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2013 Transmission Stakeholder Meeting

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1 2013 Transmission Stakeholder Meeting
Ameren Transmission Company of Illinois and Ameren Illinois Company October 17, 2012

2 Agenda Main Purpose is to review ATXI and AIC Projected 2013 Transmission Rate Calculations Background on Attachment O, GG & MM Overview of MTEP and MVPs Forward Looking Rates Approved Incentives ATXI Comparison to Current Revenue Requirement AIC Comparison to Current Revenue Requirement 2013 AMIL Pricing Zone NITS Charge

3 Aic and Atxi Both AIC and ATXI are transmission owning subsidiaries of Ameren Corporation, as well as MISO Transmission Owners (TOs) The sum of their Attachment O net revenue requirements equals the total revenue requirement for AMIL pricing zone to be collected under Schedule 9 (NITS) AIC will continue to build and own traditional reliability projects ATXI is in the process of building and will own new regional transmission projects

4 MISO ATTACHMENTs O, GG & MM
Calculate rates for Schedules 9, 26 & 26-A Attachment GG - Schedule 26 (page 5) Attachment MM - Schedule 26-A (page 6) Attachment O - net revenue requirement billed under Schedule 9 (page 7) Schedules 26 and 26-A are billed by MISO Schedule 9 is billed by Ameren

5 Cost Recovery for certain Network Upgrades Eligible projects
MISO ATTACHMENT gg Cost Recovery for certain Network Upgrades Eligible projects Baseline Reliability Market Efficiency Generator Interconnections Cost shared based upon project type MISO-wide based on load Subregional based on LODF (Line Outage Distribution Factor) AIC has three Attachment GG projects completed ATXI has no Attachment GG projects

6 Cost recovery for Multi-Value Projects (MVPs)
MISO ATTACHMENT MM Cost recovery for Multi-Value Projects (MVPs) Very similar format as Attachment GG Criteria for being considered Developed through planning process and support energy policy Multiple types of economic value across multiple pricing zones with benefit to costs > 1 Address at least one: Projected NERC violation Economic-based issue Cost shared across MISO based on load AMIL Zone is approximately 9% Ameren MVPs will primarily be built by ATXI AIC will be responsible for modifications needed to its existing facilities

7 MISO ATTACHMENT O, GG & MM
All transmission costs included in Attachment O calculation Schedule 9 based on net revenue requirement – reductions for: Costs recovered in Schedules 26 & 26-A Point-to-Point revenue in Schedules 7 & 8 Rental revenue Revenue from generator interconnections Questions on Tariffs?

8 Miso transmission expansion plan (MTEP)
Developed on an annual basis building upon previous analysis MISO, Transmission Owners & Stakeholders Includes subregional planning meetings MTEP goals Ensure the reliability of the transmission system Ensure compliance with NERC Standards Provide economic benefits, such as increased market efficiency Facilitate public policy objectives, such as meeting Renewable Portfolio Standards Address other issues or goals identified through the stakeholder process Multiple future scenarios analyzed End result – comprehensive, cohesive plan for MISO footprint MTEP approved by MISO Board of Directors

9 Brief history of development
MISO MVPS Brief history of development Began investigating value added expansion in 2003 2008 Regional Generation Outlet Study (RGOS) - formed basis of Candidate MVP portfolio Portfolio refined due to additional analysis MISO approved portfolio of 17 Projects Seven transmission line segments (MTEP proj numbers) in Ameren territory Ameren identifies these three projects as: Illinois Rivers (four line segments) Spoon River Mark Twain (two line segments) Broadly cost-shared, AMIL pricing zone allocated 9% of each MVP no matter where project is located or who builds it

10 MAP OF AMEREN MVPs

11 Rates better reflect current costs Implemented by several MISO TOs
Forward looking rates Rates better reflect current costs Implemented by several MISO TOs Requires true-up to actual year costs New calculations based on projected 2013 data Rate base items -13 month average balance Interest on over/under recovery 2013 true-up calculated in 2014 and reflected in 2015 rates FERC approved forward looking rates for ATXI effective March 1, 2012 AIC filed request at FERC in July 2012 and expects an Order by the end of 2012.

