United States
Securities and Exchange Commission
Washington, D.C. 20549

Form 10-Q

X QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2004.

___ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
ACT OF 1934

For the transition period from _______________ to _______________.

Commission File Number 1-7978

Black Hills Power, Inc.
Incorporated in South Dakota IRS Identification Number 46-0111677

625 Ninth Street
Rapid City, South Dakota 57701

Registrant’s telephone number (605) 721-1700

Former name, former address, and former fiscal year if changed since last report

NONE

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes X No______

Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act).

Yes______ No X

As of October 29, 2004 there were issued and outstanding 23,416,396 shares of the Registrant’s common stock, $1.00 par value, all of which were held beneficially and of record by Black Hills Corporation.

Reduced Disclosure

The Registrant meets the conditions set forth in General Instruction H (1) (a) and (b) of Form 10-Q and is therefore filing this Form 10-Q with the reduced disclosure format.

TABLE OF CONTENTS

		Page
PART I.	FINANCIAL INFORMATION
Item 1.	Financial Statements
	Condensed Statements of Income -
	Three and nine months ended September 30, 2004 and 2003	3
	Condensed Balance Sheets -
	September 30, 2004 and December 31, 2003	4
	Condensed Statements of Cash Flows -
	Nine months ended September 30, 2004 and 2003	5
	Notes to Condensed Financial Statements	6-10
Item 2.	Results of Operations	10-12
Item 4.	Controls and Procedures	12
PART II.	OTHER INFORMATION
Item 1.	Legal Proceedings	13
Item 6.	Exhibits	13
	Signatures	14
	Exhibit Index	15

BLACK HILLS POWER, INC.
CONDENSED STATEMENTS OF INCOME
(unaudited)

	Three months ended						Nine months ended
	September 30						September 30
	2004			2003			2004			2003
	(in thousands)
Operating revenue	$	47,921		$	46,268		$	129,377		$	129,238

Operating expenses:
Fuel and purchased power		18,506			15,545			45,698			41,426
Operations and maintenance		5,993			6,564			19,991			18,667
Administrative and general		4,533			2,837			12,721			9,940
Depreciation and amortization		4,703			4,809			14,448			14,346
Taxes, other than income taxes		1,680			2,018			6,044			6,114

		35,415			31,773			98,902			90,493

Operating income		12,506			14,495			30,475			38,745

Other income (expense):
Interest expense		(4,138	)		(4,499	)		(12,545	)		(12,704	)
Other income		274			335			852			1,360

		(3,864	)		(4,164	)		(11,693	)		(11,344	)

Income before income taxes and
discontinued operations		8,642			10,331			18,782			27,401
Income taxes		(2,782	)		(3,559	)		(6,070	)		(9,208	)

Income from continuing operations		5,860			6,772			12,712			18,193
Discontinued operations, net of
income taxes (Note 3)		--			--			--			1,906

Net income	$	5,860		$	6,772		$	12,712		$	20,099

The accompanying notes to condensed financial statements are an integral part of these condensed financial statements.

BLACK HILLS POWER, INC.
CONDENSED BALANCE SHEETS
(unaudited)

	September 30			December 31
	2004			2003
	(in thousands)
ASSETS
Current assets:
Cash and cash equivalents	$	607		$	1,052
Receivables (net of allowance for doubtful accounts of $909 and $898, respectively)		15,145			17,012
Receivables - related party		25,868			38,618
Materials, supplies and fuel		10,684			9,560
Prepaid income taxes		--			2,813

		52,304			69,055

Investments		3,101			2,920

Property and equipment		635,278			623,197
Less accumulated depreciation		(228,144	)		(212,041	)

		407,134			411,156

Other assets:
Regulatory asset		4,172			4,320
Other		14,287			15,622

		18,459			19,942

Total	$	480,998		$	503,073

LIABILITIES AND STOCKHOLDER'S EQUITY
Current liabilities:
Accounts payable	$	6,057		$	6,929
Accounts payable - related party		873			7,909
Accrued liabilities		13,608			15,691
Current maturities of long-term debt		46,989			1,986
Deferred income taxes		24			239

