FINAL COLORADO ELECTRIC COST OF CAPITAL STUDY FOR TAX YEAR 2015

DIVIDEND (EARNINGS) GROWTH MODEL

ELECTRIC COMPANIES ALLETE Alliant Energy Amer. Elec. Power Ameren Corp. Avista Corp. Black Hills CenterPoint Energy Cleco Corp. CMS Energy Corp. Consol. Edison Dominion Resources DTE Energy Duke Energy Edison Int'l El Paso Electric Empire Dist. Elec. Entergy Corp. Exelon Corp. FirstEnergy Corp. G't Plains Energy Hawaiian Elec. IDACORP Inc. Integrys Energy MGE Energy NextEra Energy Northeast Utilities NorthWestern Corp. OGE Energy Pepco Holdings PG&E Corp. Pinnacle West Capital PNM Resources Portland General PPL Corp. Public Serv. Enterprise SCANA Corp. Sempra Energy Southern Co. TECO Energy UIL Holdings Vectren Corp. Westar Energy Wisconsin Energy Xcel Energy Inc.

TICKER ALE LNT AEP AEE AVA BKH CNP CNL CMS ED D DTE DUK EIX EE EDE ETR EXC FE GXP HE IDA TEG MGEE NEE NU NWE OGE POM PCG PNW PNM POR PPL PEG SCG SRE SO TE UIL VVC WR WEC XEL

EXPECTED VALUE GROWTH DIVIDEND EQUITY LINE RATE YIELD RATE BETA 6.0% 3.7% 9.70% 0.80 5.0% 3.1% 8.07% 0.80 4.5% 3.5% 8.04% 0.70 4.5% 3.6% 8.08% 0.75 5.5% 3.7% 9.21% 0.80 9.5% 3.1% 12.55% 0.90 5.5% 4.4% 9.90% 0.75 2.0% 2.9% 4.93% 0.80 6.5% 3.3% 9.78% 0.70 2.0% 3.9% 5.91% 0.60 5.5% 3.3% 8.75% 0.70 5.5% 3.3% 8.78% 0.75 5.0% 3.8% 8.84% 0.60 2.5% 2.6% 5.05% 0.75 3.0% 2.9% 5.87% 0.70 4.0% 3.5% 7.53% 0.70 1.5% 3.8% 5.30% 0.70 3.5% 3.3% 6.84% 0.70 4.5% 3.7% 8.19% 0.70 6.0% 3.5% 9.52% 0.85 4.0% 3.7% 7.70% 0.80 1.5% 2.8% 4.34% 0.80 0.5% 3.5% 3.99% 0.80 9.0% 2.5% 11.48% 0.70 6.0% 2.9% 8.90% 0.70 8.0% 3.1% 11.10% 0.75 3.5% 2.9% 6.43% 0.70 5.5% 3.0% 8.46% 0.90 7.0% 4.0% 11.01% 0.70 5.0% 3.4% 8.42% 0.65 4.0% 3.5% 7.48% 0.70 11.0% 2.7% 13.70% 0.85 5.0% 3.0% 7.99% 0.80 0.0% 4.2% NFM 0.60 2.0% 3.7% 5.65% 0.75 5.0% 3.6% 8.58% 0.75 7.0% 2.5% 9.48% 0.75 3.5% 4.4% 7.88% 0.55 4.0% 4.3% 8.30% 0.85 4.5% 4.0% 8.47% 0.80 9.0% 3.3% 12.29% 0.80 6.0% 3.4% 9.39% 0.75 5.5% 3.2% 8.70% 0.65 5.5% 3.5% 8.98% 0.65 Beta Industry Average 0.74

CAPM MODEL EX ANTE EQUITY RATE 11.50% 11.50% 10.47% 10.98% 11.50% 12.52% 10.98% 11.50% 10.47% 9.44% 10.47% 10.98% 9.44% 10.98% 10.47% 10.47% 10.47% 10.47% 10.47% 12.01% 11.50% 11.50% 11.50% 10.47% 10.47% 10.98% 10.47% 12.52% 10.47% 9.96% 10.47% 12.01% 11.50% 9.44% 10.98% 10.98% 10.98% 8.93% 12.01% 11.50% 11.50% 10.98% 9.96% 9.96%

EX POST EQUITY RATE 8.88% 8.88% 8.18% 8.53% 8.88% 9.58% 8.53% 8.88% 8.18% 7.48% 8.18% 8.53% 7.48% 8.53% 8.18% 8.18% 8.18% 8.18% 8.18% 9.23% 8.88% 8.88% 8.88% 8.18% 8.18% 8.53% 8.18% 9.58% 8.18% 7.83% 8.18% 9.23% 8.88% 7.48% 8.53% 8.53% 8.53% 7.13% 9.23% 8.88% 8.88% 8.53% 7.83% 7.83%

