| x      | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934     |
|--------|------------------------------------------------------------------------------------------|
|   |                                                                                     |
|   | For the fiscal year ended December 31, 2009                                              |
|   |                                                                                     |
| o      | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
|   |                                                                                     |
|   | For the transition period from ___________________ to __________________                 |
|   |                                                                                     |
|   | Commission File Number 1-7978                                                            |

| Incorporated in South Dakota                                                                                                                                                                                                                              |   | IRS Identification Number 46-0111677 |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------------------------------------|
| 625 Ninth Street, Rapid City, South Dakota  57701                                                                                                                                                                                               |
|                                                                                                                                                                                                                                                      |   |                                 |
| Registrant's telephone number, including area code: (605) 721-1700                                                                                                                                                                                        |
|                                                                                                                                                                                                                                                      |   |                                 |
|      Securities registered pursuant to Section 12(b) of the Act                           None      |
|                                                                                                                                                                                                                                                      |   |                                 |
|      Securities registered pursuant to Section 12(g) of the Act                           None |

----

| Class                         | Outstanding at February 26, 2010 |
|-------------------------------|----------------------------------|
| Common stock, $1.00 par value | 23,416,396 shares                |

----

| TABLE OF CONTENTS |
|-------------------|
|              |   |   |
|              |   | Page |
|              |   |   |
|              | GLOSSARY OF TERMS | 3 |
|              |   |   |
| ITEMS 1. and 2.   | BUSINESS AND PROPERTIES | 5 |
|              | Safe Harbor for Forward Looking Information | 5 |
|              | General | 7 |
|              | Regulations | 10 |
|              |   |   |
| ITEM 1A.          | RISK FACTORS | 11 |
|              |   |   |
| ITEM 1B.          | UNRESOLVED STAFF COMMENTS | 20 |
|              |   |   |
| ITEM 3.           | LEGAL PROCEEDINGS | 20 |
|              |   |   |
| ITEM 5.           | MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS | 20 |
|              |   |   |
| ITEM 7.           | MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS | 20 |
|              |   |   |
| ITEM 8.           | FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA | 25 |
|              |   |   |
| ITEM 9.           | CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE | 58 |
|              |   |   |
| ITEM 9A.          | CONTROLS AND PROCEDURES | 58 |
|              |   |   |
| ITEM 9B.          | OTHER INFORMATION | 58 |
|              |   |   |
| ITEM 15.          | EXHIBITS, FINANCIAL STATEMENT SCHEDULES | 59 |
|              |   |   |
|              | SIGNATURES | 62 |
|              |   |   |
|              | INDEX TO EXHIBITS | 63 |

----

| AFUDC                              | Allowance for Funds Used During Construction                                                                                                                               |
|------------------------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| AOCI                               | Accumulated Other Comprehensive Income                                                                                                                                     |
| ASC                                | Accounting Standards Codification                                                                                                                                          |
| ASC 105                            | ASC 105, "FASB Accounting Standards Codification and the Hierarchy of Generally Accepted Accounting Principles"                                                            |
| ASC 715                            | ASC 715, "Compensation – Retirement Benefits"                                                                                                                        |
| ASC 805                            | ASC 805, "Business Combinations"                                                                                                                                           |
| ASC 815                            | ASC 815, "Derivatives and Hedges"                                                                                                                                          |
| ASC 820                            | ASC 820, "Fair Value Measurements and Disclosures"                                                                                                                         |
| ASC 825                            | ASC 825, "Financial Instruments"                                                                                                                                           |
| ASC 855                            | ASC 855, "Subsequent Events"                                                                                                                                               |
| Basin Electric                     | Basin Electric Power Cooperative                                                                                                                                           |
| BHC                                | Black Hills Corporation                                                                                                                                                    |
| Black Hills Non-regulated Holdings | Black Hills Non-regulated Holdings, LLC, a direct, wholly-owned subsidiary of the Parent Company, that was formerly known as Black Hills Energy, Inc.                      |
| Black Hills Utility Holdings       | Black Hills Utility Holdings, Inc. a direct, wholly-owned subsidiary of BHC                                                                                                |
| Black Hills Wyoming                | Black Hills Wyoming, Inc., an indirect, wholly-owned subsidiary of Black Hills Electric Generation, Inc., a subsidiary of Black Hills Non-regulated Holdings               |
| Cheyenne Light                     | Cheyenne Light, Fuel and Power Company, a direct, wholly-owned subsidiary of BHC                                                                                           |
| CO2                                | Carbon Dioxide                                                                                                                                                             |
| Colorado Electric                  | Black Hills Colorado Electric Utility Company, LP, (doing business as Black Hills Energy), an indirect, wholly-owned  subsidiary of Black Hills Utility Holdings |
| Enserco                            | Enserco Energy Inc., a wholly-owned subsidiary of Black Hills Non-Regulated Holdings, LLC                                                                                  |
| EPA                                | U.S. Environmental Protection Agency                                                                                                                                       |
| FASB                               | Financial Accounting Standards Board                                                                                                                                       |
| FERC                               | Federal Energy Regulatory Commission                                                                                                                                       |
| GAAP                               | Accounting principles generally accepted in the United States of America                                                                                                   |
| GHG                                | Greenhouse gas                                                                                                                                                             |
| Happy Jack                         | Happy Jack Wind Farms, LLC, a subsidiary of Duke Energy Generation Services                                                                                                |
| IRS                                | Internal Revenue Service                                                                                                                                                   |
| LIBOR                              | London Interbank Offered Rate                                                                                                                                              |
| MAPP                               | Mid-Continent Area Power Pool                                                                                                                                              |
| MDU                                | Montana Dakota Utilities Company                                                                                                                                           |
| MEAN                               | Municipal Energy Agency of Nebraska                                                                                                                                        |
| MIDC                               |                                                                                                                                                                       |
| MMBtu                              | Million British thermal units                                                                                                                                              |
| Moody's                            | Moody's Investor Services, Inc.                                                                                                                                            |
| MTPSC                              | Montana Public Service Commission                                                                                                                                          |
| MW                                 | Megawatts                                                                                                                                                                  |
| MWh                                | Megawatt-hours                                                                                                                                                             |

----

| NQDC        | Non-Qualified Deferred Compensation Plan                                                                               |
|-------------|------------------------------------------------------------------------------------------------------------------------|
| PPA         | Power Purchase Agreement                                                                                               |
| PSD         | Prevention of Significant Deterioration                                                                                |
| PUHCA       | Public Utility Holding Company Act of 2005                                                                             |
| SDPUC       | South Dakota Public Utilities Commission                                                                               |
| SEC         | U. S. Securities and Exchange Commission                                                                               |
| Silver Sage | Silver Sage Windpower, LLC, a subsidiary of Duke Energy Generation Services                                            |
| S&P     | Standard & Poor's Rating Services                                                                                  |
| WECC        | Western Electricity Coordinating Council                                                                               |
| WPSC        | Wyoming Public Service Commission                                                                                      |
| WRDC        | Wyodak Resources Development Corporation, a direct, wholly-owned subsidiary of Black Hills Non-regulated Holdings, LLC |

----

| ITEMS 1and 2. | BUSINESS AND PROPERTIES |
|---------------|-------------------------|

|   | · | Our ability to obtain adequate cost recovery for our electric utility operations through regulatory proceedings and receive favorable rulings in periodic applications to recover costs for fuel and purchased power and our ability to add power generation assets into regulatory rate base; |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Our ability to successfully maintain or improve our corporate credit rating; |
|--------|--------|------------------------------------------------------------------------------|

|   | · | Our ability to obtain from utility commissions any requisite determination of prudency to support resource planning and development programs we propose to implement; |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | The timing and extent of scheduled and unscheduled outages; |
|--------|--------|-------------------------------------------------------------|

|   | · | The possibility that we may be required to take impairment charges to reduce the carrying value of some of our long-lived assets when indicators of impairment emerge; |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Changes in business and financial reporting practices arising from the enactment of the Energy Policy Act of 2005 and subsequent rules and regulations promulgated thereunder; |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Our ability to complete the permitting, construction, start-up and operation of power generating facilities in a cost-effective and timely manner; |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Our ability to remedy any deficiencies that may be identified in the review of our internal controls; |
|--------|--------|-------------------------------------------------------------------------------------------------------|

|   | · | Our ability to successfully complete labor negotiations with our union; |
|--------|--------|-------------------------------------------------------------------------|

----

|   | · | The timing, volatility and extent of changes in energy-related and commodity prices, interest rates, energy and commodity supply or volume, the cost and availability 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; |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Our ability to effectively use derivative financial instruments to hedge commodity risks; |
|--------|--------|-------------------------------------------------------------------------------------------|

|   | · | Our ability to minimize defaults on amounts due from customers and counterparty transactions; |
|--------|--------|-----------------------------------------------------------------------------------------------|

|   | · | Our ability to comply, or to make expenditures required to comply with changes in laws and regulations, particularly those relating to taxation, safety and protection of the environment and to recover those expenditures in customer rates, where applicable; |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Liabilities of environmental conditions, including remediation and reclamation obligations under environmental laws; |
|--------|--------|----------------------------------------------------------------------------------------------------------------------|

|   | · | Federal and state laws concerning climate changes and air emissions, including emission reduction mandates and renewable energy portfolio standards, may materially increase our generation and production costs and could render some of our generating units uneconomical to operate and maintain; |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Our ability to recover our borrowing costs, including debt service costs, in our customer rates; |
|--------|--------|--------------------------------------------------------------------------------------------------|

|   | · | Weather and other natural phenomena; |
|--------|--------|--------------------------------------|

|   | · | Macro- and micro-economic changes in the economy and energy industry, including the impact of (i) consolidations and changes in competition, (ii) changing conditions in the credit markets, and (iii) general economic and political conditions, including tax rates or policies and inflation rates; |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | 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 or events; |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------|

|   | · | The outcome of any ongoing or future litigation or similar disputes and the impact on any such outcome or related settlements on our financial condition or results of operations; |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Capital market conditions, which may affect our ability to raise capital on favorable terms; |
|--------|--------|----------------------------------------------------------------------------------------------|

|   | · | Price risk due to marketable securities held as investments in benefit plans; and |
|--------|--------|-----------------------------------------------------------------------------------|

|   | · | Other factors discussed from time to time in our other filings with the SEC. |
|--------|--------|------------------------------------------------------------------------------|

----

|   | · | We have a diverse customer and revenue base.  Our revenue mix for the year ended December 31, 2009 was comprised of 29% commercial, 23% residential, 12% contract wholesale, 16% wholesale off-system, 10% industrial and 10% municipal sales and other revenue. |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | We own 35% and Basin Electric owns 65% of a transmission tie that provides an interconnection between the Western and Eastern transmission grids, enabling access to both the WECC region in the West, and the MAPP region in the East.  Our system is located in the WECC region.  The total transfer capacity of the tie is 400 MW - 200 MW from West to East and 200 MW from East to West.  This transmissiontie allows us to buy and sell energy in the Eastern interconnection without having to isolate and physically reconnect load or generation between the two electrical transmission grids.  The transmission tie accommodates scheduling transactions in both directions simultaneously.  This transfer capability provides additional opportunity to sell our excess generation or to make economic purchases to serve our native load and our contract obligations, and to take advantage of the power price differentialsbetween the two electric grids.  Additionally, our system is capable of directly interconnecting up to 80 MW of generation or load to the Eastern transmission grid.  Transmission constraints within the MAPP transmission system may limit the amount of capacity that may be directly interconnected to the Eastern system at any given time. |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | We have firm point-to-point transmission access to deliver up to 50 MW of power on PacifiCorp's transmission system to wholesale customers in the Western region through 2023. |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|   | · | We have firm network transmission access to deliver power on PacifiCorp's system to Sheridan, Wyoming to serve our power sales contract with MDU through 2016, with the right to renew pursuant to the terms of PacifiCorp's transmission tariff. |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | ● | An agreement under which we supply up to 74 MW of capacity and energy to MDU for the Sheridan, Wyoming electric service territory through the end of 2016.  The sales to MDU have been integrated into our control area and are considered part of our firm native load.  This agreement permitted MDU the option to participate in the ownership of the Wygen III plant that is currently being constructed.  InApril 2009, MDU exercised this option and purchased a 25% ownership interest in Wygen III.  In conjunction with the ownership interest transaction, the agreement to supply capacity and energy through 2016 was modified.  The agreement now provides that once in commercial operation, the first 25 MW of the required 74 MW will be supplied from MDU's ownership interest in Wygen III.  During periods of reduced production at Wygen III, or during periods when Wygen III is offline, MDU willbe provided with its 25 MW from our other generation facilities or from system purchases; |
|--------|---------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | ● | An agreement with the City of Gillette, Wyoming, to provide the City its first 23 MW of capacity and energy annually.  The sales to the City of Gillette have been integrated into our control area and are considered part of our firm native load.  The agreement renews automatically and requires a seven-year notice of termination.  As of December31, 2009, neither party to the agreement had given a notice of termination; |
|--------|---------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | An agreement under which we supply 20 MW of energy and capacity to MEAN under a contract that expires in 2023.  This contract is unit-contingent based on the availability of our Neil Simpson II and Wygen III plants, with capacity purchase decreasing to 15 MW in 2018, 12 MW in 2020 and 10 MW in 2022.  The unit-contingent capacity amounts from Wygen IIIand Neil Simpson II are as follows: |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 2010-2017   20 MW - 10 MW contingent on Wygen III and 10 MW contingent on Neil Simpson II    |
|--------------------------------------------------------------------------------------------------------|
| 2018-2019   15 MW - 10 MW contingent on Wygen III and 5 MW contingent on Neil Simpson II     |
| 2020-2021   12 MW - 6 MW contingent on Wygen III and 6 MW contingent on Neil Simpson II      |
| 2022-2023   10 MW - 5 MW contingent on Wygen III and 5 MW contingent on Neil Simpson II; and |