		67,551			32,754

Long-term debt, net of current maturities		157,224			210,056

Deferred credits:
Deferred income taxes		66,641			65,633
Regulatory liability		6,116			6,337
Other		13,154			12,724

		85,911			84,694

Stockholder's equity:
Common stock $1 par value; 50,000,000 shares authorized; 23,416,396 shares issued		23,416			23,416
Additional paid-in capital		39,549			39,549
Retained earnings		108,810			114,098
Accumulated other comprehensive loss		(1,463	)		(1,494	)

		170,312			175,569

Total	$	480,998		$	503,073

The accompanying notes to condensed financial statements are an integral part of these condensed financial statements.

BLACK HILLS POWER, INC.
CONDENSED STATEMENTS OF CASH FLOWS
(unaudited)

	Nine months ended
	September 30
	2004			2003
	(in thousands)
Operating activities:
Net income	$	12,712		$	20,099
Adjustments to reconcile net income to cash provided by
operating activities:
Income from discontinued operations		--			(1,906	)
Depreciation and amortization		14,448			14,346
Deferred income tax		793			4,312
Change in operating assets and liabilities -
Accounts receivable and other current assets		3,961			2,927
Accounts payable and other current liabilities		(9,991	)		4,526
Other operating activities		1,734			(5,983	)

		23,657			38,321

Investing activities:
Property additions		(10,426	)		(21,992	)
Decrease in notes receivable from associated companies, net		12,334			11,249
Increase in investments		(181	)		(199	)

		1,727			(10,942	)

Financing activities
Dividends paid		(18,000	)		(23,728	)
Long-term debt - repayments		(7,829	)		(3,088	)

		(25,829	)		(26,816	)

Increase (decrease) in cash and cash equivalents		(445	)		563
Cash and cash equivalents:
Beginning of period		1,052			518

End of period	$	607		$	1,081

Supplemental disclosure of cash flow information
Cash paid (received) during the period for:
Interest	$	14,745		$	14,996
Income taxes paid (refunded), net	$	(3,111	)	$	(4	)
Stock dividend distribution to Black Hills Corporation, the
parent company of Black Hills Power, Inc. (Note 3)	$	--		$	45,687

The accompanying notes to condensed financial statements are an integral part of these condensed financial statements.

BLACK HILLS POWER, INC.

Notes to Condensed Financial Statements
(unaudited)
(Reference is made to Notes to Financial Statements
included in the Company’s Annual Report on Form 10-K)

(1)

MANAGEMENT’S STATEMENT

The financial statements included herein have been prepared by Black Hills Power, Inc. (the Company) without audit, pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted pursuant to such rules and regulations; however, the Company believes that the footnotes adequately disclose the information presented. These financial statements should be read in conjunction with the financial statements and the notes thereto, included in the Company’s 2003 Annual Report on Form 10-K filed with the Securities and Exchange Commission.

Accounting methods historically employed require certain estimates as of interim dates. The information furnished in the accompanying financial statements reflects all adjustments which are, in the opinion of management, necessary for a fair presentation of the September 30, 2004, December 31, 2003 and September 30, 2003, financial information and are of a normal recurring nature. The results of operations for the nine months ended September 30, 2004, are not necessarily indicative of the results to be expected for the full year.

(2)

RECLASSIFICATIONS

Certain 2003 amounts in the financial statements have been reclassified to conform to the 2004 presentation. These reclassifications did not have an effect on the Company’s total stockholder’s equity or net income as previously reported.

(3)

NON-CASH DIVIDEND AND DISCONTINUED OPERATIONS

During the quarter ended March 31, 2003, the Company distributed a non-cash dividend to its parent company, Black Hills Corporation (Parent). The dividend consisted of 10,000 common shares of Black Hills Generation, Inc., formerly known as Black Hills Energy Capital, Inc., (Generation), which represents 100 percent ownership of Generation.

