Meeting the Challenge: The New Energy Landscape MANAGER, POLICY AND OUTREACH BRIDGET MCLAUGHLIN DOCKTER.

Meeting the Challenge:The New Energy Landscape

MANAGER, POLICY AND OUTREACHBRIDGET MCLAUGHLIN DOCKTER

• Provides safe, clean, reliable energy to more than 3.4 million electric and 1.9 million gas customers

• 19,851 employees and contractors

• Regulated operations in 8 Midwestern and Western states

• Headquartered in Minneapolis

Overview

Northern States Power Company –

Minnesota• 1.4 million electric

customers• 500,000 gas customers

Public Service Company of

Colorado• 1.4 million electric

customers• 1.3 million gas

customers

Southwestern Public Service

Company• 400,000 electric

customers

Northern States Power Company –

Wisconsin• 250,000 electric

customers• 110,000 gas customers

ACCOMPLISHMENTS

No. 1 wind provider in America

Building Solar Capacity

A Leader inEmission Reductions

A Leaderin Conservation

A Leaderin Transmission30%

Carbon ReductionBy 2020

Strong Reliability

StormResponse

All at aCompetitive

Price

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5

AGENDA

IndustryTrends

Where WeWant to Go

How We Get There

TRENDS IN THE ENERGY INDUSTRY

ChangingEconomics

Growing Customer Expectations

Changing Policy Landscape

6

CHANGING ECONOMICSNatural Gas

Drilling and Fracking

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Price and Production

Henry Hub Price$/MMBtu

Marketed MonthlyProduction MMcf

Millions

$-

$2

$4

$6

$8

$10

$12

$14

1,000,000.0

1,200,000.0

1,400,000.0

1,600,000.0

1,800,000.0

2,000,000.0

2,200,000.0

2,400,000.0

2,600,000.0Price Production

CHANGING ECONOMICSRenewable Costs

2005 2009 2013$0

$20

$40

$60

$80

$-

$2

$4

$6

$8

$10

$/MWh $/MMBtu

• Competes with natural gas

• Great energy hedge

WindEnergy Tax Credit

8

CHANGING ECONOMICSRenewable Costs

• Technology improvements lower costs

• Utility costs must be considered

• Higher penetration requires greater system support

SolarEnergyUtility Scale

EnergyRooftop

TaxCredit

$400

$300

$200

$100

2006 2013 2013$0

2009

Incentive

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CHANGING ECONOMICS On the Horizon

Heat and Power

Micro Grids

Battery Storage

Fuel Cells

Utility in a Box

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The Energy Grid

GROWING CUSTOMER EXPECTATIONS

MORE OPTIONS INCREASED RELIABILITY

LOCAL CONTROL COMPETITIVE PRICES

CONVENIENCEGREEN ENERGY

COMMUNICATIONPRICE CERTAINTY

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30%

CHANGING POLICY LANDSCAPEEPA Proposed Carbon Reduction: Clean Power Plan

41%

11%

35%

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35%by 2030

40%reductionby 2030

2016 – 2030 RESOURCE PLAN

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63% Carbon Free

Reasonable

Cost

Coal29%

Nuclear28%

Wind25%

Natural Gas 8%

Solar8%

Hydro2%

Carbon reduction

Grid modernization

Innovative products and services

New regulatory framework

TRANSFORMATIVE REGULATION

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The Energy Landscape

has Changed

It’s Time for a New Approach

KEEPING THE MOMENTUM GOING

We’ve Accomplished Great Things

Together

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