1. Large-Scale Renewable Energy: The Top Challenges Dick Kelly Chairman, President and CEO EPRI 2008 Summer Session August 4, 2008 Dick Kelly Chairman, President and CEO EPRI 2008 Summer Session August 4, 2008

2. Northern States Power Company- Minnesota Public Service Company of Colorado Southwestern Public Service Northern States Power Company- Wisconsin Xcel Energy Electric Customers 3.3 million Gas Customers 1.8 million Xcel Energy Electric Customers 3.3 million Gas Customers 1.8 million

3. Xcel Energy Wind and Solar Resources Xcel Energy States Served Wind Density High Low Source: National Renewable Energy Laboratory Source: NREL, 2004

4. Xcel Energy Renewable Energy Portfolio No. 1 wind provider in the nation No. 5 for solar energy No. 1 wind provider in the nation No. 5 for solar energy 7,400 MW 20202007 2,700 MW

5. Challenges of Wind Energy Forecasting Intermittency Integration Cost Forecasting Intermittency Integration Cost

6. Challenge No. 1: Wind Forecasting Critical information not available Site wind characteristics Turbine availability Site topography Site wind characteristics Turbine availability Site topography

7. Challenge No. 2: Intermittency Total PSCo Wind Generation MW Time of Day

8. Intermittency Solutions More transmission Large-scale storage A smarter grid More transmission Large-scale storage A smarter grid

9. Challenge No. 3: Impact on Conventional Supply Base-load plants cycle faster and more often Higher maintenance costs Base-load plants cycle faster and more often Higher maintenance costs

10. Challenge No. 4: Cost Production tax credit for wind Solar investment tax credit More certainty Production tax credit for wind Solar investment tax credit More certainty