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BUSINESS ENVIRONMENT <br /> V \/ PAiswell oositionec <br /> for the future <br /> The business environment in the electric utility industry is dynamic and <br /> complex. MMPA has assembled a resource portfolio that gives the Agency <br /> flexibility to respond to changes in this environment while positioning it to <br /> be successful in the future. <br /> Regulatory Uncertainties Increased Renewable Requirements <br /> The electric utility industry is currently facing In 2016, the State of Minnesota's renewable <br /> significant uncertainty regarding energy policy energy standard increased. Now, 17%of all <br /> and regulation. The Midcontinent Independent energy provided to customers in Minnesota <br /> System Operator (MISO)-the entity responsible must come from renewable sources-up from <br /> for wholesale electric markets in Minnesota-is 12% in prior years. This requirement steps up in <br /> frequently revising and changing its rules and future years-to 20% in 2020 and 25% in 2025. <br /> market constructs. Utilities such as MMPA must Recently, legislation has been proposed to <br /> constantly stay on top of regulatory and market increase the renewable energy standard as <br /> changes to ensure that good decisions are high as 50% in 2030. <br /> being made to position the Agency well for <br /> MMPA's investments in renewable energy <br /> the future. <br /> go beyond what is required for compliance <br /> Low Natural Gas Prices purposes. We've added renewable resources <br /> After setting record highs last decade, natural to reduce our exposure to commodity price <br /> gas prices have remained low for the last fluctuations and help provide stable electric <br /> few years. MMPA has benefited from these rates to our members. <br /> low natural gas prices, as our conventional <br /> Agency Load Growth <br /> generation resources are natural gas-fired. In <br /> In a business environment where many utilities <br /> addition to being economic and efficient, our <br /> are experiencing flat or declining loads, MMPA's <br /> natural gas generation portfolio positions the <br /> load is growing. Our member cities are seeing <br /> Agency well compared to coal should future <br /> increases in both residential and business <br /> regulation seek to place a direct cost on <br /> customers-including new data centers <br /> carbon dioxide production. <br /> and distribution facilities for large national <br /> corporations. MMPA supports its member <br /> communities by providing competitive power <br /> rates, which helps our members attract new <br /> business customers. <br /> 2016 MMPA Annual Report 7 <br /> 88 <br />