1 OPSI Raleigh, NC Gas Market & Electric Integration John Lawhorn, Senior Director Policy & Economic Studies October. 8, 2013

2 Major Interstate Pipelines in the MISO Footprint OPSI October 8, 2013 Meeting – Raleigh

3 MISO’s Gas-Electric Coordination Efforts Coordination with FERC MISO has also been actively involved in FERC’s on-going gas-electric coordination efforts, including participating in technical conferences, providing feedback on key gas-electric issues, and keeping FERC up-to-date on MISO’s collaboration with its Stakeholders and the natural gas industry OPSI October 8, 2013 Meeting – Raleigh

4 MISO’s Electric and Natural Gas Coordination Task Force OPSI October 8, 2013 Meeting – Raleigh h Background MISO Stakeholder group established in Oct to provide a forum for cross-industry education and collaboration, to identify gas-electric interdependency challenges, and to develop recommendations for solutions. InitiativeStatus Draft Issue Paper on Misalignment of the Gas/Electric DaysCompleted Aug. 2013; recommendation to MISO Steering Committee to survey MISO Market Participants on moving up MISO Day Ahead market schedule Draft Issue Paper on Resource Adequacy - Scope Loss of Load Expectation Study to capture fuel risk In progress; examines GADS reporting, seasonal aspects of resource adequacy, LOLE methodology and capacity accreditation; considers market-based vs. administrative solutions In progress; study completion targeted for Q Draft Issue Paper on Coordinated OperationsIn progress; examines info/data sharing; trial communication exchange with NG pipelines planned Develop database of NG generators and associated infrastructure in the MISO footprint In progress Develop web platform to consolidate critical pipeline notices impacting MISO, and pipeline overlay overhead display for MISO Ops Being investigated / in progress Set up seasonal meetings/conference calls with NG pipelines to improve communication and situational awareness. Being investigated / in progress

5 Phase III Gas Study Overview OPSI October 8, 2013 Meeting – Raleigh Takeaways The Phase III builds upon MISO’s previous gas infrastructure analyses through the application of complementary methodologies; the outcome is a comprehensive understanding of major gas infrastructure trends in the MISO Midwest and MISO South regions. MISO Midwest There is a clear trend of decreasing sub-regional constraints and increasing interconnectivity in the MISO Midwest footprint, with isolated exceptions. Shifting supply and demand fundamentals outside and inside the Midwest Market will increasingly position the region as a destination rather than a waypoint for gas en route to other markets. The increased retention of supply passing through the region, the greater diversity of supply options and the growth in Bakken production will provide end users with opportunities to reassess asset portfolios. Strong supply basins in the Northeastern US will continue to impact Midwestern flow patterns and will increasingly help serve Midwestern demand; however, infrastructure expansion is still needed to move gas into the region and to address area-specific constraints. MISO South End users in the MISO South Region will continue to have access to numerous supply sources due to an exceptionally well-connected pipeline network.

6 APPENDIX OPSI October 8, 2013 Meeting – Raleigh

7 Midwest Demand Still Mostly Residential and Commercial in Base Demand Scenario Residential /Commercial is largest source of demand in region Powerburn and Industrial demand have base load growth Source: Bentek Energy OPSI October 8, 2013 Meeting – Raleigh

8 Midwest Market Area Realizes a More Diversified Supply Portfolio Source: Bentek Energy OPSI October 8, 2013 Meeting – Raleigh

9 Up to 35% of inflow volumes were destined for downstream markets Source: Bentek Energy OPSI October 8, 2013 Meeting – Raleigh

10 The future of corridor flows into the Midwest Market Source: Bentek Energy OPSI October 8, 2013 Meeting – Raleigh

11 Nominal Gas Prices for MTEP13 and Phase III Study Scenarios OPSI October 8, 2013 Meeting – Raleigh