12 Forward looking rates timeline
September 1, 2012 Calculate 2013 revenue requirements for AIC & ATXI October 31, 2012 Meet with Customers to discuss rate input projections and cost detail January 1, 2013 New rates in effect July 1, 2013 Calculate and post 2012 true-up (Only ATXI in 2013) September 1, 2013 Calculate 2014 revenue requirements for AIC & ATXI Includes 2012 true up with interest for ATXI October 31, 2013 January 1, 2014 New rates in effect based on 2014 projections and 2012 true-up for ATXI

13 Rate incentives FERC approved the following rate incentives for Illinois River in Docket No. EL10-80 CWIP (no AFUDC) Abandonment (requires additional filing prior to recovery) Hypothetical capital structure during construction for ATXI July 2012 filing requested similar incentives for Spoon River and Mark Twain Projects

14 ATXI Revenue Requirement
Projected 2012 vs Projected 2013

15 Atxi Projections for 2013 ATXI Rate Base Mar-12 Jan-13 Change Percent
Page.Line Mar-12 Jan-13 Change Percent 2.6 Total Gross Plant 53,171,000 63,438,000 10,267,000 19% 2.12 Total Accum Depreciation 1,653,000 2,652,000 999,000 60% 2.18 TOTAL NET PLANT 51,518,000 60,786,000 9,268,000 18% 2.18a 100% CWIP RECOVERY 8,742,000 33,665,000 24,923,000 285% ADJUSTMENTS TO RATE BASE N/A 2.20 Account No. 282 -11,550,000 -12,172,000 -622,000 5% 2.21 Account No. 283 -8,000 2.22 Account No. 190 4,009,000 3,984,000 -25,000 -1% 2.25 Land Held for Future Use 2.26 CWC 68,110 115,500 47,391 70% 2.27 Materials & Supplies 2.28 Prepayments TOTAL ADJUSTMENTS -7,472,891 -8,080,500 -607,610 8% 2.30 TOTAL RATE BASE 52,787,110 86,370,500 33,583,391 64%

16 Atxi Projections for 2013 ATXI Expenses Mar-12 Jan-13 Change Percent
Page.Line Mar-12 Jan-13 Change Percent O&M 3.1 Transmission 44,876 41,000 -3,876 -9% 3.1a Less LSE Expenses N/A 3.2 Less Account 565 3.3 A&G 500,000 883,000 383,000 77% 3.4 Less FERC Annual Fees 3.5 Less EPRI, ect. 3.5a Plus Trans. Reg. Comm. Exp 3.8 TOTAL O&M 544,876 924,000 379,124 70% 3.12 TOTAL DEPRECIATION 1,013,856 1,006,000 -7,856 -1% TAXES 3.13 Payroll 3.16 Property 3.18 Other 25,000 3.27 Income Taxes 2,391,316 4,188,901 1,797,584 75% TOTAL TAXES 4,213,901 1,822,584 76% TOTAL EXPENSES 3,950,048 6,143,901 2,193,852 56%

17 ATXI True-up & Net Revenue Requirement
Atxi Projections for 2013 ATXI True-up & Net Revenue Requirement Page.Line Mar-12 Jan-13 Change Percent 1.1 Gross Revenue Requirement 7,790,601 7,845,158 54,557 1% 1.6 Total Revenue Credits 611,000 488,000 -123,000 -20% 1.6a Historic Year Actual ATRR N/A 1.6b Projected ATRR from Prior Year 1.6c Prior Year ATRR True-Up 1.6d Prior Year Divisor True-Up 1.6e Interest on Prior Year True-Up 1.7 NET REVENUE REQUIREMENT 7,179,601 7,357,158 177,557 2%

