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Black Hills Acquires Xcel Energy's Wyoming Utility

Black Hills Acquires Xcel Energy's Wyoming Utility

Black Hills Corp. and Xcel Energy Inc. announced late Tuesday that they have entered into an agreement where Black Hills will acquire Cheyenne Light, Fuel & Power (CLF&P) from Xcel, pending regulatory approval by the Federal Energy Regulatory Commission and the Wyoming Public Service Commission. Terms of the transaction were not disclosed.

CLF&P is a utility serving residential, commercial and industrial energy consumers in Cheyenne, WY. The utility currently has approximately 38,000 electric customers and 30,000 gas customers. Its peak electric load is 156 MW, and power is provided under an all-requirements contract with Public Service Company of Colorado, which extends through 2007. Annual natural gas distribution and transportation is approximately 4.8 million MMBtu.

An Xcel spokesman said the Cheyenne sale came as a result of Xcel looking at its core businesses and seeing what operations fit within its strategy moving forward.

While the companies were keeping mum on the price, Black Hills noted that the purchase price is expected to approximate Xcel Energy's book value. The companies added that they expect the deal to be closed by the end of 2004.

"The proposed acquisition of Cheyenne Light, Fuel & Power is an excellent expansion of our regulated utility operations," said Daniel P. Landguth, CEO of Black Hills. "Adding significantly to our retail presence in Wyoming augments our diversified energy activities in the state. We currently mine coal in the Powder River Basin, and produce oil and natural gas. We also generate electric power at two Wyoming sites for wholesale customers in Wyoming, South Dakota, Montana, Nebraska and Colorado, and for utility customers in Wyoming, South Dakota and Montana."

Xcel Energy said it expects to record a one-time gain of approximately 1 cent per share upon completion of the transaction. CLF&P contributed less than 1 cent per share to Xcel Energy's annual earnings.

"Cheyenne Light Fuel & Power has been an important part of our system for many years," said Richard C. Kelly, Xcel Energy's president. "This change in ownership will be largely transparent to the customer. Black Hills is a highly regarded utility and will continue to offer quality service to customers in the area."

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