BLACK HILLS CORPORATION
625 Ninth Street
Rapid City, South Dakota 57701

NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD MAY 23, 199521, 1996

To the Shareholders of
Black Hills Corporation

NOTICE IS HEREBY GIVEN that the Annual Meeting of the holders of Common
Stock of BLACK HILLS CORPORATION (herein called the Company) will be held at
the Holiday Inn Rushmore Plaza Hotel, 505 North Fifth Street, Rapid City, South
Dakota, on Tuesday, May 23, 1995,21, 1996, commencing at 9:30 A.M., for the following
purposes:

1. To elect three Class IIII Directors to serve until the Annual Meeting of
Shareholders in 1998;1999;

2. To consider and act upon an amendment toon a proposal authorizing the EmployeeBlack Hills
Corporation 1996 Stock Purchase Plan to allow the
issuance of an additional 200,000 shares
pursuant to theOption Plan;

3. To ratify the appointment of Arthur Andersen LLP to serve as independent
auditors of the Company for the year 1995;1996;

4. To transact such other business as may properly come before the meeting
or any adjournment thereof.

Only shareholders of record at the close of business on April 7, 1995,March 8, 1996, are
entitled to notice of and to vote at the meeting or any adjournment thereof.

All shareholders are cordially invited to attend the meeting. Please
complete, date, sign, and return the accompanying form of proxy. A return
envelope is enclosed which requires no postage if mailed in the United States.
We appreciate your giving this matter your prompt attention.

By Order of the Board of Directors

ROXANN R. BASHAM
Corporate Secretary

Dated: April 14, 1995March 22, 1996

BLACK HILLS CORPORATION
625 Ninth Street
Rapid City, South DakotaNINTH STREET
RAPID CITY, SOUTH DAKOTA 57701

PROXY STATEMENT

A proxy in the accompanying form is solicited by the Board of Directors of
Black Hills Corporation, a South Dakota corporation (the Company), to be voted
at the Annual Meeting of Shareholders of the Company to be held Tuesday, May
23, 1995,21, 1996, and at any adjournment thereof.

The enclosed form of proxy, when executed and returned, will be voted as set
forth therein. Any shareholder signing a proxy has the power to revoke the
same in writing, addressed to the Secretary of the Company, or in person at the
meeting at any time before the proxy is exercised.

All shares represented by valid, unrevoked proxies will be voted at the
Annual Meeting. Shares voted as abstentions on any matter (or as "withhold
authority" as to Directors) will be counted as shares that are present and
entitled to vote for purposes of determining the presence of a quorum at the
meeting and as unvoted, although present and entitled to vote, for purposes of
determining the approval of each matter as to which the shareholder has
abstained. If a broker submits a proxy which indicates that the broker does
not have discretionary authority as to certain shares to vote on one or more
matters, those shares will be counted as shares that are present and entitled
to vote for purposes of determining the presence of a quorum at the meeting,
but will not be considered as present and entitled to vote with respect to such
matters.

The Company will bear all costs of the solicitation. In addition to
solicitation by mail, officers and employees of the Company may solicit proxies
by telephone, telegraph, or in person. Chemical BankKissel-Blake Inc. has been retained by
the Company to assist in the solicitation of proxies at an anticipated cost of
$3,000.$2,500 plus out-of-pocket expenses. Also, the Company will, upon request,
reimburse brokers or other persons holding stock in their names or in the names
of their nominees for reasonable expenses in forwarding proxies and proxy
material to the beneficial owners of stock.

This Proxy Statement and the accompanying form of proxy are to be first
mailed on April 14, 1995.March 22, 1996. The Company's Annual Report to Shareholders and Form
10-K for the year 1994 has been1995 is being mailed to shareholders.

shareholders with this proxy
statement.

VOTING RIGHTS AND PRINCIPAL HOLDERS

Only shareholders of record at the close of business on April 7, 1995,March 8, 1996, will
be entitled to vote at the meeting. The outstanding voting stock of the
Company as of such record date consisted of 14,399,43614,433,821 shares of Common Stock.

Each outstanding share of Common Stock is entitled to one vote. Cumulative
voting is permitted in the election of directors. Each share is entitled to
three votes, one each for the election of three directors, and the three votes
may be cast for a single person or may be distributed among two or three
persons.

The Company is not aware of any person or group who is the beneficial owner
of more than five percent of the Company's Common Stock.
ITEM I

ELECTION OF DIRECTORS

In accordance with the Bylaws and Article Fifth of the Restated Articles of
Incorporation, the Company's directors are elected to three classes of
staggered terms consisting of three years each. At this Annual Meeting of
Shareholders, three directors will be elected to Class IIII of the Board of
Directors to hold office for a term of three years until the Annual Meeting of
Shareholders in 19981999 and until their respective successors shall be duly
elected and qualified.

The terms of Michael B. Enzi, Everett E. Hoyt, and Charles
T. Undlin expire at the timeEach of the 1995 Annual Meeting. Mr.
Undlin has elected not to standnominees for re-election.

Thedirector is presently a member of the Board of
Directors has nominated Kirk E. Dean for
election as Director to succeed Mr. Undlin and nominated the
re-election of Michael B. Enzi and Everett E. Hoyt to each serve
a three-year term ending at the time of the Annual Meeting in
1998.Company. The proxy attorneys will vote your stock for the
election of the three nominees for director listed below, unless otherwise
instructed. If, at the time of the meeting, any of such nominees shall be
unable to serve in the capacity for which they are nominated or for good cause
will not serve, an event which the Board of Directors does not anticipate, it
is the intention of the persons designated as Proxy Attorneys to vote, at their
discretion, for nominees to replace those who are unable to serve. The
affirmative vote of a majority of the common shares present and entitled to
vote with respect to the election of directors is required for the election of
the nominees to the Board of Directors.

The following information, including principal occupation or employment for
the past five or more years, is furnished with respect to each of the following
persons who are nominated as Class IIII directors, each to serve for a term of
three years to expire in 1998.1999.

THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE ELECTION OF THE FOLLOWING
NOMINEES:
Nominees for Election Until
1998 Annual Meeting - Class III

Name, Age, Principal Occupation for
NOMINEES FOR ELECTION UNTIL
1999 ANNUAL MEETING - CLASS I

NAME, AGE, PRINCIPAL OCCUPATION FOR DIRECTOR
LAST FIVE YEARS AND OTHER DIRECTORSHIPS SINCE

GLENN C. BARBER, 62 1984

President and General Manager, Glenn
C. Barber & Associates Inc. (a general
construction company)

BRUCE B. BRUNDAGE, 60 1986

President and Director, Brundage &
Company (a firm specializing in corporate
financing), Englewood, Colorado; Director,
Vicorp Restaurants, Inc., Denver, Colorado

KAY S. JORGENSEN, 44 1992

South Dakota Legislative Representative,
Lawrence County, South Dakota;
Business Consultant, Spearfish, South Dakota

DIRECTORS WHOSE TERMS EXPIRE AT
1997 ANNUAL MEETING - CLASS II

NAME, AGE, PRINCIPAL OCCUPATION FOR DIRECTOR
LAST FIVE YEARS AND OTHER DIRECTORSHIPS SINCE

DANIEL P. LANDGUTH, 49 1989

Chairman, President, and Chief Executive
Officer of the Company since January 1,
1991

DALE E. CLEMENT, 62 1979

Senior Vice President-Finance of the Company
and subsidiaries

JOHN R. HOWARD, 55 1977

President, Industrial Products, Inc. (an
industrial parts distributor) since
March 2, 1992; General Manager of Black
Hills Packing Co. (a meat processing
concern), Rapid City, South Dakota, from
December 1978 to June 1, 1991; Director,
Last Five Years and Other Directorships Since

Kirk E. Dean, 47 --

President, Rapid City Market,
Norwest Bank South Dakota, N.A.
Rapid City, South Dakota

Michael B. Enzi, 51 1992

Accounting Manager, Dunbar Well Service,
Inc. (an oil well servicing company),
Gillette, Wyoming; Wyoming State Senator,
Campbell County, Wyoming; President of NZ
Shoes, Inc. (retail shoe store), Gillette,
Wyoming

Everett E. Hoyt, 55

DIRECTORS WHOSE TERMS EXPIRE AT
1998 ANNUAL MEETING - CLASS III

NAME, AGE, PRINCIPAL OCCUPATION FOR DIRECTOR
LAST FIVE YEARS AND OTHER DIRECTORSHIPS SINCE

KIRK E. Dean, 48 1995

President and District Manager,
Rapid City Market, Norwest Bank
South Dakota, N.A. Rapid City, South Dakota

MICHAEL B. ENZI, 52 1992

EVERETT E. HOYT, 56 1991

President and Chief Operating Officer of
Black Hills Power and Light Company
since
October 1, 1989

Directors Whose Terms Expire atSECURITY OWNERSHIP OF MANAGEMENT

As of February 29, 1996, Annual Meeting - Class I

Name, Age, Principal Occupation for Director
Last Five Years and Other Directorships Since

Glenn C. Barber, 61 1984

President and General Manager, Glenn
C. Barber & Associates Inc. (a general
construction company)

Bruce B. Brundage, 59 1986

President and Director, Brundage &
Company (a firm specializing in corporate
financing), Englewood, Colorado; Director,
Vicorp Restaurants, Inc., Denver, Colorado

Kay S. Jorgensen, 44 1992

Concessionaire, Black Hills Passion Play,
Spearfish, South Dakota; South Dakota
Legislative Representative, Lawrence County,
South Dakota

Directors Whose Terms Expire at
1997 Annual Meeting - Class II

Name, Age, Principal Occupation for Director
Last Five Years and Other Directorships Since