|   | · | In July 2009, we entered into a five-year PPA with MEAN.  The contract commences the month following the onset of commercial operations of Wygen III.  Under this contract, MEAN will purchase 5 MW of unit-contingent capacity from Neil Simpson II and 5 MW of unit-contingent capacity from Wygen III. |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|   | · | A PPA with PacifiCorp expiring in 2023, involving the purchase by us of 50 MW of coal-fired baseload power; |
|--------|--------|-------------------------------------------------------------------------------------------------------------|

|   | · | A reserve capacity integration agreement with PacifiCorp expiring in 2012, which makes available to us 100 MW of reserve capacity in connection with the utilization of the Ben French Combustion Turbine units; |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | A 20-year PPA with Cheyenne Light expiring in 2028, under which we will purchase up to 20 MW of wind energy through Cheyenne Light's agreement with Happy Jack; |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | A 20-year PPA with Cheyenne Light expiring in 2029, under which we will purchase up to 20 MW of wind energy through Cheyenne Light's agreement with Silver Sage; and |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | A Generation Dispatch Agreement with Cheyenne Light that requires us to purchase all of Cheyenne Light's excess energy. |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------|

----

----

| ITEM 1A. | RISK FACTORS |
|----------|--------------|

----

|   | · | Operational limitations imposed by environmental and other regulatory requirements. |
|--------|--------|-------------------------------------------------------------------------------------|

|   | · | Interruptions to supply of fuel and other commodities used in generation. |
|--------|--------|---------------------------------------------------------------------------|

|   | · | Breakdown or failure of equipment or processes. |
|--------|--------|-------------------------------------------------|

|   | · | Inability to recruit and retain skilled technical labor. |
|--------|--------|----------------------------------------------------------|

|   | · | Labor relations.  Renewal negotiations of the collective bargaining agreement are planned in early 2010. |
|--------|--------|--------------------------------------------------------------------------------------------------------------------|

|   | · | Disrupted transmission and distribution.  We depend on transmission and distribution facilities, including those operated by unaffiliated parties, to deliver the electricity that we sell to our retail and wholesale customers.  If transmission is interrupted, our ability to sell or deliver product and satisfy our contractual obligations may be hindered. |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

----

|   | · | The inability to obtain required governmental permits and approvals; |
|--------|--------|----------------------------------------------------------------------|

|   | · | Contract restrictions upon the timing of scheduled outages; |
|--------|--------|-------------------------------------------------------------|

|   | · | Cost of supplying or securing replacement power during scheduled and unscheduled outages; |
|--------|--------|-------------------------------------------------------------------------------------------|

|   | · | The unavailability or increased cost of equipment; |
|--------|--------|----------------------------------------------------|

|   | · | The inability and cost of recruiting and retaining skilled labor; |
|--------|--------|-------------------------------------------------------------------|

|   | · | Supply interruptions, work stoppages and labor disputes; |
|--------|--------|----------------------------------------------------------|

|   | · | Capital and operating costs to comply with increasingly stringent environmental laws and regulations; |
|--------|--------|-------------------------------------------------------------------------------------------------------|

|   | · | Opposition by members of the public or special-interest groups; |
|--------|--------|-----------------------------------------------------------------|

|   | · | Weather interferences; |
|--------|--------|------------------------|

|   | · | Unexpected engineering, environmental and geological problems; and |
|--------|--------|--------------------------------------------------------------------|

|   | · | Unanticipated cost overruns. |
|--------|--------|------------------------------|

----

----

----

----

|   | · | The Energy Policy Act of 2005 and the repeal of the PUHCA; |
|--------|--------|------------------------------------------------------------|

|   | · | Industry consolidation; |
|--------|--------|-------------------------|

|   | · | Consumer demands; |
|--------|--------|-------------------|

|   | · | Transmission constraints; |
|--------|--------|---------------------------|

|   | · | Renewable resource supply requirements; |
|--------|--------|-----------------------------------------|

|   | · | Resistance to the siting of utility infrastructure or to the granting of right-of-ways; |
|--------|--------|-----------------------------------------------------------------------------------------|

|   | · | Technological advances; and |
|--------|--------|-----------------------------|

|   | · | Greater availability of natural gas-fired power generation, and other factors. |
|--------|--------|--------------------------------------------------------------------------------|

----

----

| ITEM 1B. | UNRESOLVED STAFF COMMENTS |
|----------|---------------------------|

| ITEM 3. | LEGAL PROCEEDINGS |
|---------|-------------------|

| ITEM 5. | MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS |
|---------|-----------------------------------------------------------------------|

| ITEM 7. | MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS |
|---------|---------------------------------------------------------------|

|                     | 2009           |    |   | 2008   |   |    | 2007   |   |
|--------------------------|----------------|---------|--------|--------|--------|---------|--------|--------|
|                     | (in thousands) |    |
|                     |           |    |   |   |   |    |   |   |
| Revenue                  | $              | 207,079 |   |   | $      | 232,674 |   |   | $ | 199,701 |   |
| Fuel and purchased power |           | 91,349  |   |   |   | 113,672 |   |   |   | 79,425 |   |
| Gross margin             |           | 115,730 |   |   |   | 119,002 |   |   |   | 120,276 |   |
|                     |           |    |   |   |   |    |   |   |   |   |   |
| Operating expenses       |           | 80,925  |   |   |   | 80,366  |   |   |   | 72,762 |   |
| Operating income         |           | 34,805  |   |   |   | 38,636  |   |   |   | 47,514 |   |
|                     |           |    |   |   |   |    |   |   |   |   |   |
| Interest expense, net    |           | (11,164 | )      |   |   | (10,111 | )      |   |   | (10,903 | ) |
| Other income             |           | 7,802   |   |   |   | 3,785   |   |   |   | 853 |   |
| Income tax expense       |           | (8,304  | )      |   |   | (9,551  | )      |   |   | (12,568 | ) |
| Net income               | $              | 23,139  |   |   | $      | 22,759  |   |   | $ | 24,896 |   |

----

|        Electric Revenue        (in thousands) |   |
|--------------------------------------------------------------------------------------------------------------------------|--------|
|                                                                                                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Customer Base                                                                                                            | 2009   |   |   | Percentage Change |   |   | 2008 |   |   | Percentage Change |   |   | 2007 |   |
|                                                                                                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Commercial                                                                                                               | $      | 59,897 |   |   |   | 3 | % |   | $ | 58,289 |   |   |   | 4 | % |   | $ | 55,991 |   |
| Residential                                                                                                              |   | 48,586 |   |   |   | 4 |   |   |   | 46,854 |   |   |   | 3 |   |   |   | 45,657 |   |
| Industrial                                                                                                               |   | 20,014 |   |   |   | (7 | ) |   |   | 21,432 |   |   |   | (2 | ) |   |   | 21,974 |   |
| Municipal                                                                                                                |   | 2,735 |   |   |   | - |   |   |   | 2,734 |   |   |   | 1 |   |   |   | 2,697 |   |
| Total retail sales                                                                                                       |   | 131,232 |   |   |   | 1 |   |   |   | 129,309 |   |   |   | 2 |   |   |   | 126,319 |   |
| Contract wholesale                                                                                                       |   | 25,358 |   |   |   | (5 | ) |   |   | 26,643 |   |   |   | 6 |   |   |   | 25,240 |   |
| Wholesale off-system                                                                                                     |   | 32,212 |   |   |   | (49 | ) |   |   | 63,770 |   |   |   | 81 |   |   |   | 35,210 |   |
| Total electric sales                                                                                                     |   | 188,802 |   |   |   | (14 | ) |   |   | 219,722 |   |   |   | 18 |   |   |   | 186,769 |   |
| Other revenue                                                                                                            |   | 18,277 |   |   |   | 41 |   |   |   | 12,952 |   |   |   | - |   |   |   | 12,932 |   |
| Total revenue                                                                                                            | $      | 207,079 |   |   |   | (11 | )% |   | $ | 232,674 |   |   |   | 17 | % |   | $ | 199,701 |   |

|                 Megawatt-HoursSold |   |
|--------------------------------------------------------------------------------------------------------------------|--------|
|                                                                                                               |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Customer Base                                                                                                      | 2009   |   |   | Percentage Change |   |   | 2008 |   |   | Percentage Change |   |   | 2007 |   |
|                                                                                                               |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Commercial                                                                                                         |   | 723,360 |   |   |   | 3 | % |   |   | 699,734 |   |   |   | 1 | % |   |   | 690,702 |   |
| Residential                                                                                                        |   | 529,825 |   |   |   | 1 |   |   |   | 524,413 |   |   |   | 1 |   |   |   | 518,148 |   |
| Industrial                                                                                                         |   | 353,041 |   |   |   | (15 | ) |   |   | 414,421 |   |   |   | (5 | ) |   |   | 434,627 |   |
| Municipal                                                                                                          |   | 33,948 |   |   |   | (1 | ) |   |   | 34,368 |   |   |   | (1 | ) |   |   | 34,661 |   |
| Total retail sales                                                                                                 |   | 1,640,174 |   |   |   | (2 | ) |   |   | 1,672,936 |   |   |   | - |   |   |   | 1,678,138 |   |
| Contract wholesale                                                                                                 |   | 645,297 |   |   |   | (3 | ) |   |   | 665,795 |   |   |   | 2 |   |   |   | 652,931 |   |
| Wholesale off-system                                                                                               |   | 1,009,574 |   |   |   | (6 | ) |   |   | 1,074,398 |   |   |   | 58 |   |   |   | 678,581 |   |
| Total electric sales                                                                                               |   | 3,295,045 |   |   |   | (3 | ) |   |   | 3,413,129 |   |   |   | 13 |   |   |   | 3,009,650 |   |
| Losses and company use                                                                                             |   | 159,207 |   |   |   | 90 |   |   |   | 83,598 |   |   |   | (29 | ) |   |   | 118,253 |   |
| Total energy                                                                                                       |   | 3,454,252 |   |   |   | (1 | )% |   |   | 3,496,727 |   |   |   | 12 | % |   |   | 3,127,903 |   |

|                                      | 2009   | 2008   | 2007   |
|-------------------------------------------|--------|--------|--------|
| Regulated power plant fleet availability: |   |   |   |
| Coal-fired plants                         | 90.3%  | 93.5%  | 95.4%  |
| Other plants                              | 97.7%  | 89.2%  | 99.4%  |
| Total availability                        | 93.5%  | 91.6%  | 97.2%  |