18 ATXI Attachment MM Calculation - Page 1
Atxi Projections for 2013 ATXI Attachment MM Calculation - Page 1 (1) (3) (4) Line No. Transmission Allocator 1 Gross Transmission Plant - Total 97,103,000 1a Transmission Accumulated Depreciation 2,652,000 2 Net Transmission Plant - Total 94,451,000 O&M TRANSMISSION EXPENSE 3 Total O&M Allocated to Transmission 924,000 3a Transmission O&M 41,000 3b Less: LSE Expenses included in above, if any - 3c Less: Account 565 included in above, if any 3d Adjusted Transmission O&M 4 Annual Allocation Factor for Transmission O&M 1.55% OTHER O&M EXPENSE 4a Other O&M Allocated to Transmission 883,000 4b Annual Allocation Factor for Other O&M 0.91% GENERAL AND COMMON (G&C) DEPRECIATION EXPENSE 5 Total G&C Depreciation Expense 6 Annual Allocation Factor for G&C Depreciation Expense 0.00% TAXES OTHER THAN INCOME TAXES 7 Total Other Taxes 25,000 8 Annual Allocation Factor for Other Taxes 0.03% 9 Annual Allocation Factor for Other Expense 0.94% INCOME TAXES 10 Total Income Taxes 4,188,901 11 Annual Allocation Factor for Income Taxes 4.43% RETURN (Note I) 12 Return on Rate Base 7,336,763 13 Annual Allocation Factor for Return on Rate Base 7.77% 14 Annual Allocation Factor for Return 12.20% HYPOTHETICAL CAPITAL STRUCTURE (HCS) RETURN 15 Annual Allocation Factor HCS Return (Note J) 0.0042%

19 ATXI Attachment MM Calculation - Page 2
Atxi Projections for 2013 ATXI Attachment MM Calculation - Page 2 (1) (2) (3) (4) (5) (6) (7) (8) (9) Line No. Project Name MTEP Project Number Project Gross Plant Project Accumulated Depreciation Transmission O&M Annual Allocation Factor Annual Allocation for Transmission O&M Expense Other Expense Annual Allocation Factor Annual Allocation for Other Expense Annual Expense Charge (Note C) Page 1 line 4 (Col 4 * Col 5) Page 1 line 9 (Col 3 * Col 7) (Col 6 + Col 8) Multi-Value Projects (MVP) 1a Pana-Sugar Creek 2237 $13,801,511 $0 1.55% 0.94% $129,056.49 1b Sidney-Rising 2239 $3,083,519 $28,833.66 1c Palmyra-Pawnee 3017 $23,644,040 $221,092.95 1d Pawnee-Pana 3169 $2,363,032 $22,096.47 (10) (11) (11a) (12) (13) (14) (15) (16) Project Net Plant Annual Allocation Factor for Return Annual Allocation Factor for HCS Return Annual Return Charge Project Depreciation Expense Annual Revenue Requirement True-Up Adjustment MVP Annual Adjusted Revenue Requirement (Col 3 - Col 4) (Pg 1 line 14) (Pg 1 line 15) (Note J) (Col 10 * (Col Col 11a)) (Note E) (Sum Col. 9, 12 & 13) (Note F) Sum Col 14 & 15 (Note G) 12.20% 0.0042% $ ,684,753 $ 1,813,810 $1,813,809.87 $ ,406 $ ,239 $405,239.48 $ ,886,233 $ 3,107,326 $3,107,325.94 $ ,456 $ ,552 $310,552.28 2 MVP Total Annual Revenue Requirements $5,636,928 3 Rev. Req. Adj For Attachment O

20 Atxi Projections for 2013 Ameren MVPS Ameren Name 2012-2013 CAPEX
MTEP #s MTEP Description Illinois Rivers $78 million 2237 Pana - Mt. Zion - Kansas - Sugar Creek 345 kV line 2239 Sidney to Rising 345 kV line 3017 Palmyra-Quincy-Meredosia - Ipava & Meredosia-Pawnee 345 kV Line 3169 Pawnee to Pana kV Line Spoon River $0.0 million 3022 Fargo-Galesburg-Oak Grove 345 kV Line Mark Twain 2248 Adair - Ottumwa 345 3170 Adair-Palmyra 345 kV Line

