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FOR IMMEDIATE RELEASE: Dec. 28, 2006  
CONTACT: Leah Mohr, South Dakota Public Utilities Commission, (605) 773-3201 

Public Utilities Commission approves
Black Hills Power rate increase

PIERRE, S.D. – The South Dakota Public Utilities Commission today agreed to allow Black Hills Power to increase their electric rates by approximately 7.8 percent. This was the first rate increase the company sought before the commission in more than 10 years.

The final increase was established as part of a settlement agreement between the PUC Staff and Black Hills Power. The company filed an application with the PUC on June 30, 2006, to raise electric rates by approximately 9.5 percent.

"Commissioners generally dread rate cases, but that was not the situation here," said PUC Chairman Dusty Johnson. "Black Hills Power has not had a rate increase in more than a decade; the monthly fixed customer charge is increasing by only
50 cents; and all parties agreed that the settlement was fair and reasonable," he continued.

"This is actually a unique rate structure that insulates the consumer from cost increases as well as gives them an opportunity to benefit from some of the company's cost decreases," stated PUC Vice Chairman Gary Hanson. "This is a reasonable and fair rate change especially considering that over the past few months we have seen rate increases of 35 percent and 60 percent granted in other parts of the country."

"I feel the decision we made here today was needed," said PUC Commissioner Steve Kolbeck. "The negotiations in which PUC Staff participated held the rate increase down to a reasonable amount and yet will enable the company to achieve a return that is fair and allow them to continue to provide safe and reliable service to its customers," he concluded.

Commissioners praised the efforts of all parties for conducting thorough and thoughtful examination in evaluating all aspects of the rate case and for reaching an agreement in a reasonable timeframe.

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MEDIA NOTE: Visit the PUC Web site, www.puc.sd.gov, for more information about this docket. Select "Commission Actions," then "2006 Electric Dockets." Click on the docket titled EL06-019 to access the documents.