----

| Resources       | 2009   |      |   | Percentage Change |   |   | 2008   |   |   | Percentage Change |   |   | 2007   |   |
|-----------------|--------|-----------|--------|-------------------|--------|--------|--------|--------|--------|-------------------|--------|--------|--------|--------|
|            |   |      |   |              |   |   |   |   |   |              |   |   |   |   |
| MWh generated:  |   |      |   |              |   |   |   |   |   |              |   |   |   |   |
| Coal            |   | 1,721,074 |   |              |   | (1     | )%     |   |   | 1,731,838         |   |   |   | (2     | )% |   |   | 1,758,280 |   |
| Gas             |   | 46,723    |   |              |   | (24    | )      |   |   | 61,801            |   |   |   | (32    | ) |   |   | 90,618 |   |
|            |   | 1,767,797 |   |              |   | (1     | )      |   |   | 1,793,639         |   |   |   | (3     | ) |   |   | 1,848,898 |   |
|            |   |      |   |              |   |   |   |   |   |              |   |   |   |   |   |   |   |   |   |
| MWh purchased   |   | 1,686,455 |   |              |   | (1     | )      |   |   | 1,703,088         |   |   |   | 33     |   |   |   | 1,279,005 |   |
| Total resources |   | 3,454,252 |   |              |   | (1     | )%     |   |   | 3,496,727         |   |   |   | 12     | % |   |   | 3,127,903 |   |

|                             | 2009   | 2008   | 2007   |
|----------------------------------|--------|--------|--------|
|                             |   |   |   |
| Heating and cooling degree days: |   |   |   |
| Actual                           |   |   |   |
| Heating degree days              | 7,753  | 7,676  | 6,627  |
| Cooling degree days              | 354    | 482    | 1,033  |
|                             |   |   |   |
| Variance from 30-year average:   |   |   |   |
| Heating degree days              | 8%     | 6%     | (7)%   |
| Cooling degree days              | (41)%  | (19)%  | 74%    |

|   | · | $6.5 million increase in other margins primarily due to an increase in transmission rates effective January 1, 2009; |
|--------|--------|----------------------------------------------------------------------------------------------------------------------|

|   | · | Increased other income primarily due to a $2.2 million increase of AFUDC-equity, attributable to the ongoing construction of Wygen III; and |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Income tax expense decreased $1.2 million primarily due to a decrease in pre-tax net income and the favorable tax impact as a result of the increase in AFUDC-equity. |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Margins from wholesale off-system sales decreased $7.6 million due to a 46% decrease in energy prices and a 6% decrease in total MWh sold in the power markets; |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Increase in net interest expense of $1.1 million primarily due to a new debt issuance; and |
|--------|--------|--------------------------------------------------------------------------------------------|

|   | · | A $1.0 million decrease in retail and wholesale margins primarily due to increased coal costs and a 2% decrease in MWh sold related to lower cooling degree days. |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|   | · | A $2.6 million reduction in retail and wholesale sales margins due to increased fuel and purchased power costs, primarily due to increased coal costs and scheduled and unscheduled outages at Ben French, Osage and Neil Simpson I coal-fired plants.  The duration of the Ben French outage was three months as we accelerated the completion of maintenance projects that were originally scheduled for this plant in2009; |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Increased operating expenses due to increased repairs and maintenance expenses and labor overhead costs; and |
|--------|--------|--------------------------------------------------------------------------------------------------------------|

|   | · | Increased administrative and general expenses of $1.9 million due to an increase in the workers' compensation reserve. |
|--------|--------|------------------------------------------------------------------------------------------------------------------------|

|   | · | Margins from wholesale off-system sales increased $1.3 million.  Total MWh increased 58% as we were able to take advantage of favorable market conditions and high MIDC pricing due to below normal temperatures; and |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Income related to a $5.3 million increase of AFUDC, primarily attributable to the ongoing construction of Wygen III. |
|--------|--------|----------------------------------------------------------------------------------------------------------------------|

----

----

| ITEM 8. |  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA    |
|---------|---------------------------------------------------------------------|
|    |                                                                |
|    |  INDEX TO FINANCIAL STATEMENTS                  |

| Management's Report on Internal Control over Financial Reporting                                               | 26      |
|----------------------------------------------------------------------------------------------------------------|---------|
|                                                                                                           |    |
| Report of Independent Registered Public Accounting Firm                                                        | 27      |
|                                                                                                           |    |
| Statements of Income for the three years ended December 31, 2009                                               | 28      |
|                                                                                                           |    |
| Balance Sheets as of December 31, 2009 and 2008                                                                | 29      |
|                                                                                                           |    |
| Statements of Cash Flows for the three years ended December 31, 2009                                           | 30      |
|                                                                                                           |    |
| Statements of Common Stockholder's Equity and Comprehensive Income for the three years ended December 31, 2009 | 31      |
|                                                                                                           |    |
| Notes to Financial Statements                                                                                  | 32 - 57 |

----

----

----

| Years ended December 31,                              | 2009           |    |   | 2008   |   |    | 2007   |   |
|-------------------------------------------------------|----------------|---------|--------|--------|--------|---------|--------|--------|
|                                                  | (in thousands) |    |
|                                                  |           |    |   |   |   |    |   |   |
| Operating revenues                                    | $              | 207,079 |   |   | $      | 232,674 |   |   | $ | 199,701 |   |
|                                                  |           |    |   |   |   |    |   |   |   |   |   |
| Operating expenses:                                   |           |    |   |   |   |    |   |   |   |   |   |
| Fuel and purchased power                              |           | 91,349  |   |   |   | 113,672 |   |   |   | 79,425 |   |
| Operations and maintenance                            |           | 30,339  |   |   |   | 31,028  |   |   |   | 25,786 |   |
| Administrative and general                            |           | 24,586  |   |   |   | 21,864  |   |   |   | 19,965 |   |
| Depreciation and amortization                         |           | 19,465  |   |   |   | 20,930  |   |   |   | 20,763 |   |
| Taxes, other than income taxes                        |           | 6,535   |   |   |   | 6,544   |   |   |   | 6,248 |   |
| Total operating expenses                              |           | 172,274 |   |   |   | 194,038 |   |   |   | 152,187 |   |
|                                                  |           |    |   |   |   |    |   |   |   |   |   |
| Operating income                                      |           | 34,805  |   |   |   | 38,636  |   |   |   | 47,514 |   |
|                                                  |           |    |   |   |   |    |   |   |   |   |   |
| Other (expense) income:                               |           |    |   |   |   |    |   |   |   |   |   |
| Interest expense                                      |           | (11,422 | )      |   |   | (10,836 | )      |   |   | (11,787 | ) |
| Interest income                                       |           | 258     |   |   |   | 725     |   |   |   | 884 |   |
| AFUDC - equity                                        |           | 5,831   |   |   |   | 3,605   |   |   |   | 601 |   |
| Other expense                                         |           | -       |   |   |   | (47     | )      |   |   | - |   |
| Other income                                          |           | 1,971   |   |   |   | 227     |   |   |   | 252 |   |
| Total other expense                                   |           | (3,362  | )      |   |   | (6,326  | )      |   |   | (10,050 | ) |
|                                                  |           |    |   |   |   |    |   |   |   |   |   |
| Income from continuing operations before income taxes |           | 31,443  |   |   |   | 32,310  |   |   |   | 37,464 |   |
| Income tax expense                                    |           | (8,304  | )      |   |   | (9,551  | )      |   |   | (12,568 | ) |
|                                                  |           |    |   |   |   |    |   |   |   |   |   |
| Net income                                            | $              | 23,139  |   |   | $      | 22,759  |   |   | $ | 24,896 |   |

----

| At December 31,                                                                                                         | 2009                                 |     |   | 2008   |   |
|-------------------------------------------------------------------------------------------------------------------------|--------------------------------------|----------|--------|--------|--------|
|                                                                                                                    | (in thousands, except share amounts) |     |
|           ASSETS                                                      |                                 |     |   |   |   |
| Current assets:                                                                                                         |                                 |     |   |   |   |
| Cash and cash equivalents                                                                                               | $                                    | 1,709    |   |   | $      | 4 |   |
| Receivables – customers, net                                                                                      |                                 | 19,991   |   |   |   | 23,881 |   |
| Receivables – affiliates, net                                                                                     |                                 | 4,146    |   |   |   | 12,619 |   |
| Other receivables, net                                                                                                  |                                 | 5,293    |   |   |   | 2,111 |   |
| Money pool note receivable                                                                                              |                                 | 57,737   |   |   |   | - |   |
| Materials, supplies and fuel                                                                                            |                                 | 18,825   |   |   |   | 19,309 |   |
| Regulatory assets, current                                                                                              |                                 | 7,467    |   |   |   | 4,382 |   |
| Other current assets                                                                                                    |                                 | 1,639    |   |   |   | 1,348 |   |
| Total current assets                                                                                                    |                                 | 116,807  |   |   |   | 63,654 |   |
| Investments                                                                                                             |                                 | 4,197    |   |   |   | 3,999 |   |
| Property, plant and equipment                                                                                           |                                 | 950,577  |   |   |   | 843,691 |   |
| Less accumulated depreciation and amortization                                                                          |                                 | (293,823 | )      |   |   | (281,220 | ) |
| Total property, plant and equipment, net                                                                                |                                 | 656,754  |   |   |   | 562,471 |   |
| Other assets:                                                                                                           |                                 |     |   |   |   |   |   |
| Regulatory assets - non-current                                                                                         |                                 | 31,305   |   |   |   | 33,818 |   |
| Other, non-current assets                                                                                               |                                 | 3,730    |   |   |   | 2,842 |   |
| Total other assets                                                                                                      |                                 | 35,035   |   |   |   | 36,660 |   |
| TOTAL ASSETS                                                                                                            | $                                    | 812,793  |   |   | $      | 666,784 |   |
|               LIABILITIESAND STOCKHOLDER'S EQUITY |                                 |     |   |   |   |   |    |
| Current liabilities:                                                                                                    |                                 |     |   |   |   |   |   |
| Current maturities of long-term debt                                                                                    | $                                    | 32,025   |   |   | $      | 2,016 |   |
| Accounts payable                                                                                                        |                                 | 24,175   |   |   |   | 26,567 |   |
| Accounts payable - affiliate                                                                                            |                                 | 10,030   |   |   |   | 10,411 |   |
| Notes payable - affiliate                                                                                               |                                 | -        |   |   |   | 70,184 |   |
| Accrued liabilities                                                                                                     |                                 | 17,892   |   |   |   | 15,083 |   |
| Regulatory liability, current                                                                                           |                                 | 1,238    |   |   |   | 68 |   |
| Deferred income tax liability - current                                                                                 |                                 | 1,853    |   |   |   | 732 |   |
| Total current liabilities                                                                                               |                                 | 87,213   |   |   |   | 125,061 |   |
|                                                                                                                    |                                 |     |   |   |   |   |   |
| Long-term debt, net of current maturities                                                                               |                                 | 297,044  |   |   |   | 149,193 |   |
|                                                                                                                    |                                 |     |   |   |   |   |   |
| Deferred credits and other liabilities:                                                                                 |                                 |     |   |   |   |   |   |
| Deferred income tax liability - non-current                                                                             |                                 | 96,207   |   |   |   | 85,504 |   |
| Regulatory liabilities, non-current                                                                                     |                                 | 14,955   |   |   |   | 13,573 |   |
| Benefit plan liabilities                                                                                                |                                 | 28,224   |   |   |   | 29,904 |   |
| Other, non-current liabilities                                                                                          |                                 | 10,952   |   |   |   | 8,626 |   |
| Total deferred credits and other liabilities                                                                            |                                 | 150,338  |   |   |   | 137,607 |   |
| Commitments and contingencies (Notes 4, 5, 9 and 12)                                                                    |                                 |     |   |   |   |   |    |
| Stockholder's equity:                                                                                                   |                                 |     |   |   |   |   |    |
| Common stock $1 par value; 50,000,000 shares authorized; Issued: 23,416,396 shares in 2009 and 2008                     |                                 | 23,416   |   |   |   | 23,416 |   |
| Additional paid-in capital                                                                                              |                                 | 39,575   |   |   |   | 39,575 |   |
| Retained earnings                                                                                                       |                                 | 216,420  |   |   |   | 193,281 |   |
| Accumulated other comprehensive loss                                                                                    |                                 | (1,213   | )      |   |   | (1,349 | ) |
| Total stockholder's equity                                                                                              |                                 | 278,198  |   |   |   | 254,923 |   |
| TOTAL LIABILITIES AND STOCKHOLDER'S EQUITY                                                                              | $                                    | 812,793  |   |   | $      | 666,784 |   |

