Great River Energy

2013 Annual True-Up Meeting

August 7, 2014

Agenda

• Introduction• Disclosure• Meeting purpose• Discuss the Regulatory Timeline• Review the 2013 Annual True-Up results

– actual to forecast comparison– discuss drivers

• Discuss next steps• Question / Answer

Disclosure

All figures in this document are preliminary and subject to change. Per the revised Formula Rate

Protocols, figures will be finalized after the Information Exchange, Challenge Procedures, and

MISO’s review are complete1.

1 Awaiting FERC’s final decision on Docket ER13-2379 on FERC’s investigation into MISO Formula Rate Protocols

Meeting Purpose

• The revised Formula Rate Protocols require GRE to hold an Annual True-Up Meeting among Interested Parties between the Publication Date (June 1) and September 1

• Compare actual 2013 values against projections on which the 2013 rates were based

• Review the Annual True-Up Adjustment calculation

June 1

•Deadline for Annual True-Up

•Info Exchange Period and Review Period begin

June 1 – September

1

•Deadline For Annual True-Up Meeting

September 1 – October 1

•Deadline to Post Projected Net Revenue Requirement

September 1 – October 1

•Deadline for meeting on Projected Net Revenue Requirement

November 1

•Deadline for joint meeting on regional cost-shared projects

December 1

•Deadline for Interested Parties to submit information requests

January 10

•Deadline for Transmission Owner to respond to information requests

January 31

•Deadline for Interested Parties to submit Informal Challenges

February 28

•Deadline for transmission owner to respond to Informal Challenges

March 15

•Deadline to submit Informational Filing to the Commission

March 31

•Deadline for Interested Parties to file Formal Challenge at the Commission

Formula Rate Protocol Timeline

2013 True-Up Adjustment Overview

Actual Projected Difference

Net Revenue Requirement $99,203,840 $96,975,134 $2,228,705 (a)

Divisor True-Up

Divisor 2,012,4152,023,75111,336

Projected Rate ($/kW/Yr) $47.919

True-Up (Divisor Difference x Projected Rate) $543,204 (b)

Interest $79,442 (c)

Total 2013 True-Up Adjustment (Under Recovery) $2,851,352 (a+b+c)

2013 ATTR Summary

$(7.0)

$13.0

$33.0

$53.0

$73.0

$93.0

$97.0

$0.96

$(0.96) $(0.17)

$0.94 $1.46

$99.2

Return Operating Expenses Attachment GG Adjustment Attachment MM Adjustment Revenue Credits

$2.2M Difference

(2.3% )P

roje

cted

AT

RR

Act

ual A

TR

R

Revenue Requirement Overview

Projected 2013 Net Revenue Requirement $96,975,134

Actual to Projected Differences:

Return $963,753

O&M Expense $(963,019)

Attachment GG Adjustment $(165,196)

Attachment MM Adjustment $935,421

Revenue Credits $1,457,747

Actual 2013 Net Revenue Requirement $99,203,840

Overall Difference$2,228,705

Return Overview

Projected 2013 Rate Base $671,736,732

Actual to Projected Differences:

Net Plant $(13,839,565)

Construction Work In Progress $2,306,365

Adjustments to Rate Base * $333,388

Land Held for Future Use $0

Working Capital $389,971

Actual 2013 Rate Base$660,260,116

Overall Difference$(11,476,617)

*offset to Rate Base

Return Overview

Actual Return %

D/E Ratio Weighted

LTD 85.05% 4.77% (a)

Equity 14.95% 1.85% (b)

Return 6.63% (a+b)

Projected Return %

D/E Ratio Weighted

LTD 86.06% 4.70% (a)

Equity 13.94% 1.73% (b)

Return 6.42% (a+b)

Overall Difference = 0.2012%

Return Overview

Rate Base

Actual to Projected Difference $(11,476,617)

Actual Return Rate 6.63%

$(760,342) (a)

Return Rate

Projected Rate Base $671,736,732

Actual to Projected Difference in Return % 0.2012%

$1,351,390 (b)

Overall Difference in Return $591,048 (a+b)

Operating Expense Overview

Projected 2013 Operating Expense $78,815,432

Actual to Projected Differences:

O&M (includes A&G) $(755,842)

Depreciation Expense $(332,354)

Taxes Other Than Income Taxes $125,177

Income Taxes $0

Actual 2013 Operating Expense $77,852,413

Overall Difference$(963,019)

Attachment GG & MM Overview

Attachment GG

Projected ATRR $17,872,720

Actual to Projected Differences:

Annual Expense Charge $64,038

Annual Return Charge $199,605

Depreciation Expense $(98,447)

Actual ATRR $18,037,916

Overall Difference $165,196

Attachment MM

Projected ATRR $5,998,423

Actual to Projected Differences:

Annual Expense Charge $(4,983)

Annual Return Charge $(429,469)

Depreciation Expense $(500,970)

Actual ATRR $5,063,002

Overall Difference $(935,421)

Revenue Credits Overview

Projected 2013 Revenue Credits $4,338,375

Actual to Projected Differences:

Account 454 (Rent From Electric Property) $(629,236)

Account 456 (Other Electric Revenues) $(828,511)

Actual 2013 Revenue Credits $2,880,628

Overall Difference $(1,457,747)

Next Steps

• Information Exchange Procedures*

– Interested Parties have until December 1, 2014** to submit information requests

– GRE shall make a good faith effort to respond within 15 business days of receipt of such request

– Any information request should be submitted in writing to: • Todd Butkowski (tbutkowski@GREnergy.com) and• Seth Nelson (snelson@GREnergy.com)

– All questions and answers will be distributed by e-mail to the Interested Party who asked the question(s) and will be posted on the MISO website and OASIS

* Awaiting FERC’s final decision on Docket ER13-2379 on FERC’s investigation into MISO Formula Rate Protocols ** If December 1 falls on a weekend or a holiday recognized by FERC, the deadline for submitting the request will be extended to the next business day

Questions?