Iowa Energy and Policy Issue Discussion Jeff Kaman Manager, Energy and Climate Strategy Deere & Company Jeff Kaman 25 years in energy: Power plant operations; MISO/Regional markets and policy; Iowa regulatory experience; 7+ years with increasing responsibility in this role for Deere. At Deere, I focus our priorities on reliability – in contracts and infrastructure; supply cost reduction – we have an active goal and new initiative for our U.S. natural gas strategy; and sustainability – setting and achieving our public goals in energy and GHG as well as some other company climate policy items. TODAY: Following up the utility panel, with some context on what’s happening in Iowa. I want to end with a Q&A and to generate some comments from you.

John Deere – in the U.S.

Deere’s Energy Profile in Iowa 13 major sites Electricity IOUs: MidAmerican, Alliant Rural Electric Cooperatives Municipal Utilities Limited self-generation, Demand Response Natural Gas IOUs: MidAmerican, Black Hills Iowa Gas Transportation (gas marketer contract) sites and Utility/PGA sites

Electricity Policy Issues Capacity State jurisdiction vs. organized market Protection of assets from retirement* Impact of subsidies/policy U.S. DOE “resiliency” policy effort In Iowa, there is no formal “integrated resource planning” (IRP); but required to be “reasonable” and advance ratemaking certainty is provided for new build * Iowa Notes: Coal plant reductions, fuel switching, early retirement announced for Duane Arnold Energy Center. Source: 2017 State of the Market Report for the MISO Electricity Market – Analytic Appendix. Prepared by Independent Market Monitor for the MidContinent ISO – Potomac Economics. June 2017. https://cdn.misoenergy.org/2017%20State%20of%20the%20 Market%20Report%20Analytical%20Appendix243521.pdf

Electricity Policy Issues Carbon Paris Climate Accord – U.S. exit announced Clean Power Plan Electric utility only (customer energy efficiency removed) Now withdrawn; replacement to focus on existing asset efficiency Various proposals for Federal Tax and Dividend Carbon price up to $40/mt CO2e Upstream tax, but dividends to individuals, not us… Border adjustments for some energy-intensive exports. Would these be WTO compliant?

Electricity Policy Issues Trends Tax Cut and Jobs Act Customer needs/wants Market development Customer owned generation Storage Transportation sector electrification Utility risk/reward

Iowa – Unique? Good regulatory history leadership IGOV energy planning in Vilsack (~1998-2000) and Reynolds (2016) Administrations Today, Iowa is at least somewhat unique in… Wind Advance Ratemaking No nuclear moratorium Clarity on regulated utility renewable electricity claims for customers

Utility Regulatory Proceedings In Iowa Legislature (“Super Regulators”): Law established before case/issues are heard Iowa Utilities Board: Regulator/Decision Maker Consumer Advocate Customer Intervention Groups Environmental Groups Others…

2018 Iowa “Utility Omnibus” Legislation https://legiscan.com/IA/text/SF2311/2017 (Including some proposals that did not eventually pass) Expansion of Advance Ratemaking Principles Transmission, Energy Storage, Electric Grid Protection and Management, Cyber Security, Electric Vehicle Infrastructure, Other Emerging Technologies Energy Efficiency Plans Capped programs, very stringent new cost effectiveness requirements, bill line item Modifications intended to address utility concerns with net metering Forward-Looking Test Year Coal Plant environmental cost recovery Transmission Cost Adjustments Transmission – Right of First Refusal Gas Extension Recovery Charges

Questions (…in addition to any from the utilities’ panel discussion) Utility Rates: Value of immediacy vs. stability/volatility? How long is too long between rate cases – is a utility still making valuable investments (e.g. Transmission, Distribution, Maintenance)? Is customer DR and energy efficiency (1) a tax; (2) a resource and check against the need for utility assets? Is Demand adequately valued… In Cost of Service? In EEP and DR programs? What should be utility assets? What constitutes utility vs. customer risk, and how should that be reflected in rates?

Closing Thoughts Changes are in progress Our Priorities: Reliability, Cost, Sustainability Customer Rights Statement: Bill Riders are a last resort. Engage!