Black Hills Corporation Announces Acquisition Credit Agreement

For Information Contact: Mark T. Thies, Executive Vice President; Dale T. Jahr, Director, Investor Relations

RAPID CITY, SD—May 10, 2007—Black Hills Corporation (NYSE: BKH) announced that the Company recently entered into a senior unsecured Acquisition Facility with ABN AMRO Bank N.V. as administrative agent and other banks to provide for interim funding for the Company’s pending acquisition of Aquila’s electric utility in Colorado and its gas utilities in Colorado, Kansas, Nebraska and Iowa.

The Acquisition Facility is a committed facility to fund an acquisition term loan in a single draw in an amount of up to $1 billion. The commitment to fund the acquisition term loan terminates on August 5, 2008. Upon funding of the loan, the loan termination date is the earlier of 364 days from the loan funding date or February 5, 2009. The facility includes conditions precedent to funding, including the completion of the Aquila acquisition substantially as specified in the existing asset purchase agreements. The facility also includes customary affirmative and negative covenants largely replicating the covenants under the Company’s existing corporate revolving credit facility.

Permanent financing to replace the Acquisition Facility for funding the $940 million purchase price and for related other costs of the acquisition of the Aquila assets is expected to be provided through a combination of new equity, mandatory convertible securities, unsecured debt at the holding company level and internally generated cash resources.

ABOUT BLACK HILLS CORPORATION
Black Hills Corporation is an integrated energy company. Our retail businesses are Black Hills Power, an electric utility serving western South Dakota, northeastern Wyoming and southeastern Montana; and Cheyenne Light, Fuel & Power, an electric and gas distribution utility serving the Cheyenne, Wyoming vicinity. Black Hills Energy, the wholesale energy business unit, generates electricity, produces natural gas, oil and coal, and markets energy. More information is available at our Internet website: www.blackhillscorp.com.

CAUTION REGARDING FORWARD-LOOKING STATEMENTS
This news release includes “forward-looking statements” as defined by the Securities and Exchange Commission, or SEC. We make these forward-looking statements in reliance on the safe harbor protections provided under the Private Securities Litigation Reform Act of 1995. All statements, other than statements of historical facts, included in this release that address activities, events or developments that we expect, believe or anticipate will or may occur in the future are forward-looking statements. These forward-looking statements are based on assumptions which we believe are reasonable based on current expectations and projections about future events and industry conditions and trends affecting our business. However, whether actual results and developments will conform to our expectations and predictions is subject to a number of risks and uncertainties that, among other things, could cause actual results to differ materially from those contained in the forward-looking statements, including the risk factors described in Item 1A of Part I of our 2006 Annual Report on Form 10-K filed with the SEC, and the following:

• Our ability to successfully integrate and profitably operate the acquisition of Aquila properties;
• Our ability to successfully maintain or improve our corporate credit ratings;
• Capital market conditions, which may affect our ability to raise capital on favorable terms;
• Other factors discussed from time to time in our other filings with the SEC.
  

New factors that could cause actual results to differ materially from those described in forward-looking statements emerge from time to time, and it is not possible for us to predict all such factors, or the extent to which any such factor or combination of factors may cause actual results to differ from those contained in any forward-looking statement. We assume no obligation to update publicly any such forward-looking statements, whether as a result of new information, future events, or otherwise.