Revenues and net income from the discontinued operations are as follows (in thousands):

	Nine months ended
	September 30,
	2003
Revenue	$	41,485

Income before income taxes	$	2,833
Income taxes		(927	)

Net income from discontinued operations	$	1,906

(4)

RECENTLY ADOPTED ACCOUNTING PRONOUNCEMENTS

In May 2004, the Financial Accounting Standards Board (FASB) issued FASB Staff Position (FSP) No. 106-2, “Accounting and Disclosure Requirements Related to the Medicare Prescription Drug, Improvement and Modernization Act of 2003” (FSP 106-2), which provides guidance on the accounting for the effects of the Medicare Prescription Drug, Improvement and Modernization Act of 2003 (2003 Medicare Act) for employers that sponsor postretirement healthcare plans that provide prescription drug benefits. FSP 106-2 supersedes FSP 106-1 that was issued in January 2004 under the same title. FSP 106-2 is effective for the first interim period beginning after June 15, 2004. The Company provides prescription drug benefits to certain eligible employees and will include the effects of the 2003 Medicare Act on its next actuarial measurement of the accumulated postretirement benefit obligation or net periodic postretirement benefit cost. The Company uses a September 30 measurement date for the Plan.

(5)

COMPREHENSIVE INCOME

The following table presents the components of the Company’s comprehensive income (in thousands):

	Three months ended				Nine months ended
	September 30				September 30
	2004		2003		2004		2003
Net income	$	5,860	$	6,772	$	12,712	$	20,099
Other comprehensive income, net of tax:
Fair value adjustment on derivatives
designated as cash flow hedges included
in discontinued operations		--		--		--		(360	)
Reclassification adjustment on interest rate
swap included in net income		10		10		31		31

Comprehensive income	$	5,870	$	6,782	$	12,743	$	19,770

(6)

CHANGES IN LONG-TERM DEBT

On August 31, 2004, the Company effected a call on $5.9 million, 6.7 percent Pollution Control Revenue Bonds issued through Lawrence County, South Dakota. The bonds had a maturity date of 2010.

On September 21, 2004, the Company initiated a notice to call, effective October 21, 2004, the entire $45 million Series AB 8.3 percent bonds. The bonds had a maturity date of 2024. Due to the notice to call, the bonds have been classified to current maturities of long-term debt on the September 30, 2004 Balance Sheet.

(7)

RELATED-PARTY TRANSACTIONS

Receivables

The Company has accounts receivable balances related to transactions with other Black Hills Corporation subsidiaries. The balances were $0.5 million and $0.9 million as of September 30, 2004 and December 31, 2003, respectively.

The Company also has extended a line of credit to its Parent, Black Hills Corporation (the Parent), which is due on demand. Outstanding advances were $25.4 million at September 30, 2004 and $37.7 million at December 31, 2003. Interest income received on the note was $0.7 million and $1.2 million for the nine month periods ended September 30, 2004 and September 30, 2003, respectively. Advances under these notes bear interest at a variable rate that does not exceed prime (3.09 percent at September 30, 2004) and is receivable monthly.

Other Balances and Transactions

In addition to the above transactions, in order to fuel its combustion turbine, the Company purchased natural gas from Enserco Energy, an indirect subsidiary of the Parent. The amount purchased during the three month periods ended September 30, 2004 and September 30, 2003 was approximately $0.9 million and $2.7 million, respectively. The amount purchased during the nine month periods ended September 30, 2004 and September 30, 2003 was approximately $1.5 million and $5.4 million, respectively. These amounts are included in “Fuel and purchased power” on the Condensed Statements of Income.

