10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-Q

x	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
	For the quarterly period ended March 31, 2013
OR
o	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE 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 o

Indicate by check mark whether the Registrant has submitted electronically and posted on its corporate website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the Registrant was required to submit and post such files).

Yes x No o

Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company (as defined in Rule 12b-2 of the Exchange Act).

Large accelerated filer	o	Accelerated filer	o
Non-accelerated filer	x	Smaller reporting company	o

Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes o No x

As of April 30, 2013, 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
	GLOSSARY OF TERMS AND ABBREVIATIONS	3
PART 1.	FINANCIAL INFORMATION
Item 1.	Financial Statements
	Condensed Statements of Income and Comprehensive Income - unaudited	4
	Three Months Ended March 31, 2013 and 2012
	Condensed Balance Sheets - unaudited	5
	March 31, 2013 and December 31, 2012
	Condensed Statements of Cash Flows - unaudited	6
	Three Months Ended March 31, 2013 and 2012
	Notes to Condensed Financial Statements - unaudited	7
Item 2.	Managements’ Discussion and Analysis of Financial Condition and Results of Operations	12
Item 4.	Controls and Procedures	16
PART II.	OTHER INFORMATION	16
Item 1.	Legal Proceedings	16
Item 1A.	Risk Factors	16
Item 6.	Exhibits	16
	Signatures	18
	Exhibit Index	19

2

GLOSSARY OF TERMS AND ABBREVIATIONS

The following terms and abbreviations appear in the text of this report and have the definitions described below:

AFUDC	Allowance for Funds Used During Construction
ASC	Accounting Standards Codification
BHC	Black Hills Corporation, the Parent Company
Black Hills Energy	The name used to conduct the business of Black Hills Utility Holdings, Inc., and its subsidiaries
Black Hills Utility Holdings	Black Hills Utility Holdings, Inc. a direct, wholly-owned subsidiary of BHC
Black Hills Service Company	Black Hills Service Company, LLC, a direct, wholly-owned subsidiary of BHC
Cheyenne Light	Cheyenne Light, Fuel and Power Company, a direct, wholly-owned subsidiary of the BHC
Cheyenne Prairie	Cheyenne Prairie Generating Station currently being constructed in Cheyenne, Wyoming by Cheyenne Light and Black Hills Power. Construction is expected to be completed for this 132 MW facility in 2014.
FERC	Federal Energy Regulatory Commission
Fitch	Fitch Ratings
Happy Jack	Happy Jack Wind Farms, LLC, a subsidiary of Duke Energy Generation Services
LIBOR	London Interbank Offered Rate
Moody's	Moody's Investor Services, Inc.
MW	Megawatts
SDPUC	South Dakota Public Utilities Commission
SEC	U.S. Securities and Exchange Commission
Silver Sage	Silver Sage Windpower, LLC, a subsidiary of Duke Energy Generation Services
S&P	Standard & Poor's Rating Services
WRDC	Wyodak Resources Development Corp., an indirect, wholly-owned subsidiary of BHC

3

BLACK HILLS POWER, INC.

CONDENSED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME

(unaudited)

	Three Months Ended March 31,
	2013			2012
	(in thousands)
Revenue	$	59,817		$	62,270
Operating expenses:
Fuel and purchased power	22,098			24,715
Operations and maintenance	16,808			16,543
Depreciation and amortization	6,986			6,950
Taxes - property	1,422			1,320
Total operating expenses	47,314			49,528
Operating income	12,503			12,742
Other income (expense):
Interest expense	(4,847		)	(4,290		)
AFUDC - borrowed	58			57
Interest income	27			24
AFUDC - equity	134			116
Other income (expense), net	82			388
Total other income (expense)	(4,546		)	(3,705		)
Income from continuing operations before income taxes	7,957			9,037
Income tax expense	(2,375		)	(2,984		)
Net income	5,582			6,053
Other comprehensive income (loss):
Reclassification adjustments of cash flow hedges settled and included in net income (net of tax (expense) benefit of $(6) and $(6))	10			10
Reclassification adjustment of benefit plan liability (net of tax (expense) benefit of $(6) and $0)	11			—
Other comprehensive income	21			10
Comprehensive income	$	5,603		$	6,063

The accompanying Notes to Condensed Financial Statements are an integral part of these Condensed Financial Statements.

4

BLACK HILLS POWER, INC.

CONDENSED BALANCE SHEETS

(unaudited)

	March 31, 2013			December 31, 2012
	(in thousands, except common stock par value and share amounts)
ASSETS
Current assets:
Cash and cash equivalents	$	3,063		$	3,805
Receivables - customers, net	23,309			23,867
Receivables - affiliates	4,896			5,027
Other receivables, net	628			673
Money pool notes receivable, net	35,063			31,645
Materials, supplies and fuel	21,284			20,633
Deferred income tax assets, net, current	1,563			16,631
Regulatory assets, current	4,891			4,998
Other, current assets	5,432			5,781
Total current assets	100,129			113,060
Investments	4,438			4,359
Property, plant and equipment	1,036,672			1,024,768
Less accumulated depreciation and amortization	(326,160		)	(322,830		)
Total property, plant and equipment, net	710,512			701,938
Other assets:
Regulatory assets, non-current	48,921			48,244
Other, non-current assets	5,685			5,322
Total other assets	54,606			53,566
TOTAL ASSETS	$	869,685		$	872,923
LIABILITIES AND STOCKHOLDER’S EQUITY
Current liabilities:
Accounts payable	$	17,128		$	14,318
Accounts payable - affiliates	18,030			21,896
Accrued liabilities	17,232			15,477
Regulatory liabilities, current	22			37
Total current liabilities	52,412			51,728
Long-term debt, net of current maturities	269,945			269,944
Deferred credits and other liabilities:
Deferred income tax liability, net, non-current	146,521			158,918
Regulatory liabilities, non-current	45,845			43,849
Benefit plan liabilities	26,627			25,888
Other, non-current liabilities	3,274			3,138
Total deferred credits and other liabilities	222,267			231,793
Commitments and contingencies (Notes 4, 5, 7 and 9)
Stockholders’ equity:
Common stock $1 par value; 50,000,000 shares authorized; 23,416,396 shares issued	23,416			23,416
Additional paid-in capital	39,575			39,575
Retained earnings	263,469			257,887
Accumulated other comprehensive loss	(1,399		)	(1,420		)
Total stockholders’ equity	325,061			319,458
TOTAL LIABILITIES AND STOCKHOLDER’S EQUITY	$	869,685		$	872,923

The accompanying Notes to Condensed Financial Statements are an integral part of these Condensed Financial Statements.

5

BLACK HILLS POWER, INC.

CONDENSED STATEMENTS OF CASH FLOWS

(unaudited)

	Three Months Ended March 31,
	2013			2012
	(in thousands)
Operating activities:
Net income	$	5,582		$	6,053
Adjustments to reconcile net income to net cash provided by operating activities-
Depreciation and amortization	6,986			6,950
Deferred income tax	2,252			2,695
Employee benefits	774			957
AFUDC - equity	(134		)	(116		)
Other adjustments, net	389			703
Change in operating assets and liabilities -
Accounts receivable and other current assets	(1,334		)	3,696
Accounts payable and other current liabilities	393			2,705
Regulatory assets	746			(22		)
Regulatory liabilities	161			(659		)
Contributions to defined benefit pension plan	—			(6,835		)
Other operating activities, net	1,182			25
Net cash provided by (used in) operating activities	16,997			16,152
Investing activities:
Property, plant and equipment additions	(14,243		)	(6,965		)
Change in money pool notes receivable, net	(3,418		)	(9,563		)
Other investing activities	(78		)	(86		)
Net cash provided by (used in) investing activities	(17,739		)	(16,614		)
Financing activities:
Long-term debt - repayments	—			(21		)
Net cash provided by (used in) financing activities	—			(21		)
Net change in cash and cash equivalents	(742		)	(483		)
Cash and cash equivalents, beginning of period	3,805			2,812
Cash and cash equivalents, end of period	$	3,063		$	2,329

See Note 8 for supplemental cash flow information.

The accompanying Notes to Condensed Financial Statements are an integral part of these Condensed Financial Statements.

6

BLACK HILLS POWER, INC.