21 AIC Revenue Requirement
June 2012 vs Projected 2013

22 Aic Projections for 2013 AIC Rate Base Jun-12 Jan-13 Change Percent
Page.Line Jun-12 Jan-13 Change Percent 2.6 Total Gross Plant 953,216,965 1,203,711,514 250,494,549 26% 2.12 Total Accum Depreciation 425,415,799 446,612,300 21,196,502 5% 2.18 TOTAL NET PLANT 527,801,167 757,099,214 229,298,047 43% 2.18a 100% CWIP RECOVERY N/A ADJUSTMENTS TO RATE BASE 2.20 Account No. 282 -136,971,095 -221,677,954 -84,706,860 62% 2.21 Account No. 283 -1,155,409 -10,630,339 -9,474,930 820% 2.22 Account No. 190 26,320,342 47,632,202 21,311,860 81% 2.23 Account No. 255 -785,425 2.25 Land Held for Future Use 1,637,671 528,800 -1,108,871 -68% 2.26 CWC 3,755,531 4,399,010 643,479 17% 2.27 Materials & Supplies 4,038,558 4,093,957 55,399 1% 2.28 Prepayments 1,015,306 936,720 -78,585 -8% TOTAL ADJUSTMENTS -101,359,096 -175,503,029 -74,143,933 73% 2.30 TOTAL RATE BASE 426,442,071 581,596,185 155,154,114 36%

23 Aic Projections for 2013 AIC Expenses Jun-12 Jan-13 Change Percent O&M
Page.Line Jun-12 Jan-13 Change Percent O&M 3.1 Transmission 38,237,889 39,184,517 946,628 2% 3.1a Less LSE Expenses 3,090,097 0% 3.2 Less Account 565 14,522,516 11,657,490 -2,865,027 -20% 3.3 A&G 9,969,183 11,319,374 1,350,191 14% 3.4 Less FERC Annual Fees N/A 3.5 Less EPRI, ect. 582,803 596,873 14,070 3.5a Plus Trans. Reg. Comm. Exp 32,593 32,649 56 3.8 TOTAL O&M 30,044,248 35,192,080 5,147,832 17% 3.12 TOTAL DEPRECIATION 17,308,466 22,079,756 4,771,291 28% TAXES 3.13 Payroll 642,493 875,947 233,453 36% 3.16 Property 802,435 1,005,911 203,475 25% 3.18 Other 241,057 369,141 128,085 53% 3.27 Income Taxes 21,427,193 26,615,064 5,187,871 24% TOTAL TAXES 23,113,179 28,866,063 5,752,884 TOTAL EXPENSES 70,465,892 86,137,899 15,672,007 22%

24 Total AIC Revenue Requirement
Aic Projections for 2013 Total AIC Revenue Requirement Page.Line Jun-12 Jan-13 Change Percent 2.30 TOTAL RATE BASE 426,442,071 581,596,185 155,154,114 36% 4.30 Rate of Return 10.44% 10.06% -0.38% -4% 3.28 Return 44,537,530 58,531,643 13,994,113 31% Total Expenses 70,465,892 86,137,899 15,672,007 22% 3.29 TOTAL GROSS REV. REQ. 115,003,422 144,669,542 29,666,120 26% 3.30 Less ATT. GG Adjustment 2,539,687 3,600,384 1,060,697 42% 3.30a Less ATT. MM Adjustment N/A 3.31 GROSS REV. REQ. UNDER ATT. O 112,463,734 141,069,158 28,605,423 25%

25 AIC True-up & Net Revenue Requirement
Aic Projections for 2013 AIC True-up & Net Revenue Requirement Page.Line Jun-12 Jan-13 Change Percent 1.1 Gross Revenue Requirement 112,463,734 141,069,158 28,605,423 25% 1.6 Total Revenue Credits 7,886,618 8,011,058 124,440 2% 1.6a Historic Year Actual ATRR N/A 1.6b Projected ATRR from Prior Year 1.6c Prior Year ATRR True-Up 1.6d Prior Year Divisor True-Up 1.6e Interest on Prior Year True-Up 1.7a NET REVENUE REQUIREMENT 104,577,116 133,058,099 28,480,983 27% 1.7b Prairie Power 583,724 0% 1.7 AIC Adjusted Revenue Requirement 105,160,840 133,641,823 28,480,984

