Good day ladies and gentlemen and welcome to the Black Hills Corporation 2010 second quarter earnings conference call. My name is [Latasha] and I will be your coordinator for today. At this time all participants are in a listen-only mode. Following the prepared remarks, there will be a question-and-answer session. (Operator Instructions) As a reminder this conference is being recorded for replay purposes. I would now like to turn the presentation to Mr. Jason Ketchum, Director of Investor Relations of Black Hills Corporation, please proceed sir.

Thank you [Latasha], good morning everyone and welcome to the Black Hills second quarter 2010 earnings call. With me today are Dave Emery, Chairman and CEO and Tony Cleberg, CFO. Before I turn the call over I need to remind you that during the course of this call some of the comments we make may contain forward-looking statements as defined by the Securities and Exchange Commission and there are a number of uncertainties [Indiscernible]. Although we believe that our expectations and beliefs are based on reasonable assumptions, actual results may differ materially. We direct you to our earnings release slide 2 of the Investor Presentation on our website and our most recent form 10-K and form 10-Q filed with the Securities and Exchange Commission for a list of some of the factors that could cause future results to differ materially from our expectations. I will now turn the call over to Dave Emery.

Alright, thank you Jason. Good morning everyone thanks for joining us. Before we discuss the quarter I’d like to first take a minute or two and explain some of the formatting changes we’ve made to our quarter earnings press release. For the past several years, as all of you are aware we’ve been extremely busy at Black Hills and as a result we’ve had a lot of--I’ll call it special activities so buying, selling, major construction projects, [Indiscernible] integration activities and the like. We’ve received a lot of feedback from you, our investors stating that all of those special or unique, one time non-recurring type of activities make it very hard to determine the actual performance of our ongoing operating businesses. Last year, Tony in his financial portion of the presentation started including a reconciliation of those special items and we received a lot of positive feedback on that reconciliation that we’d included in the web cast presentation portion of our materials. So you may have noticed that yesterday in the press release we made a change for the second quarter and that’s one that one that we intend to continue going forward in our quarterly earnings releases. We will present the adjusted earnings numbers first. They are non-GAAP measure but we do believe they give a more meaningful representation of the ongoing earnings potential of the business. Then we’ll also of course provide the GAAP numbers and in additional we’ll provide a table with the specific reconciliation of the GAAP to non-GAAP or adjusted numbers. You can see the details of all the special items and their related impact on earnings. Obviously the intent of this change in format is to make our earnings numbers more transparent and easily understood. As usual we love to have feedback on our…

Thank you Dave, good morning. Since our last quarterly call we’ve been focused on a number of initiatives and more importantly we’ve accomplished a number of key milestones that position us for continued earnings growth. From an earnings standpoint the second quarter had the large mark to market decline in our interest rates swaps which overshadows the 19% improvement that we saw in operating income. In addition, the extended outage at Wygen I cost us more in repair expenses and reduced our expected coal sales. So even though coal sales went up, they didn’t go up quite as much as what we would have like them to. Moving to slide 10 I have included a quarterly EPS analysis and this is consistent with past quarters. We’ve adjusted our income from continuing operations to display the impact of special items recorded during each quarter. This slide displays five quarters with the second quarter amounts designated for 2009 and 2010 in the two outside box columns. The only adjustment to the second quarter 2010 was a $0.41 addition for an unrealized loss on interest rate swap. So income from continuing operations as adjusted was $0.19 which compares to $0.18 in 2009. Last year we included a $0.53 subtraction for an unrealized gain on the same interest rates swaps and a $0.07 addition for a couple of non-routine costs. The trailing fourth quarters now adds to $1.65. Moving to slide 11, here we display our income statement for the second quarter of 2010 and 2009. Highlights include 19% increase in operating income year over year and this was driven by an improved performance of $5.2 million in the Electric Utilities. The gas utilities and non-regulator businesses were generally flat year over year but there were some fluctuations among the segments that I’ll describe…

Alright, thank you, Tony. Moving on to slide 16, as Tony mentioned, we’ve got a very solid balance sheet, very strong cash flows demonstrated access to the capital markets and on top of that, excellent growth plans with 2010 capital budget forecast of up 477 million. We’re making a lot of investments that will provide future growth for us in the future. Slide 17 is something we’ve been showing you for a couple of years now, and this gives you an idea of our growth capital investments, not including routine things like new customer hook ups or maintenance or overhauls; things like that. Between 2008 and 2011, we’re forecasting almost 1.1 billion in growth capital spending; very large number, very positive impact for the future. The only change of significant sum is slide from previous quarters is the Black Hills Energy Colorado electric generation facility. We’ve nailed that range from 240 to 260 million, down to 250 to 260 as we’ve continued making progress on executing procurement contracts and construction contracts and taking more of the uncertainty out of that project. The next slide, number 18 is just a timeline of events, notable changes there just include [audio break] a few items have been completed or we’ve reached significant milestones on a few projects in the last quarter as we’ve discussed already. On slide 19 is an update on the Colorado electric generation and this will be the utility plant; 180 megawatt facility that we intend to rate base in our Colorado electric utility, had significant progress on that project as I mentioned at the beginning of the call after receiving our air permit we immediately started construction. Prior to receiving the air permit, we did as much work essentially outside the fence as we could, access roads, site grading,…