Notes to Condensed Financial Statements

(unaudited)

(Reference is made to Notes to Financial Statements

included in our 2012 Annual Report on Form 10-K)

(1) MANAGEMENT'S STATEMENT

The unaudited condensed financial statements included herein have been prepared by Black Hills Power, Inc. (the “Company,” “we,” “us,” or “our”), pursuant to the rules and regulations of the SEC. 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, we believe that the footnotes adequately disclose the information presented. These condensed financial statements should be read in conjunction with the financial statements and the notes thereto, included in our 2012 Annual Report on Form 10-K filed with the SEC.

Accounting methods historically employed require certain estimates as of interim dates. The information furnished in the accompanying condensed financial statements reflects all adjustments, including accruals, which are, in the opinion of management, necessary for a fair presentation of the March 31, 2013, December 31, 2012 and March 31, 2012 financial information and are of a normal recurring nature. The results of operations for the three months ended March 31, 2013 and March 31, 2012, and our financial condition as of March 31, 2013 and December 31, 2012 are not necessarily indicative of the results of operations and financial condition to be expected as of or for any other period.

(2) ACCOUNTS RECEIVABLE AND ALLOWANCE FOR DOUBTFUL ACCOUNTS

Following is a summary of Receivables - customers, net included in the accompanying Condensed Balance Sheets (in thousands) as of:

	March 31, 2013			December 31, 2012
Accounts receivable trade	$	15,548		$	14,965
Unbilled revenues	7,919			9,004
Allowance for doubtful accounts	(158		)	(102		)
Receivables - customers, net	$	23,309		$	23,867

7

(3) REGULATORY ASSETS AND LIABILITIES

Our regulated electric operations are subject to regulation by various state and federal agencies. The accounting policies followed are generally subject to the Uniform System of Accounts of the FERC.

Our regulatory assets and liabilities were as follows (in thousands) as of:

	Recovery/Amortization Period (in years)	March 31, 2013		December 31, 2012
Regulatory assets:
Unamortized loss on reacquired debt(a)	14	$	2,440	$	2,501
AFUDC(b)	45	8,447		8,460
Employee benefit plans(c)	13	27,854		27,001
Deferred energy costs(a)	1	6,117		6,892
Flow through accounting(a)	35	8,368		8,019
Other(a)	2	586		369
Total regulatory assets		$	53,812	$	53,242

Regulatory liabilities:
Cost of removal for utility plant(a)	53	$	27,546	$	26,630
Employee benefit plans(d)	13	16,542		15,689
Other(e)	13	1,779		1,567
Total regulatory liabilities		$	45,867	$	43,886

____________________

(a) Recovery or return of costs, but not allowed a rate of return.

(b) In addition to recovery of costs, we are allowed a rate of return.

(c) In addition to recovery of costs, we are allowed a return on approximately $23.5 million.

(d) Approximately $13.2 million is included in our rate base calculation as a reduction to rate base.

(e) Approximately $0.8 million is included in our rate base calculation as a reduction to rate base.

(4) RELATED-PARTY TRANSACTIONS

Receivables and Payables

We have accounts receivable and accounts payable balances related to transactions with other BHC subsidiaries. The balances were as follows (in thousands) as of:

	March 31, 2013		December 31, 2012
Receivables - affiliates	$	4,896	$	5,027
Accounts payable - affiliates	$	18,030	$	21,896

Money Pool Notes Receivable and Notes Payable

We have entered into a Utility Money Pool Agreement (the “Agreement”) with BHC, Cheyenne Light and Black Hills Energy. Under the Agreement, we may borrow from BHC however the Agreement restricts us from loaning funds to BHC or to any of BHC’s non-utility subsidiaries. The Agreement does not restrict us from making dividends to BHC. Borrowings under the Agreement bear interest at the weighted average daily cost of external funds as defined under the Agreement, or if there are no external funds outstanding on that date, then the rate will be the daily one-month LIBOR plus 1.0%. Advances under the Utility Money Pool notes bear interest at a weighted average daily rate (1.78% at March 31, 2013).

8

We had the following balances with the Utility Money Pool (in thousands) as of:

	March 31, 2013		December 31, 2012
Money pool notes receivable, net	$	35,063	$	31,645

Net interest income (expense) relating to balances for the Utility Money Pool was as follows (in thousands):

	Three Months Ended March 31,
	2013			2012
Net interest income (expense)	$	(440	)	$	283

Other Balances and Transactions

Sales and purchases with related parties were as follows (in thousands):

	Three Months Ended March 31,
	2013		2012
Revenues:
Energy sold to Cheyenne Light	$	140	$	526
Rent from electric properties	$	988	$	1,259
Purchases:
Purchase of coal from WRDC	$	4,524	$	5,995
Purchase of excess energy from Cheyenne Light	$	946	$	742
Purchase of renewable wind energy from Cheyenne Light - Happy Jack	$	650	$	671
Purchase of renewable wind energy from Cheyenne Light - Silver Sage	$	1,085	$	1,077
Purchase of natural gas - other	$	—	$	7
Corporate support services from Parent, Black Hills Service Company and Black Hills Utilities Holdings Inc.	$	7,276	$	4,805

(5) EMPLOYEE BENEFIT PLANS

Defined Benefit Pension Plan

The components of net periodic benefit cost for the Defined Benefit Pension Plan were as follows (in thousands):

	Three Months Ended March 31,
	2013			2012
Service cost	$	213		$	191
Interest cost	742			742
Expected return on plan assets	(941		)	(785		)
Prior service cost	11			14
Net loss (gain)	652			650
Net periodic benefit cost	$	677		$	812

9

Non-pension Defined Benefit Postretirement Healthcare Plan

The components of net periodic benefit cost for the Non-Pension Defined Postretirement Healthcare Plan were as follows (in thousands):

	Three Months Ended March 31,
	2013			2012
Service cost	$	54		$	53
Interest cost	60			86
Amortization of prior service cost	(69		)	(69		)
Net loss (gain)	2			35
Net periodic benefit cost	$	47		$	105

Supplemental Non-qualified Defined Benefit Plans

The components of net periodic benefit cost for the Supplemental Non-qualified Defined Benefit Plans were as follows (in thousands):

	Three Months Ended March 31,
	2013		2012
Interest cost	$	33	$	26
Net loss (gain)	17		14
Net periodic benefit cost	$	50	$	40

Contributions

We anticipate that we will make contributions to each of the benefit plans during 2013 and 2014. Contributions to the Pension Plan will be made in cash and contributions to the Healthcare Plan and the Supplemental Plans are expected to be made in the form of benefit payments. Contributions are as follows (in thousands):

	Three Months Ended March 31, 2013		Remaining Anticipated Contributions for 2013		Anticipated Contributions for 2014
Defined Benefit Pension Plan	$	—	$	1,582	$	3,483
Non-Pension Defined Benefit Postretirement Healthcare Plan	$	109	$	329	$	489
Supplemental Non-qualified Defined Benefit Plans	$	54	$	162	$	215

10

(6) FAIR VALUE OF FINANCIAL INSTRUMENTS

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The ASC on Fair Value Measurements and Disclosure Requirements establishes a hierarchy for grouping assets and liabilities, based on significance of inputs. For additional information see Note 1 included in our 2012 Annual Report on Form 10-K filed with the SEC.

The estimated fair values of our financial instruments were as follows (in thousands) as of:

	March 31, 2013				December 31, 2012
	Carrying Amount		Fair Value		Carrying Amount		Fair Value
Cash and cash equivalents (a)	$	3,063	$	3,063	$	3,805	$	3,805
Long-term debt, including current maturities (b)	$	269,945	$	351,165	$	269,944	$	359,567

_________________

(a) Fair value approximates carrying value due to either short-term length of maturity or variable interest rates that approximate prevailing market rates and therefore is classified in Level 1 in the fair value hierarchy.

(b) Long-term debt is valued using the market approach based on observable inputs of quoted market prices and yields available for debt instruments either directly or indirectly for similar maturities and debt ratings in active markets and therefore is classified in Level 2 in the fair value hierarchy. The carrying amount of our variable rate debt approximates fair value due to the variable interest rates with short reset periods.

(7) LONG TERM DEBT

Pollution Control Refund Revenue Bonds

On May 15, 2012, we repaid in full $6.5 million principal and interest on the 4.8% Pollution Control Revenue Bonds which were originally due to mature on October 1, 2014.

(8) SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION

	Three Months Ended March 31,
	2013			2012
	(in thousands)
Non-cash investing and financing activities -
Property, plant and equipment acquired with accrued liabilities	$	4,953		$	1,417
Cash (paid) refunded during the period for -
Interest (net of amounts capitalized)	$	(3,098	)	$	(2,318	)
Income taxes, net	$	—		$	(150	)

(9) COMMITMENTS AND CONTINGENCIES

Other than the items discussed below, there have been no significant changes to commitments and contingencies from those previously disclosed in Note 12 of our Notes to the Financial Statements in our 2012 Annual Report on Form 10-K.

