United States
Securities and Exchange Commission
Washington, D.C. 20549

Form 10-Q

X      QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
         EXCHANGE ACT OF 1934

         For the quarterly period ended JuneSeptember 30, 2004.

OR

___  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
        ACT OF 1934


          For the transition period from _______________ to _______________.

          Commission File Number 1-7978

Black Hills Power, Inc.
Incorporated in South Dakota       IRS Identification Number 46-0111677

625 Ninth Street
Rapid City, South Dakota 57701

Registrant’s telephone number (605) 721-1700

Former name, former address, and former fiscal year if changed since last report

NONE

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

         Yes X                  No______

Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act).

Yes______        No X

As of July 31,October 29, 2004 there were issued and outstanding 23,416,396 shares of the Registrant’s common stock, $1.00 par value, all of which were held beneficially and of record by Black Hills Corporation.

Reduced Disclosure

The Registrant meets the conditions set forth in General Instruction H (1) (a) and (b) of Form 10-Q and is therefore filing this Form 10-Q with the reduced disclosure format.

TABLE OF CONTENTS


Page
PART I.  FINANCIAL INFORMATION     
Item 1.  
Financial Statements		     
   
Condensed Statements of Income -		     
      Three and sixnine months ended JuneSeptember 30, 2004 and 2003  3  
   
Condensed Balance Sheets -		     
      JuneSeptember 30, 2004 and December 31, 2003  4  
   
Condensed Statements of Cash Flows -		     
      SixNine months ended JuneSeptember 30, 2004 and 2003  5  
   
Notes to Condensed Financial Statements		  6-96-10  

Item 2.		  Results of Operations  10-12  

Item 4.		  Controls and Procedures  12  

PART II.		  OTHER INFORMATION     

Item 1.		  Legal Proceedings  13  

Item 6.		  Exhibits and Reports on Form 8-K  13  
   
Signatures		  14  
   
Exhibit Index		  15  

2

BLACK HILLS POWER, INC.
CONDENSED STATEMENTS OF INCOME
(unaudited)

Three months endedSix months endedThree months endedNine months ended
June 30September 30
2004
2003
2004
2003
2004
2003
2004
2003
(in thousands)(in thousands)


Operating revenue		  $39,809 $39,207 $81,456 $82,970   $47,921 $46,268 $129,377 $129,238 
Operating expenses:  
Fuel and purchased power  14,383  11,445  27,193  25,881   18,506  15,545  45,698  41,426 
Operations and maintenance  7,817  6,679  13,997  12,103   5,993  6,564  19,991  18,667 
Administrative and general  4,110  3,665  8,188  7,103   4,533  2,837  12,721  9,940 
Depreciation and amortization  4,803  4,809  9,746  9,537   4,703  4,809  14,448  14,346 
Taxes, other than income taxes  2,136  2,012  4,364  4,097   1,680  2,018  6,044  6,114 
  33,249  28,610  63,488  58,721   35,415  31,773  98,902  90,493 
Operating income  6,560  10,597  17,968  24,249   12,506  14,495  30,475  38,745 
Other income (expense):  
Interest expense  (4,217) (4,301) (8,433) (8,604)  (4,138) (4,499) (12,545) (12,704)
Other income  267  741  606  1,424   274  335  852  1,360 
  (3,950) (3,560) (7,827) (7,180)  (3,864) (4,164) (11,693) (11,344)
Income before income taxes and  
discontinued operations  2,610  7,037  10,141  17,069   8,642  10,331  18,782  27,401 
Income taxes  (794) (2,315) (3,289) (5,648)  (2,782) (3,559) (6,070) (9,208)
Income from continuing operations  1,816  4,722  6,852  11,421   5,860  6,772  12,712  18,193 
Discontinued operations, net of  
income taxes (Note 3)  --  --  --  1,906   --  --  --  1,906 
Net income $1,816 $4,722 $6,852 $13,327  $5,860 $6,772 $12,712 $20,099 

The accompanying notes to condensed financial statements are an integral part of these condensed financial statements.

