1. Open Access Transmission Tariff Amendment No. 9 Greg Broeking, Chief Financial Officer March 7, 2012

2. 2 Background Information A cost-of-service study was performed to:  Update revenue required to serve the District’s transmission customers  Accommodate the significant increase of third-party generation Additional study  An additional review of the cost-of-service was conducted for a reasonability check  Other rate options were examined and recommended  The economic development rate on a MWh basis was proposed to mitigate the Pancaking Effect

3. 3 Economic Development Benefits The unemployment rate is extremely high in the District’s service area  New renewable resources would help create new job opportunities New generation facilities would benefit the ratepayer  Improving reliability  Providing additional revenue due to the increase of the throughput on the District’s transmission system

4. 4 Overview of Changes Revisions to IID’s Open Access Transmission Tariff (OATT) and Generator Interconnection Agreement (GIA): Transmission reserve capacity section  The economic development rate will be on a MWh basis  Accommodate the significant increase of third-party generation Possible reserved capacity requirement(s) to mitigate financial risk to the District  Provide a form of support for the reserved capacity that shall be reasonable for the required service needs  A review of the customer’s annual usage may be done to adjust future transmission capacity reservations

5. 5 Overview of Changes (continued)  An additional fee may be imposed when the committed minimum usage is not met  When not utilized, the reserved capacity will be temporarily released to the District for potential resell to other customers Transmission Rate Credits  Provided for a period of 25 years or the duration of the Power Purchase Agreement (PPA), whichever is shorter

6. 6 Economic Development Availability – The rate will be available to eligible new long-term firm transmission service customers Duration – The rate is proposed for a period of 15 years Change in rate – The economic development rate is subject to change if the cost to serve the wholesale transmission customers increases

7. 7 OATT Rates (Current) ¹ Includes: Schedule 1 Scheduling, System Control & Dispatch Schedule 2 Reactive Supply and Voltage Control Schedule 7 Firm Point-to-Point Transmission

8. Economic Development Rate 8

9. 9 Next Steps Written comments – Submit by Thursday, March 16, 2012 Review of comments – A summary of comments with IID’s responses will be provided on its OASIS at www.westtrans.net www.westtrans.net Provide input to Board of Directors - Staff will provide comments and report stakeholder input to the Board Final step – Will request Board approval of Amendment No. 9, to the IID’s OATT

10. 10 Please email comments, suggestions, and questions to Jamie Asbury, IID Inter-Connect Transmission Contracts Administrator at jlasbury@iid.comjlasbury@iid.com Thank you for your participation in the stakeholder process.