Cheyenne Prairie

Construction of Cheyenne Prairie, a 132 MW natural gas-fired electric generating facility, by us and Cheyenne Light is expected to cost approximately $222.0 million, exclusive of financing costs. Construction is expected to be completed by September 30, 2014. As of March 31, 2013, committed contracts for equipment purchases and for construction were 28% and 13% complete, respectively.

11

Oil Creek Fire

On June 29, 2012, a forest and grassland fire occurred in the western Black Hills. We subsequently received written damage claims from the State of Wyoming and one landowner seeking recovery for alleged injury to timber, grass, fencing, fire suppression and rehabilitation costs of approximately $8.0 million. On April 16, 2013, thirty-four private landowners filed suit in United States District Court for the District of Wyoming, asserting similar claims, based upon allegations of negligence, common law nuisance and trespass. The suit seeks recovery of both actual and exemplary damages in an unspecified amount. Our investigation into the cause and origin of the fire is pending. We expect to deny and will vigorously defend all claims arising out of the lawsuit, pending the completion of our investigation. Given the uncertainty of litigation, however, a loss related to the fire and the litigation is reasonably possible. We cannot reasonably estimate the amount of a potential loss because our investigation is ongoing. Further claims may be presented by other parties. Although we cannot predict the outcome of our investigation or the viability of alleged claims, based on information currently available, management believes that any such claims, if determined adversely to us, will not have a material adverse effect on our financial condition or results of operation.

12

ITEM 2.MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND

RESULTS OF OPERATIONS

The following tables provide certain financial information and operating statistics

	Three Months Ended March 31,
	2013			2012			Variance
	(in thousands)
Revenue	$	59,817		$	62,270		$	(2,453	)
Fuel and purchased power	22,098			24,715			(2,617		)
Gross margin	37,719			37,555			164
Operating expenses	25,216			24,813			403
Operating income	12,503			12,742			(239		)
Interest income (expense), net	(4,762		)	(4,209		)	(553		)
Other income (expense), net	216			504			(288		)
Income tax expense	(2,375		)	(2,984		)	609
Net income	$	5,582		$	6,053		$	(471	)

	Electric Revenue by Customer Type
	Three Months Ended March 31,
	(dollars in thousands)
	2013		Percentage Change	2012
Commercial	$	17,484	4%	$	16,808
Residential	16,442		6%	15,476
Industrial	6,010		—%	6,020
Municipal	714		2%	698
Total retail revenue	40,650		4%	39,002
Contract wholesale	5,767		18%	4,905
Off-system wholesale	6,250		(45)%	11,273
Other revenue	7,150		1%	7,090
Total revenue	$	59,817	(4)%	$	62,270

13

	Megawatt Hours Sold by Customer Type
	Three Months Ended March 31,
	2013	Percentage Change	2012
Residential	160,970	7%	150,428
Commercial	175,617	3%	170,093
Industrial	91,632	(4)%	95,735
Municipal	7,783	3%	7,568
Total retail quantity sold	436,002	3%	423,824
Contract wholesale	103,784	17%	89,048
Wholesale off-system	238,447	(48)%	458,230
Total quantity sold	778,233	(20)%	971,102
Losses and company use	40,101	(8)%	43,587
Total energy	818,334	(19)%	1,014,689

	Megawatt Hours Generated and Purchased
	Three Months Ended March 31,
Generated -	2013	Percentage Change	2012
Coal-fired	427,015	(15)%	499,792
Gas-fired	3,120	760%	363
Total generated	430,135	(14)%	500,155
Total purchased	388,199	(25)%	514,534
Total generated and purchased	818,334	(19)%	1,014,689

	Power Plant Availability
	Three Months Ended March 31,
	2013		2012
Coal-fired plants	95.9	%	97.3	%
Other plants	97.8	%	99.9	%
Total availability	96.7	%	98.3	%

	Degree Days
	Three Months Ended March 31,
	2013			2012
	Actual	Variance from 30-year Average		Actual	Variance from 30-year Average
Heating and cooling degree days:
Heating degree days	3,210	—	%	2,711	(16	)%
Cooling degree days	—	—	%	—	—	%

14

Amounts are presented on a pre-tax basis unless otherwise indicated. Minor differences in amounts may result due to rounding.

Three Months Ended March 31, 2013 Compared to Three Months Ended March 31, 2012. Net income was $5.6 million compared to $6.1 million for the same period in the prior year primarily due to the following:

Gross marginincreased primarily due to an increase of $0.5 million from wholesale margins due to higher volumes, $0.2 million from retail margins due to higher volumes, partially offset by a $0.5 million decrease in off-system sales margins due to increased costs and lower volumes.

Operations and maintenanceincreased primarily due to an increase in compensation and benefits costs.

Interest expense, net increased primarily due to lower interest income received on affiliate borrowings.

Other income, net was comparable to the same period in the prior year.

Income tax expense: The effective tax rate decreased due to research and development credits including the full year 2012 estimated benefit as a result of retroactive reinstatement and flow through of a greater tax benefit attributable to costs deducted as repairs and maintenance for tax purposes.

Significant Events

Cheyenne Prairie

Construction and infrastructure work for Cheyenne Prairie, a natural gas-fired electric generating facility to serve our customers and the customers of Cheyenne Light began in April. The 132 MW generation project is expected to cost approximately $222.0 million, with up to $15 million of construction financing costs, for a total of $237 million. Through March 31, 2013, $21.4 million has been expended and the project is on schedule to be placed into service in the fourth quarter of 2014.

On January 17, 2013, the SDPUC approved a stipulation for interim rates effective April 1, 2013, subject to refund, for the use of a construction rider for the South Dakota portion of costs for Cheyenne Prairie in lieu of the traditional allowance for funds used during construction. Public hearings with the SDPUC are scheduled to commence September 16, 2013.

On December 17, 2012, we filed a request with the SDPUC seeking a $13.7 million increase in annual electric revenues. Public hearings with the SDPUC are scheduled to commence October 8, 2013. We expect to implement interim rates, subject to refund, in June 2013.

Credit Ratings

Credit ratings impact our ability to obtain short- and long-term financing, the cost of such financing, and vendor payment terms, including collateral requirements. As of March 31, 2013, our first mortgage bonds credit ratings, as assessed by the three major credit rating agencies, were as follows:

Rating Agency	Rating
S&P	BBB+
Moody’s	A3
Fitch	A-

15

FORWARD-LOOKING INFORMATION

This Quarterly Report on Form 10-Q contains forward-looking statements as defined by the SEC. Forward-looking statements are all statements other than statements of historical fact, including without limitation those statements that are identified by the words “anticipates,” “estimates,” “expects,” “intends,” “plans,” “predicts” and similar expressions, and include statements concerning plans, objectives, goals, strategies, future events or performance, and underlying assumptions and other statements that are other than statements of historical facts. From time to time, the Company may publish or otherwise make available forward-looking statements of this nature, including statements contained within Item 7 - Management’s Discussion & Analysis.

Forward-looking statements involve risks and uncertainties, which could cause actual results or outcomes to differ materially from those expressed. The Company’s expectations, beliefs and projections are expressed in good faith and are believed by the Company to have a reasonable basis, including without limitation, management’s examination of historical operating trends, data contained in the Company’s records and other data available from third parties. Nonetheless, the Company’s expectations, beliefs or projections may not be achieved or accomplished.

Any forward-looking statement contained in this document speaks only as of the date on which the statement is made, and the Company undertakes no obligation to update any forward-looking statement or statements to reflect events or circumstances that occur after the date on which the statement is made or to reflect the occurrence of unanticipated events. New factors emerge from time to time, and it is not possible for management to predict all of the factors, nor can it assess the effect of each factor on the Company’s business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statement. All forward-looking statements, whether written or oral and whether made by or on behalf of the Company, are expressly qualified by the risk factors and cautionary statements described in Item 1A of our 2012 Annual Report on Form 10-K, including statements contained within Item 1A - Risk Factors and Part II, Item 1A of this Quarterly Report on Form 10Q.

ITEM 4. CONTROLS AND PROCEDURES

This section should be read in conjunction with Item 9A, “Controls and Procedures” included in our Annual Report on Form 10-K for the year ended December 31, 2012.

