March 1, 2011

Mr. Kyle Kohne

Chair, Technical Studies Subcommittee

Bonneville Power Administration

PO Box 491 MS

Vancouver, WA98666

Mr. Kent Bolton

WECC Technical Staff

University of UtahResearchPark

615 Arapeen Drive, Suite 210

Salt Lake City, UT 84108-1288

2011 ANNUAL PROGRESS REPORT

In accordance with reporting guidelines by the WECC Planning Coordinating Committee

(PCC), please find attached Black Hills Power’s 2011 Annual Progress Report on significant additions and changes to our system. The projects included in the report have no significant impacts on the WECC interconnected system. Please contact me if you have any questions or concerns.

Sincerely,

Wes R. Wingen

Transmission Planning Engineer

Improving life with energy

Minnekhata 230 kV Substation:

The Minnekhata 230 kV substation isrequired to provide additional 230:69 kV transformation capacity in the southern Black Hills. The station will tap the existing Westhill-Osage 230 kV line approximately 9.7 miles from the Westhill substation and will include a 70 MVA 230:69 kV transformer. Reliability analysis for this project was initially performed as part of the 2008 BHBE LTP Study. Construction on the substation is scheduled to begin in 2010 and is expected to be complete in Q3 2011. There are no updates to this project from the 2010 Progress Report submittal.

St. Onge 230 kV Substation:

The St. Onge 230 kV substation isrequired to provide additional 230:69 kV transformation capacity in the northern Black Hills. The station will tap the existing Lange-Lookout 230 kV line approximately 10 miles from the Lookout substation and will include a 150 MVA 230:69 kV transformer. Reliability analysis for this project was initially performed as part of the 2008 BHBE LTP Study. Construction on the substation has been delayed and is now scheduled to begin in 2013 and is expected to be complete in 2014. The one-year delay is the only change to this project from the 2010 Progress Report submittal.

Wygen3 Generation Project:

The Wygen3 Generation Project consists of the addition of mine mouth coal-fired generation at the Wyodak generation complex near Gillette, Wyoming. The addition adds a 110 MW air-cooled steam unit at the site, and will interconnect to the Donkey Creek 230 kV substation via 13.8:230 kV step-up transformer. The Wygen3 unit began construction in 2008 and was placed into commercial operation in 2010.

Pumpkin Buttes-Windstar 230 kV Transmission Line:

The Pumpkin Buttes-Windstar 230 kV line consists of approximately 60 miles of 1272 ACSR ‘Bittern’ conductor on wood H-frame poles. The line was constructed to provide needed Common Use System(CUS) transmission capacity, accommodate projected load growth, andincrease Wyodak area stability margins. The Pumpkin Buttes-Windstar line was placed into service in 2010.

Teckla-Osage 230 kV Transmission Line:

The Teckla-Osage 230 kV line will consist of approximately 60 miles of 1272 ACSR ‘Bittern’ conductor on H-frame poles. The line will be constructed to provide needed Common Use System (CUS) transmission capacity, accommodate projected load growth, and increase Wyodak area stability margins. Reliability analysis for this project was initially performed as part of the 2008 BHBE LTP Study. The Teckla-Osage line construction was delayed and is now scheduled to begin in 2013, and is expected to be complete in 2014. The construction delay was the only change to this project from the 2010 Progress Report submittal.

Osage-Lange 230 kV Transmission Line:

The Osage-Lange 230 kV line will consist of approximately 75 miles of 1272 ACSR ‘Bittern’ conductor on H-frame poles. The line will be constructed to provide needed Common Use System (CUS) transmission capacity and provide an additional path to the Rapid City load center. Reliability analysis for this project was initially performed as part of the 2008 BHBE LTP Study as specified in Attachment K to the BHBE OATT. The Osage-Lange line construction was delayed and is now scheduled to begin in 2013. The project is still expected to be complete in 2015. The delay in the construction start date is the only change to this project from the 2010 Progress Report submittal.

Reno Junction 200 MW Wind Farm:

The Reno Junction Wind Farm is a proposed generation project consisting of one hundred thirty-four (134) GE 1.5 MW wind turbines. The generation project will interconnect to the Pumpkin Buttes 230 kV substation via a radial 230 kV line. The project has an executed LGIA that is under suspension. There are no changes to the status of this project from the 2010 Progress Report submittal.

Weston Wind I 250.7 MW Wind Farm:

The Weston Wind I Wind Farm is a proposed generation project consisting of one hundred nine (109) Siemens SWT-2.3-93 2.3 MW wind turbines. The generation project will interconnect to a new substation on the Wyodak-Osage 230 kV line approximately 6 miles northwest of the existing Osage power plant in Weston County, Wyoming. The customer has completed the System Impact Study phase, and a Facilities Study Agreement has been tendered. The SIS report for this project is included to be considered the Comprehensive Progress Report.