----

| Years ended December 31,                                                           | 2009           |     |   | 2008   |   |     | 2007   |   |
|------------------------------------------------------------------------------------|----------------|----------|--------|--------|--------|----------|--------|--------|
|                                                                               | (in thousands) |     |
| Operating activities:                                                              |           |     |   |   |   |     |   |   |
| Net income                                                                         | $              | 23,139   |   |   | $      | 22,759   |   |   | $ | 24,896 |   |
| Adjustments to reconcile net income to net cash provided by operating activities - |           |     |   |   |   |     |   |   |   |   |   |
| Depreciation and amortization                                                      |           | 19,465   |   |   |   | 20,930   |   |   |   | 20,763 |   |
| Provision for valuation allowances                                                 |           | (111     | )      |   |   | (18      | )      |   |   | 138 |   |
| Deferred income taxes                                                              |           | 11,600   |   |   |   | 16,072   |   |   |   | 3,864 |   |
| AFUDC - equity                                                                     |           | (5,831   | )      |   |   | (3,605   | )      |   |   | (601 | ) |
| Other non-cash                                                                     |           | 351      |   |   |   | 434      |   |   |   | 965 |   |
| Change in operating assets and liabilities -                                       |           |     |   |   |   |     |   |   |   |   |   |
| Accounts receivable and other current assets                                       |           | 13,233   |   |   |   | (11,909  | )      |   |   | (11,257 | ) |
| Accounts payable and other current liabilities                                     |           | 2,556    |   |   |   | 7,821    |   |   |   | (6,151 | ) |
| Regulatory assets                                                                  |           | (2,205   | )      |   |   | (738     | )      |   |   | 6,471 |   |
| Regulatory liabilities                                                             |           | 586      |   |   |   | (518     | )      |   |   | 441 |   |
| Other operating activities                                                         |           | 3,375    |   |   |   | 736      |   |   |   | (5,413 | ) |
| Net cash provided by operating activities                                          |           | 66,158   |   |   |   | 51,964   |   |   |   | 34,116 |   |
|                                                                               |           |     |   |   |   |     |   |   |   |   |   |
| Investing activities:                                                              |           |     |   |   |   |     |   |   |   |   |   |
| Property, plant and equipment additions                                            |           | (146,148 | )      |   |   | (132,247 | )      |   |   | (34,043 | ) |
| Proceeds from sale of ownership interest in plant                                  |           | 32,783   |   |   |   | -        |   |   |   | - |   |
| Notes receivable from affiliate companies, net                                     |           | (82,737  | )      |   |   | 10,304   |   |   |   | 2,960 |   |
| Other investing activities                                                         |           | 1,067    |   |   |   | (225     | )      |   |   | (222 | ) |
| Net cash used in investing activities                                              |           | (195,035 | )      |   |   | (122,168 | )      |   |   | (31,305 | ) |
|                                                                               |           |     |   |   |   |     |   |   |   |   |   |
| Financing activities:                                                              |           |     |   |   |   |     |   |   |   |   |   |
| Note payable to affiliate companies, net                                           |           | (45,184  | )      |   |   | 70,184   |   |   |   | - |   |
| Long-term debt issuance                                                            |           | 180,000  |   |   |   | -        |   |   |   | - |   |
| Long-term debt - repayments                                                        |           | (2,140   | )      |   |   | (2,009   | )      |   |   | (2,001 | ) |
| Other financing activities                                                         |           | (2,094   | )      |   |   | -        |   |   |   | - |   |
| Net cash provided by (used in) financing activities                                |           | 130,582  |   |   |   | 68,175   |   |   |   | (2,001 | ) |
|                                                                               |           |     |   |   |   |     |   |   |   |   |   |
| Increase (decrease) in cash and cash equivalents                                   |           | 1,705    |   |   |   | (2,029   | )      |   |   | 810 |   |
|                                                                               |           |     |   |   |   |     |   |   |   |   |   |
| Cash and cash equivalents:                                                         |           |     |   |   |   |     |   |   |   |   |   |
| Beginning of year                                                                  |           | 4        |   |   |   | 2,033    |   |   |   | 1,223 |   |
| End of year                                                                        | $              | 1,709    |   |   | $      | 4        |   |   | $ | 2,033 |   |

----

|                                                 |   | Common Stock   |   |   | Additional Paid-In Capital |   |   | Retained Earnings |   |   | Accumulated Other Comprehensive Income (Loss) |   |   | Total  |    |
|------------------------------------------------------|--------|----------------|--------|--------|----------------------------|--------|--------|-------------------|--------|--------|-----------------------------------------------|--------|--------|--------|---------|
|                                                 |   | Shares         |   |   | Amount                     |   |   |              |   |   |                                          |   |   |   |    |   |   |   |
|                                                 |   | (in thousands) |   |
|                                                 |   |           |   |   |                       |   |   |              |   |   |                                          |   |   |   |    |   |   |   |
| Balance at December 31, 2006                         |   |           | 23,416 |   |                       | $      | 23,416 |              |   | $      | 39,575                                        |   |   | $      | 145,810 |   |   | $ | (932 | ) |   | $ | 207,869 |   |
| Comprehensive Income:                                |   |           |   |   |                       |   |   |              |   |   |                                          |   |   |   |    |   |   |   |   |   |   |   |   |   |
| Net income                                           |   |           | -      |   |                       |   | -      |              |   |   | -                                             |   |   |   | 24,896  |   |   |   | - |   |   |   | 24,896 |   |
| Other comprehensive loss, net of tax, (see Note 8)   |   |           | -      |   |                       |   | -      |              |   |   | -                                             |   |   |   | -       |   |   |   | (345 | ) |   |   | (345 | ) |
| Total comprehensive income                           |   |           | -      |   |                       |   | -      |              |   |   | -                                             |   |   |   | 24,896  |   |   |   | (345 | ) |   |   | 24,551 |   |
|                                                 |   |           |   |   |                       |   |   |              |   |   |                                          |   |   |   |    |   |   |   |   |   |   |   |   |   |
| Balance at December 31, 2007                         |   |           | 23,416 |   |                       |   | 23,416 |              |   |   | 39,575                                        |   |   |   | 170,706 |   |   |   | (1,277 | ) |   |   | 232,420 |   |
| Comprehensive Income:                                |   |           |   |   |                       |   |   |              |   |   |                                          |   |   |   |    |   |   |   |   |   |   |   |   |   |
| Net income                                           |   |           | -      |   |                       |   | -      |              |   |   | -                                             |   |   |   | 22,759  |   |   |   | - |   |   |   | 22,759 |   |
| Other comprehensive loss, net of tax, (see Note 8)   |   |           | -      |   |                       |   | -      |              |   |   | -                                             |   |   |   | -       |   |   |   | (72 | ) |   |   | (72 | ) |
| Total comprehensive income                           |   |           | -      |   |                       |   | -      |              |   |   | -                                             |   |   |   | 22,759  |   |   |   | (72 | ) |   |   | 22,687 |   |
| Adoption of accounting pronouncement (see Note 9)    |   |           | -      |   |                       |   | -      |              |   |   | -                                             |   |   |   | (184    | ) |   |   | - |   |   |   | (184 | ) |
|                                                 |   |           |   |   |                       |   |   |              |   |   |                                          |   |   |   |    |   |   |   |   |   |   |   |   |   |
| Balance at December 31, 2008                         |   |           | 23,416 |   |                       |   | 23,416 |              |   |   | 39,575                                        |   |   |   | 193,281 |   |   |   | (1,349 | ) |   |   | 254,923 |   |
| Comprehensive Income:                                |   |           |   |   |                       |   |   |              |   |   |                                          |   |   |   |    |   |   |   |   |   |   |   |   |   |
| Net income                                           |   |           | -      |   |                       |   | -      |              |   |   | -                                             |   |   |   | 23,139  |   |   |   | - |   |   |   | 23,139 |   |
| Other comprehensive income, net of tax, (see Note 8) |   |           | -      |   |                       |   | -      |              |   |   | -                                             |   |   |   | -       |   |   |   | 136 |   |   |   | 136 |   |
| Total comprehensive income                           |   |           | -      |   |                       |   | -      |              |   |   | -                                             |   |   |   | 23,139  |   |   |   | 136 |   |   |   | 23,275 |   |
|                                                 |   |           |   |   |                       |   |   |              |   |   |                                          |   |   |   |    |   |   |   |   |   |   |   |   |   |
| Balance at December 31, 2009                         |   |           | 23,416 |   |                       | $      | 23,416 |              |   | $      | 39,575                                        |   |   | $      | 216,420 |   |   | $ | (1,213 | ) |   | $ | 278,198 |   |

----

| (1) | BUSINESS DESCRIPTION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES |
|-----|---------------------------------------------------------------------|

----

|                                 | Recovery Period    |   | 2009   |   |   | 2008   |   |
|--------------------------------------|--------------------|--------|--------|--------|--------|--------|--------|
|                                 |               |   |   |   |   |   |   |
| Regulatory assets:                   |               |   |   |   |   |   |   |
| Unamortized loss on reacquired debt  | 14 years           |   | $      | 2,207  |   |   | $      | 2,367 |   |
| AFUDC                                | Up to 45 years     |   |   | 7,579  |   |   |   | 4,995 |   |
| Defined benefit postretirement plans | Up to 17 years     |   |   | 21,024 |   |   |   | 26,256 |   |
| Deferred energy costs                | Less than one year |   |   | 7,467  |   |   |   | 4,382 |   |
| Other                                |               |   |   | 495    |   |   |   | 200 |   |
| Total regulatory assets              |               |   | $      | 38,772 |   |   | $      | 38,200 |   |
|                                 |               |   |   |   |   |   |   |   |   |
| Regulatory liabilities:              |               |   |   |   |   |   |   |   |   |
| Cost of removal for utility plant    | Up to 53 years     |   | $      | 13,678 |   |   | $      | 11,705 |   |
| Other                                |               |   |   | 2,515  |   |   |   | 1,936 |   |
| Total regulatory liabilities         |               |   | $      | 16,193 |   |   | $      | 13,641 |   |

----

|                                        | 2009   |   |   | 2008   |   |
|---------------------------------------------|--------|--------|--------|--------|--------|
|                                        |   |   |   |   |   |
| Accounts receivable trade                   | $      | 14,703 |   |   | $      | 18,860 |   |
| Unbilled revenues                           |   | 5,547  |   |   |   | 5,391 |   |
| Total accounts receivable – customers |   | 20,250 |   |   |   | 24,251 |   |
| Allowance for doubtful accounts             |   | (259   | )      |   |   | (370 | ) |
| Net accounts receivable                     | $      | 19,991 |   |   | $      | 23,881 |   |

----

----

----

----

| (2) | PROPERTY, PLANT AND EQUIPMENT |
|-----|-------------------------------|

|                                                            | 2009   |    |   | 2009 Weighted Average Useful Life |   |   | 2008   |   |   | 2008 Weighted Average Useful Life |   |   | Lives(in years) |   |
|-----------------------------------------------------------------|--------|---------|--------|-----------------------------------|--------|--------|--------|--------|--------|-----------------------------------|--------|--------|-----------------|--------|
| Electric plant:                                                 |   |    |   |                              |   |   |   |   |   |                              |   |   |            |   |
| Production                                                      | $      | 336,534 |   |                              |   | 53     |   |   | $      | 326,606                           |   |   |            | 47     |   |   |   | 30-62 |   |
| Transmission                                                    |   | 86,841  |   |                              |   | 44     |   |   |   | 70,470                            |   |   |            | 45     |   |   |   | 35-55 |   |
| Distribution                                                    |   | 264,847 |   |                              |   | 37     |   |   |   | 249,652                           |   |   |            | 37     |   |   |   | 15-65 |   |
| Plant acquisition adjustment                                    |   | 4,870   |   |                              |   | 32     |   |   |   | 4,870                             |   |   |            | 32     |   |   |   | 32 |   |
| General                                                         |   | 55,701  |   |                              |   | 22     |   |   |   | 47,127                            |   |   |            | 23     |   |   |   | 10-50 |   |
| Total electric plant                                            |   | 748,793 |   |                              |   |   |   |   |   | 698,725                           |   |   |            |   |   |   |   |   |   |
| Less accumulated depreciation and amortization                  |   | 293,823 |   |                              |   |   |   |   |   | 281,220                           |   |   |            |   |   |   |   |   |   |
| Electric plant net of accumulated depreciation and amortization |   | 454,970 |   |                              |   |   |   |   |   | 417,505                           |   |   |            |   |   |   |   |   |   |
| Construction work in progress                                   |   | 201,784 |   |                              |   |   |   |   |   | 144,966                           |   |   |            |   |   |   |   |   |   |
| Net electric plant                                              | $      | 656,754 |   |                              |   |   |   |   | $      | 562,471                           |   |   |            |   |   |   |   |   |   |

