1. Indiana Municipal Power Agency Joint Ownership Raj Rao, President Indiana Municipal Power Agency APPA Joint Action Workshop January 10, 2006

2. Indiana Municipal Power Agency Joint Ownership Existing Ownership Gibson #5 –Coal-fired Generation (625 MW) –24.55% Ownership (156 MW) Trimble County Unit 1 –Coal-fired Generation (528 MW) –12.88% Ownership (68 MW)

3. Indiana Municipal Power Agency Joint Ownership Benefits –Economies of Scale –Experienced Operator –Tax Exempt Financing

4. Indiana Municipal Power Agency Joint Ownership Cons –Majority Owner and Operator Makes the Decisions –Limited Control –Accounting issues on allocations

5. Indiana Municipal Power Agency Joint Ownership Proposed Projects Trimble County Unit #2 –Coal-fired –750 MW –IMPA (12.88%) IMEA (12.12%) LG&E (75%) –Commercial in 2010

6. Indiana Municipal Power Agency Joint Ownership Proposed Projects Prairie State Generation –Coal-fired –1,650 MW –Mine Mouth –Coal Reserves –Ownership of Coal Mine

7. Indiana Municipal Power Agency Environmental Performance 4.37 0.37 0.75 0.30 0.26 0.12 0.182 0.07 1.08 0.97 Prairie State’s emissions will be one-fifth the U.S. coal plant average 0.39 0.16 U.S. Average 2003 Clean Air Interstate Rule 2010 Prairie State Permit Clean Air Interstate Rule 2015 U.S. Average 1970 Illinois Average 2003 *2003 estimated. Source: Environmental Protection Agency (EPA) National Air Pollutant Emission Trends; EIA Annual Review 2002 (October 2003).

8. Indiana Municipal Power Agency Joint Ownership Prairie State Generation –Peabody Coal Company –Investor Owned Utility –CCS (Illinois) (G&T) –Wolverine (Michigan) (G&T) –IMPA (Indiana) –KMPA (Kentucky) –MJMEUC (Missouri) –NIMPA (Illinois) –WPPI (Wisconsin)

9. Indiana Municipal Power Agency Joint Ownership Prairie State Generation –60% Public Power (Muni & REMC) –40% IOU and Merchant

10. Indiana Municipal Power Agency Joint Ownership Due diligence investigation of design Relationships with other partners and with lead partner Rights to future additions of generation

11. Indiana Municipal Power Agency Development Period Development period costs EPC contract negotiation Pricing changes between participation and development phases Methods to monitor progress of project Proactive approach to public relations

12. Indiana Municipal Power Agency Development Period Environmental permitting hurdles Recordkeeping from day one Cancellation penalties Protection of confidential information Insurance decision (Contractor or owner provided)

13. Indiana Municipal Power Agency Construction And Ongoing Operations Level of representation and monitoring during construction Backup power supply plans for the non- firm resource Capital and O&M budget monitoring, invoice review and audits

14. Indiana Municipal Power Agency Construction And Ongoing Operations Emission allowances allocation and air quality systems performance Capital cost exposure due to changing environmental regulations A&G cost increase exposure and control