1. Clean Power Plan EW-2012-0065 Tim Wilson Director of Energy Supply Services

2. Discussion Overview Company History Empire’s Generation Resources Empire’s Service Territory Diverse Resource Mix Environmental Upgrades Empire’s CO2 History Compliance Plan Preferences Empire’s Integrated Resource Plan Missouri (MO) Compliance Plan Challenges Questions? 2

3. The Empire District Electric Co. Investor-owned utility NYSE: EDE Established in 1909 168,000 Electric customers 8,100 miles of line (transmission & distribution) 1,365 megawatts generating capacity 44,000 Natural Gas customers 1,200 transmission & distribution mains Fiber Optic & Water Service 750 employees

4. Empire’s Generation Resources

5. Empire’s Service Territory 5

6. Cost-effective Reduces risk Hedge against future environmental rules Diverse Resource Mix Purchases in 1997 and 2002 include contract and non-contract PP, mainly coal purchases. Combined and Simple Cycle represent natural gas generation.

7. Environmental Upgrades Asbury Power Plant $25M – 1970 original construction $30M – 1990 low-sulfur coal conversion $32M – 2008 install SCR for NOx

8. Asbury Air Quality Control System Completed December 2014 Original Estimate $112M - $130M* Actual Cost $112M – low end of range Rate impact - savings of $2M Total rate increase about 4% Effective July 26, 2015 * Excluding capitalized interest (AFUDC)

9. Riverton Power Plant First Unit 1906 Old Kate - St. Louis World’s Fair Units 1 – 6 now retired Units 7 & 8 Installed 1950 & 1954 $5M & $7M Transitioned to natural gas in 2012 Retire 7, 8 & 9 in 2016 Units 10 & 11 remain in operation Riverton Generating Station

10. Environmental Upgrades Retired Unit’s 7 and 8 Built in 1950 and 1954 Retired in 2014 and 2015 Riverton Unit 12 Simple cycle CT $49 million - 2007 Combined cycle expansion $165 – 175 million - mid-2016 140-150 jobs at peak construction Anticipated emission reductions up to: NOx – 95% SO2 – 95% CO2 – 40%

11. Empire CO 2 History 11

12. Compliance Plan Preferences Preference for State plan vs. Federal Plan Maximizes flexibility Nobody understands Missouri like MDNR Mass-based approach Maximizes flexibility Trading-ready program to minimize cost to consumers Allowance allocations Fixed or mostly fixed amount for planning purposes Irrevocable No set-asides and no new source compliment Clean Energy Incentive Program Should be a federal program that does not take allowances from affected Electric Generating Unit’s (EGU’s) Reduces flexibility for affected EGU’s Leakage State plan should address by either showing not an issue or through the allowance allocation process New units should be addressed under new unit rule 12

13. Empire’s 2016 Integrated Resource Plan (IRP) 13 Empire’s 2016 IRP to be filed April 1, 2016 IRP Goals (not all-inclusive list) Provide the public with energy services that are safe, reliable, and efficient, at just and reasonable rates, in compliance with all legal mandates, and in a manner that is consistent with state energy and environmental policies Consider demand-side, supply-side and renewable resources on an equivalent basis Utilize the minimization of long-run utility costs as a primary criterion while also considering other factors such as risk and rate impacts Generate a set of resource plans that includes contingency plans and other required plans for planning purposes, including the CPP Updated each year for known and measurable changes

14. MO Compliance Plan Challenges Empire operates in four states with affected EGU’s in three states Very important MO works with KS and AR, at a minimum MO utilities operate in both SPP and MISO Timing Final submittal of state plan will directly affect resource additions and RFP/contract negotiation/permitting/construction timelines MDNR to balance development of robust plan with compliance timelines Other state plans What are neighboring states doing? Mass vs. Rate, etc. Trading ready? Compliance costs directly attributable to state plan flexibility 14

15. Questions? Tim Wilson twilson@empiredistrict.com