Daniel P. Landguth, 48 1989

Chairman, President, and Chief Executive
Officer of the Company since January 1,
1991; President and Chief Operating
Officer of Black Hills Corporation from
October 1989

Dale E. Clement, 61 1979

Senior Vice President-Finance of the Company
and subsidiaries since September 1, 1989

John R. Howard, 54 1977

Security Ownership of Management

The following table sets forth information, as of December
31, 1994, with respect tothe beneficial
ownership of Common Stock of the Company for each Director, each executive
officer named in the Summary Compensation table herein, and all Directors and
executive officers of the Company as a group.
Number of Shares and Nature
Name of Beneficial Owner Of Beneficial Ownership

Glenn C. Barber 3,011
Bruce B. Brundage 3,615
Dale E. Clement 10,197
Kirk E. Dean 186
Michael B. Enzi 1,354
John R. Howard 11,102
Everett E. Hoyt 4,705
Kay S. Jorgensen 513
Daniel P. Landguth 8,679
Charles T. Undlin 8,356

All Directors and executive
officers as a group 56,872
NUMBER OF SHARES AND NATURE
NAME OF BENEFICIAL OWNER OF BENEFICIAL OWNERSHIP (1)

Glenn C. Barber 3,309
Bruce B. Brundage 3,615(2)
Dale E. Clement 11,660(4)
Kirk E. Dean 352
Michael B. Enzi 1,679(3)
John R. Howard 11,242
Everett E. Hoyt 5,071(4)
Kay S. Jorgensen 542
Daniel P. Landguth 9,163(4)

All Directors and executive
officers as a group 53,985(4)

(1)Represents outstanding Common Stock beneficially owned both directly
and indirectly as of December 31, 1994.February 29, 1996. The Common Stock interest of each
named person and all Directors and executive officers as a group represents
less than one percent of the aggregate amount of Common Stock issued and
outstanding. Except as indicated by footnote below, the beneficial owner
possesses sole voting and investment powers with respect to the shares shown.

(2)Includes 3,600 shares owned by Brundage & Co. Pension Plan and Trust of
which Mr. Brundage is the Trustee and haswith sole voting and investment power.

authority.

(3)Includes 100 shares owned jointly with Mr. Enzi's son as to which he
shares voting and investment powerauthority and 106112 shares for which Mr. Enzi is
custodian of his minor daughter.

(4)Includes Common Stock held by the Trustee of the Company's Retirement
Savings Plan (401K) of which the Trustee has sole voting and investment
powerauthority as follows: Mr. Clement 1,041 shares, Mr. Hoyt 3,9494,172 shares,
Mr. Landguth 2,8753,037 shares, and all Directors and executive officers as a group
9,21811,680 shares.

The BoardBased solely upon a review of Company records and Committeescopies of reports on Form
3, 4 and 5 furnished to the Company, the Company believes that during 1995 all
persons subject to the reporting requirements of Section 16(a) of the
Securities Exchange Act of 1934, as amended, filed the required reports on a
timely basis.

THE BOARD AND COMMITTEES

The Executive Committee is comprised of Glenn C. Barber, BruceKirk E. Dean,
Michael B. Brundage,Enzi, John R. Howard, and Daniel P. Landguth, and
Charles T. Undlin, with Mr. Landguth
serving as Chairman. The Committee exercises the authority of the Board of
Directors in the interval between meetings of the Board, recommends to the
Board of Directors persons to be elected as officers, and recommends persons to
be appointed to Board Committees. The Executive Committee held threetwo meetings
during 1994.1995.

The Compensation Committee is comprised of Glenn C. Barber, Bruce B.
Brundage, Kirk E. Dean, Michael B. Enzi, John R. Howard, and Kay S. Jorgensen,
and Charles T. Undlin, with Mr. BarberMs. Jorgensen serving as Chairman. The Committee performs functions
required by the Board of Directors in the administration of all federal and
state statutes relating to employment and compensation, recommends to the Board
of Directors compensation for officers, and considers and approves the
Company's compensation program including benefits and stock ownership plans.
The Committee will be the administrator of the Company's 1996 Stock Option Plan
submitted for approval at this meeting. The Compensation Committee held twothree
meetings in 1994.1995.

The Audit Committee is comprised of Glenn C. Barber, Bruce B. Brundage,
Michael B. Enzi, John R. Howard, and Kay S. Jorgensen, with Mr. HowardEnzi serving as Chairman. The
Committee annually recommends to the Board of Directors an independent
accounting firm to be appointed by the Board for ratification by the
shareholders, reviews the scope and results of the annual audit including
reports and recommendations of the firm, reviews the Company's internal audit
function, and periodically confers with the internal audit group, management of
the Company, and its independent accountants. The Audit Committee held two
meetings in 1994.1995.

The Nominating Committee is comprised of Glenn C. Barber,Bruce B. Brundage, Kirk E. Dean,
John R. Howard, Kay S. Jorgensen, and Daniel P. Landguth, and Charles T. Undlin, with Mr. Howard
serving as Chairman. The Committee recommends to the Board of Directors
persons to be nominated as directors or to be elected to fill vacancies on the
Board. The Bylaws require that an outside director serve as Chairman of the
Committee. The Nominating Committee held one meetingtwo meetings in 1994.1995.

Pursuant to the Company's Bylaws, nominations from shareholders for Board
membership will be considered by the Nominating Committee. Shareholders who
wish to submit names for future consideration for Board membership should do so
in writing prior to November 25, 1995,22, 1996, addressed to Nominating Committee,
c/o Corporate Secretary, Black Hills Corporation, P.O. Box 1400, Rapid City,
South Dakota 57709.

Members of the Committees referred to herein are designated by the Board of
Directors upon recommendation of the Executive Committee each year at a meeting
held following the Annual Meeting of Shareholders.

The Board of Directors held teneleven meetings during 1994.1995. Each director
attended no less than 8085 percent of the aggregate of the total number of Board
meetings and Committee meetings on which the director served.

Compensation Committee Interlocks and Insider ParticipationCOMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

The Compensation Committee is solely comprised of the following outside
directors, Glenn C. Barber, Bruce B. Brundage, Kirk E. Dean, Michael B. Enzi,
John R. Howard, and Kay S. Jorgensen, and
Charles T. Undlin.Jorgensen.

Mr. Howard is also a director of Norwest Bank - South Dakota, N.A. Mr. Dean
is President of the Rapid City Market - Norwest Bank South Dakota, N.A., of
which the Company has a $15$10 million line of credit. During 1994,1995, Norwest Bank -
South Dakota, N.A. participated in short-term loans to the Company of up to
$14.7$4.3 million at an interest rate of 1/8 percent less than the prime rate.
Directors' FeesTotal interest charges for the year were approximately $31,000.

Norwest Bank Minnesota, N.A. is the Trustee and Paying Agent for the
Company's Pollution Control and Industrial Development Revenue Bonds. The
Company paid approximately $24,000 for this service in 1995. The Company
recently engaged Norwest Bank Minnesota as their Transfer Agent, Registrar, and
Dividend Disbursing Agent for its Common Stock effective February 16, 1996.
The Company estimates the fee for this service will be less than $50,000
annually plus out of pocket expenses.

Norwest Bank South Dakota and Norwest Bank Minnesota are subsidiaries of
Norwest Corp. Neither Mr. Howard nor Mr. Dean have a direct relationship with
Norwest Minnesota. Based on proposals from other banks to serve as Transfer
Agent, Registrar, and Dividend Disbursing Agent, the Company is of the opinion
that the terms of the above transactions were no less favorable to the Company
than those available from other banks.

DIRECTORS' FEES

Directors who are not officers of the Company receive an annual fee of
$12,000 plus a fee of $600 for each board meeting and committee meeting
attended providing such committee meetings are substantive in nature and
content.

Directors' Retirement PlanThe Board of Directors approved an amendment to the Bylaws at its January
30, 1996, meeting requiring the Directors to beneficially own 100 shares of
Common Stock when they are initially elected a Director and requiring each
Director to apply at least 50 percent of his or her retainer toward the
purchase of additional shares until the Director has cumulated at least 2,000
shares of Common Stock.

DIRECTORS' RETIREMENT PLAN

The Company has a Retirement Plan for those directors who are not otherwise
employed by the Company (outside directors). The monthly benefit is $1,000
payable for the number of months the outside director served or for 120 months,
whichever is less. The monthly benefits commence at the earliest of (1) the
first full complete month the outside director is 60 years of age or more and
is no longer a director of the Company or (2) the first full month after the
death of the outside director or former outside director. The Board of
Directors may withdraw retirement benefits for any outside director dismissed
for cause. The monthly benefit is paid to the participating director, or if
deceased, the director's designated beneficiary, and if none, his or her
estate.

Executive Compensation

Compensation Committee Report on Executive CompensationEXECUTIVE COMPENSATION

COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION

The Compensation Committee of the Board of Directors is responsible for
developing and making recommendations to the Board on executive compensation.
The components of the Company's executive compensation program consists of a
base salary, an incentive gainsharing bonus, and results compensation. The mix
of base salary, incentive bonus, and results compensation reflects the
Company's goals of attracting and retaining highly qualified and motivated
managers, recognizing and rewarding outstanding performance, fostering a
cohesive management team, and having a portion of compensation contingent upon
the performance of the Company.

The Committee makes annual recommendations to the Board concerning the base
salary, incentive gainsharing bonus, and results compensation for the Chief
Executive Officer and each of the other executive officers of the Company.
Recognizing a market based compensation structure, the Committee strives to
ensure that competitive salary ranges and base salaries are being maintained.
In 1995 the later part of 1992, the Compensation
Committee hired Hewitt Associates, an internationally recognized
compensation consultant firm, to review the executive and
director compensation being paid at the Company. Data collected
for that 1992 review was again utilized in 1994, aged for the
passage of time.

