Black Hills Corporation Announces Commencement of Wygen II
Power Plant Commercial Operations for Cheyenne Light Customers

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

RAPID CITY, SD—January X, 2008—Black Hills Corporation (NYSE: BKH) announced today that its newest power plant entered into commercial service on January 1, 2008, as anticipated.

The 95-megawatt, coal-fired base load Wygen II plant is owned by the Company’s Cheyenne Light, Fuel & Power subsidiary. In November 2007, the Wyoming Public Service Commission approved a new rate structure for Cheyenne Light, effective January 1, 2008, which placed Wygen II into rate base. The Commission approved general increases of $6.7 million for electric rates and $4.4 million for natural gas rates, reflecting increased costs of providing service. The approval stipulates an allowed return on equity of 10.9 percent on a capital structure that is 54 percent equity and 46 percent debt. A final Commission Order is pending.

David R. Emery, Chairman, President and CEO of Black Hills Corporation, said, “We are pleased to announce that Wygen II began providing power to our Cheyenne Light system last week, as planned. To the credit of our power generation team, we completed another successful construction project cost-effectively and in less than 30 months. This power plant, with its use of state-of-the-art emissions control technology, is among the cleanest in the United States. We believe it is among the first coal-fired plants
in the United States to reduce mercury emissions. In addition to its low emissions profile, Wygen II is expected to contribute to electric cost stability for our customers throughout its useful life.”

ABOUT BLACK HILLS CORPORATION
Black Hills Corporation is a diversified 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 web site: www.blackhillscorp.com. Information about Cheyenne Light, Fuel & Power is also available at www.cheyennelight.com.