----

| (3) | JOINTLY OWNED FACILITIES |
|-----|--------------------------|

|   | · | We own a 20% interest and PacifiCorp owns an 80% interest in the Wyodak Plant (Plant), a 362 MW coal-fired electric generating station located in Campbell County, Wyoming.  PacifiCorp is the operator of the Plant.  We receive 20% of the Plant's capacity and are committed to pay 20% of its additions, replacements and operating and maintenance expenses.  As of December 31, 2009 and 2008,our investment in the Plant included $79.8 million and $79.1 million, respectively, in electric plant and $52.2 million and $50.8 million, respectively, in accumulated depreciation, and is included in the corresponding captions in the accompanying Balance Sheets.  Our share of direct expenses of the Plant was $8.0 million, $8.0 million and $7.3 million for the years ended December 31, 2009, 2008 and 2007, respectively, and is included in the corresponding categories of operating expenses in the accompanyingStatements of Income. |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | We also own a 35% interest and Basin Electric owns a 65% interest in the Converter Station Site and South Rapid City Interconnection (the transmission tie), an AC-DC-AC transmission tie.  The transmission tie provides an interconnection between the Western and Eastern transmission grids, which provides us with access to both the WECC region and the MAPP region.  The total transfer capacity of thetransmission tie is 400 MW - 200 MW West to East and 200 MW from East to West.  We are committed to pay 35% of the additions, replacements and operating and maintenance expenses.  Our share of direct expenses was $0.1 million for each of the years ended December 31, 2009, 2008 and 2007.  As of December 31, 2009 and 2008, our investment in the transmission tie was $19.6 million and $19.8 million, with $3.8 million and $2.5 million, respectively, of accumulated depreciation and isincluded in the corresponding captions in the accompanying Balance Sheets. |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | The Balance Sheet includes our ownership interest in the assets and liabilities of the Wygen III facility currently under construction.  We own 75% of Wygen III and MDU owns 25%.  Wygen III is expected to commence operations by April 1, 2010.  Included in the December 31, 2009 Balance Sheet in Construction Work in Progress was $175.6 million.  During 2009, we were reimbursed $48.4million for the construction.  Our share of direct expenses of the jointly-owned facility is included in Operating expenses in the Statements of Income. |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| (4) | RISK MANAGEMENT |
|-----|-----------------|

|                                         | Natural Gas Swaps |    |
|----------------------------------------------|-------------------|---------|
|                                         |              |    |
| Notional*                                    |              | 232,500 |   |
| Maximum terms in months                      |              | 10      |   |
| Current derivative liabilities               | $                 | 5       |   |
| Pre-tax accumulated other comprehensive loss | $                 | (5      | ) |

| * | Gas in MMbtus. |
|---|----------------|

| (5) | LONG-TERM DEBT |
|-----|----------------|

|                                              | 2009   |    |   | 2008   |   |
|---------------------------------------------------|--------|---------|--------|--------|--------|
| First mortgage bonds:                             |   |    |   |   |   |
| 8.06% due 2010                                    | $      | 30,000  |   |   | $      | 30,000 |   |
| 9.49% due 2018                                    |   | 2,520   |   |   |   | 2,810 |   |
| 9.35% due 2021                                    |   | 19,980  |   |   |   | 21,645 |   |
| 7.23% due 2032                                    |   | 75,000  |   |   |   | 75,000 |   |
| 6.125% due 2039                                   |   | 180,000 |   |   |   | - |   |
| Unamortized discount on 6.125% bonds              |   | (124    | )      |   |   | - |   |
|                                              |   | 307,376 |   |   |   | 129,455 |   |
| Other long-term debt:                             |   |    |   |   |   |   |   |
| Pollution control revenue bonds at 4.8% due 2014  |   | 6,450   |   |   |   | 6,450 |   |
| Pollution control revenue bonds at 5.35% due 2024 |   | 12,200  |   |   |   | 12,200 |   |
| Other                                             |   | 3,043   |   |   |   | 3,104 |   |
|                                              |   | 21,693  |   |   |   | 21,754 |   |
|                                              |   |    |   |   |   |   |   |
| Total long-term debt                              |   | 329,069 |   |   |   | 151,209 |   |
| Less current maturities                           |   | (32,025 | )      |   |   | (2,016 | ) |
| Net long-term debt                                | $      | 297,044 |   |   | $      | 149,193 |   |

----

| (6) | FAIR VALUE OF FINANCIAL INSTRUMENTS |
|-----|-------------------------------------|

|                                                         | 2009            |    |   | 2008       |   |
|--------------------------------------------------------------|-----------------|---------|--------|------------|--------|
|                                                         | Carrying Amount |    |   | Fair Value |   |   | Carrying Amount |   |   | Fair Value |   |
|                                                         |            |    |   |       |   |   |   |   |   |   |   |
| Cash and cash equivalents                                    | $               | 1,709   |   |       | $      | 1,709 |   |   | $ | 4 |   |   | $ | 4 |   |
| Derivative financial instruments – accrued liabilities | $               | 5       |   |       | $      | 5 |   |   | $ | - |   |   | $ | - |   |
| Long-term debt, including current maturities                 | $               | 329,069 |   |       | $      | 344,942 |   |   | $ | 151,209 |   |   | $ | 144,107 |   |

----

| (7) | INCOME TAXES |
|-----|--------------|

|                     | 2009   |   |   | 2008   |   |   | 2007   |   |
|--------------------------|--------|--------|--------|--------|--------|--------|--------|--------|
|                     |   |   |   |   |   |   |   |   |
| Current                  | $      | (3,296 | )      |   | $      | (6,521 | )      |   | $ | 8,704 |   |
| Deferred                 |   | 11,600 |   |   |   | 16,072 |   |   |   | 3,864 |   |
| Total income tax expense | $      | 8,304  |   |   | $      | 9,551  |   |   | $ | 12,568 |   |

| Years ended December 31,                                     | 2009   |    |   | 2008   |   |
|--------------------------------------------------------------|--------|---------|--------|--------|--------|
|                                                         |   |    |   |   |   |
| Deferred tax assets, current:                                |   |    |   |   |   |
| Asset valuation reserve                                      | $      | 90      |   |   | $      | 129 |   |
| Employee benefits                                            |   | 946     |   |   |   | 932 |   |
| Other                                                        |   | 2       |   |   |   | - |   |
| Total deferred tax assets, current                           |   | 1,038   |   |   |   | 1,061 |   |
|                                                         |   |    |   |   |   |   |   |
| Deferred tax liabilities, current:                           |   |    |   |   |   |   |   |
| Prepaid expenses                                             |   | 214     |   |   |   | 213 |   |
| Deferred costs                                               |   | 2,677   |   |   |   | 1,580 |   |
| Total deferred tax liabilities, current                      |   | 2,891   |   |   |   | 1,793 |   |
|                                                         |   |    |   |   |   |   |   |
| Net deferred tax liability, current                          | $      | 1,853   |   |   | $      | 732 |   |
|                                                         |   |    |   |   |   |   |   |
| Deferred tax assets, non-current:                            |   |    |   |   |   |   |   |
| Plant related differences                                    | $      | 1,151   |   |   | $      | 1,151 |   |
| Regulatory liabilities                                       |   | 7,847   |   |   |   | 10,156 |   |
| Employee benefits                                            |   | 3,468   |   |   |   | 3,528 |   |
| Items of other comprehensive income                          |   | 175     |   |   |   | 227 |   |
| Research and development credit                              |   | 1,038   |   |   |   | - |   |
| Other                                                        |   | 128     |   |   |   | 128 |   |
| Total deferred tax assets, non-current                       |   | 13,807  |   |   |   | 15,190 |   |
|                                                         |   |    |   |   |   |   |   |
| Deferred tax liabilities, non-current:                       |   |    |   |   |   |   |   |
| Accelerated depreciation and other plant related differences |   | 93,253  |   |   |   | 83,112 |   |
| AFUDC                                                        |   | 4,926   |   |   |   | 3,247 |   |
| Regulatory assets                                            |   | 10,011  |   |   |   | 11,270 |   |
| Employee benefits                                            |   | 1,052   |   |   |   | 2,237 |   |
| Other                                                        |   | 772     |   |   |   | 828 |   |
| Total deferred tax liabilities, non-current                  |   | 110,014 |   |   |   | 100,694 |   |
|                                                         |   |    |   |   |   |   |   |
| Net deferred tax liability, non-current                      | $      | 96,207  |   |   | $      | 85,504 |   |
|                                                         |   |    |   |   |   |   |   |
| Net deferred tax liability                                   | $      | 98,060  |   |   | $      | 86,236 |   |

----

|                                                               | 2009   |   |   | 2008   |   |
|--------------------------------------------------------------------|--------|--------|--------|--------|--------|
|                                                               |   |   |   |   |   |
| Increase in deferred income tax liability from the preceding table | $      | 11,824 |   |   | $      | 16,457 |   |
| Deferred taxes related to regulatory assets and liabilities        |   | (1,323 | )      |   |   | (1,200 | ) |
| Deferred taxes associated with other comprehensive income          |   | (73    | )      |   |   | 38 |   |
| Deferred taxes related to property basis differences               |   | 2,851  |   |   |   | 767 |   |
| Deferred taxes related to AFUDC                                    |   | (1,679 | )      |   |   | - |   |
| Other                                                              |   | -      |   |   |   | 10 |   |
| Deferred income tax expense for the period                         | $      | 11,600 |   |   | $      | 16,072 |   |

|                                                       |   | 2009   |   |   | 2008   |   |   | 2007   |   |
|------------------------------------------------------------|--------|--------|--------|--------|--------|--------|--------|--------|--------|
|                                                       |   |   |   |   |   |   |   |   |   |
| Federal statutory rate                                     |   |   | 35.0   | %      |   |   | 35.0   | %      |   |   | 35.0 | % |
| Amortization of excess deferred and investment tax credits |   |   | (0.9   | )      |   |   | (0.7   | )      |   |   | (1.0 | ) |
| Equity AFUDC                                               |   |   | (6.2   | )      |   |   | (3.6   | )      |   |   | - |   |
| Other                                                      |   |   | (1.5   | )      |   |   | (1.1   | )      |   |   | (0.5 | ) |
|                                                       |   |   | 26.4   | %      |   |   | 29.6   | %      |   |   | 33.5 | % |

|                                     | 2009   |   |   | 2008   |   |
|------------------------------------------|--------|--------|--------|--------|--------|
|                                     |   |   |   |   |   |
| Unrecognized tax benefits at January 1   | $      | 767    |   |   | $      | - |   |
| Additions for prior year tax positions   |   | 3,110  |   |   |   | - |   |
| Additions for current year tax positions |   | -      |   |   |   | 767 |   |
|                                     |   |   |   |   |   |   |   |
| Unrecognized tax benefits at December 31 | $      | 3,877  |   |   | $      | 767 |   |