Utilizing thereviewed several data from the Hewitt Associates study and
comparing it tosources including data from the
Edison Electric Institute, the trade association of investor-owned electric
utilities, the
Committee recommended to the Board thein determining market base salarycompensation for the Chief
Executive Officer as well as for the other executive officers.
The salaries were not only based upon comparable market salary information but
also on the accomplishments of individual performance objectives.

The Company's position is to establish a market salary level for each salary
range that is at or near the median (50th percentile) of the range of salaries
of comparable companies surveyed. A performance matrix system is used in
determining the percentage of salary increase taking into account the
performance rating for the individual officer and the relationship of the
officers current salary to market. An outstanding performance rating is given
when there is extraordinary and exceptional accomplishment, results are far in
excess of requirements, and demanding objectives are attained. A superior
performance rating indicates results are well above the expected level and the
individual was successful in accomplishing challenging objectives. Competent
performance ratings are given when all position requirements are met, the
individual consistently performs the job in a satisfactory manner, and
realistic objectives are obtained. Base salary increases in 19941995 for the
Company's officers ranged from 2 percent to 5 percent.

In April 1994,1995, the Compensation Committee granted the Chief Executive
Officer a superior rating based on efforts made in commencing construction on theof Neil Simpson
Unit #2, a new power plant, a successful
common equity sale, the increase in dividends, and maintenance of
earnings.earnings during a heavy construction and financing period for the Company. The
Compensation Committee approved a 5 percent base salary increase in the amount
of $9,176$9,635 for the Chief Executive Officer. The increase to the base salary
brings the Chief Executive Officer's base salary to 98103 percent of market as
determined by wage surveys. Consolidated earnings per share in 19931994 was $1.66,
compared to $1.73 in 1992. However, 1992 earnings
included a $0.07 per share non-recurring after-tax non-cash gain.
Without this gain in 1992, earnings per share would have been flatunchanged from 1993 with 13.8 percent more average shares outstanding.
Dividends increased 3.23.1 percent over 1992.1993.

The Company currently maintains a variety of employee benefit plans and
programs in which its executive officers may participate, including the
gainsharing program, the results compensation program, the retirement savings
(401k) plan, the pension plan, and the pension equalization plan. With the
exception of the Pension Equalization Plan (PEP), these benefit plans and
programs are generally available to all employees within the Company.

The Executive Gainsharing Program is one of three sections of a Company wide
program. The goals of the Executive Gainsharing Program support the interests
of the customer and shareholder. This is accomplished through increased cost
containment and operating efficiencies which in the end result reduce costs and
increase earnings. The program for 1994 which
paid a 2 to 3 percent gainshare award in 1995 consisted of a safety goal, a
reduction in budgeted operating expenses, and a goal related to the new power plant.successful
rates cases. The program paid a 1.58 percent gainshare award in 1996 based on
1995's program.

The Results Compensation Program began in 1994 and was designed to recognize and reward the
contribution that group performance makes to corporate success. All regular
full-time and regular part-time non-union employees are eligible to participate
in the program. The local union IBEW, 1250, elected not to participate in the
Results Compensation Program. The program has two key financial goals, a
business unit goal and a corporate goal. The business unit goal is based upon
the percentage of operating income for the respective business unit which
exceeds budgeted amounts. The corporate goal is based upon the percentage of
consolidated earnings per share which exceeds budgeted amounts. Each goal is
weighted 50 percent and must exceed 5 percent of budgeted amounts before a
bonus is paid. The maximum bonus which can be paid is 8 percent. The
executive officers earned a 2.25 percent results compensation bonus in 19941995 which was paid
in 1995.1996 that ranged from 1.50 percent to 3.40 percent. Company wide bonuses
ranged from 20.95 percent to 6.203.40 percent.

It is the objective of the Company to pay its executives a fair salary,
based on the comparable pay of similar types of companies in relation to
achieving corporate, business unit, and individual performance objectives. The Company does not offer
any restricted stock awards, stock options, or other long-term
incentive compensation plans.
Furthermore, officers are not permitted to serve on the Board of Directors of
any other corporation operating for profit. The intent of the latter is that
if the executives are paid fairly, the Company and its shareholders should
demand their full attention and, therefore, their efforts are totally directed
toward the Company and not interrupted by the obligations of serving as a
director for other for profit corporations.

FUTURE PLANS

The Committee recently retained an executive compensation consultant to
review the Company's Executive Officer compensation practices. The Committee's
efforts focused on reviewing the competitiveness of the current compensation
package and the appropriateness of implementing a long-term incentive
compensation program.

The Committee has recommended implementation of the Black Hills Corporation
1996 Stock Option Plan as a long-term incentive for employees of the Company.
The Committee's objective in adopting the Plan and a summary of the Plan is
discussed as Item II. The Plan is fully set forth at Addendum A.

COMPENSATION COMMITTEE

Kay S. Jorgensen, Chairman Glenn C. Barber Chairman Bruce B. Brundage
Kirk E. Dean Michael B. Enzi John R. Howard Kay S. Jorgensen Charles T. Undlin

The following table is furnished for the fiscal year ended December 31,
1994,1995, with respect to the Chief Executive Officer of the Company and the
executive officers whose salary and bonus compensation for 19941995 exceeded
$100,000.

SUMMARY COMPENSATION TABLE

Name
SUMMARY COMPENSATION TABLE

NAME AND PRINCIPAL POSITION YEAR SALARY BONUS(1)

Daniel P. Landguth 1995 $197,516 $ 6,397
Chairman, President, and 1994 188,110 10,180
Chief Executive 1993 178,466 10,761
Officer of the Company
and subsidiaries

Everett E. Hoyt 1995 $132,845 $6,962
President and Chief 1994 128,365 6,945
Operating Officer of 1993 123,566 3,906
Black Hills Power and
Light Company

Dale E. Clement 1995 $129,910 $4,173
Senior Vice President - 1994 127,363 5,582
Finance of the Company 1993 124,266 3,966
and Principal Annual Compensation
Position Year Salary Bonus

Daniel P. Landguth 1994 $188,110 $10,180
Chairman, President, and 1993 178,466 10,761
Chief Executive Officer of 1992 173,134 18,250
the Company and subsidiaries

Everett E. Hoyt 1994 $128,365 $ 6,945
President and Chief Operating 1993 123,566 3,906
Officer of Black Hills Power 1992 121,008 5,791
and Light Company

Dale E. Clement 1994 $127,363 $ 5,582
Senior Vice President - 1993 124,266 3,966
Finance of the Company and 1992 122,430 5,612 Subsidiaries

(1)Bonus amounts for 1995 and 1994 include amounts earned under the
Results Compensation Program and the Incentive Gainshare Program, cash bonus
programs for Company employees based on the attainment of predetermined
profitability measures. Bonus amounts for 1993 include amounts earned under
the Incentive Gainshare Program. Mr. Landguth's bonus in 1993 also includes a
one-time performance bonus of $4,900.

Bonus amounts for 1992 include amounts earned
under the Incentive Gainshare Program and lump sum payments that
were received in lieu of base salary increases.

Retirement PlansRETIREMENT PLANS

The Company has a defined benefit retirement plan (Retirement(Pension Plan) for its
employees. The RetirementPension Plan provides benefits at retirement based on length of
employment service and average monthly pay in the five consecutive calendar
years of highest earnings out of the last ten years. Employees do not
contribute to the RetirementPension Plan. The amount of annual contribution by the
employers to the RetirementPension Plan is based on an actuarial determination. Accrued
benefits become 100 percent vested after an employee completes five years of
service.

The Company also has a Pension Equalization Plan (the PEP), a nonqualified
(benefits are not tax deductible until paid) supplemental plan, which is
designed to provide the higher paid executive employee a retirement benefit
which, when added to social security benefits and the pension to be received
from the RetirementPension Plan, will approximate retirement benefits being paid by other
employers to its employees with like executive positions. The employee's
pension from the qualified pension plan is limited under the current law to not
exceed $120,000 annually and the compensation taken into account in determining
contributions and benefits cannot exceed $150,000. The amounts of deferred
compensation paid under nonqualified plans such as the PEP are not subject to
the limits. A participant under the PEP does not qualify for benefits until
the benefits become vested under a vesting schedule - 20 percent after three
years of employment under the plan increasing up to 100 percent vesting after
eight years of employment under the plan. No credit for past service is
granted under the PEP. The annual benefit is 25 percent of the employee's
average earnings (if salary was less than two times the Social Security Wage
Base) or 30 percent (if salary was more than two times the Social Security Wage
Base) times the vesting percentage. Average earnings are normally an employees
average earnings for the five highest consecutive full years of employment
during the ten full years of employment immediately preceding the year of
calculation. The annual PEP benefit is paid on a monthly basis for 15 years to
each participating employee and if deceased to the employee's designated
beneficiary or estate, commencing at the earliest of death or when the employee
is both retired and 62 years of age or more.

In the event that at the time of a Participant's retirement from the Company
the Participant's salary level exceeds the qualified pension plan annual
compensation limitation of $150,000, then the Participant shall receive an
additional benefit which is measured by the difference between the monthly
benefit which would have been provided to the Participantparticipant under the Company's
defined benefit retirement planPension Plan as if there were no annual compensation limitation and the monthly
benefit to be provided to the Participant under the RetirementPension Plan.

Participants in the PEP are designated by the Board of Directors upon
recommendation of the Chief Executive Officer. Selection is based on key
employees as determined by management and consideration of performance rather
than salary based only. The minimum salary component applied in the selection
process is the maximum annual Social Security taxable wage base which is
presently at $61,200.

Retirement Benefits$62,700.