The Company also received revenues of approximately $0.2 million and $0.6 million for the three month periods ended September 30, 2004 and September 30, 2003, and $0.6 million and $0.8 million for the nine month periods ended September 30, 2004 and September 30, 2003, respectively, from Black Hills Wyoming, Inc., an indirect subsidiary of Black Hills Corporation, for the transmission of electricity.

(8)

EMPLOYEE BENEFIT PLAN

Defined Benefit Pension Plan

The Company has a noncontributory defined benefit pension plan (Plan) covering the employees of the Company who meet certain eligibility requirements.

The components of net periodic benefit cost for the Plan for the periods ended September 30 are as follows, (in thousands):

	Three Months Ended						Nine Months Ended
	2004			2003			2004			2003
Service cost	$	240		$	178		$	720		$	534
Interest cost		655			625			1,965			1,875
Expected return on plan assets		(855	)		(618	)		(2,565	)		(1,854	)
Amortization of prior service cost		41			41			123			123
Amortization of net loss		270			276			810			828

Net periodic benefit cost	$	351		$	502		$	1,053		$	1,506

The Company does not anticipate that a contribution will be made to the Plan in the 2004 fiscal year.

Supplemental Nonqualified Defined Benefit Plan

The Company has various supplemental retirement plans for outside directors and key executives of the Company. The Plans are nonqualified defined benefit plans.

The components of net periodic benefit cost for the supplemental nonqualified plans for the periods ended September 30 are as follows, (in thousands):

	Three Months Ended					Nine Months Ended
	2004		2003			2004		2003
Service cost	$	--	$	1		$	--	$	3
Interest cost		27		26			81		78
Amortization of prior service credit		--		(1	)		--		(3	)
Amortization of net loss		13		11			39		33

Net periodic benefit cost	$	40	$	37		$	120	$	111

The Company anticipates that contributions to the supplemental retirement plans for the 2004 fiscal year will be approximately $0.1 million; the contributions are expected to be in the form of benefit payments.

Non-pension Defined Benefit Postretirement Plan

Employees who are participants in the Company’s postretirement healthcare plan and who retire from the Company on or after attaining age 55 after completing at least five years of service to the Company are entitled to postretirement healthcare benefits. These financial statements and this Note do not reflect the effects of the 2003 Medicare Act on the postretirement benefit plan (see Note 4).

The components of net periodic benefit cost for the postretirement healthcare plan for the periods ended September 30 are as follows, (in thousands):

	Three Months Ended						Nine Months Ended
	2004			2003			2004			2003
Service cost	$	75		$	50		$	225		$	150
Interest cost		121			109			363			327
Amortization of net transition obligation		29			29			87			87
Amortization of prior service credit		(5	)		(5	)		(15	)		(15	)
Amortization of net loss		36			19			108			57

Net periodic benefit cost	$	256		$	202		$	768		$	606

The Company anticipates that contributions to the postretirement healthcare plan for the 2004 fiscal year will be approximately $0.5 million; the contributions are expected to be in the form of benefits and administrative costs paid.

(9)

LEGAL PROCEEDINGS

The Company is subject to various legal proceedings, claims and litigation as described in Note 6 of the Company’s 2003 Annual Report on Form 10-K. There have been no material developments in these proceedings or any new material proceedings that have developed during the first nine months of 2004.

(10)

SUBSEQUENT EVENT

On October 21, 2004, the Company effected a call on its Series AB, $45 million 8.3 percent First Mortgage Bonds. The bonds had a maturity date of 2024.