26 AIC Attachment GG Calculation - Page 1
Aic Projections for 2013 AIC Attachment GG Calculation - Page 1 (1) (2) (3) (4) Attachment O Line Page, Line, Col. Transmission Allocator No. 1 Gross Transmission Plant - Total Attach O, p 2, line 2 col 5 (Note A) 1,171,789,360 2 Net Transmission Plant - Total Attach O, p 2, line 14 and 23b col 5 (Note B) 737,577,578 O&M EXPENSE 3 Total O&M Allocated to Transmission Attach O, p 3, line 8 col 5 35,192,080 4 Annual Allocation Factor for O&M (line 3 divided by line 1 col 3) 3.00% GENERAL AND COMMON (G&C) DEPRECIATION EXPENSE 5 Total G&C Depreciation Expense Attach O, p 3, lines 10 & 11, col 5 (Note H) 974,916 6 Annual Allocation Factor for G&C Depreciation Expense (line 5 divided by line 1 col 3) 0.08% TAXES OTHER THAN INCOME TAXES 7 Total Other Taxes Attach O, p 3, line 20 col 5 2,250,999 8 Annual Allocation Factor for Other Taxes (line 7 divided by line 1 col 3) 0.19% 9 Annual Allocation Factor for Expense Sum of line 4, 6, and 8 3.28% INCOME TAXES 10 Total Income Taxes Attach O, p 3, line 27 col 5 26,615,064 11 Annual Allocation Factor for Income Taxes (line 10 divided by line 2 col 3) 3.61% RETURN 12 Return on Rate Base Attach O, p 3, line 28 col 5 58,531,643 13 Annual Allocation Factor for Return on Rate Base (line 12 divided by line 2 col 3) 7.94% 14 Annual Allocation Factor for Return Sum of line 11 and 13 11.54%

27 AIC Attachment GG Calculation - Page 2
Aic Projections for 2013 AIC Attachment GG Calculation - Page 2 (1) (2) (3) (4) (5) (6) (7) (8) (9) (10) (11) (12) Line No. Project Name MTEP Project Number Project Gross Plant Annual Allocation Factor for Expense Annual Expense Charge Project Net Plant Annual Allocation Factor for Return Annual Return Charge Project Depreciation Expense Annual Revenue Requirement True-Up Adjustment Network Upgrade Charge (Note C) (Page 1 line 9) (Col. 3 * Col. 4) (Note D) (Page 1 line 14) (Col. 6 * Col. 7) (Note E) (Sum Col. 5, 8 & 9) (Note F) Sum Col. 10 & 11 (Note G) 1a Wood River-Roxford kV line 728 $3,424,487 3.28% $112,274.38 $3,126,881 11.54% $360,970.35 $62,088 $535,333.19 $0 535,333 1b Sidney-Paxton 138kV Reconductor 18 miles 870 $5,994,479 $196,533.50 $5,457,597 $630,030.56 $121,199 $947,763.37 947,763 1c Coffeen Plant-Coffeen, North - 2nd. Bus tie 2829 $5,593,763 $183,395.74 $5,394,027 $622,691.99 $99,459 $905,546.32 905,546 1d Stallings Sub transformer/ring bus 2065 $7,298,067 $239,272.60 $7,229,100 $834,534.64 $137,933 $1,211,740.70 1,211,741 2 Annual Totals $3,600,384 3 Rev. Req. Adj For Attachment O

