1. Joseph L. Welch President and CEO, ITC Holdings Corp. July 16, 2007

2. 2 Who Is ITC?  ITC Holdings Corp. (“ITC”), through two of its operating subsidiaries, ITCTransmission and Michigan Electric Transmission Company, LLC (“METC”), operates fully- regulated, high-voltage transmission systems covering most of Michigan’s Lower Peninsula.  In January 2007 ITC Midwest LLC signed a definitive agreement to acquire the transmission assets of Interstate Power and Light Company, an Alliant Energy Corporation subsidiary, in Iowa, Minnesota, Illinois and Missouri.  ITC Great Plains and ITC Panhandle Transmission were formed in July 2006 and June 2007, respectively.  Rate regulation by the Federal Energy Regulatory Commission (“FERC”).  Operational subsidiaries are members of the Midwest Independent Transmission System Operator (“MISO”) and Southwest Power Pool.

3. 3  ITC and its subsidiaries are singularly focused on electric transmission.  ITC is committed to investing in the transmission grid to improve reliability, reduce congestion, enable a competitive, wholesale energy market, and lower the overall cost of delivered energy.  Only publicly traded company engaged exclusively in the transmission of electricity in the U.S.  Largest independent transmission company and currently 8th largest transmission company overall in the U.S. in terms of energy sales. (1) The Independent Transmission Company (1)Based on annual electric retail sales in the service territory as found in “Edison Electric Institute Profile: Rankings of Shareholder-Owned Electric Companies”, May 2006.

4. 4  ITC is not a market participant; its only business is transmission. —ITC doesn’t care whose electrons travel over its wires.  Transmission is the backbone of the electric system. —A reliable transmission system is critical to the success of any renewable portfolio standard policy or demand response program. Pure Focus on Transmission

5. 5  WIRES is the Working Group for Investment in Reliable and Economic Electric Systems (www.wiresgroup.com).  Serves as the voice of the electric transmission infrastructure industry, created in response to the urgent need for transmission identified by Congress in the Energy Policy Act and the electric industry.  Member companies include: —California Independent System Operator —Great River Energy —ITC Holdings Corp. —Infrasource —Midwest Independent Transmission System Operator, Inc. —National Grid —Oncor —PJM Interconnection —ScottMadden —Trans-Elect —Vinson & Elkins (counsel) —Wesco. WIRES

6. 6  Fact #1: Electric reliability is driven almost solely by the condition of the transmission grid.  Fact #2: Planning individual transmission systems without regard to the region will lead to negative results.  Fact #3: The transmission grid is critical in addressing issues such as “capacity”, reliability, competitive markets, demand response and renewable resources. The Facts

7. 7  The U.S. remains the largest consumer of energy, but China is gaining by leaps and bounds. World Energy Consumption Source: Energy Information Administration, International Energy Annual 2004

8. 8 U.S. Regular Conventional Retail Gasoline Prices ($ per Gallon) Source: Energy Information Administration (http://www.eia.doe.gov)  With the increasing world-wide demand on oil and petroleum, energy prices will only continue to increase for this resource that is becoming increasingly scarce.  The industry said that renewable resources were unable to be justified back when the price of gasoline was $1.00/gallon and later $2.00/gallon; prices have already gone past $3.00/gallon.  Renewable resources are inevitable; we must start today in order to reduce dependency on foreign oil and mitigate environmental impacts of fossil fuels.

9. 9 Electric Cars  Electric cars are gaining momentum.  For example, Ford and California Edison recently announced a partnership to test rechargeable hybrid cars in order to speed up mass production.  Widespread usage of electric vehicles will lead to an increase in energy consumption and demand on the grid.

10. 10 Renewable Resources  Renewable resources, such as wind, biomass and solar, make good public policy.  However, many impediments still exist: —Cost —Location – not located at or near load centers —Lack of robust transmission infrastructure —Size and scale  Current transmission interconnection standards do not facilitate the development of renewable resources; high barrier to entry. —Barrier to entry puts wind energy at a competitive disadvantage to incumbent generation.  Transmission is the enabler for delivering wind energy to load.

11. 11 Abundance of Wind in Central/Western U.S. Source: U.S. Dept. of Energy U.S. Annual Wind Power Resource and Wind Power Classes

12. 12  Aside from Chicago (“the Windy City”), wind typically occurs in abundance in areas with low electric demand.  Many states have implemented Renewable Portfolio Standards (“RPS”) within their state. —For example, Michigan has called for 25% RPS by 2025.  Peak load for Michigan’s Lower Peninsula is more than 22,000MW, therefore a 25% RPS represents 5,500MW.  Only 600-1,000MW of optimal wind sites in Michigan. —Other states have more wind potential than the total load in the state. —States will be dependent on the transmission grid to support renewable resources. —Some will need to export while others will need to import renewable resources.  Similar limitations exist for biomass. Limitations of Wind / RPS

13. 13 U.S. Utilities by Peak Load Source: Edison Electric Institute research, FERC Form 1  The large majority of U.S. utilities have peak loads of less than 8,000 MW. —These utilities typically do not have the resources or may choose not to invest in renewables but rather depend on the grid to import renewable resource-based energy.

14. 14 Biomass Capacity Source: U.S. Dept. of the Interior

15. 15  Transmission is the enabler for demand response programs.  For example, at a specific point in time (hour, day, etc.), assume that Chicago has reduced load due demand side management but that Detroit requires additional energy to support demand.  The grid must be able to reliably accommodate the resultant change in energy flow. —The grid must be able to withstand variations across the region. Demand Response Programs

16. 16  Given the lack of investment in the grid over the last 30 years coupled with the doubling of demand over the same period, now is opportune time.  As an industry, we must be focused not only on improving reliability within our own respective service territories, but we must also plan the grid: —With a regional view; —In consideration of future demands; and —To facilitate the development of renewables and demand response. System in Dire Need of Investment

17. 17  Policy changes are necessary to bring the benefits of renewables and demand response programs to consumers. —Interconnection standards —Cost allocation policies —Long-term focus and policies —Plan as a region Summary

18. Additional Slides

19. 19  Depreciation > $15 million for all five years Illustrative Example: Independent Transmission Company (13.88% ROE)  Additions to rate base = $50 million per year —Greater than depreciation  ROE = 13.88% —Remains steady

20. 20  Depreciation = $13-15 million Illustrative Example: Vertically Integrated Utility Under Frozen Rate  Additions to rate base = $8 million per year —Less than depreciation  ROE continues to grow due to lack of investment in system  Rate base steadily declining

21. 21 Result of Underinvestment Over Time