12400--3/17/2009--BLACK_HILLS_POWER

related topics

{cost, contract, operation}

{condition, economic, financial}

{cost, regulation, environmental}

{capital, credit, financial}

{operation, natural, condition}

{product, candidate, development}

{control, financial, internal}

{stock, price, operating}

We may not raise our retail rates without prior approval of the SDPUC, WPSC or the MTPSC. If we seek rate relief, we could experience delays, reduced or partial rate recovery, or disallowances in rate proceedings. The recent global financial crisis has made the credit markets less accessible and created a shortage of available credit. We may, therefore, be unable to obtain the financing needed to refinance debt, fund planned capital expenditures or otherwise execute our operating strategy. Regulatory commissions may refuse to approve some or all of the utility rate increases we have requested or may request in the future, or may determine that amounts passed through to customers were not prudently incurred and are, therefore, not recoverable. The recent global financial crisis has also increased our counterparty credit risk. National and regional economic conditions may cause increased late payments and uncollectible accounts, which would reduce earnings and cash flows. Our credit ratings could be lowered below investment grade in the future. If this were to occur, our access to capital and our cost of capital and other costs would be negatively affected. National and regional economic conditions may cause increased late payments and uncollectible accounts, which would reduce earnings and cash flows. Construction, expansion, refurbishment and operation of power generating and transmission facilities involve significant risks which could lead to lost revenues or increased expenses. Because prices in the wholesale power markets are volatile, our revenues and expenses may fluctuate. Our operating results can be adversely affected by milder weather. Our business is subject to substantial governmental regulation and permitting requirements as well as environmental liabilities, including those we assumed in connection with certain acquisitions. We may be adversely affected if we fail to achieve or maintain compliance with existing or future regulations or requirements, or the potentially high cost of complying with such requirements or addressing environmental liabilities. Federal and state laws concerning climate change 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. Ongoing changes in the United States utility industry, including state and federal regulatory changes, a potential increase in the number or geographic scale of our competitors or the imposition of price limitations to address market volatility, could adversely affect our profitability. Governmental authorities may assess penalties on us if it is determined that we have not complied with environmental laws and regulations. Increased risks of regulatory penalties could negatively impact our business. Increasing costs associated with our defined benefit retirement plans may adversely affect our results of operations, financial position or liquidity. Increasing costs associated with health care plans may adversely affect our results of operations, financial position or liquidity. An effective system of internal control may not be maintained, leading to material weaknesses in internal control over financial reporting.

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12400--3/17/2009--BLACK_HILLS_POWER_INC