----

| (8) | COMPREHENSIVE INCOME |
|-----|----------------------|

|                                                                                | 2009           |   |
|-------------------------------------------------------------------------------------|----------------|--------|
|                                                                                |           |   |   |   |   |   |
|                                                                                | Pre-tax Amount |   | Tax (Expense)Benefit |   | Net-of-tax Amount |   |
|                                                                                |           |   |   |   |   |   |   |   |   |
| Pension liability adjustment                                                        |           | $      | 150 |   |   | $ | (52 | ) |   | $ | 98 |   |
| Reclassification adjustments of cash flow hedges settled and included in net income |           |   | 64 |   |   |   | (24 | ) |   |   | 40 |   |
| Net change in fair value of derivatives designated as cash flow hedges              |           |   | (5 | ) |   |   | 3 |   |   |   | (2 | ) |
| Other comprehensive income                                                          |           | $      | 209 |   |   | $ | (73 | ) |   | $ | 136 |   |

|                                                                                | 2008           |   |
|-------------------------------------------------------------------------------------|----------------|--------|
|                                                                                |           |   |   |   |   |   |
|                                                                                | Pre-tax Amount |   | TaxBenefit |   | Net-of-tax Amount |   |
|                                                                                |           |   |   |   |   |   |   |   |   |
| Pension liability adjustment                                                        |           | $      | (4 | ) |   | $ | 1 |   |   | $ | (3 | ) |
| Reclassification adjustments of cash flow hedges settled and included in net income |           |   | (107 | ) |   |   | 38 |   |   |   | (69 | ) |
| Other comprehensive loss                                                            |           | $      | (111 | ) |   | $ | 39 |   |   | $ | (72 | ) |

|                                                                                | 2007           |   |
|-------------------------------------------------------------------------------------|----------------|--------|
|                                                                                |           |   |   |   |   |   |
|                                                                                | Pre-tax Amount |   | Tax (Expense) Benefit |   | Net-of-tax Amount |   |
|                                                                                |           |   |   |   |   |   |   |   |   |
| Pension liability adjustment                                                        |           | $      | 115 |   |   | $ | (39 | ) |   | $ | 76 |   |
| Reclassification adjustments of cash flow hedges settled and included in net income |           |   | 424 |   |   |   | (148 | ) |   |   | 276 |   |
| Net change in fair value of derivatives designated as cash flow hedges              |           |   | (1,069 | ) |   |   | 372 |   |   |   | (697 | ) |
| Other comprehensive loss                                                            |           | $      | (530 | ) |   | $ | 185 |   |   | $ | (345 | ) |

|                                       | 2009   |   |   | 2008   |   |
|--------------------------------------------|--------|--------|--------|--------|--------|
|                                       |   |   |   |   |   |
| Derivatives designated as cash flow hedges | $      | (893   | )      |   | $      | (932 | ) |
| Employee benefit plans                     |   | (320   | )      |   |   | (417 | ) |
| Total accumulated other comprehensive loss | $      | (1,213 | )      |   | $      | (1,349 | ) |

----

| (9) | EMPLOYEE BENEFIT PLANS |
|-----|------------------------|

----

|         | 2009   | 2008   |
|--------------|--------|--------|
|         |   |   |
| Equity       | 72%    | 68%    |
| Fixed income | 25     | 28     |
| Cash         | 3      | 4      |
| Total        | 100%   | 100%   |

----

----

| Defined Benefit Pension Plan             | At Fair Value as of December 31, 2009 |   |
|------------------------------------------|---------------------------------------|--------|
| Recurring Fair Value Measures            | Level 1                               |   |   | Level 2 |   |   | Level 3 |   |   | Total |   |
|                                     |                                  |   |   |   |   |   |   |   |   |   |   |
| Registered Investment Companies          | $                                     | 22,632 |   |   | $ | - |   |   | $ | - |   |   | $ | 22,632 |   |
| Common Collective Trust                  |                                  | -      |   |   |   | 16,408 |   |   |   | - |   |   |   | 16,408 |   |
| Total investments measured at fair value | $                                     | 22,632 |   |   | $ | 16,408 |   |   | $ | - |   |   | $ | 39,040 |   |

| Defined Benefit Pension Plan             | At Fair Value as of December 31, 2008 |   |
|------------------------------------------|---------------------------------------|--------|
| Recurring Fair Value Measures            | Level 1                               |   |   | Level 2 |   |   | Level 3 |   |   | Total |   |
|                                     |                                  |   |   |   |   |   |   |   |   |   |   |
| Registered Investment Companies          | $                                     | 17,976 |   |   | $ | - |   |   | $ | - |   |   | $ | 17,976 |   |
| Common Collective Trust                  |                                  | -      |   |   |   | 14,124 |   |   |   | - |   |   |   | 14,124 |   |
| Total investments measured at fair value | $                                     | 17,976 |   |   | $ | 14,124 |   |   | $ | - |   |   | $ | 32,100 |   |

----

|                                              |   | Defined Benefit Pension Plans |   |   | Supplemental Nonqualified Defined Benefit Retirement Plans |   |   | Non-pension Defined Benefit Postretirement Plans |   |
|---------------------------------------------------|--------|-------------------------------|--------|--------|------------------------------------------------------------|--------|--------|--------------------------------------------------|--------|
|                                              |   | 2009                          |   |   | 2008                                                       |   |   | 2009                                             |   |   | 2008 |   |   | 2009 |   |   | 2008 |   |
| Change in benefit obligation:                     |   |                          |   |   |                                                       |   |   |                                             |   |   |   |   |   |   |   |   |   |   |
|                                              |   |                          |   |   |                                                       |   |   |                                             |   |   |   |   |   |   |   |   |   |   |
| Projected benefit obligation at beginning of year |   | $                             | 51,965 |   |                                                       | $      | 48,937 |                                             |   | $ | 1,672 |   |   | $ | 1,958 |   |   | $ | 7,393 |   |   | $ | 6,649 |   |
| Service cost                                      |   |                          | 1,155  |   |                                                       |   | 1,396  |                                             |   |   | - |   |   |   | - |   |   |   | 216 |   |   |   | 264 |   |
| Interest cost                                     |   |                          | 3,143  |   |                                                       |   | 3,790  |                                             |   |   | 100 |   |   |   | 150 |   |   |   | 444 |   |   |   | 522 |   |
| Actuarial loss                                    |   |                          | 1,686  |   |                                                       |   | 2,712  |                                             |   |   | 7 |   |   |   | 65 |   |   |   | 3,474 |   |   |   | 506 |   |
| Amendments                                        |   |                          | 100    |   |                                                       |   | -      |                                             |   |   | - |   |   |   | - |   |   |   | (1,960 | ) |   |   | - |   |
| Discount rate change                              |   |                          | 1,047  |   |                                                       |   | -      |                                             |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |
| Benefits paid                                     |   |                          | (2,312 | )      |                                                       |   | (2,838 | )                                                |   |   | (89 | ) |   |   | (142 | ) |   |   | (579 | ) |   |   | (830 | ) |
| Asset transfer to affiliate                       |   |                          | (121   | )      |                                                       |   | (2,032 | )                                                |   |   | - |   |   |   | (359 | ) |   |   | (23 | ) |   |   | (297 | ) |
| Plan curtailment reduction                        |   |                          | (1,048 | )      |                                                       |   | -      |                                             |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |
| Medicare Part D adjustment                        |   |                          | -      |   |                                                       |   | -      |                                             |   |   | - |   |   |   | - |   |   |   | 46 |   |   |   | 71 |   |
| Plan participant's contributions                  |   |                          | -      |   |                                                       |   | -      |                                             |   |   | - |   |   |   | - |   |   |   | 421 |   |   |   | 508 |   |
| Net increase (decrease)                           |   |                          | 3,650  |   |                                                       |   | 3,028  |                                             |   |   | 18 |   |   |   | (286 | ) |   |   | 2,039 |   |   |   | 744 |   |
| Projected benefit obligation at end of year       |   | $                             | 55,615 |   |                                                       | $      | 51,965 |                                             |   | $ | 1,690 |   |   | $ | 1,672 |   |   | $ | 9,432 |   |   | $ | 7,393 |   |

|                                  |   | Defined Benefit Pension Plans |   |   | Supplemental Nonqualified Defined Benefit Retirement Plans |   |   | Non-pension Defined Benefit Postretirement Plans |   |
|---------------------------------------|--------|-------------------------------|--------|--------|------------------------------------------------------------|--------|--------|--------------------------------------------------|--------|
|                                  |   | 2009                          |   |   | 2008                                                       |   |   | 2009                                             |   |   | 2008 |   |   | 2009 |   |   | 2008 |   |
|                                  |   |                          |   |   |                                                       |   |   |                                             |   |   |   |   |   |   |   |   |   |   |
| Beginning market value of plan assets |   | $                             | 32,100 |   |                                                       | $      | 52,466 |                                             |   | $ | - |   |   | $ | - |   |   | $ | - |   |   | $ | - |   |
| Investment income (loss)              |   |                          | 9,337  |   |                                                       |   | (8,771 | )                                                |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |
| Benefits paid                         |   |                          | (2,312 | )      |                                                       |   | (2,249 | )                                                |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |
| Asset transfer to affiliate           |   |                          | (85    | )      |                                                       |   | -      |                                             |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |
| Ending market value of plan assets    |   | $                             | 39,040 |   |                                                       | $      | 41,446 |                                             |   | $ | - |   |   | $ | - |   |   | $ | - |   |   | $ | - |   |

----

|                         |   | Defined Benefit Pension Plans |    |   | Supplemental Nonqualified Defined Benefit Retirement Plans |   |    | Non-pension Defined Benefit Postretirement Plans |   |
|------------------------------|--------|-------------------------------|---------|--------|------------------------------------------------------------|--------|---------|--------------------------------------------------|--------|
|                         |   | 2009                          |    |   | 2008                                                       |   |    | 2009                                             |   |   | 2008 |   |   | 2009 |   |   | 2008 |   |
|                         |   |                          |    |   |                                                       |   |    |                                             |   |   |   |   |   |   |   |   |   |   |
| Regulatory asset (liability) |   | $                             | 19,580  |   |                                                       | $      | 26,256  |                                             |   | $ | - |   |   | $ | - |   |   | $ | 1,443 |   |   | $ | (11 | ) |
| Current liability            |   | $                             | -       |   |                                                       | $      | -       |                                             |   | $ | 98 |   |   | $ | 109 |   |   | $ | 325 |   |   | $ | 223 |   |
| Non-current liability        |   | $                             | (16,576 | )      |                                                       | $      | (19,864 | )                                                |   | $ | (1,592 | ) |   | $ | (1,564 | ) |   | $ | (9,110 | ) |   | $ | (7,169 | ) |

|                           | Defined Benefit Pension Plans |   | Supplemental Nonqualified Defined Benefit Retirement Plans |   | Non-pension Defined Benefit Postretirement Plans |   |
|--------------------------------|-------------------------------|--------|------------------------------------------------------------|--------|--------------------------------------------------|--------|
|                           | 2009                          |   | 2008                                                       |   | 2009                                             |   | 2008 |   | 2009 |   | 2008 |   |
|                           |                          |   |                                                       |   |                                             |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Accumulated benefit obligation |                          | $      | 47,745                                                     |   |                                             | $      | 43,894 |   |   | $ | 1,645 |   |   | $ | 1,622 |   |   | $ | 9,432 |   |   | $ | 7,393 |   |

|                                  |   | Defined Benefit Pension Plans |   |   | Supplemental Nonqualified Defined Benefit Retirement Plans |   |   | Non-pension Defined Benefit Postretirement Plans |   |
|---------------------------------------|--------|-------------------------------|--------|--------|------------------------------------------------------------|--------|--------|--------------------------------------------------|--------|
|                                  |   | 2009                          |   |   | 2008                                                       |   |   | 2007                                             |   |   | 2009 |   |   | 2008 |   |   | 2007 |   |   | 2009 |   |   | 2008 |   |   | 2007 |   |
|                                  |   |                          |   |   |                                                       |   |   |                                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Service cost                          |   | $                             | 1,155  |   |                                                       | $      | 1,117  |                                             |   | $ | 1,137 |   |   | $ | - |   |   | $ | - |   |   | $ | - |   |   | $ | 216 |   |   | $ | 211 |   |   | $ | 211 |   |
| Interest cost                         |   |                          | 3,143  |   |                                                       |   | 3,032  |                                             |   |   | 2,923 |   |   |   | 100 |   |   |   | 120 |   |   |   | 116 |   |   |   | 444 |   |   |   | 417 |   |   |   | 398 |   |
| Expected return on assets             |   |                          | (2,780 | )      |                                                       |   | (4,374 | )                                                |   |   | (3,885 | ) |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |
| Amortization of prior service cost    |   |                          | 87     |   |                                                       |   | 112    |                                             |   |   | 103 |   |   |   | - |   |   |   | 1 |   |   |   | 1 |   |   |   | - |   |   |   | - |   |   |   | - |   |
| Amortization of transition obligation |   |                          | -      |   |                                                       |   | -      |                                             |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 51 |   |   |   | 51 |   |   |   | 51 |   |
| Recognized net actuarial loss (gain)  |   |                          | 1,586  |   |                                                       |   | -      |                                             |   |   | 408 |   |   |   | 43 |   |   |   | 44 |   |   |   | 57 |   |   |   | - |   |   |   | (1 | ) |   |   | - |   |
| Curtailment expense                   |   |                          | 189    |   |                                                       |   | -      |                                             |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |
| Net periodic expense                  |   | $                             | 3,380  |   |                                                       | $      | (113   | )                                                |   | $ | 686 |   |   | $ | 143 |   |   | $ | 165 |   |   | $ | 174 |   |   | $ | 711 |   |   | $ | 678 |   |   | $ | 660 |   |