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 March 31, 2013. Based on their evaluation, they have concluded that our disclosure controls and procedures are effective.

There were no changes in our internal control over financial reporting during the quarter ended March 31, 2013, that materially affected or are reasonably likely to materially affect our internal control over financial reporting.

BLACK HILLS POWER, INC.

Part II - Other Information

Item 1. Legal Proceedings

For information regarding legal proceedings, see Note 12 of Notes to Financial Statements in Item 8 of our 2012 Annual Report on Form 10-K and Note 9 of our Notes to Condensed Financial Statements in this Quarterly Report on Form 10-Q, which information from Note 9 is incorporated by reference into this item.

Item 1A. Risk Factors

There are no material changes to the Risk Factors previously disclosed in Item 1A. of Part I in our Annual Report on Form 10-K for the year ended December 31, 2012.

16

Item 6. Exhibits

Exhibit 3.1* Restated Articles of Incorporation of the Registrant (filed as an exhibit to the Registrant’s Form 8-K dated June 7, 1994 (No. 1-7978)).

Exhibit 3.2* Articles of Amendment to the Articles of Incorporation of the Registrant, as filed with the Secretary of State of the State of South Dakota on December 22, 2000 (filed as an exhibit to the Registrant’s Form 10-K for 2000).

Exhibit 3.3* Bylaws of the Registrant (filed as an exhibit to the Registrant’s Registration Statement on Form S-8 dated July 13, 1999).

Exhibit 4.1* Restated and Amended Indenture of Mortgage and Deed of Trust of Black Hills Corporation (now called Black Hills Power, Inc.) dated as of September 1, 1999 (filed as Exhibit 4.19 to the Registrant's Post-Effective Amendment No. 1 to the Registrant's Registration Statement on Form S-3 (No. 333-150669-01)). First Supplemental Indenture, dated as of August 13, 2002, between Black Hills Power, Inc. and The Bank of New York Mellon (as successor to J.P. Morgan Chase Bank), as Trustee (filed as Exhibit 4.20 to the Registrant's Post-Effective Amendment No. 1 to the Registrant's Registration Statement on Form S-3 (No. 333-150669-01)). Second Supplemental Indenture, dated as of October 27, 2009, between Black Hills Power, Inc. and The Bank of New York Mellon (filed as Exhibit 4.21 to the Registration Statement on Form S-3 (No. 333-150669-01)).

Exhibit 31.1 Certification of Chief Executive Officer 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 of Chief Financial Officer 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 of Chief Executive Officer 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 of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes - Oxley Act of 2002.

Exhibit 101 Financial Statements for XBRL Format

_________________________

* Previously filed as part of the filing indicated and incorporated by reference herein.

17

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, Chairman

and Chief Executive Officer

/S/ ANTHONY S. CLEBERG

Anthony S. Cleberg, Executive Vice President

and Chief Financial Officer

Dated: May 9, 2013

18

EXHIBIT INDEX

Exhibit Number Description

Exhibit 3.1* Restated Articles of Incorporation of the Registrant (filed as an exhibit to the Registrant’s Form 8-K dated June 7, 1994 (No. 1-7978)).

Exhibit 3.2* Articles of Amendment to the Articles of Incorporation of the Registrant, as filed with the Secretary of State of the State of South Dakota on December 22, 2000 (filed as an exhibit to the Registrant’s Form 10-K for 2000).

Exhibit 3.3* Bylaws of the Registrant (filed as an exhibit to the Registrant’s Registration Statement on Form S-8 dated July 13, 1999).

Exhibit 4.1* Restated and Amended Indenture of Mortgage and Deed of Trust of Black Hills Corporation (now called Black Hills Power, Inc.) dated as of September 1, 1999 (filed as Exhibit 4.19 to the Registrant's Post-Effective Amendment No. 1 to the Registrant's Registration Statement on Form S-3 (No. 333-150669-01)). First Supplemental Indenture, dated as of August 13, 2002, between Black Hills Power, Inc. and The Bank of New York Mellon (as successor to J.P. Morgan Chase Bank), as Trustee (filed as Exhibit 4.20 to the Registrant's Post-Effective Amendment No. 1 to the Registrant's Registration Statement on Form S-3 (No. 333-150669-01)). Second Supplemental Indenture, dated as of October 27, 2009, between Black Hills Power, Inc. and The Bank of New York Mellon (filed as Exhibit 4.21 to the Registration Statement on Form S-3 (No. 333-150669-01)).

Exhibit 31.1 Certification of Chief Executive Officer 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 of Chief Financial Officer 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 of Chief Executive Officer 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 of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes - Oxley Act of 2002.

Exhibit 101 Financial Statements for XBRL Format

_________________________

* Previously filed as part of the filing indicated and incorporated by reference herein.

19

EX-31.1

EXHIBIT 31.1

CERTIFICATION

I, David R. Emery, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Black Hills Power, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; and

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; and

c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting.

5. The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date:	May 9, 2013
		/S/ DAVID R. EMERY
		David R. Emery
		Chairman and Chief Executive Officer

EX-31.2

EXHIBIT 31.2

CERTIFICATION

I, Anthony S. Cleberg, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Black Hills Power, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting.

5. The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date:	May 9, 2013
		/S/ ANTHONY S. CLEBERG
		Anthony S. Cleberg
		Executive Vice President and
		Chief Financial Officer

EX-32.1

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

In connection with the Quarterly Report of Black Hills Power, Inc. (the “Company”) on Form 10-Q for the period ended March 31, 2013 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, David R. Emery, Chairman and Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. ss. 1350, as adopted pursuant to ss. 906 of the Sarbanes-Oxley Act of 2002, that:

(1) The Report fully complies with the requirements of Section 13 (a) or

15 (d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material

respects, the financial condition and results of operations of the Company.

Date:	May 9, 2013
		/S/ DAVID R. EMERY
		David R. Emery
		Chairman and Chief Executive Officer

EX-32.2

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

In connection with the Quarterly Report of Black Hills Power, Inc. (the “Company”) on Form 10-Q for the period ended March 31, 2013 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, David R. Emery, Chairman and Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. ss. 1350, as adopted pursuant to ss. 906 of the Sarbanes-Oxley Act of 2002, that:

(1) The Report fully complies with the requirements of Section 13 (a) or

15 (d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material

respects, the financial condition and results of operations of the Company.

Date:	May 9, 2013
		/S/ DAVID R. EMERY
		David R. Emery
		Chairman and Chief Executive Officer

XML

Employee Benefit Plans Employee Benefit Plans (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2013	Mar. 31, 2012
Pension Plans, Defined Benefit [Member]
Defined Benefit Plan, Net Periodic Benefit Cost [Abstract]
Service Cost	$ 213	$ 191
Interest Cost	742	742
Expected Return on Plan Assets	(941)	(785)
Prior Service Cost (Benefit)	11	14
Net Loss (Gain)	652	650
Net Periodic Benefit Cost	677	812
Pension and Other Postretirement Benefit Contributions [Abstract]
Contributions made by Employer	0
Remaining Anticipated Employer Contributions in Current Fiscal Year	1,582
Anticipated Future Employer Contributions in Next Fiscal Year	3,483
Other Postretirement Benefit Plans, Defined Benefit [Member]
Defined Benefit Plan, Net Periodic Benefit Cost [Abstract]
Service Cost	54	53
Interest Cost	60	86
Prior Service Cost (Benefit)	(69)	(69)
Net Loss (Gain)	2	35
Net Periodic Benefit Cost	47	105
Pension and Other Postretirement Benefit Contributions [Abstract]
Contributions made by Employer	109
Remaining Anticipated Employer Contributions in Current Fiscal Year	329
Anticipated Future Employer Contributions in Next Fiscal Year	489
Other Pension Plans, Postretirement or Supplemental Plans, Defined Benefit [Member]
Defined Benefit Plan, Net Periodic Benefit Cost [Abstract]
Interest Cost	33	26
Net Loss (Gain)	17	14
Net Periodic Benefit Cost	50	40
Pension and Other Postretirement Benefit Contributions [Abstract]
Contributions made by Employer	54
Remaining Anticipated Employer Contributions in Current Fiscal Year	162
Anticipated Future Employer Contributions in Next Fiscal Year	$ 215

XML

Regulatory Accounting

3 Months Ended

Mar. 31, 2013

Regulated Operations [Abstract]

Regulatory Assets and Liabilities [Text Block]

REGULATORY ASSETS AND LIABILITIES

Our regulated electric operations are subject to regulation by various state and federal agencies. The accounting policies followed are generally subject to the Uniform System of Accounts of the FERC.

