Aquila Transaction Progressing on All Fronts
Message from David Emery, President and CEO of Black Hills Corporation

You may have read recent media accounts reporting that Great Plains Energy is having difficulty obtaining regulatory approvals in Missouri for its merger with Aquila. I want to assure you that we remain confident that all the necessary approvals will be in place for our anticipated first quarter 2008 close.

Regulatory proceedings are contentious by their very nature, and it is not unusual to have disagreement among the parties. We expected the Missouri proceedings between Great Plains and the regulators to be challenging, and that has been the case. Consumer advocates have opposed the Great Plains merger, claiming that it could result in higher short-term rates for Aquila's customers in Missouri. The proceedings have been delayed for a month, giving Great Plains an opportunity to focus on issues and settlement.

The Missouri regulatory dispute is related to the merger of the Missouri utilities rather than our purchase of Aquila's utilities in Colorado, Iowa, Kansas and Nebraska, though both deals must have approvals in place to proceed. We have obtained regulatory approvals for our portion of the deal in Iowa and Nebraska, and we expect decisions in Colorado and Kansas in January and February.

We will keep you informed as the regulatory process progresses. We are focused on our integration efforts and on operating our existing businesses as we enter the home stretch of the Aquila transaction.

In February 2007, Black Hills agreed to acquire Aquila’s utility properties in CO, IA, KS, and NE. We have agreed to pay $940 million for the deal, which is pending regulatory approvals. The transaction also involves Great Plains Energy, a Kansas City, MO company, which will merge with Aquila after our purchase of the utilities.