1. Wind Development & Policy Options Donna Johnson Pinnacle Technology March 2004

2. Sizes and Applications Small (  10 kW) Homes Farms Remote Application Intermediate (10-250 kW) Village Power Hybrid Systems Distributed Power Large (660 kW - 2+MW) Central Station Wind Farms Distributed Power Community Wind

3. Large and Small Wind Turbines are Different z Large Turbines (500-2000 kW) Installed in “Windfarm” Arrays Totaling 1 - 100 MW $1,000/kW; Designed for Low Cost of Energy Requires 6 m/s (13 mph) Average Sites z Small Turbines (0.3-100 kW) Installed in “Rural Residential” On- Grid and Off-Grid Applications $2,500-5,000/kW; Designed for Reliability / Low Maintenance Requires 4 m/s (9 mph) Average Sites

4. Growth of Wind Energy Capacity Worldwide MW Installed Year Jan 2003 Cumulative MW Rest of World = 2,803 North America = 5,018 Europe = 21,319 Sources: BTM Consult Aps, March 2001 Windpower Monthly, January 2003 ActualProjected Rest of World North America Europe

7. Population versus Wind Resources

8. Wind Cost of Energy 0 2 4 6 8 10 12 1990 COE (¢/kWh [constant 2000 $]) Low wind speed sites 1995 2000 2005 2010 2015 2020 High wind speed sites Bulk Power Competitive Price Band

9. Drivers for Wind Power zDeclining Wind Energy Costs zFuel Price Uncertainty zFederal and State Policies zEconomic Development zGreen Power zEnergy Security

10. Why Have a Renewable Public Policy? zResource Diversity: plants of various sizes and technologies, dispersed throughout the state, lowers risks associated with unplanned outages & high required reserve margins zReduced Fuel-Price Risk: energy security and price stability zEnvironmental Protection: reduced air emissions zSustainability: renewables do not deplete resources, nor are they susceptible to fossil fuel price increases Vermont Public Service Board - 1996

11. Current Policies in Kansas zProduction Tax Credit expired 12/31/03 - $0.017/kWh zRenewable Energy Production Incentive zFERC 888 z Renewable Energy exempt from Property Tax z 25kW homeowner or 100kW commercial systems will be paid 150% of utility’s monthly system average cost z Electric Generation Facility Siting - does not apply to renewable energy facilities that are 100 MW or less z State Energy Program Grants FEDERALSTATE

12. Four Different Wind Users - Each has Different Policy Needs Produce Power Primarily for Own Consumption Produce Power Primarily for Sale Homeowner Schools, Commercial, Farms, Churches Wind Farms Small Producers 1-5 MW

13. States Have Instituted a Wide Range of Policies zTax Incentives zDirect Cash Payments zLow Cost Capital Programs zDistributed Resource Policies zCustomer Choice Opportunities zEnvironmental Regulations zOther Programs

14. Tax Incentives zProduction Tax Credits zInvestment Tax Credits zProperty Tax Reduction zAccelerated Depreciation

15. Direct Cash Incentives zProduction Incentives zInvestment Incentives (Grants)

16. Low-Cost Capital Programs zGovernment Subsidized Loans zProject Loan Guarantees zProject Aggregation

17. Distributed Resource Policies zStandard Contracts for Small Projects zNet Metering zLine Extension Policies

19. Customer Choice Opportunities zUtility-Supplied Green Pricing Options zGreen Marketing from Retail Electric Sellers (deregulated or renewable deregulation) zAggregate Consumer Purchases (deregulated) zFuel Source Disclosure Requirements & Certification

21. General Environmental Regulation zExternality Valuation in Resource Planning zExternality Valuation in Environmental Dispatch zEmissions Taxes zEmission Caps/Marketable Permits

22. Other zGovernment Purchases zSite Prospecting, Review & Permitting zRenewable Portfolio Standard zAuctioned Contracts zPerformance Based Rate Making

26. Contact Information Donna Johnson, President Pinnacle Technology, Inc. 619 East 8th Street, Suite D Lawrence, KS 66044 Tel: (785) 832-8866 Fax: (785) 749-9214 donnaj@pinnaclet.com www.ksrenew.com