3

BLACK HILLS POWER, INC.
CONDENSED BALANCE SHEETS
(unaudited)

June 30December 31September 30December 31
2004
2003
2004
2003
(in thousands)(in thousands)
ASSETS          

Current assets:		  
Cash and cash equivalents $893 $1,052  $607 $1,052 
Receivables (net of allowance for doubtful accounts of $905 and $898, respectively)  16,036  17,012 
Receivables (net of allowance for doubtful accounts of $909 and $898, respectively)  15,145  17,012 
Receivables - related party  33,551  38,618   25,868  38,618 
Materials, supplies and fuel  10,448  9,560   10,684  9,560 
Prepaid income taxes  --  2,813   --  2,813 
Deferred income taxes  108  -- 
  61,036  69,055   52,304  69,055 
Investments  3,086  2,920   3,101  2,920 
Property and equipment  631,216  623,197   635,278  623,197 
Less accumulated depreciation  (223,921) (212,041)  (228,144) (212,041)
  407,295  411,156   407,134  411,156 
Other assets:  
Regulatory asset  4,320  4,320   4,172  4,320 
Other  14,074  15,622   14,287  15,622 
  18,394  19,942   18,459  19,942 
Total $489,811 $503,073  $480,998 $503,073 
LIABILITIES AND STOCKHOLDER'S EQUITY  

Current liabilities:		  
Accounts payable $6,786 $6,929  $6,057 $6,929 
Accounts payable - related party  569  7,909   873  7,909 
Accrued liabilities  16,025  15,691   13,608  15,691 
Current maturities of long-term debt  1,988  1,986   46,989  1,986 
Deferred income taxes  --  239   24  239 
  25,368  32,754   67,551  32,754 
Long-term debt, net of current maturities  208,083  210,056   157,224  210,056 
Deferred credits:  
Deferred income taxes  66,877  65,633   66,641  65,633 
Regulatory liability  6,174  6,337   6,116  6,337 
Other  12,867  12,724   13,154  12,724 
  85,918  84,694   85,911  84,694 
Stockholder's equity:  
Common stock $1 par value; 50,000,000 shares authorized; 23,416,396 shares issued  23,416  23,416   23,416  23,416 
Additional paid-in capital  39,549  39,549   39,549  39,549 
Retained earnings  108,950  114,098   108,810  114,098 
Accumulated other comprehensive loss  (1,473) (1,494)  (1,463) (1,494)
  170,442  175,569   170,312  175,569 
Total $489,811 $503,073  $480,998 $503,073 

The accompanying notes to condensed financial statements are an integral part of these condensed financial statements.

4

BLACK HILLS POWER, INC.
CONDENSED STATEMENTS OF CASH FLOWS
(unaudited)

Six months endedNine months ended
June 30September 30
2004
2003
2004
2003
(in thousands)(in thousands)
Operating activities:            
Net income $6,852 $13,327  $12,712 $20,099 
Adjustments to reconcile net income to cash provided by  
operating activities:  
Income from discontinued operations  --  (1,906)  --  (1,906)
Depreciation and amortization  9,746  9,537   14,448  14,346 
Deferred income tax  897  5,679   793  4,312 
Change in operating assets and liabilities -  
Accounts receivable and other current assets  3,296  788   3,961  2,927 
Accounts payable and other current liabilities  (7,149) 4,979   (9,991) 4,526 
Other operating activities  1,672  (1,644)  1,734  (5,983)
  15,314  30,760   23,657  38,321 
Investing activities:  
Property additions  (5,903) (11,724)  (10,426) (21,992)
Decrease in notes receivable from associated companies, net  4,665  2,846   12,334  11,249 
Increase in investments  (264) (179)  (181) (199)
  (1,502) (9,057)  1,727  (10,942)
Financing activities  
Dividends paid  (12,000) (17,727)  (18,000) (23,728)
Long-term debt - repayments  (1,971) (2,518)  (7,829) (3,088)
  (13,971) (20,245)  (25,829) (26,816)
Increase (decrease) in cash and cash equivalents  (159) 1,458   (445) 563 

Cash and cash equivalents:		  
Beginning of period  1,052  518   1,052  518 
End of period $893 $1,976  $607 $1,081 
Supplemental disclosure of cash flow information  
Cash paid (received) during the period for:  
Interest $8,349 $8,529  $14,745 $14,996 
Income taxes refunded, net $(3,111)$(3,886)
Income taxes paid (refunded), net $(3,111)$(4)

Stock dividend distribution to Black Hills Corporation, the		  
parent company of Black Hills Power, Inc. (Note 3) $-- $45,687  $-- $45,687 

The accompanying notes to condensed financial statements are an integral part of these condensed financial statements.

