12400--3/27/2006--BLACK_HILLS_POWER

related topics

{cost, regulation, environmental}

{product, candidate, development}

{capital, credit, financial}

{stock, price, operating}

{cost, contract, operation}

{condition, economic, financial}

Our credit ratings could be lowered in the future. If this were to occur, our access to capital and our cost of capital and other costs would be negatively affected. We may not raise our retail rates without prior approval of the South Dakota Public Utilities Commission or the Wyoming Public Services Commission. If we seek rate relief, we could experience delays in obtaining approvals and could have rate recovery disallowed in rate proceedings. Because prices in the wholesale power markets are volatile, our revenues and expenses may fluctuate. Construction, expansion, refurbishment and operation of power generating and transmission and resource recovery facilities involve significant risks which could lead to lost revenues or increased expenses. Our business is subject to substantial governmental regulation and permitting requirements as well as on-site environmental liabilities we assumed when we acquired some of our facilities. We may be adversely affected by any future inability to comply with existing or future regulations or requirements or the potentially high cost of complying with such requirements. Ongoing changes in the United States utility industry, such as state and federal regulatory changes, a potential increase in the number of our competitors or the imposition of price limitations to address market volatility, could adversely affect our profitability.

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12400--3/27/2006--BLACK_HILLS_POWER_INC