AVERAGE EQUITY RATE 10.19% 10.19% 9.32% 9.76% 10.19% 11.05% 9.76% 10.19% 9.32% 8.46% 9.32% 9.76% 8.46% 9.76% 9.32% 9.32% 9.32% 9.32% 9.32% 10.62% 10.19% 10.19% 10.19% 9.32% 9.32% 9.76% 9.32% 11.05% 9.32% 8.89% 9.32% 10.62% 10.19% 8.46% 9.76% 9.76% 9.76% 8.03% 10.62% 10.19% 10.19% 9.76% 8.89% 8.89% MEAN SELECTED MEDIAN

EQUITY RATE USED 9.94% 9.13% 8.68% 8.92% 9.70% 11.80% 9.83% 10.19% 9.55% 8.46% 9.04% 9.27% 8.65% 9.76% 9.32% 8.43% 9.32% 8.08% 8.76% 10.07% 8.94% 10.19% 10.19% 10.40% 9.11% 10.43% 9.32% 9.76% 10.17% 8.66% 8.40% 12.16% 9.09% 8.46% 9.76% 9.17% 9.62% 7.95% 9.46% 9.33% 11.24% 9.57% 8.80% 8.94% 9.45% 9.45% 9.32%

PERCENT COMMON EQUITY INCLUDES PREF. STOCK 64.84% 71.63% 65.61% 65.98% 60.32% 68.13% 56.57% 71.48% 54.29% 63.88% 68.57% 66.07% 61.16% 65.78% 62.21% 63.58% 57.29% 61.85% 47.09% 55.44% 67.69% 67.38% 67.57% 80.02% 65.20% 65.20% 64.78% 73.89% 60.18% 63.09% 71.38% 60.48% 57.10% 54.08% 71.65% 60.35% 68.91% 66.62% 59.03% 59.52% 70.80% 61.41% 72.33% 61.35% 64.13% 64.00% 64.81%

DEBT RATE 4.94% 4.56% 5.19% 4.94% 4.94% 5.19% 4.81% 4.94% 5.19% 4.56% 5.19% 5.19% 4.94% 4.94% 5.19% 4.94% 4.94% 5.19% 5.19% 5.19% 5.19% 4.81% 4.56% 4.38% 4.81% 4.81% 4.94% 4.56% 5.19% 4.94% 4.81% 5.19% 4.94% 4.94% 5.19% 5.19% 5.19% 4.81% 5.19% 5.19% 4.56% 4.56% 4.56% 4.94% 4.94% 4.94% 4.94%

PERCENT TOTAL CAP DEBT RATE 35.16% 8.18% 28.37% 7.83% 34.39% 7.48% 34.02% 7.56% 39.68% 7.81% 31.87% 9.69% 43.43% 7.65% 28.52% 8.69% 45.71% 7.56% 36.12% 7.05% 31.43% 7.83% 33.93% 7.88% 38.84% 7.21% 34.22% 8.11% 37.79% 7.76% 36.42% 7.16% 42.71% 7.45% 38.15% 6.98% 52.91% 6.87% 44.56% 7.90% 32.31% 7.73% 32.62% 8.43% 32.43% 8.36% 19.98% 9.20% 34.80% 7.62% 34.80% 8.47% 35.22% 7.78% 26.11% 8.40% 39.82% 8.19% 36.91% 7.28% 28.62% 7.37% 39.52% 9.41% 42.90% 7.31% 45.92% 6.84% 28.35% 8.46% 39.65% 7.59% 31.09% 8.24% 33.38% 6.90% 40.97% 7.71% 40.48% 7.65% 29.20% 9.29% 38.59% 7.64% 27.67% 7.62% 38.65% 7.39% 35.87% 7.83% 36.00% 7.83% 35.19% 7.78%

Electrics: If DGM Equity rate, NMF or below 6.5 or above 14%; then CAPM used exclusively for Equity Rate

* - Please see attached pages for debt ratings. 2015 Final Electric Cost of Capital Study.xls Page 1

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COLORADO COST OF CAPITAL - STATISTICS PAGE

RISK PREMIUM CALCULATION EX ANTE MARKET RISK (Rm) (1) SAFE RATE (Rf) (2) EX ANTE RISK PREMIUM (Rp) (3) EX POST RISK PREMIUM (4) EX ANTE CAPM FORMULA EX POST CAPM FORMULA (1) (2) (3) (4)

2015 13.55% 3.28% 10.27% 7.00%

2015 EQUALIZATION FACTOR All Colorado State Assessed Properties

100.00%

3.28% + (beta x 10.27 %) 3.28% + (beta x 7.00 %)

