Black Hills Energy Files Electric Rate Request in Colorado to be Effective January 1, 2012

PUEBLO, Colo., April 29, 2011 /PRNewswire/ -- Black Hills Corp. (NYSE: BKH) utility subsidiary Black Hills Energy – Colorado Electric announced today that it has filed an electric rate request with the Colorado Public Utilities Commission to recover capital and operating costs associated with the Pueblo Airport Generation Station facilities, the associated infrastructure and other utility expenses. In its request, Black Hills Energy is seeking a $40.2 million, or an 18.8 percent, increase in annual revenues, with an anticipated effective date for new rates of Jan. 1, 2012, the projected start date of commercial operations for the new Pueblo Airport Generation Station.

"We are committed to providing our customers with safe, reliable electric service at a reasonable price," said Christopher Burke, vice president of operations, Black Hills Energy – Colorado Electric. "This rate filing is needed to recover costs associated with construction of the Pueblo Airport Generation Station projects, which will replace a 300-megawatt, long-term power purchase agreement that expires at the end of this year." The request is a normal part of Black Hills Energy's utility business that must comply with established regulatory procedures and will receive a detailed review by the Colorado PUC.

If the rate increase request is approved, a typical Black Hills Energy residential customer using an average of 600 kilowatt-hours of electricity each month can expect an estimated increase of $18.96 per month. A typical small-commercial customer using an average of 2,300 kWh of electricity each month can expect an estimated increase of $67.20 per month. The increase experienced by Black Hills Energy's commercial, industrial and governmental customers will vary depending on rate class, load factor and the level of their electricity demand and usage. Black Hills Energy currently serves approximately 93,300 residential, commercial, industrial and governmental electric customers in southern Colorado.

In early 2008, Public Service Company of Colorado, a division of Xcel Energy, notified Black Hills Energy that they would not renew the power purchase agreement that supplies 75 percent of Black Hills Energy's electricity needs in Colorado and is scheduled to expire Dec. 31, 2011. Subsequently, Black Hills Energy filed an Electric Resource Plan with the Colorado PUC providing analysis of the best- and least-cost option to serve the future electricity needs of the utility's customers and remain in compliance with the state of Colorado's Renewable Energy Standards. In 2009, the Colorado PUC approved plans for Black Hills Energy to build two natural-gas-fired combustion turbines totaling 180 megawatts and to competitively solicit the remaining replacement power needs with the oversight of an independent evaluator selected by the Colorado PUC. Black Hills Colorado IPP, a subsidiary of Black Hills Corp., was the winning bidder and will supply 200 megawatts of electricity through a 20-year purchase power agreement that also begins on Jan. 1, 2012.

For more detailed information, you can view Black Hills Energy – Colorado Electric's complete rate request at the Colorado PUC website in the near future at http://www.dora.state.co.us/puc/docketsdecisions/DocketsDecisions.htm, or go to www.blackhillsenergy.com.

Black Hills/Colorado Electric Utility Company, LP d/b/a Black Hills Energy

Black Hills Energy serves 93,300 electric customers in 21 southeastern Colorado communities and was ranked No. 6 in Total Solar Watts per Customers in Solar Electric Power Association's 2009 Utility Solar Rankings report. Black Hills Energy is a subsidiary of Black Hills Corp. — a diversified energy company with a tradition of exemplary service and a vision to be the energy partner of choice — based in Rapid City, S.D., with corporate offices in Denver and Papillion, Neb. Black Hills Corp. serves 763,000 natural gas and electric utility customers in Colorado, Iowa, Kansas, Montana, Nebraska, South Dakota and Wyoming and its non-regulated businesses generate wholesale electricity, produce natural gas, oil and coal, and market energy. Black Hills' 2,100 employees partner to produce results that improve life with energy. More information is available at www.blackhillscorp.com.

SOURCE Black Hills Corp.

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