RETIREMENT BENEFITS

The following table illustrates estimated annual benefits payable under the
RetirementPension Plan and the PEP to employees who retire at the normal retirement date.

Years of Service
Annual 15 20 25 30 35
Pay Years Years Years Years Years

$ 60,000 $ 27,941 $ 32,255 $ 36,569 $ 40,883 $ 45,196
75,000 35,291 40,805 46,319 51,833 57,346
90,000 42,641 49,355 56,069 62,783 69,496
110,000 52,441 60,755 69,069 77,383 85,696
125,000 59,791 69,305 78,819 88,333 97,846
150,000 79,541 91,055 102,569 114,083 125,596
175,000 93,041 106,555 120,069 133,583 147,096
200,000 106,541 122,055 137,569 153,083 168,596
225,000 120,041 137,555 155,069 172,583 190,096
Estimated annual benefits payable to officers named below at age 65 from all
sources are as follows: Daniel P. Landguth, 35 yrs. - $159,597;$165,806; Dale E.
Clement, 33 yrs. - $82,533$82,011(1); Everett E. Hoyt, 31 yrs. - $78,156$75,157(1).

The benefits in the foregoing table were calculated as a straight life
annuity. Amounts shown are exclusive of Social Security benefits and include
benefits from both the RetirementPension Plan and from the PEP assuming a 100 percent
vested interest in the PEP.

(1) Such amounts are adjusted for benefits applicable to service for prior
employment.

Employees' Stock Purchase PlanEMPLOYEES' STOCK PURCHASE PLAN

Employees of the Company and its subsidiaries are eligible to participate in
the Employees' Stock Purchase Plan, as approved by the shareholders at the 1987
Annual Meeting under which offerings of the Company's Common Stock, at the
discretion of the Board, are made to employees at a price equal to 90 percent
of the closing sale price on the New York Stock Exchange on the date of the
offering. An offering was extended to employees in 19941995 and officers
subscribed to 2,2001,880 shares at a price of $17.10$20.25 per share. Shares are held in
nominee name until subscriptions are paid for in full.

Retirement Savings PlanRETIREMENT SAVINGS PLAN

The Company has a Retirement Savings Plan under Section 401(k) of the
Internal Revenue Code of 1954, as amended, which permits employees of the
Company and its subsidiaries, including officers, to elect to invest up to 15
percent of their eligible earnings on a pre-tax basis into an investment fund
subject to limitations imposed by the Internal Revenue Code. The Company makes
no contributions to the Plan.

Distribution from the fund will be made to employees at termination of
employment, retirement, death, or in case of hardship. No amounts were paid or
distributed pursuant to the Retirement Savings Plan to the individuals named
herein nor to the officers as a group.

The Trustee for the Retirement Savings Plan (401(k) Plan) has voting power
with respect to shares held in the name of the Trustee of the Plan.

Stock Performance GraphSEVERANCE AGREEMENTS

The Company has entered into change of control severance agreements
("Severance Agreements") with each of its executive officers. The Severance
Agreements provide for certain payments and other benefits to be payable upon a
Change in Control and a subsequent termination of employment, either
involuntary or for a Good Reason.

A Change in Control is defined as: (i) an acquisition of 30 percent or more
of the common stock of the Company (except for certain defined acquisitions,
such as acquisition by employee benefit plans, the Company itself, or any
subsidiary); or (ii) members of the Incumbent Board at the time the agreements
were executed cease to constitute at least two-thirds of the members of the
Board, with an Incumbent Board being defined at those individuals consisting of
the Board on the date the Agreement was executed and any other directors
elected subsequently whose election was approved by the Incumbent Board; or
(iii) approval by the shareholders of the Company of a merger, consolidation,
or reorganization; liquidation or dissolution; or agreement for sale or other
disposition of all or substantially all of the assets of the Company (with
exceptions for transactions which do not involve an effective change in control
of voting securities or Board membership, and transfers to subsidiaries or sale
of subsidiaries); and (iv) all regulatory approvals required to effect a Change
in Control have been obtained.

A Good Reason for termination which would trigger payment of benefits is
defined to include (i) a change in the Executive's status, title, position or
responsibilities, (ii) a reduction in the Executive's annual compensation or
any failure to pay the Executive any compensation or benefits to which he is
entitled within 7 days of the date due, (iii) any material breach by the
Company of any provisions of the Severance Agreement, (iv) requiring the
Executive to be based outside a 50-mile radius from Rapid City, South Dakota;
or (v) failure of the Company to obtain an agreement from any successor company
to assume and agree to perform the Severance Agreement. The Severance
Agreement with the Chief Executive Officer ("CEO") also contains an optional
Window Period, defined as a 30-day period of time beginning on the one-year
anniversary after the Change in Control, during which time the CEO may
terminate for any reason and receive the payments and benefits.

Upon a Change in Control, the Executive will have an employment contract for
three-year period (but not beyond age 65), denominated the "Employment Term."
During the Employment Term, the Executive shall receive annual compensation at
least equal to the highest rate in effect at any time during the one-year
period preceding the Change in Control and shall also receive employment
welfare benefits, pension benefits, and supplemental retirement benefits on a
basis no less favorable than those received prior to the Change in Control.

If the Executive's employment with the Company is terminated during the
Employment Term, involuntarily or for a Good Reason (or by the CEO for any
reason during a Window Period), then the Executive is entitled to the following
benefits: (i) severance pay equal to 2.99 times Executive's five-year average
taxable compensation; provided that the foregoing payment is subject to
proportionate reduction based upon when termination takes place during the
Employment Term and based upon a ratio of Executive's Employment Term to 36
months; and (ii) continuation of employee welfare benefits for the remainder of
the Employment Term (with an offset for similar benefits received) along with
additional credited service under the Pension Equalization Plan and Pension
Plan equal to the remainder of the Employment Term.

The Severance Agreement contain a "cap" provision which reduces any amounts
payable to an amount which would prevent any payments from being nondeductible
under the Internal Revenue Code. The Severance Agreements provide for
reimbursement of legal fees and expenses of the Executive incurred after the
Change in Control by the Executive in seeking to obtain or enforce any benefits
provided by the Severance Agreement. The Executive is not required to mitigate
the amount of any payment or benefit by seeking other employment or otherwise,
and the payments or benefits are not reduced whether or not the Executive
obtains other employment and/or benefits (except for employee welfare
benefits).

STOCK PERFORMANCE GRAPH

The graph below compares the cumulative shareholder return on the Company's
Common Shares for the last five fiscal years with the cumulative total return
of the S&P 500 Index and the Edison Electric Institute Electric Index, (EEI
Electric Index) and the
Duff & Phelps Quality II Electrics Index over the same period (assuming the investment of $100 on
December 31, 1989,1990, and the reinvestment of all dividends).

The Company has changed its
industry index from the Duff & Phelps Quality II Electrics to the
EEI Electric Index because the Securities and Exchange Commission
has approved the EEI Electric Index as a published index. The
Company believes the EEI Electric Index is more widely recognized
by investors. Both indexes have been shown for comparison
purposes.

(INSERT CAMERA READY GRAPH)

1990 1991 1992 1993 1994 1995
Black Hills Corporation $112 $161 $167 $146 $146$143 $149 $130 $130 $160
S&P 500 $ 97 $126 $136 $150 $152$130 $140 $155 $157 $215
EEI ELectric $101 $131 $141 $156 $138
Duff & Phelps Quality
II Electrics $104$129 $139 $154 $136 $143 $159 $142

$179

ITEM II

PROPOSAL TO AMENDAPPROVE THE 1987 EMPLOYEEBLACK HILLS CORPORATION 1996 STOCK PURCHASEOPTION PLAN

TO ALLOW THE ISSUANCE
OF AN ADDITIONAL 200,000 SHARES OF COMMON STOCK,
PAR VALUE $1.00,
PURSUANT TO THE PLAN

The 1987 Employee Stock Purchase Plan (the Plan), providing
for the sale of shares of the Company's Common Stock, Par Value
$1.00 (Shares) to employees, was adopted by the Board of
Directors on January 29, 1987, and approved by the shareholders
on May 20, 1987.BACKGROUND

The Board of Directors isadopted, subject to shareholder approval, the Black
Hills Corporation 1996 Stock Option Plan (the "Plan"). A full copy of the opinion that
the Plan has proved to be of substantial value in stimulating the
efforts of employees and increasing their ownership in the
Company. The number of Shares remaining for issuance under the Plan
is insufficient to provide adequately for the future
participation by eligible employees who wish to purchase Shares.

Accordingly, on February 14, 1995, the Boardattached as Addendum A. The purpose of Directors
adopted an amendment to the Plan is to increaseenable the number of Shares
available for issuance under the Plan by an additional 200,000
Shares. The Plan is briefly described below.

Each full-time employeeCompany to
offer certain officers and other key employees of the Company and its
subsidiaries including officers, but excluding directors not otherwise
employed byoptions to acquire shares of the Company, is eligible to participate in the Plan.
A full-time employee is one who has been in the employunissued and authorized Common
Stock of the Company, or subsidiary for at least six months prior tothereby attracting, retaining and rewarding such
employees and strengthening the Offering Datemutuality of interest between such employees
and who is in the active service of the Company or
subsidiary. Any employee whose customary employment is 20 hours
or less per week or whose customary employment is for not more
than five months per calendar year is not eligible to
participate. As of December 31, 1994 there were approximately
342 employees of the Company and 96 employees of the subsidiaries
who would have been eligible to participate in the Plan on that
date.

The Board of Directors of the Company determines the time
(Offering Date) at which Shares may be offered. The maximum
number of Shares which could originally be issued by the Company
under the Plan was 100,000 Shares subject to adjustment in the
event of stock dividends, stock splits or reverse stock splits.
This amount was increased to 137,459 Shares on March 2, 1992, to
reflect the adjustment for the three-for-two split. The amount
would be increased to 337,459 Shares if this proposal is
approved.