----

|                  | Defined Benefit Pension Plans |   | Supplemental Nonqualified Defined Benefit Retirement Plans |   | Non-pension Defined Benefit Postretirement Plans |   |
|-----------------------|-------------------------------|--------|------------------------------------------------------------|--------|--------------------------------------------------|--------|
|                  | 2009                          |   | 2008                                                       |   | 2009                                             |   | 2008 |   | 2009 |   | 2008 |   |
|                  |                          |   |
| Net loss              |                          | $      | -                                                          |   |                                             | $      | - |   |   | $ | (324 | ) |   | $ | (347 | ) |   | $ | - |   |   | $ | - |   |
| Prior service cost    |                          |   | -                                                          |   |                                             |   | - |   |   |   | - |   |   |   | (1 | ) |   |   | - |   |   |   | - |   |
| Transition obligation |                          |   | -                                                          |   |                                             |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |
|                  |                          | $      | -                                                          |   |                                             | $      | - |   |   | $ | (324 | ) |   | $ | (348 | ) |   | $ | - |   |   | $ | - |   |

|                                                                                | Defined Benefits Pension Plans |   |   | Supplemental Nonqualified Defined Benefit Retirement Plans |   |   | Non-pension Defined Benefit Postretirement Plans |   |
|-------------------------------------------------------------------------------------|--------------------------------|--------|--------|------------------------------------------------------------|--------|--------|--------------------------------------------------|--------|
|                                                                                |                           |   |   |                                                       |   |   |                                             |   |
| Net loss                                                                            | $                              | 895    |   |                                                       | $      | 20     |                                             |   | $ | 111 |   |
| Prior service cost                                                                  |                           | 41     |   |                                                       |   | -      |                                             |   |   | (91 | ) |
| Transition obligation                                                               |                           | -      |   |                                                       |   | -      |                                             |   |   | - |   |
| Total net periodic benefit cost expected to be recognized during calendar year 2010 | $                              | 936    |   |                                                       | $      | 20     |                                             |   | $ | 20 |   |

----

|                                                                                    | Defined Benefit Pension Plans | Supplemental Nonqualified Defined Benefit Retirement Plans | Non-pension Defined Benefit Postretirement Plans |
|-----------------------------------------------------------------------------------------|-------------------------------|------------------------------------------------------------|--------------------------------------------------|
|                                                                                    |                          |                                                       |                                             |
| Weighted-average assumptions used to determine benefit obligations:                     | 2009                          | 2008                                                       | 2007                                             | 2009 | 2008 | 2007 | 2009 | 2008 | 2007 |
|                                                                                    |                          |                                                       |                                             |   |   |   |   |   |   |
| Discount rate                                                                           | 6.05%                         | 6.20%                                                      | 6.35%                                            | 6.10% | 6.20% | 6.35% | 5.90% | 6.10% | 6.35% |
| Rate of increase in compensation levels                                                 | 4.25%                         | 4.25%                                                      | 4.34%                                            | 5.00% | 5.00% | 5.00% | N/A | N/A | N/A |
|                                                                                    |                          |                                                       |                                             |   |   |   |   |   |   |
| Weighted-average assumptions used to determine net periodic benefit cost for plan year: | 2009                          | 2008                                                       | 2007                                             | 2009 | 2008 | 2007 | 2009 | 2008 | 2007 |
|                                                                                    |                          |                                                       |                                             |   |   |   |   |   |   |
| Discount rate                                                                           | 6.25%                         | 6.35%                                                      | 5.95%                                            | 6.20% | 6.35% | 5.95% | 6.10% | 6.35% | 5.95% |
| Expected long-term rate of return on assets*                                            | 8.50%                         | 8.50%                                                      | 8.50%                                            | N/A | N/A | N/A | N/A | N/A | N/A |
| Rate of increase in compensation levels                                                 | 4.25%                         | 4.34%                                                      | 4.31%                                            | 5.00% | N/A | 5.00% | N/A | N/A | N/A |

| * | The expected rate of return on plan assets changed to 8.00% for the calculation of the 2010 net periodic pension cost. |
|---|------------------------------------------------------------------------------------------------------------------------|

|      |                          |   |   |                                                      |   |   | Non-pension Defined Benefit Postretirement Plans |   |
|-----------|-------------------------------|--------|--------|-----------------------------------------------------------|--------|--------|--------------------------------------------------|--------|
|      | Defined Benefit Pension Plans |   |   | Supplemental Nonqualified Defined Benefit Retirement Plan |   |   | Expected Gross Benefit Payments                  |   |   | Expected Medicare Part D Drug Benefit Subsidy |   |   | Expected Net Benefit Payments |   |
|      |                          |   |   |                                                      |   |   |                                             |   |   |   |   |   |   |   |
| 2010      | $                             | 2,584  |   |                                                      | $      | 98     |                                             |   | $ | 405 |   |   | $ | (80 | ) |   | $ | 325 |   |
| 2011      |                          | 2,743  |   |                                                      |   | 112    |                                             |   |   | 486 |   |   |   | (86 | ) |   |   | 400 |   |
| 2012      |                          | 2,833  |   |                                                      |   | 94     |                                             |   |   | 544 |   |   |   | (94 | ) |   |   | 450 |   |
| 2013      |                          | 2,975  |   |                                                      |   | 77     |                                             |   |   | 585 |   |   |   | (101 | ) |   |   | 484 |   |
| 2014      |                          | 3,152  |   |                                                      |   | 93     |                                             |   |   | 628 |   |   |   | (107 | ) |   |   | 521 |   |
| 2015-2019 |                          | 18,086 |   |                                                      |   | 557    |                                             |   |   | 3,683 |   |   |   | (624 | ) |   |   | 3,059 |   |

----

| (10) | RELATED-PARTY TRANSACTIONS |
|------|----------------------------|

----

----

| (11) | SUPPLEMENTAL CASH FLOWS INFORMATION |
|------|-------------------------------------|

| Years ended December 31,                                        | 2009           |    |   | 2008   |   |   | 2007   |   |
|-----------------------------------------------------------------|----------------|---------|--------|--------|--------|--------|--------|--------|
|                                                            | (in thousands) |    |
| Non-cash investing and financing activities -                   |           |    |   |   |   |   |   |   |
| Property, plant and equipment financed with accrued liabilities | $              | 10,191  |   |   | $      | 13,294 |   |   | $ | 1,323 |   |
| Distribution to Parent                                          | $              | 225,000 |   |   | $      | -      |   |   | $ | - |   |
| Borrowing from Parent                                           | $              | 200,000 |   |   | $      | -      |   |   | $ | - |   |
|                                                            |           |    |   |   |   |   |   |   |   |   |   |
| Supplemental disclosure of cash flow information:               |           |    |   |   |   |   |   |   |   |   |   |
| Cash paid during the period for -                               |           |    |   |   |   |   |   |   |   |   |   |
| Interest (net of amounts capitalized)                           | $              | 14,252  |   |   | $      | 11,578 |   |   | $ | 11,782 |   |
| Income taxes (refunded) paid                                    | $              | (3,700  | )      |   | $      | (5,877 | )      |   | $ | 17,284 |   |

| (12) | COMMITMENTS AND CONTINGENCIES |
|------|-------------------------------|

|   | · | A PPA with PacifiCorp expiring in 2023, which provides for the purchase by us of 50 MW of electric capacity and energy.  The price paid for the capacity and energy is based on the operating costs of one of PacifiCorp's coal-fired electric generating plants.  Costs incurred under this agreement were $11.8 million in 2009, $11.6 million in 2008 and $10.9 million in 2007. |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | A firm point-to-point transmission access agreement to deliver up to 50 MW of power on PacifiCorp's transmission system to wholesale customers in the western region through 2023.  Costs incurred under this agreement were $1.2 million in each of the years ended 2009, 2008 and 2007, respectively. |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Cheyenne Light entered into a 20-year PPA with Happy Jack for 29.4 MW of energy.  Under a separate inter-company agreement, Cheyenne Light has agreed to sell 20 MW of energy from Happy Jack to us; |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Cheyenne Light entered into a 20-year PPA with Silver Sage for 30 MW of energy.  Commercial operations commenced on October 1, 2009.  Under a separate inter-company agreement, Cheyenne Light has agreed to sell 20 MW of energy from Silver Sage to us; and |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | A Generation Dispatch Agreement with Cheyenne Light that requires us to purchase all of Cheyenne Light's excess energy. |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------|

----

|   | · | A contract with the City of Gillette, Wyoming, expiring in 2012, to provide the city's first 23 MW of capacity and energy.  The agreement renews automatically and requires a seven-year notice of termination.  This contract is integrated into our control area and is treated as part of our firm native load.  As of December 31, 2009, neither party to the agreement had given notice of termination; |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | An agreement under which we supply up to 74 MW of capacity and energy to MDU for the Sheridan, Wyoming electric service territory through the end of 2016.  The sales to MDU have been integrated into our control area and are considered part of our firm native load.  In accordance with the terms of the agreement, MDU exercised its option to participate in the ownership of the Wygen III plant that iscurrently being constructed.  Under an agreement entered into in April 2009, MDU purchased a 25% undivided interest in the Wygen III plant.  We retain responsibility for operations of the facility with a life-of-plant lease and agreements with MDU for operations and coal supply.  In conjunction with the sales transaction, we also modified the 2004 PPA under which we supplied MDU with 74 MW of capacity and energy through 2016.  The PPA with MDU will be supplied from itsownership interest in Wygen III.  During periods of reduced production at Wygen III, or during periods when Wygen III is offline, we will provide MDU with its first 25 MW from our other generation facilities or from system purchases; and |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | An agreement under which we supply 20 MW of energy and capacity to MEAN under a contract that expires in 2023.  This contract is unit-contingent based on the availability of our Neil Simpson II and Wygen III plants, with capacity purchase decreasing to 15 MW in 2018, 12 MW in 2020 and 10 MW in 2022.  The unit-contingent capacity amounts from Wygen III and Neil Simpson II are as follows: |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 2010-2017    20 MW - 10 MW contingent on Wygen III and 10 MW contingent on Neil Simpson II    |
|---------------------------------------------------------------------------------------------------------|
| 2018-2019   15 MW - 10 MW contingent on Wygen III and 5 MW contingent on Neil Simpson II |
| 2020-2021    12 MW - 6 MW contingent on Wygen III and 6 MW contingent on Neil Simpson II      |
| 2022-2023    10 MW - 5 MW contingent on Wygen III and 5 MW contingent on Neil Simpson II; and |

|   | · | A five-year PPA with MEAN which commences the month following the onset of commercial operations of Wygen III.  Under this contract, MEAN will purchase 5 MW of unit-contingent capacity from Neil Simpson II and 5 MW of unit-contingent capacity from Wygen III. |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| (13) | QUARTERLY HISTORICAL DATA (Unaudited) |
|------|---------------------------------------|

