1996

          EXECUTIVE

          GAINSHARING PROGRAM


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                    1996 EXECUTIVE GAINSHARING PROGRAM



       The Executive Gainsharing Program is one of three sections of a        
       Company-wide gainsharing program.  Other work units participating in
       the Company-wide program are the Bargaining Unit and a program for the
       Staff.  Each of the three work units have goals established in which
       participants can directly influence the results.  The maximum award
       that any participant may receive is three percent.

       This program is designed for the officers in the following positions:
       Chairman, President and CEO; President and COO; Sr. Vice President,
       Finance; Vice President, Administration; Vice President, Power Supply;
       Secretary/Treasurer, and Controller.


                             BLACK HILLS CORPORATION
                   1996 EXECUTIVE GAINSHARING PROGRAM GOALS

       I. SAFETY GOAL (1%)

          This  category  has  a  total  award  value  of  1%.  The category is
          comprised of safety goals dependent on each other.  The goals are:

          A.  Motor Vehicle Accidents
          B.  OSHA Lost Time Accidents

          To receive a 1% award, the Company average must be less than the NCEA
          average at year-end in each respective area.

       II. O&M EXPENSE REDUCTION GOAL (1%)

          This category has a total award value of 1%.  For an award to be paid
          in this category, a reduction in the O&M budget must occur.  A payout
          to  the  participants  will  be  equal  to one-third of  the  average
          company-wide participant gainshare payout.

          Example: If the average 1995 gainshare award  payout  per participant
                 is 2.5%,  each participant (officer) in this specific  program
                 would receive a payout equal to .825%.

       III. COMPANY STRATEGIC DIRECTION GOAL (1%)

          The goal has a total award value of 1%.  Participants will develop  a
          plan representing their respective area of responsibility in relation
          to  the  strategic organizational direction the Company will model in
          five years given the information known at the present time.  At year-
          end, the CEO  will  determine  to  what  degree  the  goal  has  been
          achieved.  Awards for each participant can be made in 1/4% increments
          not to exceed 1%.
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       NOTE:   For  each  MVA,  LTA, or public liability an individual employee
       has, the equivalent of a 1%  award  will be deducted from their award as
       previously calculated.  (An employee  could lose the entire 3% potential
       award should they incur three of the above mentioned incidents.)

       STOP LOSS: The basic goal of gainsharing is to reduce costs.  Therefore,
       employees who have a MVA, LTA, public liability,  operations or property
       damage loss in excess of $10,000 and are found to be  at  fault  will be
       ineligible  for  any Gainshare Award that year.  An incident that occurs
       in one year but accumulates  expenses in more than one year would affect
       an employee's Gainsharing Award in the year expenses reach $10,000.  The
       Gainsharing  Committee will address  special  situations  and  determine
       effect.


                                     GUIDELINES

       The program will  be  comprised of a one year period starting January 1,
       1996, through December 31, 1996.  The gainshare program calculations and
       payout checks, if awarded,  will  be  issued in the first quarter of the
       following year.

       An individual employee's gainsharing bonus,  if  any,  will  be  paid on
       gross  pay  as it appears on the employee's W-2.  This includes regular,
       paid time off, and other forms of compensation.

       An employee who transfers between one of the three gainshare programs as
       defined in the 1996 Gainsharing Program will have their gainshare bonus,
       if  awarded, based  upon  where  the  greatest  amount  of  time  worked
       occurred.  The maximum gainsharing award an employee may receive is 3%.

       Anyone  terminated  from  employment with Black Hills Corporation before
       the completion of the program  will  not be eligible for any gainsharing
       bonus.  Exceptions would be death, permanent disability or retirement.


                          Board of Directors Retain Discretion

       This  Plan is not at any time a contract  of  employment.   The  Company
       reserves  the  right  to  change this Plan whenever and in any manner it
       deems appropriate.  Irrespective  of  changes in the Plan, no rights are
       vested.  All awards are earned only when  and if finally approved by the
       Board of Directors notwithstanding anything  contained  in the Plan that
       may be construed to be to the contrary.

       The Board of Directors, in its sole and absolute discretion, may decline
       to  approve  any  award,  though  the  participant may have achieved  or
       exceeded  threshold  and  target  levels  of   performance.   Setting  a
       threshold  or  target  of  performance  for  any  participant  does  not
       constitute a promise to pay an award even if the participant  meets  the
       threshold  or  target of performance.  In determining whether to make an
       award and the amount  of  the award, the Board of Directors may consider
       criteria  other  than  or  in  addition  to  the  threshold  and  target
       performance determined under this  Plan.   Nothing  in  this  Plan  is a
       promise  by the Company or any of its subsidiaries to continue to employ
       any participant for any period of time.