Heartland Sells its Share of Power Project

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Heartland Sells its Share of Power Project

October 10, 2018

Heartland Consumers Power District has sold its 51 megawatt (MW) share of the Missouri Basin Power Project’s Laramie River Station.

According to Heartland CEO Russell Olson, the sale provides numerous benefits, including rate stability for customers.

“Divesting of LRS achieves many of the long-terms goals we set forth in our strategic plan. Most importantly, it gives customers steady rates and more certainty about the future.”

Goals outlined in Heartland’s strategic plan included stabilizing rates, enhancing customer relations and maintaining sound financial health. A resource divestiture was identified early on as the best way to achieve Heartland’s goals.

Heartland was previously looking at excess capacity of 30% after the year 2020, which would have to be sold in the market, presumably at a loss.

“This sale brings us into balance, with our load more equally matching our generation and reducing our reliance on the market.”

It also decreases the company’s coal exposure, providing a more balanced mix of resources and reducing risk of future regulation costs and will help the company’s continual operation with sound financial metrics.

Laramie River Station in Wheatland, Wyo., was constructed as part of the Missouri Basin Power Project, which also includes Grayrocks Dam and Reservoir and nearly 650 miles of high voltage transmission line.

LRS was the first resource in Heartland’s generating portfolio and began supplying electrical power to their customers in 1980.

Heartland is selling its interest in MBPP to Tri-State Generation & Transmission, a cooperative based in Colorado. Tri-State previously held a 24% ownership share in LRS.

The unit sale will consist of Heartland’s ownership share in MBPP, retroactive to July 1, 2018, including capacity and energy from Heartland’s MBPP entitlement of LRS, transmission and substation facilities, associated land, property and inventory.

Heartland’s baseload resource now consists of 80 MW from Whelan Energy Center Unit 2, which became operational in 2011. Heartland has a 36% entitlement share in the 220 MW plant located near Hastings, Nebraska. It meets or exceeds all current pollution control standards and is well-positioned to meet any future proposed rules.

A purchased power agreement with NextEra Energy provides 51 MW of wind energy from the Wessington Springs Wind Energy Center. Heartland also utilizes contracts with customers and other utilities to acquire low-cost capacity resources.

For more on the sale, see http://blog.hcpd.com/2018/10/heartland-divests-of-excess-resource/

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