ITP10 Fuel Cost Determination April 19, 2011 ESWG Teleconference 2

Team & Purpose Team of stakeholders formed during the March 28, 2011 ESWG meeting to determine fuel costs for use in the 2011 ITP10. –Bennie Weeks (Xcel Energy) –Paul Dietz (Westar Energy) –David Ried (Omaha Public Power District) Determining reasonable costs in 2022 for the primary fuels of interest: –Coal, Natural Gas, Uranium and Fuel Oil 3

Meetings & Topics April 4 th –Decided on uranium & fuel oil prices in 2022 –Discussed methodologies behind the values April 6 th –Decided coal & natural gas prices in 2022 –Discussed market indicators and their validity April 19 th –Presenting the groups results to the ESWG for review 4

Uranium Price in 2022: $ / MMBtu –Applies to the whole eastern interconnect –Held constant throughout the year Reasons behind this value: –Nuclear units will provide power despite slight changes in the fuel cost –Experience in economic studies that any transmission development will not change the output of the nuclear plants 5

Fuel Oil Price in 2022: –Held constant throughout the year Reasons behind these values: –Fracking for gas & liquids has increased domestic oil production and the price of mid-continent oil prices –Baseline of Kansas City Rack Rate for crude in 2022 –Transportation cost is included 6 ClassPrice $/MMBtu #2 Fuel Oil23.74 #6 Fuel Oil 0.3% Sulphur20.28 #6 Fuel Oil 0.7% Sulphur17.64 #6 Fuel Oil 1.0% Sulphur14.43 #6 Fuel Oil 2.0% Sulphur14.37

Coal Price in 2022: $1.20 / MMBtu –Powder River Basin as primary SPP source –Held constant throughout the year Reasons behind this value: –Value matches expectations and has the appropriate relative difference from gas price 7

Coal Prices in the Eastern Interconnect 8 Importance: – Appalachian coal competitive with gas – Influences propensity for exports out of SPP Reasons for these values: – Based upon current NYMEX trades – 2.4% growth and discount rates applied Mine Mouth / TypePrice $/MMBtu Powder River Basin1.20 North Lignite1.33 Central Interconnect?1.88 Rocky Mountain1.99 Gulf Lignite2.35 Illinois2.82 Northern Appalachian2.88 Southern Appalachian3.23 Central Appalachian4.45 Imported2.27

Delivered Price of Coal Delivery to individual plants through the footprint is a unique cost Starting value provided by Ventyx Verified and modified by SPP based on geographic distance from mine 9

Natural Gas Price in 2022: $8.24 –Henry Hub, no transport cost –Varies by month Reasons behind this value: –Average of NYMEX futures trading for 2022 as of Apr 1 st –A dependable price that is traded in markets everyday 10

Delivered Price of Natural Gas Five SPP regions with unique natural gas price adjustments –Nebraska, $-0.20/MMBtu –North SPP, $-0.36/MMBtu –Central SPP, $-0.46/MMBtu –West SPP, $-0.36/MMBtu –South SPP, $-0.13/MMBtu 11

Fuel Input Approval – Next Steps Finalize the reference fuel prices the ITP10 and begin benchmarking Next steps –Benchmarking of data inputs –Determine gas prices in sensitivities 12