The Plan provides that an eligible employee may subscribe
for not less than 20 nor more than 400 Shares in connection with
each offering thereunder at a price equal to 90 percent of the
fair market value of such Shares on the date an offering is made
but not less than book value. The fair market value is deemed to
be the closing sale price of the Shares on the Offering Date as

reported on the New York Stock Exchange - Composite Transactions.

A subscription, subject to cancellation by the employee,
must be completed through payroll deductions within 12 months
from the Subscription Date. All dividends declared and paid on
Shares subscribed for will be applied toward the purchase of
additional Shares through the Dividend Reinvestment and Stock
Purchase Plan at the Offering Price. The Company pays all
administrative costs of the Plan.

The Plan is administered byCompany's shareholders. In addition, the Board of Directors which has
power and authority to promulgate such rules and regulations as
it deems appropriate therefor, to interpret its provisions and to
take all action in connection therewith as it deems necessary.
Other aspects of administration are handled by the Employees'
Stock Purchase Plan Committee, the membership of which will be
designated from time to time by the President of the Company. No
person is specifically compensated from assets ofbelieves
that the Plan will provide the participants therein with an incentive for
excellence in individual performance and will promote teamwork among the
performanceparticipants.

DURATION

The Plan shall commence on May 21, 1996 and shall remain in effect, subject
to the right of any such administrative duties.

Thethe Board of Directors mayto amend modify, suspend or terminate the Plan at any
time, without notice, provided however,
thatuntil all shares subject to it shall have been purchased or acquired, but
in no such amendment, modificationevent shall any awards be granted on or termination shall
adversely affect any existing subscription or offering, and
provided further, that no such amendment shall increaseafter May 21, 2006.

SHARES AVAILABLE

The Board of Directors has reserved an aggregate of 200,000 shares
("Shares") of the number of sharesCompany's authorized to be offered under the Plan, or
change the definition of eligible participantsbut unissued Common Stock for issuance
under the Plan. Amounts received by the Company from the saleAll of the Shares willmay, but need not, be issued pursuant to the
exercise of "Incentive Stock Options" within the meaning of Section 422 of the
Internal Revenue Code of 1986, as amended (the "Code"). If there is a lapse,
expiration, termination or cancellation of any option prior to the issuance of
Shares thereunder, those Shares may again be used for its general corporate purposes.

Since inceptionnew awards under the
Plan.

ADMINISTRATION

The Plan provides for administration by a committee (the "Committee"), to be
comprised of either the Compensation Committee of the Board or another
committee designated by the Board. Initially, the Company's Compensation
Committee, composed of all outside (nonemployee) Directors, will administer the
Plan. Among the Committee's powers are the authority to interpret the Plan,
through March 1, 1995, 80,528
Shares have been purchased, 24,233 Shares have been subscribedestablish rules and regulations for its operation, select officers and other
key employees of the Company and its subsidiaries to receive awards, and
32,698 Shares remain for future offerings.

Itconsistent with the Plan determine the form, amount and other terms and
conditions of each of the awards. The Committee also has the power to make
adjustments in the terms and conditions of any of the awards in recognition of
unusual or nonrecurring events whenever the Committee determines that such
adjustments are appropriate in order to prevent dilution or enlargement of the
benefits or potential intended to be made available under the Plan.

ELIGIBILITY FOR PARTICIPATION

Officers and other full-time employees of the Company or any of its
subsidiaries, including subsidiaries of subsidiaries, are eligible to
participate in the Plan. The selection of participants from eligible employees
is within the judgementdiscretion of the Committee. Members of the Board of Directors
that the Plan
promotes employee interest in the Company to the benefitwho are not employees of the Company and its shareholders and the Amendment to the Plan should
be approved. Adoption of the following resolution is therefore
recommended:

RESOLVED, That the shareholderspart-time employees of the Company do
hereby approve the Amendmentare
not eligible to the Employee Stock Purchase
Plan, as adopted by the Board of Directors at their meeting
held on February 14, 1995, increasing the number of shares
of the Company's authorized and unissued shares of Common
Stock, par value $1.00, to an additional 200,000 shares to
be available for issuanceparticipate under the Plan.

Vote RequiredSTOCK OPTIONS

Under the Plan, the Committee is authorized to award two types of options,
(i) Incentive Stock Options ("ISO") and (ii) Nonqualified Stock Options
("NQSO"). The difference in these two types of options is explained in the
following paragraph. The Option Price for every award issued for either an ISO
or an NQSO shall be equal to 100 percent of the Fair Market Value (the closing
price on the New York Stock Exchange) on the date the award is made, or the
Committee may set a higher Option Price. Each such option shall expire at the
time the Committee shall determine but in no event shall be exercisable later
than the tenth anniversary date of its grant. Payment to exercise for any of
said options shall be in cash or, if permitted by the award, by tendering
previously acquired shares having an aggregate Fair Market Value at the time of
exercise to total the Option Price and which shares have been held by the
participant for at least six months, or a combination of cash and shares. The
Plan does not authorize the Company to make employees loans with which to
exercise options.

FEDERAL TAX TREATMENT

Under current law, the following are the United States federal income tax
consequences generally arising with respect to awards under the Plan.

A participant who is granted an ISO within the meaning of Section 422 of the
Code does not recognize any taxable income at the time of the grant or at the
time of exercise. Similarly, the Company is not entitled to any deduction at
the time of grant or at the time of exercise. If the participant makes no
disposition of the Shares acquired pursuant to an ISO before the later of two
years from the date of grant and one year from the date of exercise, any gain
or loss realized on a subsequent disposition of the Shares shall be treated as
a long-term capital gain or loss. Under such circumstances, the Company will
not be entitled to any deduction for federal income tax purposes.

A participant who is granted a NQSO will not have taxable income at the time
of the grant but will have taxable income at the time of exercise equal to the
difference between the exercised price of the Shares and the market value of
the shares on the date of exercise. The Company will be entitled to a tax
deduction at that time for the same amount.

REGULATORY APPROVAL

The Plan is subject to the approval of the South Dakota Public Utilities
Commission and the Wyoming Public Service Commission. Until such approvals are
received, the Committee will make no awards under the Plan.

VOTE REQUIRED

An affirmative vote of the holders of the majority of all issued and
outstanding shares of Common Stock is required to adoptapprove the foregoing resolution.Plan.

The Board of Directors recommends the adoption of the following
resolution:

RESOLVED, that the shareholders of the Company do hereby
approve the Black Hills Corporation 1996 Stock Option Plan.

A vote FOR is a vote in favor of adopting the resolution and the Plan.

THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR ADOPTION OF THE RESOLUTION.PLAN.

ITEM III

APPOINTMENT OF INDEPENDENT AUDITORS

The firm of Arthur Andersen LLP, independent public accountants, conducted
the audit of the Company and its subsidiaries for 1994.1995. Representatives of
Arthur Andersen LLP will be present at the Annual Meeting and will have the
opportunity to make a statement, if they desire to do so, and to respond to
appropriate questions.

Audit services performed by Arthur Andersen LLP during 19941995 included
examinationsaudits of the financial statements of the Company and its subsidiaries and
limited reviewsanalysis of interim financial information.

The Board of Directors, on recommendation of the Audit Committee and
subject to ratification by shareholders, has appointed Arthur Andersen LLP to
perform an examinationaudit of the consolidated financial statements of the Company and
its subsidiaries for the year 19951996 and to render their opinion thereon.

THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR RATIFICATION
OF THE APPOINTMENT OF ARTHUR ANDERSEN LLP TO SERVE AS
INDEPENDENT PUBLIC ACCOUNTANTS FOR THE YEAR 19951996

SHAREHOLDER PROPOSALS FOR 19961997 ANNUAL MEETING

Shareholder proposals intended to be presented at the 19961997 Annual Meeting
of Shareholders must be received by the Secretary of the Company in writing at
its home officesoffice at 625 Ninth Street, P.O. Box 1400, Rapid City, South Dakota
57709, prior to November 25, 1995.22, 1996. Any proposal submitted must be in
compliance with Rule 14a-8 of Regulation 14A of the Securities and Exchange
Commission.

ITEM V

TRANSACTION OF OTHER BUSINESS

The Board of Directors does not intend to present any business for action
by the shareholders at the meeting except the matters referred to in this Proxy
Statement. If any other matters should be properly presented at the meeting,
it is the intention of the persons named in the accompanying form of proxy to
vote thereon in accordance with the recommendations of the Board of Directors.

If a shareholder participates in the Company's Dividend
Reinvestment and Stock Purchase Plan, the proxy to vote shares of
record will serve as instructions to vote shares held in custody
for the shareholder. Accordingly, as Transfer Agent for shares
of the Company's Common Stock, Chemical Bank will cause shares
held in the name of its nominee for the account of a shareholder
participating in the Plan to be voted in the same way as that
shareholder votes shares registered in their name. If
shareholders do not vote the shares registered in their name,
shares held for their account in the Plan will not be voted.

Please complete and sign the accompanying form of proxy whether or not you
expect to be present at the meeting and promptly return it in the enclosed
postage paid envelope.

By Order of the Board of Directors

ROXANN R. BASHAM
Corporate Secretary

Dated: April 14, 1995

March 22, 1996

INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE

The information required by Item 13, Financial and Other Information, of
Regulation 14-A is provided in the Company's Annual Report onto Shareholders and
Form 10-K for the year ended December 31, 1994,1995, which is incorporated by
reference into this Proxy Statement.

