Independent Evaluator Role and Comments

1. Independent Evaluator Role and Comments For the Oklahoma Gas and Electric Company – Wind Energy RFP Presented by: La Capra Associates, Inc. New Energy Opportunities, Inc. Presented to: Technical Conference Oklahoma City, Oklahoma January 9, 2009

2. OVERVIEW Independent Evaluator (IE) Functions in RFP Process IE Comments on Draft RFP IE for this RFP — Who We Are Interest in Prospective Bidder Comments 2

3. IE Functions for Wind Energy RFP RFP design process Advise utility Comment on draft RFP Assist in consideration of comments from interested parties Prior to evaluation of bids Work with OG&E to refine evaluation methodology, criteria, assumptions Q&A: Review utility draft answers to bidder questions Bid evaluation Independently evaluate bids/review utility bid evaluation If there is disagreement regarding winning bid(s), Utility determines winning bidder(s) IE submits its evaluation to OCC Subject to OCC determination 3

4. Comments on Draft RFP IE comments posted on OG&E website Potential bids Power purchase agreements (PPAs)/WEPAs: 20-year terms sought Utility-owned generation (UOG)—where OG&E may recover costs under cost-of-service ratemaking Utility acquires wind energy development assets from third party, with engineering, procurement and construction agreement (EPC) OR Utility self-build Objective: appropriate comparison of WEPA and UOG bids UOGs—accuracy and reasonableness of estimates Differences in risk allocation between fixed-price $/MWh bids (WEPAs) vs. bids based on estimated costs and projected output (UOGs) 4

5. Comments on Draft RFP—cont’d. Issues with Estimates: UOG bids Estimated output (MWh) Actual performance has historically been 10% below estimated performance UOG bids should provide best available estimates, with references to analyses and data regarding historical underperformance IE will adjust estimated performance if necessary to assure credible estimates Overly optimistic energy projections will result in reduced non-price score Unscheduled maintenance Risk-adjustment of estimated energy prices: price firmness Output Capital costs Operating costs Production tax credit (PTC) risks Utilization of PTC Loss of federal PTC due to project delay 5

6. Comments on Draft RFP—cont’d. Issue: Term of evaluation for assessing levelized estimated cost of energy 20-year WEPA bids sought—term of evaluation—20 years At time our comments were prepared, with respect to UOG bids, OG&E had not decided whether to use: 25-year useful life/book depreciation with 25-year evaluation term (which IE had concerns with) OR 20-year book depreciation with 20-year evaluation term OG&E has now decided to use 20-year book depreciation with 20-year evaluation term for purposes of bid evaluation; IE concurs 6

7. Independent Evaluator for this RFP Independent Evaluator 7 • La Capra Associates, Inc. (La Capra Associates) • John Athas, Managing Consultant • Carrie Gilbert and other La Capra Associates employees • New Energy Opportunities, Inc. (NEO) • Barry Sheingold, President, NEO • La Capra Associates/NEO collaborations: Similar roles or advising on renewable energy RFPs • Delaware • Massachusetts • New York • Rhode Island • Other RFP experience: CA, OK, HI, UT, OR, AZ

8. Interest in Prospective Bidder Comments 8 • Areas of particular interest • Reasonableness of requirement that proposed projects have a scheduled commercial operation date by 12/31/2010 • Impact of current financial environment on RFP • We are interested in your comments and questions • Your input is important to the process Please send copies of your comments to: John Athas*, La Capra Associates, Inc. jathas@lacapra.com Barry Sheingold, New Energy Opportunities, Inc. bjs@newenergyopps.com *This is an update to the names in the draft RFP Section 2.1