SMMPA Attachment O 2017 Annual Meeting Transmission Formula Rate Update August 17, 2017

Background SMMPA is a not-for-profit, political subdivision of the State of Minnesota SMMPA supplies power to its 18 member municipal utilities SMMPA is governed by its members Seven member board of directors For more information on SMMPA and its members visit SMMPA’s website at: http://www.smmpa.org

Background Attachment O SMMPA became a Transmission Owning member of MISO April 1, 2006 As a Transmission Owner (TO) SMMPA must annually establish rates for open access use of its transmission assets SMMPA filed with FERC in 2006 for its own Cash Flow Attachment O historical template SMMPA utilizes the Cash Flow Attachment O historical template approved by FERC based on data from EIA 412w

Attachment O Timeline June 1st, 2017 publish Attachment O and supporting documentation based on calendar year 2016 actual data September 1st, 2017 deadline to hold annual stakeholders meeting on formula rate update December 1st, 2017 deadline for interested parties to submit information requests January 10th, 2018 deadline for TO to respond information requests January 31st, 2018 deadline for interested parties to submit informal challenges February 28th, 2018 deadline for TO to respond to informal challenges March 15, 2018 submit informational filing to FERC March 31, 2018 deadline for interested parties to submit formal challenge to FERC

2016 Attachment O Summary Transmission plant $180,370,431 Intangible – Direct Transmission $ 19,461,271 Transmission Revenue Requirements: Operation & Maintenance $ 6,724,588 Debt Service $ 24,606,983 Other Taxes $ 2,122,087 Margin Requirement $ 4,484,574 Attachment GG Revenue Credits ($ 6,859,248) Revenue Credits ($ 2,028,241) Net Revenue Requirements $ 29,050,743 Transmission Rate $3.051/kW-month

Historical Comparison 2015 Actual 2016 Actual Transmission plant $143,348,606 $180,370,431 Intangible – Direct Transmission $ 19,461,271 $ 19,461,271 Transmission Revenue Requirements: Operation & Maintenance $ 6,151,589 $ 6,724,588 Debt Service $ 20,257,351 $ 24,606,983 Other Taxes $ 2,102,801 $ 2,122,087 Margin Requirement $ 3,662,931 $ 4,484,574 Attachment GG Revenue Credits ($ 6,513,859) ($ 6,859,248) Revenue Credits ($ 1,739,050) ($ 2,028,241) Net Revenue Requirements $ 23,921,763 $ 29,050,743 Transmission Rate $2.897/kW/Mo $3.051/kW/Mo

2016 Net Revenue Requirements 2017 Rates for MISO Pricing Zones SMMPA has transmission assets and load in 4 different pricing zones in MISO SMMPA has entered into Joint Pricing Zone Agreements with GRE, ITCM and Xcel which have been filed at FERC GRE pricing zone - SMMPA has revenue requirements of $1,461,629 and a load of 43.80 MWs ITCM pricing zone – SMMPA has revenue requirements of $3,327,850 and a load of 29.60 MWs SMMPA/DPC pricing zone – SMMPA has revenue requirements of $8,302,501 and a load of 58.80 MWs – there was a load reduction of 186.90 MWs for inclusion in RPU’s Attachment O load Xcel pricing zone – SMMPA has revenue requirements of $15,958,763 and a load of 129.20 MWs

Contact Information John Winter Jd.winter@smmpa.org Laura Sandwick Lm.sandwick@smmpa.org Richard Hettwer rj.hettwer@smmpa.org MISO Attachment O Rate Data Webpage: https://www.misoenergy.org/MarketsOperations/TransmissionSettlements/Pages/TransmissionOwnerRateDa ta.aspx