Congressional Briefing Winter, 2015

Who is Mid-West? Over 250 consumer-owned, not-for-profit electric utilities in the Upper Great Plains Our members cover 9 states and serve some 12 million people Purchasers of cost-based Pick-Sloan Missouri Basin Program hydroelectric power from the Western Area Power Administration (Western) Western is the federal agency marketing power from projects owned by the U.S. Army Corps of Engineers and U.S. Bureau of Reclamation 2

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What Mid-West Does Maintain a strong presence with members of Congress and close working relationships with other regional and national organizations Engage Western, the Corps and Reclamation, which are responsible for generating and marketing federal power Monitor the costs and the rates that the Western charges for Pick- Sloan power; and work closely with Western, the Corps and Reclamation to help assure effective program development and implementation. 4

Current Issues System Reliability and Flexibility Environmental Issues Physical- and Cyber-Security FY’16 Budget 5

System Reliability and Flexibility The utility industry has worked extremely hard and invested billions of dollars to build and maintain system reliability and flexibility. We are extremely concerned about proposals and initiatives (e.g., EPA’s proposed Section 111(d) rules) that would degrade the reliability and flexibility of the most reliable power system in the world. 6

Environmental Issues The potential impacts on the Pick-Sloan Missouri Basin Projects from environmental requirements, especially from recovery plans for the three ESA-listed species on the Missouri, could be huge in terms of lost generation and the cost of replacement power. We are actively participating in the regional process to make recommendations to the U.S. Fish and Wildlife Service and the Corps of Engineers, but we are concerned about the potential outcome. 7

Physical- and Cyber-Security The utility industry is taking a proactive approach to dealing with physical- and cyber-security, but we are not going to be able to protect every remote substation or transmission line from people who want to do harm without deployment of the military to remote locations, since local police and sheriffs’ departments seem to be far too over- burdened. We are hardening our critical facilities and cyber assets, but do not need additional authorizing legislation to address these issues at this time. 8

FY’16 Budget The Administration in the FY'16 Budget appears to have backed away from the sale of the Tennessee Valley Authority. We remain concerned that any budget deal not attempt to sell the TVA or the power marketing administrations, like the Western Area Power Administration. This would simply dramatically raise energy costs on consumers throughout the plains states. 9