5

BLACK HILLS POWER, INC.

Notes to Condensed Financial Statements
(unaudited)
(Reference is made to Notes to Financial Statements
included in the Company’s Annual Report on Form 10-K)

(1) 

   MANAGEMENT’S STATEMENT


 The financial statements included herein have been prepared by Black Hills Power, Inc. (the Company) without audit, pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted pursuant to such rules and regulations; however, the Company believes that the footnotes adequately disclose the information presented. These financial statements should be read in conjunction with the financial statements and the notes thereto, included in the Company’s 2003 Annual Report on Form 10-K filed with the Securities and Exchange Commission.

 Accounting methods historically employed require certain estimates as of interim dates. The information furnished in the accompanying financial statements reflects all adjustments which are, in the opinion of management, necessary for a fair presentation of the JuneSeptember 30, 2004, December 31, 2003 and JuneSeptember 30, 2003, financial information and are of a normal recurring nature. The results of operations for the sixnine months ended JuneSeptember 30, 2004, are not necessarily indicative of the results to be expected for the full year.

(2) 

   RECLASSIFICATIONS


 Certain 2003 amounts in the financial statements have been reclassified to conform to the 2004 presentation. These reclassifications did not have an effect on the Company’s total stockholder’s equity or net income as previously reported.

(3) 

   NON-CASH DIVIDEND AND DISCONTINUED OPERATIONS


 During the quarter ended March 31, 2003, the Company distributed a non-cash dividend to its parent company, Black Hills Corporation (Parent). The dividend consisted of 10,000 common shares of Black Hills Generation, Inc., formerly known as Black Hills Energy Capital, Inc., (Generation), which represents 100 percent ownership of Generation.

 Revenues and net income from the discontinued operations are as follows (in thousands):

Six months endedNine months ended
June 30,September 30,
20032003

Revenue		  $41,485   $41,485 
Income before income taxes $2,833  $2,833 
Income taxes  (927)  (927)
Net income from discontinued operations $1,906  $1,906 

6

(4) 

   RECENTLY ISSUEDADOPTED ACCOUNTING PRONOUNCEMENTS


 In May 2004, the Financial Accounting Standards Board (FASB) issued FASB Staff Position (FSP) No. 106-2, “Accounting and Disclosure Requirements Related to the Medicare Prescription Drug, Improvement and Modernization Act of 2003” (FSP 106-2), which provides guidance on the accounting for the effects of the Medicare Prescription Drug, Improvement and Modernization Act of 2003 (2003 Medicare Act) for employers that sponsor postretirement healthcare plans that provide prescription drug benefits. FSP 106-2 supersedes FSP 106-1 that was issued in January 2004 under the same title. The Company provides prescription drug benefits to certain eligible employees and is currently analyzing what the effects of the 2003 Medicare Act has on its accumulated postretirement benefit obligation or net periodic postretirement benefit cost. FSP 106-2 is effective for the first interim period beginning after June 15, 2004. The Company provides prescription drug benefits to certain eligible employees and will include the effects of the 2003 Medicare Act on its next actuarial measurement of the accumulated postretirement benefit obligation or net periodic postretirement benefit cost. The Company uses a September 30 measurement date for the Plan.

