Willmar Municipal Utilities Annual Rate Update Meeting Wesley Hompe P.E. General Manager Friday, August 15,

Meeting Purpose Review timeline and calculations of the 2013 Willmar Municipal Utilities (WMU) historical Attachment O Rate Formula which impact transmission rates from June 1, 2014 – May 31,

Notice In accordance with Section 30.9 of the MISO Tariff, WMU’s revenue requirements for WMU’s transmission facilities integrated into the MISO transmission system are included within GRE’s Attachment O. WMU’s revenue requirements and load are located in the GRE pricing zone. 3

Municipal Profile Willmar Municipal Utilities A component unit of the City of Willmar, MN Governed by a 7 member commission Provides Electric, Water and Heat Electric Division 9,203 Electric customers 46 Electric division employees 42 MW of owned generation 1 - coal/gas unit, boiler turbine generator - 18 MW 1 - gas unit, boiler turbine generator - 8 MW 2 - wind turbines - 2 MW each 6 – diesel peaking units - 2 MW each $26.8 Million Annual Electric Operating Revenue (2013) $45.6 Million Total Electric Assets 4

5 WMU Facilities 13 mi. of 230 KV Transmission 24 mi. 69 KV Transmission 6 - Substations

Formula Rate Protocol Timeline By June 1stBy Sept 1stBy Dec 1stBy Jan 10thBy Jan 31stBy Feb 28thBy March 15thBy March 31st Post actual calculations on prior year’s Rate Information Meet with Interested Parties to discuss the calculations from the prior year Deadline for Interested Parties to submit information requests Willmar Municipal Utilities must respond to information requests Deadline for Interested Parties to submit Informal challenges Deadline to respond to Informal challenges Willmar Municipal Utilities to submit Informational filing Deadline for Interested Parties to file Formal Challenges Posted May 22 nd Meeting held August 15th More information can be found on the MISO Transmission Owner Rate Data page onOwnerRateData.aspx

Rate Base Rate Base Item2012 Actual2013 ActualDifference Gross Plant in Service $ 13,102,846 $ 13,206,033$ 103,187 Accumulated Depreciation $ (8,554,508) $ (8,954,664)$ (400,156) Net Plant in Service $ 4,548,338 $ 4,251,370$ (296,968) Adjustments Rate Base $ - Land Held for Future Use $ - Working Capital $ 187,383 $ 278,862$ 91,479 Rate Base $ 4,735,722 $ 4,530,231$ (205,491) 7

Rate Base - Continued 8 Item2012 Actual2013 ActualDifference O&M $ 388,087 $ 434,318 $ 46,231 Depreciation $ 344,560 $ 336,916 $ (7,644) Other Taxes $ 376,368 $ 398,268 $ 21,900 Income Taxes $ - Return $ 519,035 $ 496,919 $ (22,116) Gross Revenue Requirement $ 1,628,050 $ 1,666,421 $ 38,371 Less Revenue Credits $ (38,768) $ (32,895) $ 5,873 Net Revenue Requirement $ 1,589,282 $ 1,633,526 $ 44,244

Questions? 9 Please submit by to Wesley Hompe Chris Carlson All questions and answers will be distributed by to the attendee with the inquiry. In addition, the questions and answers will be posted on the MISO website: missionOwnerRateData.aspx