1. Transmission Joint Action in the Upper Midwest a presentation to the APPA Joint Action Workshop by David A. Berg, P.E. Principal December 7, 2004

2. Background Public power has a strong presence in the upper Midwest There is a rich tradition of municipal joint action in our region Transmission has become a critical issue in our region and across the country

3. Transmission Access Policy Study Group (TAPS) June 2004 White Paper "Effective Solutions for Getting Needed Transmission Built at Reasonable Cost" Examines problems and proposes policy solutions for transmission investment needs

4. TAPS White Paper Problems Identified Transmission investment needed to improve reliability Competitive wholesale market requires added transmission infrastructure Commonly proposed solutions not working Increased return and accelerated depreciation Participant funding

5. TAPS White Paper Structural Solutions Inclusive Stand-Alone Transmission Companies Shared System Model

6. TAPS White Paper Regulatory Solutions Ratemaking devices Reduce investment risk Attract capital at reasonable cost Spread cost across broad regions Regional planning to achieve cost- effective and efficient solutions Performance-based rates to hold transmission owners accountable

7. Midwest Independent System Operator (MISO)

8. MISO Issues Understanding Membership Congestion Management Ownership Incentives Regional Planning

9. Why Joint Action?

10. Single Small Municipal Utility

11. Small & Large Municipal Utilities

12. Individual Municipals & Agency

13. Individual Municipal Regional Presence

14. Collective Municipal Regional Presence

15. Midwest Municipal Transmission Group (MMTG) January 2002 formal announcement 120 Iowa & Minnesota municipals (1300 MW) Intervened in TRANSLink filing Goal - get municipal transmission recognized in TRANSLink Goal - invest in new regional highway transmission projects Successful in initial goals Continuing participation in regional transmission arena MISO Investment opportunities

16. Super Joint Action in the Upper Midwest Idea has been brewing for a while Joint Action Workshop held July 13, 2004 Joint Action Working Group formed Existing agencies "Independent" municipals 6 states Transmission identified as proper focus for expanded joint action

17. Upper Midwest Regional Focus

18. Transmission System Planning and Investment Champion TAPS approach Municipals want a seat at the table Investment = Influence

19. Expanded or Super Joint Action can not only get municipals to the table, it can get them to the head of the table

20. Current Approach Examining expansion of MMTG Interaction between MMTG Operating Committee and Joint Action Working Group MMTG Benefits Existing organization Multi-state Track record of success

21. Next Steps Conduct 2-day strategic planning meeting (early 2005) Prepare plan of development Mission Organizational structure Staffing Funding Development timeline Investment strategy Move Forward?

22. Questions and Discussion