(5) 

   COMPREHENSIVE INCOME


 The following table presents the components of the Company’s comprehensive income (in thousands):

Three months endedSix months endedThree months endedNine months ended
June 30September 30
2004
2003
2004
2003
2004
2003
2004
2003

Net income		  $1,816 $4,722 $6,852 $13,327   $5,860 $6,772 $12,712 $20,099 
Other comprehensive income, net of tax:  
Fair value adjustment on derivatives  
designated as cash flow hedges included  
in discontinued operations  --  --  --  (360)  --  --  --  (360)
Reclassification adjustment on interest rate  
swap included in net income  11  10  21  20   10  10  31  31 
Comprehensive income $1,827 $4,732 $6,873 $12,987  $5,870 $6,782 $12,743 $19,770 

(6)

   CHANGES IN LONG-TERM DEBT


On August 31, 2004, the Company effected a call on $5.9 million, 6.7 percent Pollution Control Revenue Bonds issued through Lawrence County, South Dakota. The bonds had a maturity date of 2010.

On September 21, 2004, the Company initiated a notice to call, effective October 21, 2004, the entire $45 million Series AB 8.3 percent bonds. The bonds had a maturity date of 2024. Due to the notice to call, the bonds have been classified to current maturities of long-term debt on the September 30, 2004 Balance Sheet.

7

(7) 

   RELATED-PARTY TRANSACTIONS


 Receivables

 The Company has accounts receivable balances related to transactions with other Black Hills Corporation subsidiaries. The balances were $0.5 million and $0.9 million as of JuneSeptember 30, 2004 and December 31, 2003, respectively.

 The Company also has extended a line of credit to its Parent, Black Hills Corporation (the Parent), which is due on demand. Outstanding advances were $33.0$25.4 million at JuneSeptember 30, 2004 and $37.7 million at December 31, 2003. Interest income received on the note was $0.4$0.7 million and $0.9$1.2 million for the sixnine month periods ended JuneSeptember 30, 2004 and JuneSeptember 30, 2003, respectively. Advances under these notes bear interest at a variable rate that does not exceed prime (2.62(3.09 percent at JuneSeptember 30, 2004) and is receivable monthly.

7

 Other Balances and Transactions

 In addition to the above transactions, in order to fuel its combustion turbine, the Company purchased natural gas from Enserco Energy, an indirect subsidiary of the Parent. The amount purchased during the three month periods ended JuneSeptember 30, 2004 and JuneSeptember 30, 2003 was approximately $0.3$0.9 million and $1.0$2.7 million, respectively. The amount purchased during the sixnine month periods ended JuneSeptember 30, 2004 and JuneSeptember 30, 2003 was approximately $0.5$1.5 million and $2.7$5.4 million, respectively. These amounts are included in “Fuel and purchased power” on the Condensed Statements of Income.

 The Company also received revenues of approximately $0.2 million and $0.1$0.6 million for the three month periods ended JuneSeptember 30, 2004 and JuneSeptember 30, 2003, and $0.6 million and $1.7$0.8 million for the sixnine month periods ended JuneSeptember 30, 2004 and JuneSeptember 30, 2003, respectively, from Black Hills Wyoming, Inc., an indirect subsidiary of Black Hills Corporation, for the transmission of electricity.

(7)(8) 

   EMPLOYEE BENEFIT PLAN


 Defined Benefit Pension Plan

 The Company has a noncontributory defined benefit pension plan (Plan) covering the employees of the Company who meet certain eligibility requirements.

 The components of net periodic benefit cost for the Plan for the periods ended JuneSeptember 30 are as follows, (in thousands):

Three Months EndedSix Months EndedThree Months EndedNine Months Ended
2004
2003
2004
2003
2004
2003
2004
2003

Service cost		  $240 $178 $480 $356   $240 $178 $720 $534 
Interest cost  655  625  1,310  1,250   655  625  1,965  1,875 
Expected return on plan assets  (855) (618) (1,710) (1,236)  (855) (618) (2,565) (1,854)
Amortization of prior service cost  41  41  82  82   41  41  123  123 
Amortization of net loss  270  276  540  552   270  276  810  828 
Net periodic benefit cost $351 $502 $702 $1,004  $351 $502 $1,053 $1,506 

 The Company does not anticipate that a contribution will be made to the Plan in the 2004 fiscal year.

8

 Supplemental Nonqualified Defined Benefit Plan

 The Company has various supplemental retirement plans for outside directors and key executives of the Company. The Plans are nonqualified defined benefit plans.

