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Jointly Owned Facilities:
12 Months Ended
Dec. 31, 2018
Organization, Consolidation and Presentation of Financial Statements [Abstract]  
Jointly Owned Facilities
JOINTLY OWNED FACILITIES

Our consolidated financial statements include our share of several jointly-owned utility and non-regulated facilities as described below. Our share of the facilities’ expenses are reflected in the appropriate categories of operating expenses in the Consolidated Statements of Income (Loss). Each owner of the facility is responsible for financing its investment in the jointly-owned facilities.

South Dakota Electric owns a 20% interest in the Wyodak Plant, a coal-fired electric generating station located in Campbell County, Wyoming. PacifiCorp owns the remaining ownership percentage and operates the Wyodak Plant. South Dakota Electric receives its proportionate share of the Wyodak Plant’s capacity and is committed to pay its proportionate share of its additions, replacements and operating and maintenance expenses. In addition to supplying South Dakota Electric with coal for its share of the Wyodak Plant, our Mining subsidiary, WRDC, supplies PacifiCorp’s share of the coal to the Wyodak Plant under a separate long-term agreement. This coal supply agreement is collateralized by a mortgage on and a security interest in some of WRDC’s coal reserves.

South Dakota Electric also owns a 35% interest in, and is the operator of, the Converter Station Site and South Rapid City Interconnection (the transmission tie), an AC-DC-AC transmission tie. Basin Electric owns the remaining ownership percentage. The transmission tie provides an interconnection between the Western and Eastern transmission grids, which provides us with access to both the WECC region and the SPP region. The total transfer capacity of the tie is 400 MW, including 200 MW from West to East and 200 MW from East to West. South Dakota Electric is committed to pay its proportionate share of the additions and replacements and operating and maintenance expenses of the transmission tie.

South Dakota Electric owns 52% of the Wygen III coal-fired generation facility. MDU and the City of Gillette each owns an undivided ownership interest in Wygen III and are obligated to make payments for costs associated with administrative services and their proportionate share of the costs of operating the plant for the life of the facility. South Dakota Electric retains responsibility for plant operations. Our Mining subsidiary supplies coal to Wygen III for the life of the plant.

Black Hills Wyoming owns 76.5% of the Wygen I plant while MEAN owns the remaining ownership percentage. MEAN is obligated to make payments for its share of the costs associated with administrative services, plant operations and coal supply provided by our Mining subsidiary during the life of the facility. Black Hills Wyoming retains responsibility for plant operations.

At December 31, 2018, our interests in jointly-owned generating facilities and transmission systems were (in thousands):
 
Plant in Service
Construction Work in Progress
Accumulated Depreciation
Wyodak Plant
$
115,198

$
384

$
61,730

Transmission Tie
$
20,855

$
1,860

$
6,667

Wygen I
$
119,273

$
498

$
44,155

Wygen III
$
140,072

$
645

$
22,647



Jointly Owned facility - Related Party

Colorado Electric owns 50% of the Busch Ranch I Wind Farm while Black Hills Electric Generation owns the remaining 50% ownership interest. Each company is obligated to make payments for costs associated with their proportionate share of the costs of operating the wind farm over the life of the facility. On December 11, 2018, Black Hills Electric Generation purchased its 50% ownership interest in the 29 MW Busch Ranch I Wind Farm from AltaGas for $16 million. Colorado Electric retains responsibility for operations of the wind farm. We recorded this purchase as an asset acquisition at fair value with $8.7 million of the purchase price recorded as wind generation assets, and $7.6 million recorded as an intangible asset, reflective of the fair value of the PPA. Black Hills Electric Generation will provide its share of energy from the wind farm to Colorado Electric through a new PPA, which replaces the PPA Colorado Electric had with AltaGas, expiring in October 2037.