Our regulatory assets and liabilities were as follows (in thousands) as of:

	Recovery/Amortization Period (in years)	March 31, 2013		December 31, 2012
Regulatory assets:
Unamortized loss on reacquired debt(a)	14	$	2,440	$	2,501
AFUDC(b)	45	8,447		8,460
Employee benefit plans(c)	13	27,854		27,001
Deferred energy costs(a)	1	6,117		6,892
Flow through accounting(a)	35	8,368		8,019
Other(a)	2	586		369
Total regulatory assets		$	53,812	$	53,242

Regulatory liabilities:
Cost of removal for utility plant(a)	53	$	27,546	$	26,630
Employee benefit plans(d)	13	16,542		15,689
Other(e)	13	1,779		1,567
Total regulatory liabilities		$	45,867	$	43,886

____________________

(a) Recovery or return of costs, but not allowed a rate of return.

(b) In addition to recovery of costs, we are allowed a rate of return.

(c) In addition to recovery of costs, we are allowed a return on approximately $23.5 million.

(d) Approximately $13.2 million is included in our rate base calculation as a reduction to rate base.

(e) Approximately $0.8 million is included in our rate base calculation as a reduction to rate base.

XML

Commitment and Contingencies Contract Commitments (Details) (Cheyenne Prairie [Member], USD $) In Millions, unless otherwise specified	3 Months Ended
	Mar. 31, 2013
Unrecorded Unconditional Purchase Obligation [Line Items]
Long-term Purchase Commitment, Amount	$ 222.0
Equipment [Member]
Unrecorded Unconditional Purchase Obligation [Line Items]
Long Term Purchase Commitment, Percentage Committed	28.00%
Construction Contracts [Member]
Unrecorded Unconditional Purchase Obligation [Line Items]
Long Term Purchase Commitment, Percentage Committed	13.00%

XML

Supplemental Cash Flows Information Supplemental Cash Flows Information (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2013	Mar. 31, 2012
Noncash Investing and Financing Items [Abstract]
Property, plant and equipment acquired with accrued liabilities	$ 4,953	$ 1,417
Interest and Income Taxes Paid Net [Abstract]
Interest Paid, (net of amounts capitalized)	(3,098)	(2,318)
Income taxes (paid) refunded, net	$ 0	$ (150)

XML

Commitment and Contingencies Loss Contingencies (Details) (Loss from Catastrophes [Member], USD $) In Millions, unless otherwise specified	3 Months Ended
	Mar. 31, 2013
Loss from Catastrophes [Member]
Loss Contingencies [Line Items]
Loss Contingency, Damages Sought, Value	$ 8.0

XML

Accounts Receivable

3 Months Ended

Mar. 31, 2013

Accounts Receivable, Net [Abstract]

Accounts Receivables [Text Block]

ACCOUNTS RECEIVABLE AND ALLOWANCE FOR DOUBTFUL ACCOUNTS

Following is a summary of Receivables - customers, net included in the accompanying Condensed Balance Sheets (in thousands) as of:

	March 31, 2013			December 31, 2012
Accounts receivable trade	$	15,548		$	14,965
Unbilled revenues	7,919			9,004
Allowance for doubtful accounts	(158		)	(102		)
Receivables - customers, net	$	23,309		$	23,867

XML

Condensed Income Statements (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2013	Mar. 31, 2012
Revenue	$ 59,817	$ 62,270
Operating expenses:
Fuel and purchased power	22,098	24,715
Operations and maintenance	16,808	16,543
Depreciation and amortization	6,986	6,950
Taxes - property	1,422	1,320
Total operating expenses	47,314	49,528
Operating income	12,503	12,742
Other income (expense):
Interest expense	(4,847)	(4,290)
AFUDC - borrowed	58	57
Interest income	27	24
AFUDC - equity	134	116
Other income (expense), net	82	388
Total other income (expense)	(4,546)	(3,705)
Income from continuing operations before income taxes	7,957	9,037
Income tax expense	(2,375)	(2,984)
Net income	5,582	6,053
Other comprehensive income (loss):
Reclassification adjustments of cash flow hedges settled and included in net income (net of tax (expense) benefit of $(6) and $(6))	10	10
Reclassification adjustment of benefit plan liability (net of tax (expense) benefit of $(6) and $0)	11	0
Other Comprehensive Income	21	10
Comprehensive income	$ 5,603	$ 6,063

XML

Condensed Cash Flows Statements (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2013	Mar. 31, 2012
Operating activities:
Net income	$ 5,582	$ 6,053
Adjustments to reconcile net income to net cash provided by operating activities-
Depreciation and amortization	6,986	6,950
Deferred income tax	2,252	2,695
Employee benefits	774	957
AFUDC - equity	(134)	(116)
Other adjustments, net	389	703
Change in operating assets and liabilities -
Accounts receivable and other current assets	(1,334)	3,696
Accounts payable and other current liabilities	393	2,705
Regulatory assets	746	(22)
Regulatory liabilities	161	(659)
Contributions to defined benefit pension plan	0	(6,835)
Other operating activities, net	1,182	25
Net cash provided by (used in) operating activities	16,997	16,152
Investing activities:
Property, plant and equipment additions	(14,243)	(6,965)
Change in money pool notes receivable, net	(3,418)	(9,563)
Other investing activities	(78)	(86)
Net cash provided by (used in) investing activities	(17,739)	(16,614)
Financing activities:
Long-term debt - repayments	0	(21)
Net cash provided by (used in) financing activities	0	(21)
Net change in cash and cash equivalents	(742)	(483)
Cash and Cash Equivalents
Cash and cash equivalents, beginning of period	3,805	2,812
Cash and cash equivalents, end of period	$ 3,063	$ 2,329

XML

Accounts Receivable Accounts Receivable (Details) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2013	Dec. 31, 2012
Accounts Receivable [Line Items]
Allowance for Doubtful Accounts	$ (158)	$ (102)
Receivables - customers, net	23,309	23,867
Billed Revenues [Member]
Accounts Receivable [Line Items]
Accounts Receivable, Trade	15,548	14,965
Unbilled Revenues [Member]
Accounts Receivable [Line Items]
Accounts Receivable, Trade	$ 7,919	$ 9,004

XML

Related Party Transactions Related Party Transactions (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended	12 Months Ended	3 Months Ended
	Mar. 31, 2013	Dec. 31, 2012	Mar. 31, 2013 Energy sold to Cheyenne Light [Member]	Mar. 31, 2012 Energy sold to Cheyenne Light [Member]	Mar. 31, 2013 Rent from electric properties [Member]	Mar. 31, 2012 Rent from electric properties [Member]	Mar. 31, 2013 Coal, Purchased [Member]	Mar. 31, 2012 Coal, Purchased [Member]	Mar. 31, 2013 Related Party Purchases, Other [Member]	Mar. 31, 2012 Related Party Purchases, Other [Member]	Mar. 31, 2013 Allocated Costs From Related Parties [Member]	Mar. 31, 2012 Allocated Costs From Related Parties [Member]	Mar. 31, 2013 Purchase of Excess Energy, Cheyenne Light [Member]	Mar. 31, 2012 Purchase of Excess Energy, Cheyenne Light [Member]	Mar. 31, 2013 Happy Jack Wind Purchase Power Agreeement [Member] Renewable Wind Energy, Cheyenne Light [Member]	Mar. 31, 2012 Happy Jack Wind Purchase Power Agreeement [Member] Renewable Wind Energy, Cheyenne Light [Member]	Mar. 31, 2013 Silver Sage Wind Power Purchase Agreement [Member] Renewable Wind Energy, Cheyenne Light [Member]	Mar. 31, 2012 Silver Sage Wind Power Purchase Agreement [Member] Renewable Wind Energy, Cheyenne Light [Member]
Related Party Transaction [Line Items]
Receivables - affiliates	$ 4,896	$ 5,027
Accounts payable - affiliates	18,030	21,896
Line of Credit Facility, Unused Capacity, Commitment Fee Percentage	1.00%
Related Party Transaction, Rate	1.78%
Money pool notes receivable, net	35,063	31,645
Net Interest Income (Expense), Related Party	(440)	283
Revenue from Related Parties			140	526	988	1,259
Costs and Expenses, Related Party							$ 4,524	$ 5,995	$ 0	$ 7	$ 7,276	$ 4,805	$ 946	$ 742	$ 650	$ 671	$ 1,085	$ 1,077

XML

Management's Statement

3 Months Ended

Mar. 31, 2013

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Management's Statement

MANAGEMENT'S STATEMENT

The unaudited condensed financial statements included herein have been prepared by Black Hills Power, Inc. (the “Company,” “we,” “us,” or “our”), pursuant to the rules and regulations of the SEC. 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, we believe that the footnotes adequately disclose the information presented. These condensed financial statements should be read in conjunction with the financial statements and the notes thereto, included in our 2012 Annual Report on Form 10-K filed with the SEC.

