City of Mahnomen February 16, 2016

Otter Tail Power Company's mission: To produce and deliver electricity as reliably, economically, and environmentally responsibly as possible to the balanced benefit of customers, shareholders, and employees and to improve the quality of life in the areas in which we do business. 2

Integrity - We conduct business responsibly and honestly. We accomplish our mission by making decisions based on our company's five core values: Integrity - We conduct business responsibly and honestly. Safety - We provide safe workplaces and require safe work practices. Customer focus - We provide reliable electricity and timely, courteous customer service. Resourcefulness - We draw on the ingenuity and expertise of various resources to create strategic, balanced plans. Community - We improve the quality of life in the areas in which we do business. 3

Mahnomen 4

Generation mix 5

Wind power We own or purchase more than 245 MW of installed capacity, or about 19 percent of our retail sales, from wind farms in North Dakota, Minnesota, and South Dakota. Our most recently approved integrated resource plan allows adding up to 300 MW of cost-effective wind-generated electricity in the 2017 to 2021 timeframe. 6

Wind power Minnesota North Dakota South Dakota 4.0 MW (purchased) ND Wind II (Edgeley) 21 MW (purchased) Langdon Wind Energy Center 40.5 MW (owned) 19.5 MW (purchased) Ashtabula Wind Energy Center 48.0 MW (owned) Luverne Wind Farm 49.5 MW (owned) Ashtabula II Wind Energy Center 62.4 MW (purchased) 7

TailWinds Since 2002 our TailWinds program has been available to commercial and residential customers who are interested in supporting an even greater level of company investment in wind energy technologies. In 2014 the 474 customers who were enrolled in TailWinds purchased 182,600 kilowatt-hours of wind-generated electricity each month in 100-kwh blocks. 8

Solar Power In 2013 Minnesota legislators enacted a solar energy standard that requires investor-owned utilities to supply 1.5% of their Minnesota retail electric sales with solar energy by 2020. Our Integrated Resource Plan calls for 28 MW of installed solar generation, which will comply with this standard. We'll meet most of the standard with a utility-scale solar installation. As required, we expect to meet at least 10 percent of the 1.5% with solar photovoltaic installations that are 20 kw or smaller. 9

Big Stone Plant Air-Quality Control System In April 2013, we launched a three-year $384 million project at Big Stone Plant to install a new air-quality control system (AQCS) to comply with EPA and state requirements. The project was completed and the system was operational in mid-2015, under budget and almost two years ahead of the spring 2017 deadline. The result is a 90% decrease in sulfur dioxide (SO2) and nitrous oxides (NO2) emissions and a more than 80% decrease in mercury emmission. 10

Energy efficiency Our Minnesota Conservation Improvement Program (CIP) offers customers the opportunity to save energy and money. Benefits extend to all customers through deferred utility infrastructure investments and less energy consumed. During 2014, we invested more than $5.18 million in CIP (1.62% of our annual sales), and returned more than $31.2 million in lifetime benefits to customers. 11

Energy efficiency programs Energy-efficient lighting Heat pump rebates Energy efficient equipment grants Motor and adjustable-speed drive rebates Industrial process efficiency CoolSavings air conditioning cycling Appliance recycling House therapy Student energy kits Energy feedback 12

Reliability We work hard to minimize the frequency and duration of service interruptions. As part of a long-term reliability strategy, we perform critical analyses of our transmission and distribution systems to identify areas requiring proactive maintenance. Here are our 2013 and 2014 storm-normalized reliability results as recorded by our interruption monitoring system. 13

Reliability System Average Interruption Frequency Index (SAIFI): The number of interruptions lasting five minutes or more that an average customer experienced during the year. SAIFI 2013 2014 Goal < 1.4 < 1.33 Actual 1.27 1.24 14

Reliability Customer Average Interruption Duration Index (CAIDI)—The average length of time that a customer was without service during an interruption. CAIDI 2013 2014 Goal < 57.14 minutes < 60 minutes Actual 78.6 minutes 59.93 minutes 15

2014 ACSI Relationship survey results Otter Tail Power Company 85 Highest-rated electric or dual electric/gas IOU in the comparison group 81 Industry average 75 Lowest-rated electric or dual electric/gas IOU 69 16

2014 Transaction survey results Overall contact experience satisfaction (10-pt scale) - Mean 9.1 Overall Customer Service Representative handling satisfaction (10-pt scale) - Mean 9.3 Concern resolved (Yes) 91% First-contact resolution (resolved in first contact) 82% Overall quality of service (scores 4 and 5 on a 5-pt scale) 91.1% 17

Charitable contributions Through our Community Connections giving programs, we donate to the following areas: Education Workforce Development Health and Human Services Arts and Culture Community Enhancement Environmental Stewardship 18

Charitable contributions Not only does our company support our communities, but our employees choose to contribute as well. Through several campaigns held throughout the year, we are helping to make our communities better places to work and to live. 19

Charitable contributions Community connections donations $377,660 Customer Service Center and other donations $176,603 United Way Campaign $39,000 Employee contributions $24,000 Company contributions $15,000 Children’s Miracle Network $7,565 $4,565 $3,000 Total 2014 charitable contributions $600,828 20

Economic development We positively impact the communities we serve by using local vendors when appropriate. The table below details our 2014 expenditures with vendors in our tri-state service area. Percentage of total Minnesota $174,918,000 37% North Dakota $107,014,000 22% South Dakota $9,272,000 2% Total for local vendors $291,204,000 61% 2014 total payments to all vendors $474,364,000 21

Economic development We continued our role as a corporate citizen by making the following economic impact in 2014. Property taxes paid to local jurisdictions $12,606,000 Wages and benefits paid to utility employees $90,830,000 Common dividends paid to shareholders $35,408,000 Interest paid $23,254,000 Amount paid to suppliers and vendors $474,364,000 2014 total direct economic value generated $636,462,000 22

2014 Average Rate Comparisons (cents/kwh) Manageable rates 2014 Average Rate Comparisons (cents/kwh) Residential Commercial Industrial North Dakota state average 8.91 8.81 7.28 Otter Tail Power Company 8.05 8.15 6.82 Minnesota state average 11.78 9.21 6.70 8.86 8.63 6.29 South Dakota state average 10.36 9.32 6.44 8.34 8.13 6.13 United States average 12.56 10.71 7.10 Otter Tail Power Company total system 8.43 8.37 6.47 Mahnomen Overall 6.72 23

Manageable Rates 24

New Customer Information System Our Customer Information System (CIS) performs billing, processed payments, and manages customer account information such as account balances, payment programs, and participation in demand-side management programs. We are in the process of implementing a newer system that is capable of billing increasingly complex rates, providing better workflow, integrating more easily with other systems, and ultimately offering more electronic options to our customers. Targeted implementation date is 2018. 25

Otter Tail Power Company / Mahnomen Highly competitive rates High-quality reliable service Long-term business/community relationships We believe it is in the best interests of our customers in Mahnomen to continue our relationship. 26

Questions? 27