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Adams, Bryan <br />m: John Gasal [john.gasal@connexusenergy.com] <br />:...nt: Thursday, March 27, 2008 4:01 PM <br />To: Adams, Bryan <br />Cc: Mike Rajala <br />Subject: Wholesale Power Cost Adjustments <br />Bryan, <br />This summarizes our discussion of GRE's wholesale power cost and as requested will give some of the reasons <br />for it. <br />John Gasal <br />ERMU impact. <br />January actual: $116,315.52 charge, for February bill issued in March <br />February actual: $179,988.80 charge, for March bill to be issued in April <br />March (est'd) $220,000.00 charge, for April bill to be issued in May <br />Key Drivers: <br />Note -The MISO market has a significant affect on GRE's revenues and expenses. All of GRE's generation is <br />sold into the MISO market while GRE's entire load is purchased from the MISO market. <br />• Load growth up in January, requiring additional MISO purchases. Part of this was driven by increased <br />dual fuel sales. <br />• Revenue from wind generation down due to MISO price less than budgeted. (GRE pays a fixed price <br />for the wind generation while the revenue is based on the hourly MISO price). <br />• Revenue from MISO sales from GRE's peaking stations down due to high natural gas prices. <br />• Coal Creek forced outage last week of February & first week of March. This outage occurred during <br />record high natural gas prices which drove the cost for replacement power up. <br />Information courtesy of GRE: <br />_ .per cost adjustment (PCA) <br />Costs in the wholesale power market are higher than expected this past winter due to colder weather than in <br />recent years, and consequently, higher loads. This is affecting the entire market, but has had an increased effect <br />on GRE due to the forced outage at Coal Creek Station Unit 2. <br />