GILLETTE, Wyo. (AP) — Black Hills Corp. has agreed to sell a 40-megawatt natural gas-fired power-generating unit to the city of Gillette for about $22 million.

The Gillette News Record reports ( the city estimates the deal could save it $43 million to $106 million over the next 20 years on electricity spending.

Black Hills says the sale is expected to close in 2014, pending approval from federal regulators.

The deal helps the city provide electricity during times of peak demand. The transaction includes a 20-year agreement in which Black Hills will purchase energy for the city from third parties when that energy costs less than operating the plant. Black Hills will share in any savings to the city.

Black Hills also will receive fees for operating the plant and providing administrative services.


Information from: The Gillette (Wyo.) News Record,