Accounting methods historically employed require certain estimates as of interim dates. The information furnished in the accompanying condensed financial statements reflects all adjustments, including accruals, which are, in the opinion of management, necessary for a fair presentation of the March 31, 2013, December 31, 2012 and March 31, 2012 financial information and are of a normal recurring nature. The results of operations for the three months ended March 31, 2013 and March 31, 2012, and our financial condition as of March 31, 2013 and December 31, 2012 are not necessarily indicative of the results of operations and financial condition to be expected as of or for any other period.

XML

Condensed Income Statements OCI Parenthetical (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2013	Mar. 31, 2012
Other Comprehensive Income (Loss), Unrealized Gain (Loss) on Derivatives Arising During Period, Tax	$ (6)	$ (6)
Other Comprehensive Income Loss Reclassifiction Adjustment From AOCI Pension and Other Postretirement Benefit Plans Tax	$ (6)	$ 0

XML

Regulatory Accounting Regulatory Accounting (Tables)

3 Months Ended

Mar. 31, 2013

Regulated Operations [Abstract]

Schedule of Regulatory Assets and Liabilities [Table Text Block]

Our regulatory assets and liabilities were as follows (in thousands) as of:

	Recovery/Amortization Period (in years)	March 31, 2013		December 31, 2012
Regulatory assets:
Unamortized loss on reacquired debt(a)	14	$	2,440	$	2,501
AFUDC(b)	45	8,447		8,460
Employee benefit plans(c)	13	27,854		27,001
Deferred energy costs(a)	1	6,117		6,892
Flow through accounting(a)	35	8,368		8,019
Other(a)	2	586		369
Total regulatory assets		$	53,812	$	53,242

Regulatory liabilities:
Cost of removal for utility plant(a)	53	$	27,546	$	26,630
Employee benefit plans(d)	13	16,542		15,689
Other(e)	13	1,779		1,567
Total regulatory liabilities		$	45,867	$	43,886

____________________

(a) Recovery or return of costs, but not allowed a rate of return.

(b) In addition to recovery of costs, we are allowed a rate of return.

(c) In addition to recovery of costs, we are allowed a return on approximately $23.5 million.

(d) Approximately $13.2 million is included in our rate base calculation as a reduction to rate base.

(e) Approximately $0.8 million is included in our rate base calculation as a reduction to rate base.

XML

Document and Entity Information Document	3 Months Ended
	Mar. 31, 2013	Apr. 30, 2013
Document Information [Line Items]
Entity Registrant Name	BLACK HILLS POWER INC
Entity Central Index Key	0000012400
Document Type	10-Q
Document Period End Date	Mar. 31, 2013
Amendment Flag	false
Document Fiscal Year Focus	2013
Document Fiscal Period Focus	Q1
Current Fiscal Year End Date	--12-31
Entity Current Reporting Status	Yes
Entity Filer Category	Non-accelerated Filer
Entity Common Stock, Shares Outstanding		23,416,396

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Related Party Transactions Related Party Transactions (Tables)

3 Months Ended

Mar. 31, 2013

Related Party Transaction [Line Items]

Schedule of Related Party Accounts Receivable and Payable [Table Text Block]

The balances were as follows (in thousands) as of:

	March 31, 2013		December 31, 2012
Receivables - affiliates	$	4,896	$	5,027
Accounts payable - affiliates	$	18,030	$	21,896

Schedule of Related Party Notes [Table Text Block]

We had the following balances with the Utility Money Pool (in thousands) as of:

	March 31, 2013		December 31, 2012
Money pool notes receivable, net	$	35,063	$	31,645

Schedule of Related Party Interest Income Expense [Table Text Block]

Net interest income (expense) relating to balances for the Utility Money Pool was as follows (in thousands):

	Three Months Ended March 31,
	2013			2012
Net interest income (expense)	$	(440	)	$	283

Schedule of Revenues and Purchases from Related Parties [Table Text Block]

Sales and purchases with related parties were as follows (in thousands):

	Three Months Ended March 31,
	2013		2012
Revenues:
Energy sold to Cheyenne Light	$	140	$	526
Rent from electric properties	$	988	$	1,259
Purchases:
Purchase of coal from WRDC	$	4,524	$	5,995
Purchase of excess energy from Cheyenne Light	$	946	$	742
Purchase of renewable wind energy from Cheyenne Light - Happy Jack	$	650	$	671
Purchase of renewable wind energy from Cheyenne Light - Silver Sage	$	1,085	$	1,077
Purchase of natural gas - other	$	—	$	7
Corporate support services from Parent, Black Hills Service Company and Black Hills Utilities Holdings Inc.	$	7,276	$	4,805

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Condensed Balance Sheet (USD $) In Thousands, unless otherwise specified	Mar. 31, 2013	Dec. 31, 2012
Current assets:
Cash and Cash Equivalents, at Carrying Value	$ 3,063	$ 3,805
Receivables - customers, net	23,309	23,867
Receivables - affiliates	4,896	5,027
Other receivables, net	628	673
Money pool notes receivable, net	35,063	31,645
Materials, supplies and fuel	21,284	20,633
Deferred income tax assets, net, current	1,563	16,631
Regulatory assets, current	4,891	4,998
Other, current assets	5,432	5,781
Total current assets	100,129	113,060
Investments	4,438	4,359
Property, plant and equipment	1,036,672	1,024,768
Less accumulated depreciation and amortization	(326,160)	(322,830)
Total property, plant and equipment, net	710,512	701,938
Other assets:
Regulatory assets, non-current	48,921	48,244
Other, non-current assets	5,685	5,322
Total other assets	54,606	53,566
TOTAL ASSETS	869,685	872,923
Current liabilities:
Accounts payable	17,128	14,318
Accounts payable - affiliates	18,030	21,896
Accrued liabilities	17,232	15,477
Regulatory liabilities, current	22	37
Total current liabilities	52,412	51,728
Long-term debt, net of current maturities	269,945	269,944
Liabilities, Noncurrent
Deferred income tax liability, net, non-current	146,521	158,918
Regulatory liabilities, non-current	45,845	43,849
Benefit plan liabilities	26,627	25,888
Other, non-current liabilities	3,274	3,138
Total deferred credits and other liabilities	222,267	231,793
Stockholder’s equity:
Common stock $1 par value; 50,000,000 shares authorized; 23,416,396 shares issued	23,416	23,416
Additional paid-in capital	39,575	39,575
Retained earnings	263,469	257,887
Accumulated other comprehensive loss	(1,399)	(1,420)
Total stockholder’s equity	325,061	319,458
TOTAL LIABILITIES AND STOCKHOLDER’S EQUITY	$ 869,685	$ 872,923

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Fair Value of Financial Instruments

3 Months Ended

Mar. 31, 2013

Fair Value Disclosures [Abstract]

Fair Value of Financial Instruments

FAIR VALUE OF FINANCIAL INSTRUMENTS

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The ASC on Fair Value Measurements and Disclosure Requirements establishes a hierarchy for grouping assets and liabilities, based on significance of inputs. For additional information see Note 1 included in our 2012 Annual Report on Form 10-K filed with the SEC.

The estimated fair values of our financial instruments were as follows (in thousands) as of:

	March 31, 2013				December 31, 2012
	Carrying Amount		Fair Value		Carrying Amount		Fair Value
Cash and cash equivalents (a)	$	3,063	$	3,063	$	3,805	$	3,805
Long-term debt, including current maturities (b)	$	269,945	$	351,165	$	269,944	$	359,567

_________________

(a) Fair value approximates carrying value due to either short-term length of maturity or variable interest rates that approximate prevailing market rates and therefore is classified in Level 1 in the fair value hierarchy.

(b) Long-term debt is valued using the market approach based on observable inputs of quoted market prices and yields available for debt instruments either directly or indirectly for similar maturities and debt ratings in active markets and therefore is classified in Level 2 in the fair value hierarchy. The carrying amount of our variable rate debt approximates fair value due to the variable interest rates with short reset periods.