 The components of net periodic benefit cost for the supplemental nonqualified plans for the periods ended JuneSeptember 30 are as follows, (in thousands):

Three Months EndedSix Months EndedThree Months EndedNine Months Ended
2004
2003
2004
2003
2004
2003
2004
2003

Service cost		  $-- $1 $-- $2   $-- $1 $-- $3 
Interest cost  27  26  54  52   27  26  81  78 
Amortization of prior service credit  --  (1) --  (2)  --  (1) --  (3)
Amortization of net loss  13  11  26  22   13  11  39  33 
Net periodic benefit cost $40 $37 $80 $74  $40 $37 $120 $111 

 The Company anticipates that contributions to the supplemental retirement plans for the 2004 fiscal year will be approximately $0.1 million; the contributions are expected to be in the form of benefit payments.

 Non-pension Defined Benefit Postretirement Plan

 Employees who are participants in the Company’s postretirement healthcare plan and who retire from the Company on or after attaining age 55 after completing at least five years of service to the Company are entitled to postretirement healthcare benefits. These financial statements and this Note do not reflect the effects of the 2003 Medicare Act on the postretirement benefit plan (see Note 4).

 The components of net periodic benefit cost for the postretirement healthcare plan for the periods ended JuneSeptember 30 are as follows, (in thousands):

Three Months EndedSix Months EndedThree Months EndedNine Months Ended
2004
2003
2004
2003
2004
2003
2004
2003

Service cost		  $75 $50 $150 $100   $75 $50 $225 $150 
Interest cost  121  109  242  218   121  109  363  327 
Amortization of net transition obligation  29  29  58  58   29  29  87  87 
Amortization of prior service credit  (5) (5) (10) (10)  (5) (5) (15) (15)
Amortization of net loss  36  19  72  38   36  19  108  57 
Net periodic benefit cost $256 $202 $512 $404  $256 $202 $768 $606 

 The Company anticipates that contributions to the postretirement healthcare plan for the 2004 fiscal year will be approximately $0.5 million; the contributions are expected to be in the form of benefits and administrative costs paid.

9

(8)(9) 

   LEGAL PROCEEDINGS


 The Company is subject to various legal proceedings, claims and litigation as described in Note 6 of the Company’s 2003 Annual Report on Form 10-K. There have been no material developments in these proceedings or any new material proceedings that have developed during the first sixnine months of 2004.

9

(10)

   SUBSEQUENT EVENT


On October 21, 2004, the Company effected a call on its Series AB, $45 million 8.3 percent First Mortgage Bonds. The bonds had a maturity date of 2024.

ITEM 2.    RESULTS OF OPERATIONS

Three Months EndedSix Months EndedThree Months EndedNine Months Ended
June 30September 30
2004
2003
2004
2003
2004
2003
2004
2003
(in thousands)(in thousands)

Revenue		  $39,809 $39,207 $81,456 $82,970   $47,921 $46,268 $129,377 $129,238 
Operating expenses  33,249  28,610  63,488  58,721   35,415  31,773  98,902  90,493 
Operating income $6,560 $10,597 $17,968 $24,249  $12,506 $14,495 $30,475 $38,745 
Income from continuing operations $1,816 $4,722 $6,852 $11,421  $5,860 $6,772 $12,712 $18,193 

The following table provides certain operating statistics:

Three Months EndedSix Months EndedThree Months EndedNine Months Ended
June 30September 30
2004
2003
2004
2003
2004
2003
2004
2003
Firm (system) sales - MWh   451,000  447,400  964,300  952,900    511,800  545,300  1,476,000  1,498,100 
Off-system sales - MWh  259,600  234,100  461,900  479,800   335,500  204,700  797,400  684,500 

Three Months Ended JuneSeptember 30, 2004 Compared to Three Months Ended JuneSeptember 30, 2003. Electric utility revenues increased 24 percent for the three-month period ended JuneSeptember 30, 2004, compared to the same period in the prior year. The increase in revenue was primarily due to an 11a 64 percent increase in off-system electric MWhmegawatt-hour sales offset by a 1an 11 percent decrease in average prices received. Revenues were impacted in part by plant availability resultingreceived from unscheduled and scheduled maintenance outages during the three month period ended June 30, 2004.off-system sales. Firm commercial and residential electricity revenues decreased 5 percent and 12 percent, respectively, and industrial electricity revenues increased 1 percent and 2 percent, respectively, offset by a slight decrease in residential revenues.percent. Degree days, which is a measure of weather trends, were 337 percent below last year.

