Minnesota Power 2022 Projected Rates Report Summary

Presented here is an overview of the 2022 Projected Rates Report for Minnesota Power, including details on revenue requirements, rate structures, and comparisons with 2021 figures. The report covers Attachment O, GG, and ZZ, as well as changes in transmission rates from 2014 to 2022. Key topics discussed in the annual customer meeting include formula rate protocols, transmission service details, and projected monthly rates.

• Minnesota Power
• Projected Rates Report
• Transmission Rates
• Revenue Requirements
• Annual Meeting

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1. 2022 Projected Rates Report Annual Customer Meeting October 21, 2021

2. Agenda Introduction Purpose of Today s Meeting & Overview Attachments O, GG, and ZZ Rate Structure Minnesota Power Transmission Rates 2022 Projected Rates Data Formula Rate Protocol Information Exchange Questions 2

3. Meeting Purpose Present the 2022 Attachment O, GG, and ZZ revenue requirements and compare to the 2021 revenue requirements. Engage with interested parties in Projected Report results. Comply with the Formula Rate Protocols. Overview Minnesota Power s 2022 projected transmission rates were submitted and posted on MISO s website September 1, 2021, and are subject to change pending review by MISO and other interested parties. MISO has completed its review of Minnesota Power s 2020 True-Up Attachment Report. The 2020 true-up amount, plus any interest will be applied to the annual 2022 Attachment O revenue requirement and rates. 3

4. Attachments O, GG & ZZ Rate Structure Attachment O Schedule 7 Firm Point-to-Point Transactions Schedule 8 Non-Firm Point-to-Point Transactions Schedule 9 Network Transmission Service AC & DC AC only AC only Attachment GG Schedule 26 Network Upgrade Charge, Transmission Expansion Plan AC only Attachment ZZ Schedule 45 NERC Recommendation or Essential Action AC & DC 4

5. Minnesota Power Transmission Rates Comparison of Projected Monthly Rates* ($/kW/Mo) 2014 through 2022 Year AC 2014 $1.996 2015 $2.370 2016 $2.627 2017 $3.619 2018 $3.687 2019 $3.690 2020 $4.343 2021 $4.505 2022 $4.399 DC $2.309 $2.144 $2.038 $2.512 $2.598 $2.452 $2.184 $2.127 $2.107 The rates shown are based upon Minnesota Power Revenue Requirements. This is not the MP zonal rate. The MP zonal rate includes both Minnesota Power and Great River Energy revenue requirements and load. MISO calculates the zonal rate. 5

6. Comparison - 2021 to 2022 AC Revenue Requirement Attachment O Net Revenue Requirement 2021 $ 73.2 2021 2022 Change Decrease in Return Requirement 55.2 54.2 (1.0) Increase in Operating Costs 80.6 83.1 2.5 Increase in Revenue Credits 33.6 38.2 4.6 Increase in Annual True-up (1.0) 4.8 5.8 Increase in Attachment GG Revenue Requirement 19.8 20.0 0.2 Increase in Attachment ZZ Revenue Requirement 8.2 8.3 0.1 Increase Net Revenue Requirement 73.2 75.6 2.4 Attachment O Net Revenue Requirement 2022 $ 75.6 6

7. Comparison - 2021 to 2022 Return Requirement Change in Rate Base Total Rate Base - 2021 $ 696.3 2021 814.5 2022 790.6 Change (23.8) Decrease in Net Plant in Service - GNTL No change in CWIP - GNTL Increase in Accumulated Deferred Taxes Decrease in Other Working Capital Net Decrease in Rate Base - - - (127.5) (115.6) 12.0 (0.1) (12.0) 9.4 9.3 696.3 684.4 Total Rate Base - 2022 $ 684.4 Reconciliation of Change in Return Requirement Change in Rate Base $ (12.0) 7.93% $ (0.9) Previous Year Projected Rate Base X Increase in WCC 696.3 0.00% - Decrease in Return Requirement $ (0.9) 7

