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Project disks <br />Obligation to maintain and replace, no matter how costly <br />We would carry insurance to cover insurable losses <br />Non - insured cost would most likely all qualify for tariff recovery <br />Because of the very attractive projected returns on our investment, this risk is really more about <br />not having total control over our balance sheet and becoming more leveraged than desired <br />Obligation to make necessary improvements to accommodate future interconnection generators <br />• The tariff requires the interconnecting generator to reimburse the transmission provider <br />• In general it is very hard to conceive of a situation where any cost required by regulatory <br />requirements would not be recoverable in the tariff <br />Possible future NERC Compliance responsibilities and obligations <br />Regulatory Risk <br />FERC Incentive and MISO MVP Cost Allocation will be resolve by the before we decide to <br />proceed, but we have no assurances about other possible regulatory changes <br />• It is highly unlikely that MISO or FERC would retroactively make changes to the tariff that <br />adversely affect the project economics <br />• If regulatory changes were to occur in the future, they would most likely apply to future <br />transmission and we would most likely get grandfathered <br />3 The elimination of MISO in the future <br />• If this were to occur we would have to recover our coast through other tariff methods where the rules on <br />recovery may be different <br />• Biggest risk here is that the hypothetical capital structure may not be recognized <br />• However the projected economics still yield a 14% return even with out the hypothetical capital structure <br />