Grandfather Amendment to the Pension Equalization Plan of Black Hills Corporation

Exhibit 10.2

Grandfather Amendment

to the

Pension Equalization Plan

of Black Hills Corporation

Pursuant to action taken by the Board of Directors of Black Hills Corporation, Paragraph 1 of the Pension Equalization Plan of Black Hills Corporation (“Plan”) is hereby amended to add the following paragraphs, effective January 1, 2005:

Notwithstanding any provision of this Plan to the contrary, the portion of the Plan that applies to the PEP Benefits, as generally defined in paragraph 5, of each employee who was a Participant under this Plan on December 31, 2004 to which the Participant had a legally binding right and whose right to such benefits was earned and vested before January 1, 2005, as determined under Section 409A of the Code and the regulations issued thereunder, shall be treated as “grandfathered” and exempt from the provisions of Section 409A of the Code. Effective October 3, 2004, in no event shall any amendment or other change to the PEP Benefit provisions of this Plan cause a material modification of such provisions,