28 Significant Line Expansion Projects Requiring CoCN (> $25 Million)
AIC Projections for 2013 Significant Line Expansion Projects Requiring CoCN (> $25 Million) Project Name Total Cost ISD MTEP MISO ID# MTEP Description LaSalle-Fox River approval granted $64 M 2012 MTEP05 725/726 N. LaSalle-Wedron Fox River 138 kV - 24 miles new line, kV breakers at N. LaSalle, kV Breaker at Wedron Fox River. Ottawa-Wedron Fox River 138 kV - Construct 9 miles new 138 kV line, 1 new 138 kV breaker at Ottawa Latham-Oreana approval granted $26 M 2014 MTEP08 2068 Convert Oreana 345 kV Bus to 6-Position Ring Bus with 3000 A Capability; Construct 8.5 miles of 345 kV line (2-954 kcmil ACSR conductor or equivalent capability) from Oreana Substation to 345 kV Line 4571 tap to Latham Substation kV PCB's at Oreana Substation. Brokaw-S Bloomington approval granted 2069 South Bloomington Area 345/138 kV Substation - Install 345/138 kV, 560 MVA Transformer. Extend new 345 kV line approximately 5 miles from Brokaw Substation to South Bloomington Substation. Install kV PCB at South Bloomington Substation, and kV PCB's at Brokaw Substation Duck Creek-Fargo (Maple Ridge) $78 M 2016 MTEP09 2472 Tap existing 345kV line from Duck Creek to Tazewell and create new Maple Ridge Substation ($6.5M). Build a new supply line to the Fargo Substation by extending 20 miles of 345kV from the new Maple Ridge Substation ($50.1M). Create Fargo Station and install 560 MVA 345/138kV Transformer ($9.4M) Bondville-SW Campus approval granted $42 M 2015 MTEP10 2992 Bondville-S.W. Campus 138 kV - Construct 8 miles of new 138 kV line. Construct 138 kV Ring Bus at Bondville (2 new PCB's) and a 138 kV Ring Bus at Champaign S.W. Campus (4 new PCB's).

29 Modifications to Existing Facilities
AIC Projections for 2013 Modifications to Existing Facilities Category CAPEX Projects Description Reliability/aging infrastructure replacement $178 million 196 These projects are primarily driven by the need to upgrade the transmission system based on meeting NERC standards or Ameren Planning Criteria and Guidelines. The NERC TPL standards set forth a set of tests that a transmission system must meet for a list of plausible scenarios, including contingent scenarios. Ameren Planning Criteria and Guidelines (C&G) are filed each year at FERC and constitute an additional, or complementary, set of tests that the transmission system must meet. Clearance for planned line rating $127 million 54 These projects are primarily driven by the need to upgrade the transmission system to support expected flows on the transmission circuits. Load growth, plant additions/retirements, and flow changes due to future system expansions are primary inputs into the decision to either increase ground clearances using existing wire or in some cases, increasing ground clearances with wire replacement, in order to achieve higher circuit ratings. Right of way expansion $22 million 38 These projects are driven by the need to increase the rights and rights-of-way associated with 40 transmission corridors. The primary benefit of this set of projects is increased reliability of the system in the area of vegetation. In many cases, the existing rights-of-way are much narrower than the widths specified in Ameren's Planning Criteria and Guidelines for reliable circuit operation. The 2003 blackout and the recent 2011 Northeast US major outage event had vegetation as an incipient cause. After both events, and with the adoption of the FAC-003 standard, FERC has emphasized the need for increased vegetation management efforts which these projects support. Improved Reliability $31 million 36 These projects are driven by the need to address reliability concerns driven by system topology, configuration, or condition. Operating issues, including outages, usually identify these kinds of projects. The majority of these projects involve additions of equipment in substations, e.g. relaying and/or circuit breakers.

30 AMIL Schedule 9 NITS rate for 2013
AMIL Schedule 9 Rate Calculation Page.Line Jun-12 Jan-13 Change Percent 1.7 AIC Adjusted Revenue Requirement 105,160,840 133,641,823 28,480,984 27% ATXI Adjusted Revenue Requirement 7,179,601 7,357,158 177,557 2% Total Revenue Requirement 112,340,441 140,998,982 28,658,540 26% 1.15 Ameren Illinois Divisor 7,256,406 7,175,041 (81,365) -1% . Annual Cost ($/kW/Yr) 15.482 19.651 4.170 Network & P-to-P Rate ($/kW/Mo) 1.290 1.638 0.347

31 Transmission Pricing - Attachments O, GG & MM Information
Miso web links Transmission Pricing - Attachments O, GG & MM Information https://www.midwestiso.org/MarketsOperations/MarketInformation/Pages/TransmissionPricing.aspx Ameren OASIS MTEP 11 https://www.midwestiso.org/Planning/TransmissionExpansionPlanning/Pages/MTEP11.aspx Schedule 26 & 26-A Indicative Charges https://www.midwestiso.org/Planning/TransmissionExpansionPlanning/Pages/MTEPStudies.aspx

32 QUESTIONS?


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