1. 0 2013 NASUCA Meeting Integration of Intermittent Renewable Resources Panel Michael McMullen MISO June 10, 2013

2. 1 MISO is one of the largest and most technologically advanced grid operators in the world Current MISO MISO w/ Entergy High Voltage Transmission - miles 49,67065,170 Installed Generation - MW 132,296162,296 Installed Generation - # of Units 1,2591,431 Peak System Demand - MW 98,576133,576

3. 2 MISO’s role is focused on a few key value-added areas Provide independent transmission system access Equal and non-discriminatory access Compliance with FERC requirements Improved regional coordination Enhanced system reliability Lowest cost unit commitment, dispatch and congestion management Deliver improved reliability coordination through efficient market operations Integrated system planning Broader incorporation of renewables Coordinate regional planning Market price / value discovery Encourage prudent infrastructure investment Provide wholesale alignment for retail policy implementation Provide price information transparency What We Do Implications

4. 3 MISO was formed to address federal requirements, but growth has been based on value creation 2013 Entergy Region

5. 4 MISO’s capacity is comprised primarily of coal and natural gas units… MISO Nameplate Capacity 132,296 MW Gas / Oil (32%) Renewables (14%) Nuclear (6%) Hydro (30%) Biomass (3%) MISO Nameplate Capacity – Renewables 18,734 MW Other (2%)

6. 5 …but wind resources are growing rapidly Registered nameplate wind capacity in the MISO region (in MWs) ACTUALSFORECAST MISO RPS Mandates by 2021 = ~20,770 MW

7. 6 Wind’s rapid growth is fueled by MISO’s rich wind resource base... Annual Average Wind Speed at 80 m Source: Wind resource estimates developed by AWS Truepower

8. 7 7 …and renewable portfolio standards and goals adopted in MISO states MT 15% by 2025 ND 10% by 2015 SD 10% by 2015 MN Xcel: 30% by 2030 25% by 2025 WI 10% by 2015 MI 10% by 2015 IA 105 MW MO 15% by 2021 IL 25% by 2025 IN 10% by 2025 KY No RPS State with RPS Mandate State with RPS Goal State with RPS Mandate or Goal MISO Existing Wind = 12,270 MW MISO RPS Mandates by 2021 = ~20,770 MW Source: MISO, DSIRE – Database of State Incentives for Renewables & Efficiency

9. 8 Inherent characteristics of wind have significant operational impacts on MISO Variability of wind Poor correlation of wind and load Transmission congestion caused by wind location Congestion management Over and under commitment Ramp management Surplus generation events Market dispatch of intermittent units (DIRs) Enhanced wind forecasting Future ramp capability enhancement Driver Market Issue Tools

10. 9 Wind is variable by month… Source: MISO Real-Time Operations and Transmission Asset Management Departments 9.5%7.9%5.8%3.2%4.0%5.9%9.3%8.5%7.4%9.4%8.1%8.0%9.8% Wind Energy as a % of MISO Energy Source: MISO Monthly Operations Report for the Informational Forum, April 2013

11. 10 Note: Weekends and holidays are considered off-peak and are excluded from the graph. Source: MISO Monthly Operations Report for the Informational Forum, January 2013 - April 2013 …and wind is variable day-to-day and doesn’t reliably correlate with load Daily Wind Capacity Factor % for Peak Hours 1/1/2013 – 4/30/2013

12. 11 Improved wind forecasting will allow for improved operations, but wind forecasting is not likely to become an exact science Day Ahead4 hours AheadHour Ahead Standard Deviation765 MW612 MW486 MW Mean Absolute Error587 MW476 MW390 MW Mean Absolute Percentage Error 5.3%4.3%3.5% MISO Forecasting Accuracy: 1/1/2012 – 5/13/2013

13. 12 Challenges prior to MISO dispatching intermittent resources (DIRs) Rapid increase in wind penetration –Transmission expansion lagged wind expansion –Deployment in areas with little transmission –Increasing need for manual curtailments to manage congestion Challenges of manual curtailments –Highly manual process; time consuming for reliability coordinator –Tracking firm vs. non-firm transmission service –Manual curtailments not accounted for in security constrained economic dispatch resulting in loss of price transparency –Manual curtailments less economic than automated security constrained economic dispatch –Adverse settlement impacts on wind participants

14. 13 Renewable generation is treated like any other generation resource in the market DIRs can participate in the real-time energy market DIRs can automatically be dispatched up to a forecasted limit based on an offer price and system conditions. –Participants submit a short term wind forecast instead of a hourly economic maximum like other generation resources –This enables wind to submit offers and receive dispatch instructions rather than be manually curtailed when transmission constraints limit renewable energy generation to reach the broader market region Dispatchable Intermittent Resources (DIRs) design features Dispatchable Intermittent Resources enhance system wide operational and market efficiency and improve market transparency

15. 14 DIRs launched on June 1, 2011 Registration required as of March, 2013 with limited exceptions Dispatchable Intermittent Resources (DIRs) registration Wind Nameplate Capacity (MW) Registered as DIRsWind Nameplate Capacity (MW) Jun-11Sep-11Jan-12Mar-12Jun-12Sep-12Dec-12Mar-13

16. 15 MISO is able to capture ~95% of wind’s potential through economic dispatch DIR Dispatch Below Economic Maximum (Left Axis)DIR Dispatched Energy (Left Axis) % of DIR Dispatched Down (Right Axis)

17. 16 Wind variability has the potential to create a ramping challenge which may require improved tools and new market products to manage The current wind variability and profile impact ramp requirements as significantly as net scheduled interchange –Wind capacity levels expected from the region’s Renewable Portfolio Standards will dramatically increase the operational difficulties –However, MISO’s large balancing area and geographic diversity help minimize the issue at current wind penetration levels Current operational methods to manage this ramp include –Load and wind forecasting –Pre-commitment of units –Use of fast-start units and spinning reserves to manage unexpected variability Improved operational and market methods under development –Improved load and wind forecasting –30-minute reserve products –Ramping service product

18. 17 MISO’s regional planning enables more economic placement of wind resources in the region Combination design of wind generation build-out Local design of wind generation build-out Local Design = Renewable energy requirements and goals will be met with resources within the same state as the load Combination Design = Renewable energy requirements and goals will be met with a combination of local resources and resources outside of the state with high ranking renewable energy zones ILLUSTRATIVE The economic benefit of optimizing wind into MISO’s footprint is $244 to $285 million in annual benefits Source: MISO’s 2012 Value Proposition Study which was based on the results of the Regional Generation Outlet Study II