Missouri River Energy Services and Member Attachment O Customer Meeting August 25, 2017 Terry Wolf, Manager of Transmission Services

Agenda Meeting Purpose MRES Profile MRES and MMU True-up for 2016 MRES member historical rate information Question/Answer

Meeting Purpose MRES background Regulatory Changes / Timelines MRES and MMU specific rate information MRES true-up info on Attachment O/GG/M from 2016. MMU true-up info on Attachment O from 2016. True-up from 2016 along with forecast for 2018 will be incorporated into rates to be effective on January 1, 2018. MRES member rate information ALP Utilities (ALP), Benson Municipal Utilities (BMU), Detroit Lakes Public Utilities (DLPU), Hutchinson Utilities Commission (HUC), and Worthington Public Utilities (WPU).

Worthington Wind Project Red Rock Hydroelectric Plant 60 Members served Transmission: ~362 miles Generation: ~740 MW Renewable: ~86 MW Missouri River Energy Services Odin Wind Project Worthington Wind Project Marshall Wind Project Laramie River Station Exira Station Watertown Power Plant Missouri River Yellowstone River Big Horn River Canyon Ferry Dam Fort Peck Dam Yellowtail Dam Garrison Dam Oahe Dam Big Bend Dam Fort Randall Dam Gavin’s Point Dam Rugby Wind Project Point Beach Nuclear Plant Red Rock Hydroelectric Plant MBPP Irv Simmons CapX Fargo Brookings ITA MRES Member MRES Generation Resource Planned MRES Generation Resource Federal Hydroelectric Dam Transmission Projects (MBPP, Irv Simmons, ITA, CapX (Fargo, Brookings)

MRES FERC Background Transmission facilities are owned by Western Minnesota Municipal Power Agency (WMMPA) FERC Declaratory Order (EL08-22, 12/08) combines financial statements for ATRR Attachment O effective 6/1/11 Incentive filing (EL11-45, 6/11) CapX; Fargo P2 & P3, and Brookings CWIP, Abandon Plant, Hypothetical cap structure 205 filing (ER12-351, 11/11) FERC Approved ER12-351, and EL 11-45 on January 20, 2012

Regulatory / FERC Issues Complaint against MISO TOs regarding ROE and certain TOs regarding capital structure (EL15-45) Unknown timing and impacts Resolved in 2017?? MRES filed for direct assignment of property taxes (ER17-1515) FERC accepted 7/25/17 MRES will implement for 2018 FLTY MRES will perform 2 True-ups for 2017; 1 with changes, 1 without Does not impact 2016 True-up

Regulatory / FERC Issues, Procedures and Timing cont. By June 1st Post actual calculations and true-ups based on prior year’s Rate Information By September 1st Meet with Interested Parties to discuss the actual prior year’s Rate information By October 1st Post FLTY info for MRES and MMU December 1st Deadline for information requests By January 10th Must respond to information requests January 31st Deadline for informal challenges March 15th Annual Informational filing March 31st Deadline for formal challenges

True-up of Attachment O / GG / MM MRES and MMU MMU doesn’t have any GG or MM costs Forward Rate Requirements Rate Base Operating Expenses Revenue Requirement and Rate Network Rate Summary

MRES 2016 True-Up Adjustment Overview Actual Projected Difference Net Revenue Requirement $4,922,271 $6,190,292 $1,268,021 (a) Divisor True-Up Divisor (kW) 682,133 680,773 (1,360) Projected Rate ($/kW/Yr) $9.093 True-Up (Divisor Difference x Projected Rate) ($12,366) (b) Interest - (a+b) * interest rate $89,115 (c) Total 2016 True-Up Adjustment (Under Recovery) $1,369,502 (a+b+c)

2016 MRES Annual Transmission Revenue Requirement Distribution MRES Total ATRR Attachment O, GG, MM $19,133,645 Attachment O $4,922,271 25.7% $4,834,860 (After True-up) MISO Attachment GG CapX Fargo $9,490,269 49.6% Attachment MM CapX Brookings $4,721,105 24.7%

MRES member Attachment O Information MRES is MISO TO on behalf of 6 MRES members MRES is contact for any initial questions Standard MISO templates for 5, and FLTY for 1 OTP Zone ALP – Prior Year BMU – 1 Year Lag DLPU– 1 Year Lag GRE Zone – HUC - Prior Year ITC-M Zone - WPU– 1 Year Lag NSP Zone – MMU - FLTY

MMU 2016 True-Up Adjustment Overview Actual Projected Difference Net Revenue Requirement $2,014,184 $2,056,792 $(42,608) (a) Divisor True-Up Divisor 76,308 81,166 4,858 Projected Rate ($/kW/Yr) $25.3406 True-Up (Divisor Difference x Projected Rate) $123,105 (b) Interest ((a + b) * interest rate) $5,680 (c) Total 2016 True-Up Adjustment (Under Recovery) $86,177 (a+b+c)

Revenue Requirements for 2016 TU / 2017 ALP BMU DLPU HUC MMU WPU Net Attachment O Revenue Requirement $ 274,806 $ 77,944 $ 285,665 $ 1,013,483 $ 2,014,184 $ 423,781

Questions If you have any questions after the meeting, please submit via e-mail to Terry Wolf: twolf@mrenergy.com All questions and answers will be posted on the MRES OASIS website along with any follow-up questions received within two weeks from the date of inquiry on the OASIS site. (http://oasis.midwestiso.org/OASIS/MRET )