The Company hereby undertakes to provide to each shareholder
whose proxy is solicited for theCompany's 1995 Annual Meeting, upon
written or oral requestReport to Shareholders and without charge, a copy of the
Company's 1994 Annual Report on Form 10-K (without exhibits)is being
mailed to the Securities and Exchange Commission. Requests should be
directed to Roxann R. Basham, Corporate Secretary and Treasurer,
Black Hills Corporation, P.O. Box 1400, Rapid City, SD 57709, or
telephone (605)-348-1700.Shareholders with this Proxy Statement.

PLEASE COMPLETE, SIGN AND RETURN PROMPTLY THE ENCLOSED PROXY SO THAT
YOUR STOCK MAY BE REPRESENTED AND VOTED AT THE ANNUAL MEETING.

PROXY CARD
Front of Proxy Card
BLACK HILLS CORPORATION 625 NINTH STREET
RAPID CITY, SOUTH DAKOTA 57701Addendum 1
1996 STOCK OPTION PLAN

ARTICLE 1. ESTABLISHMENT, OBJECTIVES, AND DURATION

1.1 ESTABLISHMENT OF THE PLAN. Black Hills Corporation (hereinafter referred
to as the "Company"), hereby establishes an incentive compensation plan to be
known as the "Black Hills Corporation 1996 Stock Option Plan" (hereinafter
referred to as the "Plan"), as set forth in this document. The Plan permits the
grant of Nonqualified Stock Options and Incentive Stock Options.

Subject to approval by the Company's shareholders, the Plan shall become
effective as of May 21, 1996 (the "Effective Date") and shall remain in effect
as provided in Section 1.3 hereof.

1.2 OBJECTIVES OF THE PLAN. The objectives of the Plan are to optimize the
profitability and growth of the Company through incentives which are consistent
with the Company's objectives and which link the interests of Participants to
those of the Company's shareholders; to provide Participants with an incentive
for excellence in individual performance; and to promote teamwork among
Participants.

The Plan is further intended to provide flexibility to the Company in its
ability to motivate, attract, and retain the services of Participants who make
significant contributions to the Company's success and to allow Participants to
share in the success of the Company.

1.3 DURATION OF THE PLAN. The Plan shall commence on the Effective Date, as
described in Section 1.1 hereof, and shall remain in effect, subject to the
right of the Board of Directors to amend or terminate the Plan at any time
pursuant to Article 11 hereof, until all Shares subject to it shall have been
purchased or acquired according to the Plan's provisions. However, in no event
may an Award be granted under the Plan on or after May 21, 2006.

ARTICLE 2. DEFINITIONS

Whenever used in the Plan, the following terms shall have the meanings set
forth below, and when the meaning is intended, the initial letter of the word
shall be capitalized:

2.1 "AWARD" means, individually or collectively, a grant under this Plan of
Nonqualified Stock Options or Incentive Stock Options.

2.2 "AWARD AGREEMENT" means an agreement entered into by the Company and each
Participant setting forth the terms and provisions applicable to Awards granted
under this Plan.

2.3 "BENEFICIAL OWNER" or "BENEFICIAL OWNERSHIP" shall have the meaning
ascribed to such term in Rule 13d-3 of the General Rules and Regulations under
the Exchange Act.

2.4 "BOARD" or "BOARD OF DIRECTORS" means the Board of Directors of the
Company.

2.5 "CHANGE IN CONTROL" of the Company shall be deemed to have occurred (as
of a particular day, as specified by the Board) upon the occurrence of any
event described in this Section 2.5 as constituting a Change in Control.

(a) An acquisition (other than directly from the Company) of any Shares of
the Company by any Person immediately after which such Person has
Beneficial Ownership of thirty percent (30%) or more of the Shares of the
Company; provided, however, in determining whether a Change in Control has
occurred, Shares which are acquired in a "Non-Control Acquisition" (as
hereinafter defined) shall not constitute an acquisition which would cause
a Change in Control. A "Non-Control Acquisition" shall mean an acquisition
by (i) an employee benefit plan (or a trust forming a part thereof)
maintained by (A) the Company; or (B) a Subsidiary; (ii) the Company or
its Subsidiaries; or (iii) any Person in connection with a "Non-Control
Transaction" (as hereinafter defined);

(b) The individuals who, as of the Effective Date hereof, are members of the
Board (the "Incumbent Board"), cease for any reason to constitute at least
two-thirds (2/3) of the members of the Board; provided, however, that if
the election, or nomination for election by the Company's common
shareholders, of any new director was approved by a vote of at least two-
thirds (2/3) of the Incumbent Board, such new director shall, for purposes
of this Plan, be considered as a member of the Incumbent Board; provided
further, however, that no individual shall be considered a member of the
Incumbent Board if such individual initially assumed office as a result of
either an actual or threatened "Election Contest" (as described in Rule
14a-11 promulgated under the Exchange Act) or other actual or threatened
solicitation of proxies or consents by or on behalf of a Person other than
the Board (a "Proxy Contest") including by reason of any agreement
intended to avoid or settle any Election Contest or Proxy Contest; or

(i) A merger, consolidation, or reorganization involving the Company, unless
such merger, consolidation, or reorganization is a "Non-Control
Transaction". A "Non-Control Transaction" shall mean a merger,
consolidation, or reorganization of the Company where:

(A) the shareholders of the Company, immediately before such merger,
consolidation, or reorganization, own directly or indirectly,
immediately following such merger, consolidation, or reorganization,
at least seventy percent (70%) of the combined voting power of the
outstanding Voting Securities of the corporation resulting from such
merger or consolidation or reorganization (the "Surviving
Corporation") in substantially the same proportion as their
ownership of the Voting Securities immediately before such merger,
consolidation, or reorganization;

(B) the individuals who were members of the Incumbent Board immediately
prior to the execution of the agreement providing for such merger,
consolidation, or reorganization constitute at least two-thirds (2/3)
of the members of the board of directors of the Surviving Corporation,
or a corporation beneficially directly or indirectly owning a majority
of the Voting Securities of the Surviving Corporation; and

(C) no Person other than (i) the Company; (ii) any Subsidiary; (iii) any
employee benefit plan (or any trust forming a part thereof) maintained
by the Company, the Surviving Corporation, or any Subsidiary; or (iv)
any Person who, immediately prior to such merger, consolidation, or
reorganization had Beneficial Ownership of thirty percent (30%) or
more of the then outstanding Voting Securities, has Beneficial
Ownership of thirty percent (30%) or more of the combined voting
power of the Surviving Corporation's then outstanding Voting
Securities.

(ii) A complete liquidation or dissolution of the Company; or

(iii) An agreement for the sale or other disposition of all or substantially
all of the assets of the Company to any Person other than (x) a transfer
to a Subsidiary; or (y) a sale or transfer of a Subsidiary by the Company
except if such sale or transfer would be a sale or other disposition of
all or substantially all of the assets of the Company.

(d) Notwithstanding the foregoing, (i) a Change in Control shall not be
deemed to occur solely because any Person (the "Subject Person") acquired
Beneficial Ownership of more than the permitted amount of the then
outstanding Common Stock as a result of the acquisition of Shares by the
Company which, by reducing the number of Shares then outstanding,
increases the proportional number of shares beneficially owned by the
Subject Persons, provided that if a Change in Control would occur (but
for the operation of this sentence) as a result of the acquisition of
Shares by the Company, and after such stock acquisition by the Company,
the Subject Person becomes the Beneficial Owner of any additional Shares
which increases the percentage of the then outstanding Shares beneficially
owned by the Subject Person, then a Change in Control shall occur; and
(ii) a Change in Control shall not be deemed to occur unless and until all
regulatory approvals required to effect a Change in Control of the Company
have been obtained.

2.6 "CODE" means the Internal Revenue Code of 1986, as amended from time to
time.

2.7 "COMMITTEE" means the Compensation Committee of the Board, as specified
in Article 3 herein, or such other Committee appointed by the Board to
administer the Plan with respect to grants of Awards.

2.8 "COMPANY" means Black Hills Corporation, together with any and all
Subsidiaries, and any successor thereto as provided in Article 14 herein.

2.9 "DIRECTOR" means any individual who is a member of the Board of Directors
of the Company.

2.10 "DISABILITY" shall have the meaning ascribed to such term in the
Participant's governing long-term disability plan.

2.11 "EFFECTIVE DATE" shall have the meaning ascribed to such term in Section
1.1 hereof.

2.12 "EMPLOYEE" means any full-time, active employee of the Company.
Directors who are not employed by the Company shall not be considered Employees
under this Plan.

2.13 "EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended
from time to time, or any successor act thereto.

2.14 "FAIR MARKET VALUE" shall be determined on the basis of the closing sale
price on the principal securities exchange on which the Shares are traded or,
if there is no such sale on the relevant date, then on the last previous day on
which a sale was reported.

2.15 "INCENTIVE STOCK OPTION" or "ISO" means an option to purchase Shares
granted under Article 6 herein and which is designated as an Incentive Stock
Option and which is intended to meet the requirements of Code Section 422.

2.16 "INSIDER" shall mean an individual who is, on the relevant date, an
officer, director or ten percent (10%) beneficial owner of any class of the
Company's equity securities that is registered pursuant to Section 12 of the
Exchange Act, all as defined under Section 16 of the Exchange Act.

2.17 "NONEMPLOYEE DIRECTOR" means an individual who is a member of the Board
of Directors of the Company but who is not an Employee of the Company.

2.18 "NONQUALIFIED STOCK OPTION" or "NQSO" means an option to purchase Shares
granted under Article 6 herein and which is not intended to meet the
requirements of Code Section 422.

2.19 "OPTION" means an Incentive Stock Option or a Nonqualified Stock Option,
as described in Article 6 herein.

2.20 "OPTION PRICE" means the price at which a Share may be purchased by a
Participant pursuant to an Option.