8. Comparison - 2021 to 2022 Revenue Requirement Change in Operating Costs 2021 Operating Costs $ 80.6 2021 2022 Change Decrease in Operating & Maintenance 33.6 32.6 (1.0) Increase in Depreciation 22.4 22.9 0.5 Increase in Taxes Other Than Income Taxes 10.7 13.5 2.8 Increase in Income Taxes 13.8 14.1 0.3 Net Increase in Operating Costs 80.6 83.1 2.5 2022 Operating Costs $ 83.1 8

9. Comparison - 2021 to 2022 Revenue Requirement Change in Revenue Credits 2021 Revenue Credits $ 33.6 2021 2022 Change No change in Account 454 (Rents) 0.8 0.8 (0.0) Increase in Account 456 (Transmission of Electricity by Others) 32.8 37.4 4.6 Net Increase in Revenue Credits 33.6 38.2 4.6 2022 Revenue Credits $ 38.2 9

10. Comparison - 2021 to 2022 Revenue Requirement Reconciliation of Change in True-up 2021 True-up (from 2019 Actual Attachment O) $ (1.0) 2021 2022 Change Decrease in Revenue Requirement (0.3) (1.6) (1.3) Increase in Divisor (0.6) 6.2 6.8 Increase in Interest (0.1) 0.2 0.3 Net Increase in True-up (1.0) 4.8 5.8 2022 True-up (from 2020 Actual Attachment O) $ 4.8 10

11. Comparison - 2021 to 2022 DC Revenue Requirement Attachment O Net Revenue Requirement 2021 $ 14.0 2021 2022 Change Increase in Return Requirement 5.9 6.1 0.2 Decrease in Operating Costs 9.1 8.9 (0.2) Decrease in Annual True-up 0.1 (0.0) (0.1) No change in Attachment ZZ Revenue Requirement 1.1 1.1 (0.0) 14.0 13.9 (0.1) Attachment O Net Revenue Requirement 2022 $ 13.9 11

12. Comparison - 2021 to 2022 Return Requirement Change in Rate Base Total Rate Base 2021 $ 74.9 2021 2022 Change Increase in Net Plant in Service 81.7 83.3 1.6 Increase in Accumulated Deferred Taxes (7.9) (7.1) 0.8 No change in Other Working Capital 1.1 1.1 (0.0) Net Increase in Rate Base 74.9 77.3 2.4 Total Rate Base 2022 $ 77.3 Reconciliation of Change in Return Requirement Change in Rate Base $ 2.4 7.93% $ 0.2 Previous Year Projected Rate Base X Increase in WCC 74.9 0.00% - Increase in Return Requirement $ 0.2 12

13. Comparison - 2021 to 2022 Revenue Requirement Change in Operating Costs 2021 Operating Costs $ 9.1 2021 2022 Change Decrease in Operating & Maintenance 2.3 2.2 (0.1) Decrease in Depreciation 3.7 3.5 (0.1) No change in taxes other than income taxes 1.2 1.2 (0.0) Increase in income taxes 1.9 2.0 0.1 Net decrease in Operating Costs 9.1 8.9 (0.2) 2022 Operating Costs $ 8.9 13

14. Comparison - 2021 to 2022 Revenue Requirement Reconciliation of Change in True-up 2021 True-up (from 2019 Actual Attachment O) $ 0.1 2021 2022 Change Decrease in in Revenue Requirements 0.1 (0.0) (0.1) (Interest changed by less than $100,000.) 0.0 (0.0) (0.0) 2022 True-up (from 2020 Actual Attachment O) $ (0.0) 14

15. Information Exchange Procedures Interested Parties may submit information requests until December 1, 2021. Information requests shall be submitted in writing to FormulaRateResponseTeam@mnpower.com. Minnesota Power shall make a good faith effort to respond to such requests within 15 business days. All questions and responses will be distributed via email to the Interested Party who asked the question and also will be posted on the MISO website and OASIS, unless deemed confidential. 15

16. Submit questions in writing to: FormulaRateResponseTeam@mnpower.com 16

17. Leann Ohlerking-Boes lboes@mnpower.com (218) 355-3832 Lori Hoyum lhoyum@mnpower.com (218) 355-3601 17