On March 13, 2007, the Registrant entered into a Second Amendment to the Credit Agreement dated May 5, 2005, among Black Hills Corporation, as Borrower, the financial institutions from time to time party thereto as Banks, U.S. Bank, National Association, as Co-Syndication Agent, Union Bank of California, N.A., as Co-Syndication Agent, BANK OF AMERICA, N.A., as Co-Documentation Agent, BANK OF MONTREAL dba HARRIS NESBITT, as Co-Documentation Agent, and ABN AMRO Bank N.V. as Administrative Agent (the “BHC Credit Agreement”).

The Second Amendment (i) increased the limit for borrowings or other credit accommodations for the Marketing Subsidiary Excluded Credit Facilities from $260 million to $300 million, (ii) increased the aggregate amount of commitments allowed under the facility without receiving the consent of the Banks from $500 million to $600 million, (iii) effective with the acquisition of certain electric and gas utility assets from Aquila, Inc. will increase the recourse leverage ratio limit from 0.65 to 1.00, to 0.70 to 1.00 for the first year after the Aquila acquisition and 0.65 to 1.00 thereafter, and (iv) allowed for other minor modifications to enable the Registrant to complete the acquisition of certain electric and gas utility assets from Aquila, Inc.

The BHC Credit Agreement dated May 5, 2005, filed as Exhibit 10.1 to the Registrant’s Form 10-Q for March 31, 2005, and the First and Second Amendments to the BHC Credit Agreement filed as Exhibits 10.1 and 10.2 to this Form 8-K are incorporated herein by reference.

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credit facility is extended more than once in any fiscal year for a period of more than one year. Any replacement credit facility of a Marketing Subsidiary Excluded Credit Facility shall be deemed a Marketing Subsidiary Excluded Credit Facility only if such replacement credit facility contains terms substantially the same as the Marketing Subsidiary Excluded Credit Facility being replaced (including tenor but excluding the increase in borrowings otherwise permitted above) or is approved in writing by the Required Banks.

Section 2.2 Amendment to Schedule 7.15. Schedule 7.15 is amended by deleting any reference to Black Hills Energy Resources, Inc. Credit Facility with Fortis Capital Corp.

Section 3. Ratification. The Borrower hereby ratifies, acknowledges, affirms and reconfirms its rights, interests and obligations under each Credit Document, as amended hereby, and agrees to perform each of its obligations thereunder as and when required. By executing this Amendment, the Borrower hereby further ratifies, acknowledges, affirms and reconfirms that each Credit Document, as amended hereby, constitutes a legal, valid and binding obligation of the Borrower enforceable against the Borrower in accordance with its terms, and that each such Credit Document, as amended hereby, is in full force and effect.

Section 4. Conditions. The effectiveness of this Amendment is subject to the following conditions precedent:

Section 4.1 The Borrower, the Administrative agent and the Required Lenders shall have executed and delivered this Amendment, and the Borrower shall have executed and/or delivered such other documents and instruments as Administrative Agent may require.

Section 4.2 The representations and warranties set forth in Section 5 of this Amendment shall be true and correct.

Section 4.3 All proceedings taken in connection with the transactions contemplated by this Amendment and all documents, instruments and other legal matters incident thereto shall be reasonably satisfactory to the Administrative Agent and its legal counsel.

Section 5.     Representations and Warranties.    To induce the Administrative Agent and the Banks party hereto to enter into this Amendment, the Borrower represents and warrants to the Administrative Agent and the Banks that (i) the execution, delivery and performance of this Amendment has been duly authorized by all requisite corporate action on the part of the Borrower and that this Amendment has been duly executed and delivered by the Borrower and this Amendment and the Credit Agreement, as amended hereby, constitutes valid and binding obligations of the Borrower enforceable in accordance with its terms, (ii) no Default or Event of Default (after giving effect to this Amendment) has occurred and is continuing under the Credit Agreement or would result from the execution and delivery of this Amendment, and (iii) each of the representations and warranties set forth in Section 5 of the Credit Agreement, as amended hereby, is true and correct in all material respects as of the date hereof, except that if any such representation or warranty relates solely to an earlier date it need only remain true as of such date.

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First Amendment

(iv) all deliveries, agreements and other documents delivered or executed in connection with any of the foregoing.

“Aquila Assets” means the “Purchased Assets” and the “Colorado Assets” as such terms are defined in the Asset Purchase Agreement and the “Company Interest” as such term is defined in the Partnership Interest Purchase Agreement.

“Aquila Asset Purchase Agreement” means that certain Asset Purchase Agreement dated as of February 6, 2007 by and among Gregory Acquisition Corp., a Delaware corporation, Great Plains Energy Incorporated, a Missouri corporation, the Borrower and Aquila, Inc., a Delaware corporation, as such agreement may be amended in accordance with the terms thereof.

“Aquila Credit Agreement” means that certain Credit Agreement dated as of [March 13], 2007 by and among, inter alia, ABN AMRO, as Administrative Agent, Borrower and the various financial institutions party thereto as “Banks,” as amended, supplemented or otherwise modified from time to time in accordance with the terms thereof.

“Aquila Effective Date” means the date upon which the Aquila Transactions are consummated in accordance with the terms of the Aquila Agreements.

“Aquila Transactions” means the transactions contemplated by the terms of the Aquila Agreements.

“Partnership Interests Purchase Agreement” means that certain Partnership Interests Purchase Agreement dated as of February 6, 2007 by and among Gregory Acquisition Corp., a Delaware corporation, Great Plains Energy Incorporated, a Missouri corporation, the Borrower, Aquila Colorado, LLC, a Delaware limited liability company and, Aquila, Inc., a Delaware corporation, as such agreement may be amended in accordance with the terms thereof.

(ii)     The definition of “PUCHA” appearing in Section 1.1 of the Credit Agreement is hereby deleted in its entirety and the following defined term is hereby substituted therefor:

“PUCHA” means the Public Utility Holding Company Act of 2005, as amended.

(iii)    The phrase “to accommodate an increase in the borrowings thereunder from $200,000,000 to $260,000,000” appearing in the definition of “Marketing Subsidiary Excluded Credit Facilities” in Section 1.1 of the Credit Agreement is hereby deleted in its entirety and the following language is hereby substituted therefor:

“to (x) accommodate an increase in the borrowings or other credit accommodations thereunder to $300,000,000, and (y) permit such credit facility to be either asset-based or non-asset-based (whether secured or unsecured).”

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