2.21 "PARTICIPANT" means an Employee who has outstanding an Award granted
under the Plan. The term "Participant" shall not include Nonemployee Directors.

2.22 "PERSON" shall have the meaning ascribed to such term in Section 3(a)(9)
of the Exchange Act and used in Sections 13(d) and 14(d) thereof, including a
"group" as defined in Section 13(d) thereof.

2.23 "RETIREMENT" shall have the meaning ascribed to such term in the
Company's tax-qualified defined benefit retirement plan.

2.24 "SHARES" means the shares of Common Stock of the Company.

2.25 "SUBSIDIARY" means any corporation or other Person of which a majority
of its voting power or its voting equity securities ("Voting Securities") or
equity interest is owned, directly or indirectly, by the Company.

ARTICLE 3. ADMINISTRATION

3.1 THE COMMITTEE. The Plan shall be administered by the Compensation
Committee of the Board, or by any other Committee appointed by the Board, which
Committee shall satisfy the "disinterested administration" rules of Rule 16b-3
under the Exchange Act, or any successor provision. The members of the
Committee shall be appointed from time to time by, and shall serve at the
discretion of, the Board of Directors.

3.2 AUTHORITY OF THE COMMITTEE. Subject to the provisions herein, the
Committee shall have full power to select Employees who shall participate in
the Plan; determine the sizes and types of Awards; determine the terms and
conditions of Awards in a manner consistent with the Plan; construe and
interpret the Plan and any agreement or instrument entered into under the Plan
as they apply to Employees; establish, amend, or waive rules and regulations
for the Plan's administration as they apply to Employees; and (subject to the
provisions of Article 11 herein) amend the terms and conditions of any
outstanding Award to the extent such terms and conditions are within the
discretion of the Committee as provided in the Plan. Further, the Committee
shall make all other determinations which may be necessary or advisable for the
administration of the Plan, as the Plan applies to Employees. As permitted by
law, the Committee may delegate its authority as identified herein.

3.3 DECISIONS BINDING. All determinations and decisions made by the Committee
pursuant to the provisions of the Plan and all related orders and resolutions
of the Board shall be final, conclusive and binding on all persons, including
the Company, its shareholders, Employees, Participants, and their estates and
beneficiaries.

ARTICLE 4. SHARES SUBJECT TO THE PLAN

4.1 NUMBER OF SHARES AVAILABLE FOR GRANTS. Subject to adjustment as provided
in Section 4.3 herein, the number of Shares hereby reserved for issuance to
Participants under the Plan shall be two hundred thousand (200,000).

4.2 LAPSED AWARDS. If any Award granted under this Plan is canceled,
terminates, expires, or lapses for any reason any Shares subject to such Award
again shall be available for the grant of an Award under the Plan.

4.3 ADJUSTMENTS IN AUTHORIZED SHARES. In the event of any change in corporate
capitalization, such as a stock split, or a corporate transaction, such as any
merger, consolidation, separation, including a spin-off, or other distribution
of stock or property of the Company, any reorganization (whether or not such
reorganization comes within the definition of such term in Code Section 368) or
any partial or complete liquidation of the Company, such adjustment shall be
made in the number and class of Shares which may be delivered under Section
4.1, in the number and class of and/or price of Shares subject to outstanding
Awards granted under the Plan, as may be determined to be appropriate and
equitable by the Committee, in its sole discretion, to prevent dilution or
enlargement of rights; provided, however, that the number of Shares subject to
any Award shall always be a whole number.

ARTICLE 5. ELIGIBILITY AND PARTICIPATION

5.1 ELIGIBILITY. Persons eligible to participate in this Plan include all
Employees of the Company, including Employees who are members of the Board.

5.2 ACTUAL PARTICIPATION. Subject to the provisions of the Plan, the
Committee may, from time to time, select from all eligible Employees, those to
whom Awards shall be granted and shall determine the nature and amount of each
Award.

ARTICLE 6. STOCK OPTIONS

6.1 GRANT OF OPTIONS. Subject to the terms and provisions of the Plan,
Options may be granted to Participants in such number, and upon such terms, and
at any time and from time to time as shall be determined by the Committee.

6.2 AWARD AGREEMENT. Each Option grant shall be evidenced by an Award
Agreement that shall specify the Option Price, the duration of the Option, the
number of Shares to which the Option pertains, and such other provisions as the
Committee shall determine. The Award Agreement also shall specify whether the
Option is intended to be an ISO within the meaning of Code Section 422, or an
NQSO whose grant is intended not to fall under the provisions of Code
Section 422.

6.3 OPTION PRICE. The Option Price for each grant of an Option under this
Plan shall be at least equal to one hundred percent (100%) of the Fair Market
Value of a Share on the date the Option is granted or a higher amount.

6.4 DURATION OF OPTIONS. Each Option granted to an Employee shall expire at
such time as the Committee shall determine at the time of grant; provided,
however, that no Option shall be exercisable later than the tenth (10th)
anniversary date of its grant.

6.5 EXERCISE OF OPTIONS. Options granted under this Article 6 shall be
exercisable at such times and be subject to such restrictions and conditions as
the Committee shall in each instance approve, which need not be the same for
each grant or for each Participant.

6.6 PAYMENT. Options granted under this Article 6 shall be exercised by the
delivery of a written notice of exercise to the Company, setting forth the
number of Shares with respect to which the Option is to be exercised,
accompanied by full payment for the Shares.

The Option Price upon exercise of any Option shall be payable to the Company
in full either: (a) in cash or its equivalent, or (b) if permitted in the
governing Award Agreement, by tendering previously acquired Shares having an
aggregate Fair Market Value at the time of exercise equal to the total Option
Price (provided that the Shares which are tendered must have been held by the
Participant for at least six (6) months prior to their tender to satisfy the
Option Price), or (c) if permitted in the governing Award Agreement, by a
combination of (a) and (b).

As soon as practicable after receipt of a written notification of exercise
and full payment, the Company shall deliver to the Participant, in the
Participant's name, Share certificates in an appropriate amount based upon the
number of Shares purchased under the Option(s).

6.7 RESTRICTIONS ON SHARE TRANSFERABILITY. The Committee may impose such
restrictions on any Shares acquired pursuant to the exercise of an Option
granted under this Article 6 as it may deem advisable, including, without
limitation, restrictions under applicable Federal securities laws, under the
requirements of any stock exchange or market upon which such Shares are then
listed and/or traded, and under any blue sky or state securities laws
applicable to such Shares.

6.8 TERMINATION OF EMPLOYMENT. Each Participant's Option Award Agreement
shall set forth the extent to which the Participant shall have the right to
exercise the Option following termination of the Participant's employment with
the Company. Such provisions shall be determined in the sole discretion of the
Committee, shall be included in the Award Agreement entered into with each
Participant, need not be uniform among all Options issued pursuant to this
Article 6, and may reflect distinctions based on the reasons for termination of
employment.

6.9 NONTRANSFERABILITY OF OPTIONS.

(a) INCENTIVE STOCK OPTIONS. No ISO granted under the Plan may be sold,
transferred, pledged, assigned, or otherwise alienated or hypothecated,
other than by will or by the laws of descent and distribution. Further,
all ISOs granted to a Participant under the Plan shall be exercisable
during his or her lifetime only by such Participant.

(b) NONQUALIFIED STOCK OPTIONS. Except as otherwise provided in a
Participant's Award Agreement, no NQSO granted under this Article 6 may be
sold, transferred, pledged, assigned, or otherwise alienated or
hypothecated, other than by will or by the laws of descent and
distribution. Further, except as otherwise provided in a Participant's
Award Agreement, all NQSOs granted to a Participant under this Article 6
shall be exercisable during his or her lifetime only by such Participant.

ARTICLE 7. BENEFICIARY DESIGNATION

Each Participant under the Plan may, from time to time, name any beneficiary
or beneficiaries (who may be named contingently or successively) to whom any
benefit under the Plan is to be paid in case of his or her death before he or
she receives any or all of such benefit. Each such designation shall revoke all
prior designations by the same Participant, shall be in a form prescribed by
the Company, and will be effective only when filed by the Participant in
writing with the Company during the Participant's lifetime. In the absence of
any such designation, benefits remaining unpaid at the Participant's death
shall be paid to the Participant's estate.

ARTICLE 8. DEFERRALS

The Committee may permit or require a Participant to defer such Participant's
receipt of the payment of cash or the delivery of Shares that would otherwise
be due to such Participant by virtue of the exercise of an Option. If any such
deferral election is required or permitted, the Committee shall, in its sole
discretion, establish rules and procedures for such payment deferrals.

ARTICLE 9. RIGHTS OF EMPLOYEES

9.1 EMPLOYMENT. Nothing in the Plan shall interfere with or limit in any way
the right of the Company to terminate any Participant's employment at any time,
nor confer upon any Participant any right to continue in the employ of the
Company.

9.2 PARTICIPATION. No Employee shall have the right to be selected to receive
an Award under this Plan, or, having been so selected, to be selected to
receive a future Award.

ARTICLE 10. CHANGE IN CONTROL

10.1 TREATMENT OF OUTSTANDING AWARDS. Upon the occurrence of a Change in
Control, unless otherwise specifically prohibited under applicable laws, or by
the rules and regulations of any governing governmental agencies or national
securities exchanges, any and all Options granted hereunder shall become
immediately exercisable, and shall remain exercisable throughout their entire
term.

10.2 TERMINATION, AMENDMENT, AND MODIFICATIONS OF CHANGE-IN-CONTROL
PROVISIONS. Notwithstanding any other provision of this Plan or any Award
Agreement provision, the provisions of this Article 10 may not be terminated,
amended, or modified on or after the date of a Change in Control to affect
adversely any Award theretofore granted under the Plan without the prior
written consent of the Participant with respect to said Participant's
outstanding Awards.