ITEM 2. RESULTS OF OPERATIONS

	Three Months Ended				Nine Months Ended
	September 30				September 30
	2004		2003		2004		2003
	(in thousands)
Revenue	$	47,921	$	46,268	$	129,377	$	129,238
Operating expenses		35,415		31,773		98,902		90,493

Operating income	$	12,506	$	14,495	$	30,475	$	38,745

Income from continuing operations	$	5,860	$	6,772	$	12,712	$	18,193

The following table provides certain operating statistics:

	Three Months Ended				Nine Months Ended
	September 30				September 30
	2004		2003		2004		2003
Firm (system) sales - MWh		511,800		545,300		1,476,000		1,498,100
Off-system sales - MWh		335,500		204,700		797,400		684,500

Three Months Ended September 30, 2004 Compared to Three Months Ended September 30, 2003. Electric utility revenues increased 4 percent for the three-month period ended September 30, 2004, compared to the same period in the prior year. The increase in revenue was primarily due to a 64 percent increase in off-system electric megawatt-hour sales offset by an 11 percent decrease in average prices received from off-system sales. Firm commercial and residential electricity revenues decreased 5 percent and 12 percent, respectively, and industrial revenues increased 1 percent. Degree days, which is a measure of weather trends, were 37 percent below last year.

Electric operating expenses increased 11 percent for the three-month period ended September 30, 2004, compared to the same period in the prior year. Purchased power increased $4.3 million due to a 51 percent increase in megawatt-hours purchased, at a 5 percent decrease in the average cost per megawatt-hour. Megawatt-hours purchased increased due to uneconomic dispatch of our gas turbines and to support the increase in off-system sales. Gas costs decreased 55 percent due to a 64 percent decrease in megawatt-hours generated with our gas turbines, as prevailing prices made it more economical for us to purchase power for our peaking needs when it was available rather than generate energy from our gas turbines. The average cost per megawatt-hour of our gas generation was $67.03 for the three months ended September 30, 2004, while the average cost for purchased power was $35.25 per megawatt-hour for the same period. The decrease in fuel expense was offset by increased power marketing costs, increased health insurance costs and an increase in allocated corporate costs.

Income from continuing operations decreased $0.9 million primarily due to increases in purchased power expense, costs associated with the increase in off-system sales, health insurance expense and allocated corporate costs, partially offset by an increase in off-system electric sales and the decrease in gas costs.

Nine Months Ended September 30, 2004 Compared to Nine Months Ended September 30, 2003. Electric utility revenues were flat for the nine-month period ended September 30, 2004, compared to the same period in the prior year. Off-system electric megawatt-hour sales increased 16 percent at a 5 percent decrease in average prices received. Revenues were impacted in part by reduced Open Access Transmission Tariff rates and plant availability resulting from unscheduled and scheduled maintenance outages during the nine month period ended September 30, 2004. The increase in revenue from off-system sales was partially offset by decreased retail sales. Residential and commercial revenues decreased 3 percent and 2 percent, respectively, and industrial revenues increased 3 percent. Degree days, which is a measure of weather trends, were 12 percent below last year.

Electric operating expenses increased 9 percent for the nine-month period ended September 30, 2004, compared to the same period in the prior year. Purchased power increased $9.2 million due to a 38 percent increase in megawatt-hours purchased. Megawatt-hours purchased increased primarily due to a 16 percent increase in off-system megawatt-hour sales and the uneconomic dispatch of our gas turbines. Gas costs decreased 70 percent due to an 83 percent decrease in megawatt-hours generated with our gas turbines as prevailing prices made it more economical for us to purchase power for our peaking needs when it was available rather than generate energy from our gas turbines. The average cost per megawatt-hour of our gas generation was $76.33 for the nine months ended September 30, 2004, while the average cost for purchased power was $33.38 per megawatt-hour for the same period. The decrease in fuel expense was offset by increased plant maintenance costs, power marketing costs, health insurance costs and allocated corporate costs.

Income from continuing operations decreased $5.5 million primarily due to increases in purchased power expense, maintenance expense, costs associated with the increase in off-system sales, health insurance expense and allocated corporate costs, partially offset by an increase in off-system electric sales and the decrease in gas costs.

