black Hills Power, Inc., serving customers in Wyoming and South Dakota. The process culminates in the completion of an Integrated Resource Plan, or IRP, which forecasts the energy resource requirements necessary over a 20-year planning horizon. This supports our efforts to provide customers with the safe, reliable and cost-effective energy they depend on to power their homes and business.
What factors are considered in the planning process?
The IRP process is grounded in our commitment to our customers and the steps necessary to provide them with safe, reliable and cost-effective energy in the near- and long-term. Through extensive analysis and modeling, our IRP recommends the least-cost generation resources needed to meet our customers’ energy needs and the transmission system enhancements required to support reliability and grid resiliency.
Are environmental considerations reflected in the IRP?
The IRP provides a roadmap for meeting our customers’ energy needs through a balanced mix of generation resources including coal, natural gas, wind, solar and battery storage. The plan considers opportunities for the company to sensibly achieve a cleaner emissions profile in support of our company’s sustainability goals which call for a 70% reduction in greenhouse gas emissions intensity by 2040 based on a 2005 baseline.
Does the IRP recommend changes to the company’s existing generation fleet in Wyoming?
The modeling and analysis conducted for this IRP supports the continued operation of our coal units through their engineered life. The company’s Neil Simpson II coal-fired power plant reaches the end of its original engineered life in 2025. As a result, the IRP proposes converting the 90-megawatt (MW) plant to natural gas as the least-cost option to support reliability and seasonal peak demand capacity requirements. This proposed plant conversion will require regulatory approval through a separate proceeding.
Does this mean that Black Hills Energy is backing away from its Wyoming coal operations?
Not at all. Wyoming energy has played and will continue to play a critical role in our generation mix. Our modeling and analysis assume that our coal units will continue to utilize coal as a primary fuel source through their engineered life.
With a proposed conversion of the Neil Simpson II unit from coal to natural gas, will jobs be impacted?
The IRP lays out a recommended plan for meeting future resource needs – but actual decisions and plans on any resource, including Neil Simpson II, will follow. It’s too early to speculate on any potential personnel impacts associated with the conversion of our Neil Simpson II unit. With that said, we are committed to being a long-term partner in sustaining and growing Wyoming’s economy and workforce.
Will the company require any additional generation capacity with the proposed conversion of the Neil Simpson II unit to natural gas?
Yes. The IRP identified energy capacity needs in the near-term planning period resulting from the proposed conversion of the Neil Simpson II unit. The IRP explores the option of adding up to 100 MW of new renewable energy resources including wind, solar and battery storage, to support energy needs from customer load growth and the Neil Simpson II plant conversion. The company will evaluate all types of renewable resources to ensure the least-cost, least-risk resource is implemented to support this need.
Why is the company considering battery storage?
The IRP recommends the further evaluation of battery storage for potential cost savings benefits to customers and system efficiencies, which may aid in the integration of renewable energy onto our system.
Does the IRP address other opportunities for customer cost savings?
Yes. The IRP identified a potential for customer cost savings to be achieved through the expansion of company-owned transmission serving Cheyenne Light customers. With steadily rising costs associated with third-party transmission service fees, the company is engaging in a detailed analysis and evaluation of the customer and system benefits that would be gained through a utility-owned expansion of the transmission system.
How would the proposed transmission system expansion in Cheyenne benefit customers?
The IRP identified a potential for a Cheyenne Light investment in the expansion of its owned transmission system. This transmission provides the pathway to use economic Cheyenne Light-owned generation located at our Gillette, Wyoming energy complex, Currently, Cheyenne Light relies on transmission purchased from a third party to serve our customer loads, but the costs for these network transmission services continue to rise. Cheyenne Light is engaging in a detailed analysis and evaluation of the customer and system benefits that would be gained through a utility-owned expansion of the transmission system beginning in the near-term need planning period.
Now that the company has submitted its IRP, what happens next?
The Wyoming Public Service Commission (WPSC) will set a schedule that will include public comment on our IRP. Implementation of the recommendations in the IRP may require further proceedings with the WPSC. We will continue to keep customers informed about the IRP on our website.