ARTICLE 11. AMENDMENT, MODIFICATION, AND TERMINATION

11.1 AMENDMENT, MODIFICATION, AND TERMINATION. Subject to Section 10.2
herein, the Board may at any time and from time to time, alter, amend, suspend
or terminate the Plan in whole or in part; provided, however, that no amendment
which requires shareholder approval in order for the Plan to continue to comply
with Rule 16b-3 under the Exchange Act, including any successor to such Rule,
shall be effective unless such amendment shall be approved by the requisite
vote of shareholders of the Company entitled to vote thereon.

The Committee shall not have the authority to cancel outstanding Awards and
issue substitute Awards in replacement thereof.

11.2 ADJUSTMENT OF AWARDS UPON THE OCCURRENCE OF CERTAIN UNUSUAL OR
NONRECURRING EVENTS. The Committee may make adjustments in the terms and
conditions of, and the criteria included in, Awards in recognition of unusual
or nonrecurring events (including, without limitation, the events described in
Section 4.3 hereof) affecting the Company or the financial statements of the
Company or of changes in applicable laws, regulations, or accounting
principles, whenever the Committee determines that such adjustments are
appropriate in order to prevent dilution or enlargement of the benefits or
potential benefits intended to be made available under the Plan.

11.3 AWARDS PREVIOUSLY GRANTED. No termination, amendment, or modification of
the Plan shall adversely affect in any material way any Award previously
granted under the Plan, without the written consent of the Participant holding
such Award.

ARTICLE 12. WITHHOLDING

12.1 TAX WITHHOLDING. The Company shall have the power and the right to
deduct or withhold, or require a Participant to remit to the Company, an amount
sufficient to satisfy Federal, state, and local taxes, domestic or foreign,
required by law or regulation to be withheld with respect to any taxable event
arising as a result of this Plan.

12.2 SHARE WITHHOLDING. With respect to withholding required upon the
exercise of Options, Participants may elect, subject to the approval of the
Committee, to satisfy the withholding requirement, in whole or in part, by
having the Company withhold Shares having a Fair Market Value on the date the
tax is to be determined equal to the minimum statutory total tax which could be
withheld on the transaction. All such elections shall be irrevocable, made in
writing, signed by the Participant, and shall be subject to any restrictions or
limitations that the Committee, in its sole discretion, deems appropriate.

ARTICLE 13. INDEMNIFICATION

Each person who is or shall have been a member of the Committee, or of the
Board, shall be indemnified and held harmless by the Company against and from
any loss, cost, liability, or expense that may be imposed upon or reasonably
incurred by him or her in connection with or resulting from any claim, action,
suit, or proceeding to which he or she may be a party or in which he or she may
be involved by reason of any action taken or failure to act under the Plan and
against and from any and all amounts paid by him or her in settlement thereof,
with the Company's approval, or paid by him or her in satisfaction of any
judgement in any such action, suit, or proceeding against him or her, provided
he or she shall give the Company an opportunity, at its own expense, to handle
and defend the same before he or she undertakes to handle and defend it on his
or her own behalf. The foregoing right of indemnification shall not be
exclusive of any other rights of indemnification to which such persons may be
entitled under the Company's Articles of Incorporation or Bylaws, as a matter
of law, or otherwise, or any power that the Company may have to indemnify them
or hold them harmless.

ARTICLE 14. SUCCESSORS

All obligations of the Company under the Plan with respect to Awards granted
hereunder shall be binding on any successor to the Company, whether the
existence of such successor is the result of a direct or indirect purchase, of
all or substantially all of the business and/or assets of the Company, or a
merger, consolidation, or otherwise.

ARTICLE 15. LEGAL CONSTRUCTION

15.1 GENDER AND NUMBER. Except where otherwise indicated by the context, any
masculine term used herein also shall include the feminine; the plural shall
include the singular and the singular shall include the plural.

15.2 SEVERABILITY. In the event any provision of the Plan shall be held
illegal or invalid for any reason, the illegality or invalidity shall not
affect the remaining parts of the Plan, and the Plan shall be construed and
enforced as if the illegal or invalid provision had not been included.

15.3 REQUIREMENTS OF LAW. The granting of Awards and the issuance of Shares
under the Plan shall be subject to all applicable laws, rules, and regulations,
and to such approvals by any governmental agencies or national securities
exchanges as may be required.

15.4 SECURITIES LAW COMPLIANCE. With respect to Insiders, transactions under
this Plan are intended to comply with all applicable conditions of Rule 16b-3
or its successors under the Exchange Act. To the extent any provision of the
plan or action by the Committee fails to so comply, it shall be deemed null and
void, to the extent permitted by law and deemed advisable by the Committee.

15.5 GOVERNING LAW. To the extent not preempted by Federal law, the Plan, and
all agreements hereunder, shall be construed in accordance with and governed by
the laws of the state of South Dakota.

PROXY CARD

THIS PROXY, IS SOLICITED BYON BEHALF OF THE BOARD OF DIRECTORS, WILL BE VOTED AS
DIRECTED. IF NO DIRECTION TO THE CONTRARY IS INDICATED IT WILL BE VOTED IN
ACCORDANCE WITH THE BOARD OF DIRECTORS' RECOMMENDATIONS.

Dated:_________________________________________

______________________________________________
(Signature)

Please sign exactly as name(s) appear to the left. When signing in
fiduciary or representative capacity, please add your full title. If shares
are registered in more than one name, all holders must sign. If the
signature is for a corporation, the handwritten signature and title of an
authorized officer are required, together with the full corporate name.

PLEASE COMPLETE, DATE, SIGN AND MAIL THIS PROXY IN THE ENCLOSED
POSTAGE PAID ENVELOPE.

BLACK HILLS CORPORATION

PROXY FOR USE AT THE ANNUAL MEETING OF STOCKHOLDERS OF THE COMPANY
TO BE HELDSHAREHOLDERS, MAY 23, 1995 AT21, 1996 at 9:30 A.M.

The undersigned hereby appoints Daniel P. Landguth, Dale E. Clement and David
E. Morrill, and any one or more of them, proxy attorneys, with full
substitution and revocation in each, for and on behalf of the undersigned,
and with all powers the undersigned would posess if personally present, to vote at the above Annual Meeting and any adjournment thereof all shares of Common Stock of the
undersigned at the Annual Meeting of Shareholders of Black Hills Corporation that the undersigned wouldto
be entitledheld on Tuesday, May 21, 1996 at 9:30 A.M., or at any adjournment thereof,
as follows:

1. Election of Class I Directors

Glenn C. Barber, Bruce B. Brundage, WITHHELD
Kay S. Jorgensen ___ FOR ___ AUTHORITY

(To withhold authority to vote at such meeting.

PLEASE MARK THIS PROXY AS INDICATED ON THE REVERSE SIDE TO VOTE ON
ANY ITEM. IF YOU WISH TO VOTE IN ACCORDANCE WITH THE BOARD OF DIRECTORS'
RECOMMENDATION, PLEASE SIGN THE REVERSE SIDE; NO BOXES NEED TO BE CHECKED.

COMMENT/ADDRESS CHANGE: PLEASE MARK COMMENT/ADDRESS BOX ON REVERSE SIDE
(Continued and to be signed on other side)

Back of Proxy Card X Please mark your votes this way

----------- ----------------------------
COMMON DIVIDEND REINVESTMENT SHARES

The Board of Directors recommends a vote FOR Items 1,2, and 3.

WITHHELD
FOR FOR ALL
Item 1-ELECTION OF CLASS III DIRECTORS
Nominees:
Kirk E. Dean
Michael B. Enzi
Everett E. Hoyt

WITHHELD FOR: (Write thatfor any individual nominee, write the
nominee's name in the space provided below).
(Tobelow. To cumulate votes so indicate)

Item 2-TO CONSIDER AND ACT UPON AN AMENDMENT
TO THE EMPLOYEE STOCK PURCHASE PLAN TO ALLOW
THE ISSUANCE OF AN ADDITIONAL 200,000 SHARES
PURSUANT TO THE PLAN.

Item 3-RATIFY THE APPOINTMENT OF ARTHUR
ANDERSEN LLP TO SERVE AS THE COMPANY'S
INDEPENDENT AUDITORS IN 1995.

Item 4-PROXY ATTORNEYS ARE AUTHORIZED AT
THEIR DISCRETION TO VOTE UPON SUCH OTHER
BUSINESS AS MAY PROPERLY COME BEFORE THE
MEETING.

I PLAN TO ATTEND MEETING

COMMENTS/ADDRESS CHANGE
Please mark this box if you have
written comments/address change onindicate.)

_____________________________________________________________________________

2. Approve the reverse side Black Hills Corporation
1996 Stock Option Plan ___ FOR ___ AGAINST ___ ABSTAIN

3. Ratify the appointment of Arthur
Andersen LLP to serve as Administrator under the
Company's Dividend
Reinvestment and Stock Purchase Plan,independent auditors
in 1996 ___ FOR ___ AGAINST ___ ABSTAIN

If any other business is instructed to execute a proxy
with identical instructions, forbrought before the Meeting or any shares held for my benefit.

Signature(s) Date -----------------

Please mark, date and sign as your account name appears and returnadjournment(s)
thereof, this Proxy will be voted in the enclosed envelope. If acting as executor, administrator, trustee, guardian,
etc., you should indicate same when signing. Ifdiscretion of the signer is a corporation
or partnership, please sign the full corporate or partnership name by
authorized officer or person. If shares are held jointly, each stockholder
should sign.Appointed Proxies.

THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR ELECTING EACH OF THE DIRECTORS AND
FOR PROPOSALS 2 AND 3.