Forward Looking Statements

Some of the statements in this Form 10-Q include “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 Form 10-Q 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:

•

Our ability to access the debt and equity markets, which will depend on general market conditions and the credit ratings for our debt obligations;

•

General economic and political conditions, including tax rates or policies and inflation rates;

•

The creditworthiness of counterparties to trading and other transactions, and defaults on amounts due from counterparties;

•

The amount of collateral required to be posted from time to time in our transactions;

•

Changes in or compliance with laws and regulations, particularly those relating to taxation, safety and protection of the environment;

•

The timing and extent of changes in energy-related and commodity prices, interest rates, energy and commodity supply or volume, the cost of transportation of commodities, and demand for our services, all of which can affect our earnings, liquidity position and the underlying value of our assets;

•

Weather and other natural phenomena;

•

Industry and market changes, including the impact of consolidations and changes in competition;

•

The effect of accounting policies issued periodically by accounting standard-setting bodies;

•

The cost and effects on our business, including insurance, resulting from terrorist actions or responses to such actions;

•

Capital market conditions, including price risk due to marketable securities held as investments in benefit plans; and

•

Other factors discussed from time to time in our 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.

ITEM 4. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

Our Chief Executive Officer and Chief Financial Officer evaluated the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934 (Exchange Act)) as of September 30, 2004. Based on their evaluation, they have concluded that our disclosure controls and procedures are adequate and effective to ensure that material information relating to us that is included in our reports filed under the Exchange Act is recorded, processed, summarized and reported within the required time periods.

Changes in Internal Control Over Financial Reporting

During the period covered by this Quarterly Report on Form 10-Q, there have been no changes in our internal control over financial reporting that have materially affected or are reasonably likely to materially affect our internal control over financial reporting.

BLACK HILLS POWER, INC.

Part II — Other Information

Item 1.

Legal Proceedings

For information regarding legal proceedings, see Note 6 in Item 8 of the Company’s 2003 Annual Report on Form 10-K and Note 9 of our Notes to Financial Statements in this Quarterly Report on Form 10-Q, which information from Note 9 is incorporated by reference into this item.

Item 6.

Exhibits

(a) Exhibits—

Exhibit 31.1 Certification pursuant to Rule 13a - 14(a) of the Securities Exchange Act of 1934, as
adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

Exhibit 31.2 Certification pursuant to Rule 13a - 14(a) of the Securities Exchange Act of 1934, as
adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

Exhibit 32.1 Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906
of the Sarbanes-Oxley Act of 2002.

Exhibit 32.2 Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906
of the Sarbanes-Oxley Act of 2002.

BLACK HILLS POWER, INC.

Signatures

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

BLACK HILLS POWER, INC.

/s/ David R. Emery
David R. Emery, President and
Chief Executive Officer

/s/ Mark T. Thies
Mark T. Thies, Executive Vice President and
Chief Financial Officer

Dated: November 12, 2004

EXHIBIT INDEX

Exhibit Number

Description

Exhibit 31.1

Certification pursuant to Rule 13a – 14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes – Oxley Act of 2002.

Exhibit 31.2

Certification pursuant to Rule 13a – 14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes – Oxley Act of 2002.

Exhibit 32.1

Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

Exhibit 32.2

Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

Reduced Disclosure

BLACK HILLS POWER, INC. CONDENSED STATEMENTS OF INCOME (unaudited)

BLACK HILLS POWER, INC. CONDENSED BALANCE SHEETS (unaudited)

BLACK HILLS POWER, INC. CONDENSED STATEMENTS OF CASH FLOWS (unaudited)

ITEM 2. RESULTS OF OPERATIONS

Forward Looking Statements

ITEM 4. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

Changes in Internal Control Over Financial Reporting

BLACK HILLS POWER, INC.
CONDENSED STATEMENTS OF INCOME
(unaudited)

BLACK HILLS POWER, INC.
CONDENSED BALANCE SHEETS
(unaudited)

BLACK HILLS POWER, INC.
CONDENSED STATEMENTS OF CASH FLOWS
(unaudited)