October 30, 2014

1. 2015 Attachment OCustomer Meeting for Missouri River Energy Services and Marshall Municipal Utilities October 30, 2014 Terry Wolf, Manager of Transmission Services

2. Agenda • Meeting Purpose • MRES • Profile • Attachment O Calculation • Question/Answer • MMU • Profile • Attachment O Calculation • Question/Answer • Regulatory Background and Outstanding Issues

3. Meeting Purpose • To provide an informational forum regarding the MRES forecasted Attachment O for 2015. • The forecasted Attachment O for 2015 is calculated using the Midwest ISO’s EIA Form 412 Attachment O-MRES template with a projected net revenue requirement and projected load. • Rates become effective on January 1, 2015 for joint pricing zone comprised of Otter Tail Power Company, Great River Energy, and MRES. • Attachment GG, MM effective January 1, 2015.

4. 61 Members served • Transmission: ~239 miles • Generation: ~744 MW • Renewable: ~86 MW Missouri River Energy Services Rugby Wind Project Fort Peck Dam Missouri River ITA Garrison Dam Yellowstone River Canyon Ferry Dam Big Horn River Missouri River CapX Fargo Yellowtail Dam CapX Brookings Oahe Dam WatertownPower Plant Irv Simmons Point Beach Nuclear Plant Marshall Wind Project Big Bend Dam Gavin’s PointDam Odin Wind Project Fort Randall Dam WorthingtonWind Project LaramieRiver Station MBPP Exira Station Missouri River Red Rock Hydroelectric Plant MRES Member MRES Generation Resource Planned MRES Generation Resource Federal Hydroelectric Dam Transmission Projects (MBPP, Irv Simmons, ITA, CapX (Fargo, Brookings)

5. MRES FERC Activities • Transmission facilities are owned by Western Minnesota Municipal Power Agency (WMMPA) • FERC Declaratory Order (EL08-22, 12/08) combines financial statements for ATRR • Attachment O effective 6/1/11 • Incentive filing (EL11-45, 6/11) • CapX; Fargo P2 & P3, and Brookings • CWIP, Abandon Plant, Hypothetical cap structure • 205 filing (ER12-351, 11/11) • FERC Approved ER12-351, and EL 11-45 on January 20, 2012

6. Forward Looking Attachment O • Forward Rate Requirements • Rate Base • Operating Expenses • Revenue Requirement and Rate • Network Rate Summary

7. Forward Rate Requirement • By June 1 of each year, MRES will post on OASIS all information regarding any Attachment O True-up Adjustments for the prior year. • 2015 Forward Looking Attachment O will be true-up info will be posted June 2014 from 2013 financials. • MRES will post on OASIS its projected Net Revenue Requirement including the True-Up Adjustment and load for the following year, and associated work papers in September. • MRES will hold a customer meeting to explain its formula rate input projections and cost detail.

8. Total Rate Base Note: The above numbers are transmission only and general and intangible plant allocated to transmission.

9. Rate Base Earning Hypothetical Capital Structure Return Note: The above numbers are transmission.

10. Operating Expenses Note: The above numbers are transmission only and A&G expenses, general plant depreciation and taxes allocated to transmission.

11. Return on Rate Base (Actual Capital Structure)

12. Return on Rate Base (Hypothetical Capital Structure)

13. Revenue Requirements, Excluding Prior Year True-Up

14. Revenue Requirements, Including Prior Year (2013 Actual) True-Up

15. 2015 MRES Annual TransmissionRevenue Requirement Distribution

16. Marshall Municipal Utilities • Located in SW MN • Load ~ 85 MW • Transmission • ~ 15 miles • 6 HV substations • Generation: • CT and Wind Interconnected

17. MMU FERC Activities • Transmission facilities are owned by Marshall Municipal Utilities Commission (MMU) • MMU is a member of MRES • MRES has an agency agreement with MMU (6th agency agreement in MISO) • MRES will be signatory to JPZ in NSP zone • MISO made FLTY filing on October 21, 2014, asking for effective date of 1/1/15, ER15-142

18. Forward Looking Attachment O • Forward Rate Requirements • Rate Base • Operating Expenses • Revenue Requirement and Rate • Network Rate Summary

19. Forward Rate Requirement • By June 1 of each year, MRES will post on MRES OASIS all information regarding any Attachment O True-up Adjustments for MMU for the prior year. • MRES will post on MRES OASIS projected Net Revenue Requirement including the True-Up Adjustment and load for the following year, and associated work papers in October. • MRES will hold a customer meeting for MMU to explain its formula rate input projections and cost detail.

20. Total Rate Base Note: The above numbers are transmission only and general and intangible plant allocated to transmission.

21. Operating Expenses Note: The above numbers are transmission only and A&G expenses, general plant depreciation and taxes allocated to transmission.

22. Return on Rate Base

23. Revenue Requirements, Excluding Prior Year True-Up

24. Regulatory / FERC Issues • Complaint against MISO TOs regarding ROE and certain TOs regarding capital structure (ER14-12) • Unknown timing and impacts • Resolved in 2015?? • Complaint against MISO TOs regarding Protocols (Docket EL12-35) • Required changes in timing and info shared • MMU FERC Filing ER15-142

25. Regulatory / FERC Issues, Procedures and Timing • By June 1st • Post actual calculations and true-ups based on prior year’s Rate Information • By September 1st • Meet with Interested Parties to discuss the actual prior year’s Rate information • December 1st • Deadline for information requests • By January 10th • Must respond to information requests • January 31st • Deadline for informal challenges • March 15th • Annual Informational filing • March 31st • Deadline for formal challenges

26. Questions If you have any additional questions after the meeting, please submit via e-mail to Terry Wolf: twolf@mrenergy.com All questions and answers will be distributed by e-mail to all attendees. Additionally, the questions and answers will be posted on the MRES OASIS website (http://oasis.midwestiso.org/OASIS/MRET) within two weeks from the date of inquiry.