|               | FirstQuarter |   |   | SecondQuarter |   |   | ThirdQuarter |   |   | FourthQuarter |   |
|--------------------|--------------|--------|--------|---------------|--------|--------|--------------|--------|--------|---------------|--------|
| 2009:              |         |   |   |          |   |   |         |   |   |          |   |
| Operating revenues | $            | 54,458 |   |          | $      | 46,836 |         |   | $      | 53,086        |   |   | $ | 52,699 |   |
| Operating income   |         | 10,705 |   |          |   | 5,006  |         |   |   | 8,920         |   |   |   | 10,174 |   |
| Net income         |         | 6,964  |   |          |   | 3,105  |         |   |   | 7,166         |   |   |   | 5,904 |   |
|               |         |   |   |          |   |   |         |   |   |          |   |   |   |   |   |
| 2008:              |         |   |   |          |   |   |         |   |   |          |   |   |   |   |   |
| Operating revenues | $            | 57,632 |   |          | $      | 57,978 |         |   | $      | 59,358        |   |   | $ | 57,706 |   |
| Operating income   |         | 10,591 |   |          |   | 9,270  |         |   |   | 10,228        |   |   |   | 8,547 |   |
| Net income         |         | 5,576  |   |          |   | 5,251  |         |   |   | 6,371         |   |   |   | 5,561 |   |

| (14) | SUBSEQUENT EVENT |
|------|------------------|

----

| ITEM 9. | CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE |
|---------|--------------------------------------------------------------------------------------|

| ITEM 9A. | CONTROLS AND PROCEDURES |
|----------|-------------------------|

| ITEM 9B. | OTHER INFORMATION |
|----------|-------------------|

----

| ITEM 15. | EXHIBITS, FINANCIAL STATEMENT SCHEDULES |
|----------|-----------------------------------------|

| (a)    | 1.     | Financial Statements                                                                                                                                                                                                                            |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |   |                                                                                                                                                                                                                                            |
|   |   | Financial statements required by Item 15 are listed in the index included in Item 8 of Part II.                                                                                                                                                 |
|   |   |                                                                                                                                                                                                                                            |
|   | 2.     | Schedules                                                                                                                                                                                                                                       |
|   |   |                                                                                                                                                                                                                                            |
|   |   | Valuation and Qualifying Accounts for the years ended December 31, 2009, 2008 and 2007.                                                                                                                                                         |
|   |   |                                                                                                                                                                                                                                            |
|   |   | All other schedules have been omitted because of the absence of the conditions under which they are required or because the required information is included elsewhere in the financial statements incorporated by reference in this Form 10-K. |

| BLACK HILLS POWER, INC.VALUATION AND QUALIFYING ACCOUNTSYEARS ENDED DECEMBER 31, 2009, 2008 AND 2007 |                         |
|------------------------------------------------------------------------------------------------------|------------------------------|
|                                                                                                 |                         |
| Additions                                                                                            |                         |   |
|                                                                                                 |                         |
| Description                                                                                          | Balance at beginning of year |   | Charged to costs and expenses |   | Deductions |   | Balance at end of year |   |
|                                                                                                 | (in thousands)               |   |        |   |
| Allowance for doubtful accounts:                                                                     |                         |   |   |   |   |   |   |   |   |   |   |   |
| 2009                                                                                                 |                         | $ | 370 |   |   | $ | 316 |   |   | $ | (427) |   |   | $ | 259 |   |
| 2008                                                                                                 |                         | $ | 388 |   |   | $ | 637 |   |   | $ | (655) |   |   | $ | 370 |   |
| 2007                                                                                                 |                         | $ | 250 |   |   | $ | 320 |   |   | $ | (182) |   |   | $ | 388 |   |

----

| 3. | Exhibits |
|----|----------|

| Exhibit Number |  Description                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
|----------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|           |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
| 3.1*           | Restated Articles of Incorporation of the Registrant (filed as an exhibit to the Registrant's Form 8-K dated June 7, 1994 (No. 1-7978)).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
|           |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
| 3.2*           | Articles of Amendment to the Articles of Incorporation of the Registrant, as filed with the Secretary of State of the State of South Dakota on December 22, 2000 (filed as an exhibit to the Registrant's Form 10-K for 2000).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
|           |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
| 3.3*           | Bylaws of the Registrant (filed as an exhibit to the Registrant's Registration Statement on Form S-8 dated July 13, 1999).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
|           |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
| 4.1*           | Restated and Amended Indenture of Mortgage and Deed of Trust of Black Hills Corporation (now called Black Hills Power, Inc.) dated as of September 1, 1999 (filed as Exhibit 4.19 to the Registrant's Post-Effective Amendment No. 1 to the Registrant's Registration Statement on Form S-3 (No. 333-150669-01)).  First Supplemental Indenture,dated as of August 13, 2002, between Black Hills Power, Inc. and The Bank of New York Mellon (as successor to JPMorgan Chase Bank), as Trustee (filed as Exhibit 4.20 to the Registrant's Post-Effective Amendment No. 1 to the Registrant's Registration Statement on Form S-3 (No. 333-150669-01)).  Second Supplemental Indenture, dated as of October 27, 2009, between Black Hills Power, Inc. and The Bank of New York Mellon (filed as Exhibit 4.21 to the Registration Statement on Form S-3 (No. 333-150669-01)). |
|           |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
| 10.1*          | Restated and Amended Coal Supply Agreement for NS II dated February 12, 1993 (filed as Exhibit 10.1 to the Registrant's Post-Effective Amendment No. 1 to the Registrant's Registration Statement on Form S-3 (No. 333-150669-01)).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
|           |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
| 10.2*          | Second Restated and Amended Power Sales Agreement dated September 29, 1997, between PacifiCorp and Black Hills Power, Inc. (filed as Exhibit 10.2 to the Registrant's Post-Effective Amendment No. 1 to the Registrant's Registration Statement on Form S-3 (No. 333-150669-01)).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
|           |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
| 10.3*          | Reserve Capacity Integration Agreement dated May 5, 1987, between Pacific Power & Light Company and Black Hills Power, Inc. (filed as Exhibit 10.3 to the Registrant's Post-Effective Amendment No. 1 to the Registrant's Registration Statement on Form S-3 (No. 333-150669-01)).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
|           |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
| 23             | Independent Auditors' Consent                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
|           |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
| 31.1           | Certification of Chief Executive Officer pursuant to Rule13a-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |

----

| 31.2   | Certification of Chief Financial Officer pursuant to Rule13a-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. |
|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                             |
| 32.1   | Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.                               |
|   |                                                                                                                                                                             |
| 32.2   | Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.                               |

|   | __________________________ |
|--------|----------------------------|

|   | * | Previously filed as part of the filing indicated and incorporated by reference herein. |
|--------|---|----------------------------------------------------------------------------------------|

|   | (b) | See (a) 3. Exhibits above. |
|--------|-----|----------------------------|

|   | (c) | See (a) 2. Schedules above. |
|--------|-----|-----------------------------|

----

|                                                                                   | BLACK HILLS POWER, INC.      |
|----------------------------------------------------------------------------------------|------------------------------|
|                                                                                   |                         |
|                                                                                   | By                           | /s/ DAVID R. EMERY |
|                                                                                   | David R. Emery, Chairman and |
|                                                                                   | Chief Executive Officer      |
|                                                                                   |                         |
| Dated:           March 10, 2010 |                         |

| /s/ DAVID R. EMERY                           | Director and                | March 10, 2010 |
|----------------------------------------------|-----------------------------|----------------|
| David R. Emery, Chairman and                 | Principal Executive Officer |           |
| Chief Executive Officer                      |                        |           |
|                                         |                        |           |
| /s/ ANTHONY S. CLEBERG                       | Principal Financial and     | March 10, 2010 |
| Anthony S. Cleberg, Executive Vice President | Accounting Officer          |           |
| and Chief Financial Officer                  |                        |           |
|                                         |                        |           |
| /s/ DAVID C. EBERTZ                          | Director                    | March 10, 2010 |
| David C. Ebertz                              |                        |           |
|                                         |                        |           |
| /s/ JACK W. EUGSTER                          | Director                    | March 10, 2010 |
| Jack W. Eugster                              |                        |           |
|                                         |                        |           |
| /s/ JOHN R. HOWARD                           | Director                    | March 10, 2010 |
| John R. Howard                               |                        |           |
|                                         |                        |           |
| /s/ KAY S. JORGENSEN                         | Director                    | March 10, 2010 |
| Kay S. Jorgensen                             |                        |           |
|                                         |                        |           |
| /s/ STEPHEN D. NEWLIN                        | Director                    | March 10, 2010 |
| Stephen D. Newlin                            |                        |           |
|                                         |                        |           |
| /s/ GARY L. PECHOTA                          | Director                    | March 10, 2010 |
| Gary L. Pechota                              |                        |           |
|                                         |                        |           |
| /s/ WARREN L. ROBINSON                       | Director                    | March 10, 2010 |
| Warren L. Robinson                           |                        |           |
|                                         |                        |           |
| /s/ JOHN B. VERING                           | Director                    | March 10, 2010 |
| John B. Vering                               |                        |           |
|                                         |                        |           |
| /s/ THOMAS J. ZELLER                         | Director                    | March 10, 2010 |
| Thomas J. Zeller                             |                        |           |

----

| Exhibit Number | Description                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
|----------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|           |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
| 3.1*           | Restated Articles of Incorporation of the Registrant (filed as an exhibit to the Registrant's Form 8-K dated June 7, 1994 (No. 1-7978)).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
|           |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
| 3.2*           | Articles of Amendment to the Articles of Incorporation of the Registrant, as filed with the Secretary of State of the State of South Dakota on December 22, 2000 (filed as an exhibit to the Registrant's Form 10-K for 2000).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
|           |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
| 3.3*           | Bylaws of the Registrant (filed as an exhibit to the Registrant's Registration Statement on Form S-8 dated July 13, 1999).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
|           |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
| 4.1*           | Restated and Amended Indenture of Mortgage and Deed of Trust of Black Hills Corporation (now called Black Hills Power, Inc.) dated as of September 1, 1999 (filed as Exhibit 4.19 to the Registrant's Post-Effective Amendment No. 1 to the Registrant's Registration Statement on Form S-3 (No. 333-150669-01)).  First Supplemental Indenture,dated as of August 13, 2002, between Black Hills Power, Inc. and The Bank of New York Mellon (as successor to JPMorgan Chase Bank), as Trustee (filed as Exhibit 4.20 to the Registrant's Post-Effective Amendment No. 1 to the Registrant's Registration Statement on Form S-3 (No. 333-150669-01)).  Second Supplemental Indenture, dated as of October 27, 2009, between Black Hills Power, Inc. and The Bank of New York Mellon (filed as Exhibit 4.21 to the Registration Statement on Form S-3 (No. 333-150669-01)). |
|           |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
| 10.1*          | Restated and Amended Coal Supply Agreement for NS II dated February 12, 1993 (filed as Exhibit 10.1 to the Registrant's Post-Effective Amendment No. 1 to the Registrant's Registration Statement on Form S-3 (No. 333-150669-01)).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
|           |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
| 10.2*          | Second Restated and Amended Power Sales Agreement dated September 29, 1997, between PacifiCorp and Black Hills Power, Inc. (filed as Exhibit 10.2 to the Registrant's Post-Effective Amendment No. 1 to the Registrant's Registration Statement on Form S-3 (No. 333-150669-01)).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
|           |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
| 10.3*          | Reserve Capacity Integration Agreement dated May 5, 1987, between Pacific Power & Light Company and Black Hills Power, Inc. (filed as Exhibit 10.3 to the Registrant's Post-Effective Amendment No. 1 to the Registrant's Registration Statement on Form S-3 (No. 333-150669-01)).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
|           |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
| 23             | Independent Auditors’ Consent                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
|           |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
| 31.1           | Certification of Chief Executive Officer pursuant to Rule13a-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
|           |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
| 31.2           | Certification of Chief Financial Officer pursuant to Rule13a-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |

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| 32.1   | Certification of Chief Executive Officer Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. |
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|   |                                                                                                                                               |
| 32.2   | Certification of Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. |

| * | Previously filed as part of the filing indicated and incorporated by reference herein. |
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