Tariff Changes Proposed by Integrated System (IS) 2/20/2014 Carl A. Monroe EXEC VP & COO

Tariff Change Area Review Zone 19 – Upper Missouri Zone (UMZ) Western-UGP Federal Service Exemption (FSE) Base Plan Funding – Entry Grandfathered Agreements Public Power to Non-Public Utility Network Service Thru/Out Revenue Distribution Network Service Agreement 2

Zone 19 - UMZ Includes transmission facilities of Basin Electric Power Cooperative (Basin), Western Area Power Administration – Upper Great Plains Region (Western- UGP), and Heartland Consumers Power District (Heartland) Includes facilities in East and West Interconnection Additional transmission owners would consider adding facilities within the zone –Facilities with credits under the Western tariff –Facilities that meet Attachment AI but not definition of transmission in IS 3

Zone 19 - UMZ Areas of change –Add definition of UMZ, Western-UGP –Add to Schedule 1,7, 8, 9, 11 –Attachment H, M 4

Western-UGP FSE Federal Statutes govern the functions and limitations of Western-UGP –Federal Reclamation Law, largely contained in the Department of Energy Organization Act of 1977, the Reclamation Project Act of 1939, the Flood Control Act of 1944, and the Fort Peck Project Act of 1938 –Other Federal law as applicable, and specifically Western-UGP’s ability to join an RTO consistent with section 1232 of the Energy Policy Act of 2005 –Western has advised that consistent with its statutory obligations it cannot agree to: (1) involuntary cost allocation for third-party transmission facilities, which includes SPP’s cost allocation share under its tariff and (2) Western’s rates are subject to a different standard of review pursuant to the delegation of authority from the Department of Energy delegated to FERC. Joining SPP is based on the fixed nature of the generation resources committed to the preference customers of Western-UGP as well as the sufficiency of existing transmission Western-UGP built to meet its requirements. 5

Western-UGP FSE Exempt from: –Schedule 11 Regional Transmission Cost Allocation –Congestion Costs/ARR/TCR –Marginal Losses/Overcollection Distribution –FERC’s Annual Assessment and Schedule 12 Areas of change –Add definition: FSE –40 – FSE for Schedule 11 Regional Rate –Schedules 7, 8, 9, 11, 12 6

Base Plan Funding – HW/BW Offered same as to Entergy All Facilities needed after October 1, 2015 would be in regional cost allocation for all SPP LSEs including the new members. Areas of change –Definition of Base Plan Funding –List of Facilities that would be eligible after October 1, 2015 for regional cost allocation, until integrated into SPP Planning –Regional Cost Allocation Review 7

Grandfathered Agreements Considering which transmission agreements in place at October 1, 2015 to add. Areas of change –Definition of Grandfathered Agreements –Attachment W 8

Public Power to Non-Public Utility Area of change –39.1 – Protections of Public Power extended to all Non- Public Utilities 9

Network Service Thru/Out Revenue Distribution Proposing a generic change to the revenue distribution if Network Service is provided thru and out of SPP. Change to distribute to zone exited, or shared with zones that are exited. Area of change –Attachment L 10

Network Service Agreements Split of NITS between Western-UGP and other co- supplier Unique to Western-UGP based on FSE Areas of change –Western-UGP retains all transmission usage rights –FSE –Western-UGP pays full UMZ rate excluding Schedule 11 Regional for their Federal Power deliveries to Preference Customers from Federal Resources –West Interconnection usage exempt from Schedule 11 Regional 11

Carl A. Monroe EVP & COO