Southern California Energy Summit Palm Springs, California October 4-5, 2012 Jonathan M. Weisgall Vice President, Legislative & Regulatory Affairs MidAmerican Energy Holdings Company

The dilemma: We spend more than we take in 2

MidAmerican Owned Wind Resources MidAmerican Energy Company In-service – 1,877.7 megawatts Total 2012 Total PacifiCorp MidAmerican Energy Total , ,031.2 $ , ,284.8 $ , , ,316.0 $6.0 Investment (billions) Owned Wind Generation (MW) In construction 2012 – megawatts PacifiCorp In-service at acquisition date – 32.1 megawatts In-service since acquisition – megawatts – 9 percent of total owned generation capacity – In addition, 937 megawatts contracted through purchased power agreements – 385 megawatts planned – 29 percent of total owned generation capacity – In addition, 109 megawatts contracted through purchased power agreements 3

No price on carbon Natural gas Customers Climate change debate Political arena Renewables –Tax incentives –Transmission Uncertainties in the market 4

Taxes: –PTC –ITC Spending: –Loan guarantees –Research and development Regulate: –Federal RPS –EPA regulations of coal plants – impact on renewables What can Congress do? 5

Year-end fiscal cliff Tax extenders bill Under construction by – not on-line Wide support among Democrats and Republicans – but Romney opposition How to justify against tax reform, deficit reduction, corporate welfare Phase-out What happens if PTC isn’t extended? PTC extension – wind 6

Basic R&D funding Regulatory certainty and longevity: –PTC? –ITC? –Bonus depreciation? –Federal clean energy (or renewable portfolio) standard? –Master limited partnership structure (or REIT)? Other ways to “de-risk” development What does the renewable industry need? 7

R&D funding? Department of Defense spending? PTC extension? ITC? Clean energy standard (renewable) standard? Cap and trade? More stimulus funding? Loan guarantee program? §1603 Treasury grant in lieu of credit? Federal feed-in tariff? Carbon tax? What will the renewable industry get? 8

MLP/REIT – counter to tax reform? Treasury grants out; need partner with tax appetite Risk mitigation How to incorporate new technologies? Other factors affecting industry Backstop of state RPS programs Certainty and longevity – California’s record New business models needed 9