While eating lunch in a grassy meadow, Ash and his friends encounter a Mareep, which the Pokédex describes as having a mild disposition and the ability to store electricity in their fleece. The Mareep smothers Pikachu, who retaliates with a Thunder Shock. However, Mareep's thick fleece absorbs the attack and grows in size. Soon enough, more Mareep appear and gather around Pikachu. He zaps them all, causing their wool to get very fluffy.
A young girl named Mary runs up and attempts to get the Mareep to back off, but only one listens. Her mother Ellen and a Raichu also arrive, and they succeed in freeing Pikachu from the flock. Ellen invites Ash and his friends over to her house, where she apologizes for the Mareep's behavior. She reveals that Mary was supposed to be watching the Mareep, but as she daydreamed about an upcoming festival for Mareep, they escaped. She wishes to enter, but her mother says she is too young. Sensing the tense relationship between the two, Brock offers to have the group assist the two with their daily tasks with the farm, and Ellen happily accepts.
Later, Raichu and Pikachu round up the Mareep so they can be groomed in preparation for the festival. Team Rocket watches and plans to sell the Mareep's wool so they could get rich. That evening, Mary and her Mareep, "Fluffy", continue to practice Thunder Shock outside. Ash is surprised by Fluffy's strength, and at Mary's insistence, he agrees to battle her. Pikachu narrowly dodges Fluffy's Headbutt, but he is then startled by Growl. Fluffy's Swift hits, sending Pikachu flying backwards. The two Electric Pokémon then exchange Thunder Shocks. Pikachu soon loses power, but manages to dodge several Thunder Shocks. Fluffy eventually becomes worn out from using too many Electric attacks and faints, leaving Mary distraught. Ash notes that Fluffy is exhausted and will need a night's rest to recover. Mary admits that she was focused on winning her first battle ever, and Ash reminds her that she forgot to take care of her Pokémon. Before dinner, Mary apologizes to Fluffy, and admits that she is not ready to compete in the Mareep festival yet.
In the middle of the night, a storm approaches. Ellen takes the group and the Mareep out to a cliff, to collect electricity and make their fleece look good for the festival. As their wool is fluffed up and sparkling with electricity, Team Rocket attacks and nets all of the Mareep. Ash tells Pikachu to attack, but Team Rocket captures him as well. Ellen's Raichu uses Thunderbolt, but the electricity is absorbed by a special panel. Upon trying again, the panel short-circuits, and the balloon crashes. Pikachu and the Mareep are freed, but Raichu is left exhausted. Jessie and James send out Weezing and Arbok, while Ellen uses the Mareep. However, they are not strong enough, and Pikachu is still stuck in his cage. Mary tells Ellen to concentrate the herd's energy onto Fluffy. As a result, Fluffy becomes supercharged, and, with the help of Pikachu, sends Team Rocket blasting off again.
The next morning, Ellen gives her daughter an old Poké Ball that once belonged to her mother, and says that she is ready to use Fluffy in the festival. Later, Ash, Misty, Brock, and Ellen cheer Mary on from the stands, as her first battle commences.