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Municipal Energy Agency of Nebraska Buys Interest in Black Hills Plant

August 25, 2008

GILLETTE, Wyo., Aug. 25 /PRNewswire/ — The Municipal Energy Agency of Nebraska (MEAN), and Black Hills Corporation , today announced that MEAN will purchase a 23.5 percent ownership in Black Hills’ Wygen I generation facility for $51 million. Wygen I is an 85 MW coal fired plant near Gillette, Wyoming.

“We appreciate our longstanding relationship with MEAN and look forward to our continuing partnership as co-owners of the Wygen I facility,” said David R. Emery, chairman, president and CEO of Black Hills Corporation.

MEAN’s new ownership agreement also includes payment for overhead, operations and coal supply provided by Black Hills subsidiaries for the life of the facility. MEAN currently holds a 10-year purchase power agreement with Black Hills to buy 20 MW of power annually from Wygen I. The new purchase and sale transaction is expected to close on or before December 31, 2008 thus terminating the current power purchase agreement between MEAN and Black Hills.

“Purchasing interest in the Wygen I facility provides benefits to our wholesale customers,” said MEAN Executive Director J. Gary Stauffer. “By acquiring ownership in the plant, we can continue to provide our customers with the benefits of competitively priced energy in a transmission constrained area for years to come.

MEAN’s purchase of ownership interest in the Black Hills facility received regulatory approval from the Nebraska Power Review Board and this agreement also requires Black Hills to make a filing with the Federal Energy Regulatory Commission (FERC).

ABOUT MEAN

Formed in 1981, MEAN provides wholesale power supply and energy-related services to 65 communities and one joint-action agency in four states: Colorado, Iowa, Nebraska and Wyoming. MEAN is one of four energy-related organizations of NMPP Energy, a joint-action agency headquartered in Lincoln, Neb.

ABOUT BLACK HILLS CORPORATION

Black Hills Corporation, based in Rapid City, S.D., is a diversified energy company with a tradition of exemplary service and a vision to be the energy partner of choice. The company serves 750,000 utility customers in Colorado, Iowa, Kansas, Montana, Nebraska, South Dakota and Wyoming. The non-regulated businesses generate electricity, produce natural gas, oil and coal, and market energy. We partner to produce results that improve life with energy. Learn more at http://www.blackhillscorp.com/.

Municipal Energy Agency of Nebraska

CONTACT: Media, Lynn Wilson, +1-303-501-5961, or Investor Relations,Jason Ketchum, +1-605-721-2765, both of Black Hills Corporation; or Bob Selzerof MEAN, +1-402-474-4759

Web site: http://www.blackhillscorp.com/




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