Ladies and gentlemen, we are ready to open the line up for your questions. (Operator instructions). As a reminder, in order to get as many questions answered as possible, we ask the participants to reenter the queue after asking one initial question and one follow up question. Please stand by for your first question. And your first question comes from the line of Gordon Howald with East Shore Partners. Please proceed.

Good morning all.

Good morning, Gordon.

At Enserco, you have the new coal team, you noted that you had a long position which was additive in the quarter and that you’re now in the process of monetizing. You said you typically don’t keep an open position like that. What was the VaR limits had in Enserco, what are they now with this new team? Where were you relative to your VaR, I guess, is really the question, during the second quarter? And lastly, we’ve seen strong coal pricing of late and I believe that includes PRB, how should we think about the impact of stronger coal prices on that coal position in the third quarter?

Our VaR, Gordon, we have not changed. The overall VaR limit at Enserco in a relatively low VaR limit there so we have not anticipated a change in the VaR with the addition of the coal marketing business, so we don’t expect to carry significant long positions there. It was just essentially related to the timing of when the business was bought and sold, where prior owner had accumulated some positions and then essentially stopped doing business -- not completely stopped but slowed way down right prior to closing and so they’d acquired some coal and had not been getting that coal into utilities and other customers. So essentially, it provided an open position right at closing and coal prices moved up substantially during June. We don’t anticipate that that business is going to have a huge impact on Enserco in the short run. We’ve said when we acquired it, it’ll gradually have an increased impact to earnings, very characteristic and similar, I guess, in characteristics to how our producer services part of that business will operate, more fee based, not really trading in market speculation, it’s buy the coal and resell it, and we do provide some logistical services there for some of the smaller customers where they may buy coal and want someone to deal with rail shipment, particularly if they don’t have a whole unit train for themselves, so we provide that service for a fee but don’t really expect -- at least this year and into next year, a real meaningful positive impact to the income statement on a cash and actual realized income basis. This particular quarter was very unique with the open position in the mark to market gain on that position, which of course we will close out at a profit, but don’t really anticipate that type of business being part of the ongoing activity there.

Got you. Okay, I appreciate the answer. Thank you.

Your next question comes from the line of Ella Vuernick with RBC Capital Markets. Please proceed.

Good morning. I’d appreciate some greater clarity and insight into the oil and gas business. You have mentioned in the press release that the volumes were down marginally due to some natural declines because of the current CapEx level, but you also mentioned that you’re looking to opportunistically grow your position, if I understand correctly in the Bakken. So can we infer from that that you have perhaps an updated outlook in terms of your view on commodity prices and their impacts for CapEx in oil and gas?

Yeah, I wouldn’t infer that we’ve changed our outlook Ella. I think the -- if you look at the product prices, oil prices are relatively strong and they support drilling in certain areas like the Bakken and Powder River Basin and other areas, so to the extent, we have holdings -- are involved in those plays. They are the ones that essentially rise to the top as far as the ones that you can justify today economically because oil prices are relatively positive compared to natural gas. The activity that we have has expanded, but it’s on a relative basis. If you look at last year, we spent about 20 million in E&P and that’s what’s impacting our production for this year. The wells that would have been drilled and completed last year are the ones that would have started producing late last year and early this year so that’s -- the majority of the impact of decline is related to very little drilling activity last year. This year, our disclosed budget is a little under $40 million for E&P so -- although it’s double last year, it’s still a relatively modest level of investment so I wouldn’t say we’re signaling any change over what we have in prior quarters.

Thanks for that clarification. Also, just to clarify, at coal mining, the change in the overburden process, is that a permanent change, is that something that we can -- in other words, should we be expecting a decrease in the run rate for O&M at that business on an ongoing basis due to this new procedure?

There will be a slight change in expense going forward because it affects the post mining topography plan, so all of our ongoing activity there will be some impact; a positive impact related to that change -- probably not quite as dramatic as the first one.

So this quarter was higher than -- the impact of that change was higher this quarter than in future quarters this year?

Probably a little bit more, yeah.

Okay, great. That’s all my questions. Thanks very much.

Thank you.

(Operator instructions).

Alright, it doesn’t sound like we have any additional questions. Thank you for attending the call this morning and as always, we appreciate your support of Black Hills, have a good day. Thank you.

This concludes the presentation, you may all now disconnect. Good day.