Babcock & Wilcox Awarded $100 Million Contract to Build New Coal-Fired Power Plant in Wyoming.

Business Editors & Energy Writers

BARBERTON, Ohio--(BUSINESS WIRE)--Jan. 22, 2001

The Babcock & Wilcox Company, a subsidiary of McDermott International, Inc. (NYSE:MDR), has been awarded a contract valued in excess of $100 million by a subsidiary in the Independent Energy Group of Black Hills Corporation (NYSE:BKH), to engineer, design, procure and construct Wygen Unit 1, a complete 80-megawatt coal-fired power plant near Gillette, Wyoming.

Wygen Unit 1 is the only new-capacity pulverized-coal-fired power plant currently under contract in the U.S. It is scheduled for operation in July 2003.

Wygen Unit 1 will feature a B&W pulverized-coal-fired boiler producing 778,000 pounds per hour of superheated steam at 1005 degrees Fahrenheit and 1620 pounds per square inch of pressure. B&W's extended scope with Black Hills Generation includes all auxiliary boiler island equipment, the turbine-generator, all turbine island equipment, air-cooled condenser, coal and ash handling systems, and the plant control system.

"Wygen Unit I shows Black Hills Corporation's commitment to the environment, and to its customers and shareholders," said James F. Wood, president of Babcock & Wilcox. "This is a significant development, and we are pleased to have been selected as their extended-scope contractor for this vital project."

B&W will design, manufacture and construct all major emissions control equipment, including its environmentally effective and cost-efficient dry scrubbing system that features a patented spray absorption process for sulfur dioxide removal.

Additionally, B&W will design and supply the selective catalytic reduction system for post-combustion nitrogen oxides control, and a fabric filter baghouse for particulate removal. The boiler features B&W's latest design of ultra low-NOx burners and overfire air systems.

Engineering has begun at Babcock & Wilcox headquarters in Barberton, Ohio, U.S.A.

Wygen Unit 1 will be located at Black Hills Corporation's energy complex near Gillette, Wyoming. The new unit will consume approximately 500,000 tons per year of low-sulfur sub-bituminous coal from the company's adjacent Wyodak mine, operated by Wyodak Resources Development Corporation.

"The construction of Wygen Unit I highlights the critical role of coal as a fuel in United States electric power expansion programs, especially recognizing the high cost and uncertainty of natural gas," said Wood. "We expect Wygen Unit I to be a strong reference plant for future power development projects in North America and the world."

Wygen will be the fourth coal-fired plant at Black Hill's energy complex which includes the Neil Simpson Unit 2 featuring an 80-MW boiler completed by B&W in 1995. Another B&W unit at the site, the 330-MW Wyodak Unit 1 owned primarily by PacifiCorp, was completed in 1978.

Black Hills Corporation is an energy and communication company with three business units. The Independent Energy Group (to be named Black Hills Energy Ventures) engages in the production of electricity, coal, crude oil and natural gas, primarily in the Rocky Mountain region, and the related marketing of such products in various markets throughout the United States. Black Hills Power supplies electric service in western South Dakota, northeastern Wyoming, and southeastern Montana. Black Hills FiberCom markets communications services in Rapid City and the Northern Black Hills of South Dakota.

McDermott International, Inc. is a leading worldwide energy services company. The company's subsidiaries manufacture steam-generating equipment, environmental equipment, and products for the U.S. government. They also provide engineering and construction services for industrial, utility and hydrocarbon processing facilities, and to the offshore oil and natural gas industries. The company's website is: www.mcdermott.com.

Babcock & Wilcox is also located on the Internet at www.babcock.com. Journalists will find company news, fact sheets, and industry links at http://www.babcock.com/pgg/pr/pressroom.html.

Editor's Note: Although there are many power generation companies that contain the name Babcock, the U.S.-based Babcock & Wilcox is the original, founded by George Babcock and Stephen Wilcox in 1867.