Electric operating expenses increased 1611 percent for the three-month period ended JuneSeptember 30, 2004, compared to the same period in the prior year. Purchased power increased $3.7$4.3 million due to a 4051 percent increase in megawatt-hours purchased, at a 75 percent increasedecrease in the average cost per megawatt-hour. Megawatt-hours purchased increased due to replacement power needed because of scheduled and unscheduled plant outages and uneconomic dispatch of our gas turbines.turbines and to support the increase in off-system sales. Gas costs decreased 1955 percent due to a 7864 percent decrease in megawatt-hours generated with our gas turbines, as prevailing prices made it more economical for us to purchase power for our peaking needs when it was available rather than generate energy from our gas turbines. The average cost per megawatt-hour of our gas generation was $81.89$67.03 for the three months ended JuneSeptember 30, 2004, compared to $31.34while the average cost for purchased power was $35.25 per megawatt-hour for purchased power for the same time period. The decrease in fuel expense was offset by increased maintenancepower marketing costs, for scheduled and unscheduled plant outages, increased health insurance costs and an increase in allocated corporate costs.

10

Income from continuing operations decreased $2.9$0.9 million primarily due to increases in purchased power expense, maintenance expense,costs associated with the increase in off-system sales, health insurance expense and allocated corporate costs, partially offset by an increase in firm system and off-system electric sales and athe decrease in fuel expense.gas costs.

10

SixNine Months Ended JuneSeptember 30, 2004 Compared to SixNine Months Ended JuneSeptember 30, 2003. Electric utility revenues decreased 2 percentwere flat for the six-monthnine-month period ended JuneSeptember 30, 2004, compared to the same period in the prior year. The decrease in revenue was primarily due toOff-system electric megawatt-hour sales increased 16 percent at a 4 percent decrease in off-system electric MWh sales and a 45 percent decrease in average prices received. Revenues were impacted in part by reduced Open Access Transmission Tariff rates and plant availability resulting from unscheduled and scheduled maintenance outages during the sixnine month period ended JuneSeptember 30, 2004. The decreaseincrease in revenue from off-system sales was partially offset by strongdecreased retail sales. Residential and commercial revenues decreased 3 percent and 2 percent, respectively, and industrial revenues increased 2 percent, 1 percent and 4 percent, respectively, while degree3 percent. Degree days, which is a measure of weather trends, were 612 percent below last year.

Electric operating expenses increased 89 percent for the six-monthnine-month period ended JuneSeptember 30, 2004, compared to the same period in the prior year. Purchased power increased $4.9$9.2 million due to a 3138 percent increase in megawatt-hours purchased. Megawatt-hours purchased increased primarily due to replacement power needed because of scheduleda 16 percent increase in off-system megawatt-hour sales and unscheduled plant outages andthe uneconomic dispatch of our gas turbines. Gas costs decreased 3570 percent due to a 90an 83 percent decrease in megawatt-hours generated with our gas turbines as prevailing prices made it more economical for us to purchase power for our peaking needs when it was available rather than generate energy from our gas turbines. The average cost per megawatt-hour of our gas generation was $95.22$76.33 for the sixnine months ended JuneSeptember 30, 2004, compared to $32.20while the average cost for purchased power was $33.38 per megawatt-hour for purchased power for the same time period. The decrease in fuel expense was offset by increased plant maintenance costs, for scheduled and unscheduled plant outages, increasedpower marketing costs, health insurance costs and an increase in allocated corporate costs.

Income from continuing operations decreased $4.6$5.5 million primarily due to a decrease in off-system electric revenue and increases in purchased power expense, maintenance expense, costs associated with the increase in off-system sales, health insurance expense and allocated corporate costs, partially offset by an increase in firm systemoff-system electric sales and athe decrease in fuel expense.gas costs.