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Employee Benefit Plans

3 Months Ended

Mar. 31, 2013

Defined Benefit Pension Plans and Defined Benefit Postretirement Plans Disclosure [Abstract]

Employee Benefits Disclosure [Text Block]

EMPLOYEE BENEFIT PLANS

Defined Benefit Pension Plan

The components of net periodic benefit cost for the Defined Benefit Pension Plan were as follows (in thousands):

	Three Months Ended March 31,
	2013			2012
Service cost	$	213		$	191
Interest cost	742			742
Expected return on plan assets	(941		)	(785		)
Prior service cost	11			14
Net loss (gain)	652			650
Net periodic benefit cost	$	677		$	812

Non-pension Defined Benefit Postretirement Healthcare Plan

The components of net periodic benefit cost for the Non-Pension Defined Postretirement Healthcare Plan were as follows (in thousands):

	Three Months Ended March 31,
	2013			2012
Service cost	$	54		$	53
Interest cost	60			86
Amortization of prior service cost	(69		)	(69		)
Net loss (gain)	2			35
Net periodic benefit cost	$	47		$	105

Supplemental Non-qualified Defined Benefit Plans

The components of net periodic benefit cost for the Supplemental Non-qualified Defined Benefit Plans were as follows (in thousands):

	Three Months Ended March 31,
	2013		2012
Interest cost	$	33	$	26
Net loss (gain)	17		14
Net periodic benefit cost	$	50	$	40

Contributions

We anticipate that we will make contributions to each of the benefit plans during 2013 and 2014. Contributions to the Pension Plan will be made in cash and contributions to the Healthcare Plan and the Supplemental Plans are expected to be made in the form of benefit payments. Contributions are as follows (in thousands):

	Three Months Ended March 31, 2013		Remaining Anticipated Contributions for 2013		Anticipated Contributions for 2014
Defined Benefit Pension Plan	$	—	$	1,582	$	3,483
Non-Pension Defined Benefit Postretirement Healthcare Plan	$	109	$	329	$	489
Supplemental Non-qualified Defined Benefit Plans	$	54	$	162	$	215

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Regulatory Accounting Regulatory Accounting (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2013		Dec. 31, 2012
Schedule of Regulatory Assets and Liabilities [Line Items]
Regulatory Assets	$ 53,812		$ 53,242
Regulatory Liabilities	45,867		43,886
Cost Of Removal [Member]
Schedule of Regulatory Assets and Liabilities [Line Items]
Regulatory Liabilities Amortization Period	P53Y
Regulatory Liabilities	27,546	[1]	26,630	[1]
Pension Cost [Member]
Schedule of Regulatory Assets and Liabilities [Line Items]
Regulatory Liabilities Amortization Period	P13Y
Regulatory Liabilities	16,542	[2]	15,689	[2]
Other Regulatory Liabilities [Member]
Schedule of Regulatory Assets and Liabilities [Line Items]
Regulatory Liabilities Amortization Period	P13Y
Regulatory Liabilities	1,779	[3]	1,567	[3]
Unamortized Loss on Reacquired Debt [Member]
Schedule of Regulatory Assets and Liabilities [Line Items]
Regulatory Assets, Recovery Period	P14Y
Regulatory Assets	2,440	[1]	2,501	[1]
Allowance for Cost of Equity Funds Used During Construction [Member]
Schedule of Regulatory Assets and Liabilities [Line Items]
Regulatory Assets, Recovery Period	P45Y
Regulatory Assets	8,447	[4]	8,460	[4]
Employee Benefit Plans [Member]
Schedule of Regulatory Assets and Liabilities [Line Items]
Regulatory Assets, Recovery Period	P13Y
Regulatory Assets	27,854	[5]	27,001	[5]
Deferred Fuel Costs [Member]
Schedule of Regulatory Assets and Liabilities [Line Items]
Regulatory Assets, Recovery Period	P1Y
Regulatory Assets	6,117	[1]	6,892	[1]
Flow Through Accounting [Member]
Schedule of Regulatory Assets and Liabilities [Line Items]
Regulatory Assets, Recovery Period	P35Y
Regulatory Assets	8,368	[1]	8,019	[1]
Other Regulatory Assets [Member]
Schedule of Regulatory Assets and Liabilities [Line Items]
Regulatory Assets, Recovery Period	P2Y
Regulatory Assets	586	[1]	369	[1]
Recovery Plus Rate of Return or Reduction to Rate Base [Member] | Pension Cost [Member]
Schedule of Regulatory Assets and Liabilities [Line Items]
Regulatory Liabilities	13,200
Recovery Plus Rate of Return or Reduction to Rate Base [Member] | Other Regulatory Liabilities [Member]
Schedule of Regulatory Assets and Liabilities [Line Items]
Regulatory Liabilities	800
Recovery Plus Rate of Return or Reduction to Rate Base [Member] | Employee Benefit Plans [Member]
Schedule of Regulatory Assets and Liabilities [Line Items]
Regulatory Assets	$ 23,500

[1] Recovery or return of costs, but not allowed a rate of return.

[2] Approximately $13.2 million is included in our rate base calculation as a reduction to rate base.

[3] Approximately $0.8 million is included in our rate base calculation as a reduction to rate base.

[4] In addition to recovery of costs, we are allowed a rate of return.

[5] In addition to recovery of costs, we are allowed a return on approximately $23.5 million.

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Employee Benefit Plans Employee Benefit Plans (Tables)

3 Months Ended

Mar. 31, 2013

Defined Benefit Plan Disclosure [Line Items]

Schedule of Defined Benefit Plans Contributions [Text Block]

Contributions are as follows (in thousands):

	Three Months Ended March 31, 2013		Remaining Anticipated Contributions for 2013		Anticipated Contributions for 2014
Defined Benefit Pension Plan	$	—	$	1,582	$	3,483
Non-Pension Defined Benefit Postretirement Healthcare Plan	$	109	$	329	$	489
Supplemental Non-qualified Defined Benefit Plans	$	54	$	162	$	215

Pension Plans, Defined Benefit [Member]

Defined Benefit Plan Disclosure [Line Items]

Schedule of Net Benefit Costs [Table Text Block]

The components of net periodic benefit cost for the Defined Benefit Pension Plan were as follows (in thousands):

	Three Months Ended March 31,
	2013			2012
Service cost	$	213		$	191
Interest cost	742			742
Expected return on plan assets	(941		)	(785		)
Prior service cost	11			14
Net loss (gain)	652			650
Net periodic benefit cost	$	677		$	812

Other Postretirement Benefit Plans, Defined Benefit [Member]

Defined Benefit Plan Disclosure [Line Items]

Schedule of Net Benefit Costs [Table Text Block]

The components of net periodic benefit cost for the Non-Pension Defined Postretirement Healthcare Plan were as follows (in thousands):

	Three Months Ended March 31,
	2013			2012
Service cost	$	54		$	53
Interest cost	60			86
Amortization of prior service cost	(69		)	(69		)
Net loss (gain)	2			35
Net periodic benefit cost	$	47		$	105

Other Pension Plans, Postretirement or Supplemental Plans, Defined Benefit [Member]

Defined Benefit Plan Disclosure [Line Items]

Schedule of Net Benefit Costs [Table Text Block]

The components of net periodic benefit cost for the Supplemental Non-qualified Defined Benefit Plans were as follows (in thousands):

	Three Months Ended March 31,
	2013		2012
Interest cost	$	33	$	26
Net loss (gain)	17		14
Net periodic benefit cost	$	50	$	40

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Commitment and Contingencies

3 Months Ended

Mar. 31, 2013

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies Disclosure [Text Block]

COMMITMENTS AND CONTINGENCIES

Other than the items discussed below, there have been no significant changes to commitments and contingencies from those previously disclosed in Note 12 of our Notes to the Financial Statements in our 2012 Annual Report on Form 10-K.

Cheyenne Prairie

Construction of Cheyenne Prairie, a 132 MW natural gas-fired electric generating facility, by us and Cheyenne Light is expected to cost approximately $222.0 million, exclusive of financing costs. Construction is expected to be completed by September 30, 2014. As of March 31, 2013, committed contracts for equipment purchases and for construction were 28% and 13% complete, respectively.