Refer to page 5 of the narrative summary. 20-year constant maturity - Federal Reserve (5-Year Monthly Average). Difference between (1) - (2). Long-horizon expected equity risk premium - 2015 Ibbotson SBBI Market Report (Historical Page 16)

Reuters CORPORATE INDUSTRIAL BOND YIELD INDEX-BY RATING

YIELD AVERAGE - Annual Mo. Ave. (Long-Term)

Mergent Bond Guide CORPORATE BY RATINGS - Annual Mo. Average PUBLIC UTILITY BONDS INDUSTRIAL BONDS (Mergent Bond Guide, January 2015 - page 213)

Extremely Strong AAA 4.26%

Very Strong AA 4.54%

Strong Capacity A 4.77%

Adequate Capacity BBB 5.53%

Best

High

Upper-Med.

Medium

Quality Aaa 4.16% --4.16%

Quality Aa 4.22% 4.19% 4.25%

Grade A 4.34% 4.28% 4.40%

Grade Baa 4.85% 4.80% 4.91%

More Risk BB+ 6.49%

Not Applied

`

2015 Final Electric Cost of Capital Study.xls

STATISTICS PAGE 2

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BOND RATING AND RATE ANALYSIS FOR TAX YEAR 2015 MERGENT

ELECTRIC COMPANIES ALLETE Alliant Energy American Electric Power Ameren Corp. Avista Corp. Black Hills Corporation CenterPoint Energy Cleco Corp. CMS Energy Corp. Consol. Edison Dominion Resources DTE Energy Duke Energy Edison Int'l El Paso Electric Empire Dist. Elec. Entergy Corp. Exelon Corp. FirstEnergy Corp. G't Plains Energy Hawaiian Elec. IDACORP Inc. Integrys Energy MGE Energy NextEra Energy Northeast Utilities NorthWestern Corp. OGE Energy Pepco Holdings PG&E Corp. Pinnacle West Capital PNM Resources Portland General PPL Corp. Public Serv. Enterprise SCANA Corp. Sempra Energy Southern Co. TECO Energy UIL Holdings Vectren Corp. Westar Energy Wisconsin Energy Xcel Energy Inc.

Public Services of Colorado

STANDARD AND POORS

BOND RATING A A Baa A A Baa Baa A Baa A Baa Baa A A Baa A A Baa Baa Baa Baa Baa A Aa Baa Baa A A Baa A Baa Baa A A Baa Baa Baa Baa Baa Baa A A A A

2014 YEAR END RATES 4.34% 4.34% 4.85% 4.34% 4.34% 4.85% 4.85% 4.34% 4.85% 4.34% 4.85% 4.85% 4.34% 4.34% 4.85% 4.34% 4.34% 4.85% 4.85% 4.85% 4.85% 4.85% 4.34% 4.22% 4.85% 4.85% 4.34% 4.34% 4.85% 4.34% 4.85% 4.85% 4.34% 4.34% 4.85% 4.85% 4.85% 4.85% 4.85% 4.85% 4.34% 4.34% 4.34% 4.34%

BOND RATING BBB A BBB BBB BBB BBB A BBB BBB A BBB BBB BBB BBB BBB BBB BBB BBB BBB BBB BBB A A AA A A BBB A BBB BBB A BBB BBB BBB BBB BBB BBB A BBB BBB A A A BBB

2014 YEAR END RATES 5.53% 4.77% 5.53% 5.53% 5.53% 5.53% 4.77% 5.53% 5.53% 4.77% 5.53% 5.53% 5.53% 5.53% 5.53% 5.53% 5.53% 5.53% 5.53% 5.53% 5.53% 4.77% 4.77% 4.54% 4.77% 4.77% 5.53% 4.77% 5.53% 5.53% 4.77% 5.53% 5.53% 5.53% 5.53% 5.53% 5.53% 4.77% 5.53% 5.53% 4.77% 4.77% 4.77% 5.53%

Average =

4.60%

Average =

5.28%

A

AVERAGE BOND RATE APPLIED 4.94% 4.56% 5.19% 4.94% 4.94% 5.19% 4.81% 4.94% 5.19% 4.56% 5.19% 5.19% 4.94% 4.94% 5.19% 4.94% 4.94% 5.19% 5.19% 5.19% 5.19% 4.81% 4.56% 4.38% 4.81% 4.81% 4.94% 4.56% 5.19% 4.94% 4.81% 5.19% 4.94% 4.94% 5.19% 5.19% 5.19% 4.81% 5.19% 5.19% 4.56% 4.56% 4.56% 4.94%

A

Bond rating, if rating unavailable - corresponding rating applied. Italics - if no rating available for a specific company, then the applicable rating is applied based on finan strength, if unknown then the industry average is applied.

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Bond Reference Page 3

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