Forward Looking Statements

Some of the statements in this Form 10-Q include “forward-looking statements” as defined by the Securities and Exchange Commission, or SEC. We make these forward-looking statements in reliance on the safe harbor protections provided under the Private Securities Litigation Reform Act of 1995. All statements, other than statements of historical facts, included in this Form 10-Q that address activities, events or developments that we expect, believe or anticipate will or may occur in the future are forward-looking statements. These forward-looking statements are based on assumptions, which we believe are reasonable based on current expectations and projections about future events and industry conditions and trends affecting our business. However, whether actual results and developments will conform to our expectations and predictions is subject to a number of risks and uncertainties that, among other things, could cause actual results to differ materially from those contained in the forward-looking statements, including:

Our ability to access the debt and equity markets, which will depend on general market conditions and the credit ratings for our debt obligations;

General economic and political conditions, including tax rates or policies and inflation rates;

The creditworthiness of counterparties to trading and other transactions, and defaults on amounts due from counterparties;

The amount of collateral required to be posted from time to time in our transactions;

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Changes in or compliance with laws and regulations, particularly those relating to taxation, safety and protection of the environment;

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

Weather and other natural phenomena;

Industry and market changes, including the impact of consolidations and changes in competition;

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;

Capital market conditions, including price risk due to marketable securities held as investments in benefit plans; and

Other factors discussed from time to time in our filings with the SEC

New factors that could cause actual results to differ materially from those described in forward-looking statements emerge from time to time, and it is not possible for us to predict all such factors, or the extent to which any such factor or combination of factors may cause actual results to differ from those contained in any forward-looking statement. We assume no obligation to update publicly any such forward-looking statements, whether as a result of new information, future events, or otherwise.

ITEM 4.   CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

Our Chief Executive Officer and Chief Financial Officer evaluated the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934 (Exchange Act)) as of JuneSeptember 30, 2004. Based on their evaluation, they have concluded that our disclosure controls and procedures are adequate and effective to ensure that material information relating to us that is included in our reports filed under the Exchange Act is recorded, processed, summarized and reported within the required time periods.

Changes in Internal Control Over Financial Reporting

During the period covered by this Quarterly Report on Form 10-Q, there have been no changes in our internal control over financial reporting that have materially affected or are reasonably likely to materially affect our internal control over financial reporting.

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BLACK HILLS POWER, INC.

Part II — Other Information

Item 1. 

              Legal Proceedings


 For information regarding legal proceedings, see Note 6 in Item 8 of the Company’s 2003 Annual Report on Form 10-K and Note 89 of our Notes to Financial Statements in this Quarterly Report on Form 10-Q, which information from Note 89 is incorporated by reference into this item.

Item 6. 

              Exhibits and Reports on Form 8-K


 (a)       Exhibits—

             Exhibit 31.1     Certification pursuant to Rule 13a - 14(a) of the Securities Exchange Act of 1934, as
                                     adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

             Exhibit 31.2     Certification pursuant to Rule 13a - 14(a) of the Securities Exchange Act of 1934, as
                                     adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

             Exhibit 32.1      Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906
                                      of the Sarbanes-Oxley Act of 2002.

             Exhibit 32.2      Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906
                                      of the Sarbanes-Oxley Act of 2002.

(b)       Reports on Form 8-K

            We filed no reports on Form 8-K during the quarter ended June 30, 2004.

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BLACK HILLS POWER, INC.

Signatures

        Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

       BLACK HILLS POWER, INC.

       /s/ David R. Emery                    
David R. Emery, President and
Chief Executive Officer

       /s/ Mark T. Thies                             
Mark T. Thies, Executive Vice President and
Chief Financial Officer

Dated: August 10,November 12, 2004

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EXHIBIT INDEX

  Exhibit Number Description

  Exhibit 31.1 Certification pursuant to Rule 13a – 14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes – Oxley Act of 2002.

  Exhibit 31.2 Certification pursuant to Rule 13a – 14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes – Oxley Act of 2002.

  Exhibit 32.1 Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

  Exhibit 32.2 Certification 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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