Oil Creek Fire

On June 29, 2012, a forest and grassland fire occurred in the western Black Hills. We subsequently received written damage claims from the State of Wyoming and one landowner seeking recovery for alleged injury to timber, grass, fencing, fire suppression and rehabilitation costs of approximately $8.0 million. On April 16, 2013, thirty-four private landowners filed suit in United States District Court for the District of Wyoming, asserting similar claims, based upon allegations of negligence, common law nuisance and trespass. The suit seeks recovery of both actual and exemplary damages in an unspecified amount. Our investigation into the cause and origin of the fire is pending. We expect to deny and will vigorously defend all claims arising out of the lawsuit, pending the completion of our investigation. Given the uncertainty of litigation, however, a loss related to the fire and the litigation is reasonably possible. We cannot reasonably estimate the amount of a potential loss because our investigation is ongoing. Further claims may be presented by other parties. Although we cannot predict the outcome of our investigation or the viability of alleged claims, based on information currently available, management believes that any such claims, if determined adversely to us, will not have a material adverse effect on our financial condition or results of operation.

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Long-term Debt

3 Months Ended

Mar. 31, 2013

Debt Instruments [Abstract]

Long-term Debt [Text Block]

LONG TERM DEBT

Pollution Control Refund Revenue Bonds

On May 15, 2012, we repaid in full $6.5 million principal and interest on the 4.8% Pollution Control Revenue Bonds which were originally due to mature on October 1, 2014.

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Supplemental Cash Flows Information supplemental cash flow information (Notes)

3 Months Ended

Mar. 31, 2013

Supplemental Cash Flow Information [Abstract]

Cash Flow, Supplemental Disclosures [Text Block]

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION

	Three Months Ended March 31,
	2013			2012
	(in thousands)
Non-cash investing and financing activities -
Property, plant and equipment acquired with accrued liabilities	$	4,953		$	1,417
Cash (paid) refunded during the period for -
Interest (net of amounts capitalized)	$	(3,098	)	$	(2,318	)
Income taxes, net	$	—		$	(150	)

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Accounts Receivable Accounts Receivable (Tables)

3 Months Ended

Mar. 31, 2013

Accounts Receivable, Net [Abstract]

Schedule of Accounts Receivable [Table Text Block]

Following is a summary of Receivables - customers, net included in the accompanying Condensed Balance Sheets (in thousands) as of:

	March 31, 2013			December 31, 2012
Accounts receivable trade	$	15,548		$	14,965
Unbilled revenues	7,919			9,004
Allowance for doubtful accounts	(158		)	(102		)
Receivables - customers, net	$	23,309		$	23,867

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Supplemental Cash Flows Information Supplemental Cash Flows Information (Tables)

3 Months Ended

Mar. 31, 2013

Supplemental Cash Flow Information [Abstract]

Schedule of Cash Flow, Supplemental Disclosures [Table Text Block]

	Three Months Ended March 31,
	2013			2012
	(in thousands)
Non-cash investing and financing activities -
Property, plant and equipment acquired with accrued liabilities	$	4,953		$	1,417
Cash (paid) refunded during the period for -
Interest (net of amounts capitalized)	$	(3,098	)	$	(2,318	)
Income taxes, net	$	—		$	(150	)

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Fair Value of Financial Instruments Fair Value of Financial Instruments (Details) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2013		Dec. 31, 2012		Mar. 31, 2012	Dec. 31, 2011
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Cash and Cash Equivalents, at Carrying Value	$ 3,063		$ 3,805		$ 2,329	$ 2,812
Carrying Value [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Cash and Cash Equivalents, at Carrying Value	3,063	[1]	3,805	[1]
Long-term Debt, Including Current Maturities, at Carrying Value	269,945	[2]	269,944	[2]
Fair Value [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Cash and Cash Equivalents, at Fair Value	3,063	[1]	3,805	[1]
Long-term debt, Including Current Maturities, at Fair Value	$ 351,165	[2]	$ 359,567	[2]

[1] Fair value approximates carrying value due to either short-term length of maturity or variable interest rates that approximate prevailing market rates and therefore is classified in Level 1 in the fair value hierarchy.

[2] Long-term debt is valued using the market approach based on observable inputs of quoted market prices and yields available for debt instruments either directly or indirectly for similar maturities and debt ratings in active markets and therefore is classified in Level 2 in the fair value hierarchy. The carrying amount of our variable rate debt approximates fair value due to the variable interest rates with short reset periods.

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Condensed Balance Sheet Balance Sheet Parantheticals (USD $)	Mar. 31, 2013	Dec. 31, 2012
Common stock par value	$ 1.00	$ 1.00
Common Stock, Shares Authorized	50,000,000	50,000,000
Common Stock, Shares, Issued	23,416,396	23,416,396
Common Stock, Shares, Outstanding	23,416,396	23,416,396

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Related Party Transactions

3 Months Ended

Mar. 31, 2013

Related Party Transactions [Abstract]

Related Party Transactions Disclosure [Text Block]

RELATED-PARTY TRANSACTIONS

Receivables and Payables

We have accounts receivable and accounts payable balances related to transactions with other BHC subsidiaries. The balances were as follows (in thousands) as of:

	March 31, 2013		December 31, 2012
Receivables - affiliates	$	4,896	$	5,027
Accounts payable - affiliates	$	18,030	$	21,896

Money Pool Notes Receivable and Notes Payable

We have entered into a Utility Money Pool Agreement (the “Agreement”) with BHC, Cheyenne Light and Black Hills Energy. Under the Agreement, we may borrow from BHC however the Agreement restricts us from loaning funds to BHC or to any of BHC’s non-utility subsidiaries. The Agreement does not restrict us from making dividends to BHC. Borrowings under the Agreement bear interest at the weighted average daily cost of external funds as defined under the Agreement, or if there are no external funds outstanding on that date, then the rate will be the daily one-month LIBOR plus 1.0%. Advances under the Utility Money Pool notes bear interest at a weighted average daily rate (1.78% at March 31, 2013).

We had the following balances with the Utility Money Pool (in thousands) as of:

	March 31, 2013		December 31, 2012
Money pool notes receivable, net	$	35,063	$	31,645

Net interest income (expense) relating to balances for the Utility Money Pool was as follows (in thousands):

	Three Months Ended March 31,
	2013			2012
Net interest income (expense)	$	(440	)	$	283

Other Balances and Transactions

Sales and purchases with related parties were as follows (in thousands):

	Three Months Ended March 31,
	2013		2012
Revenues:
Energy sold to Cheyenne Light	$	140	$	526
Rent from electric properties	$	988	$	1,259
Purchases:
Purchase of coal from WRDC	$	4,524	$	5,995
Purchase of excess energy from Cheyenne Light	$	946	$	742
Purchase of renewable wind energy from Cheyenne Light - Happy Jack	$	650	$	671
Purchase of renewable wind energy from Cheyenne Light - Silver Sage	$	1,085	$	1,077
Purchase of natural gas - other	$	—	$	7
Corporate support services from Parent, Black Hills Service Company and Black Hills Utilities Holdings Inc.	$	7,276	$	4,805

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Long-term Debt Long-term Debt (Details) (Polution Control Revenue Bonds Due 2014 [Member], USD $) In Millions, unless otherwise specified	0 Months Ended
	May 15, 2012
Polution Control Revenue Bonds Due 2014 [Member]
Debt Instrument [Line Items]
Early Repayment of Subordinated Debt	$ 6.5
Long-term Debt, Variable Interest, Percentage Rate	4.80%
Debt Instrument, Maturity Date	Oct. 01, 2014

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Fair Value of Financial Instruments Fair Value of Financial Instruments(Tables)

3 Months Ended

Mar. 31, 2013

Fair Value Disclosures [Abstract]

Schedule of Fair Value of Financial Instruments

The estimated fair values of our financial instruments were as follows (in thousands) as of:

	March 31, 2013				December 31, 2012
	Carrying Amount		Fair Value		Carrying Amount		Fair Value
Cash and cash equivalents (a)	$	3,063	$	3,063	$	3,805	$	3,805
Long-term debt, including current maturities (b)	$	269,945	$	351,165	$	269,944	$	359,567

_________________

(a) Fair value approximates carrying value due to either short-term length of maturity or variable interest rates that approximate prevailing market rates and therefore is classified in Level 1 in the fair value hierarchy.

(b) Long-term debt is valued using the market approach based on observable inputs of quoted market prices and yields available for debt instruments either directly or indirectly for similar maturities and debt ratings in active markets and therefore is classified in Level 2 in the fair value hierarchy. The carrying amount of our variable rate debt approximates fair value due to the variable interest rates with short reset periods.