What’s New in Southern Companies’ OATT Southern Company Transmission 2008 Customer Forum

Background Order 890 issued on Feb. 16, compliance filings made on July 13, 2007 Attachment C filed on Sept. 11, 2007 Attachment K filed on Dec. 7, 2007 Order 890-A issued on Dec. 28, A compliance filings made on Mar 17, 2008

Order 890 and 890-A As a result of FERC Orders, our Tariff is being updated frequently –Since July 13 there have been 5 revisions driven by Order 890 & 890-A At any time, the latest version is on our OASIS at:

Topics to Cover –Planning Redispatch and Conditional Firm Service –Rollover Rights –Attachment K –Unreserved Use Penalties –Attachment C –Business Practices –Performance and Study Metrics –Generator Imbalance Service –Creditworthiness

PR / CFS Order 890 modified Planning Redispatch and created Conditional Firm Service For either to be studied, Customer must select the option in the System Impact Study agreement TP at its discretion, can offer a mix of PR and CFS

PR / CFS Caveats –Only available for Point-to-Point service –Only an option for service of 2 years or more –For customers unwilling to commit to enhancements, PR and CFS will have a biennial reassessment –The “bridge” product for customers committed to enhancements has no reassessment

TP required to provide both specific conditions and number of hours for customer to choose from CFS not available for network customers Still only allowed 60 days to perform a SIS with PR and / or CFS options PR / CFS

Important takeaways –PR and/or CFS must be selected by the customer in the SIS agreement –PR and CFS will only be offered if reliability is not harmed

Rollover Rights Currently –To exercise Rollover Rights, Customer must have yearly service and request 60 days prior to expiration of service Per Order 890 –Five-year term required to have rollover rights –One-year notice provision

Rollover Rights When does this become effective? –Effective upon acceptance of Attachment K –Attachment K filed on Dec. 7, 2007 –To date, no Transmission Providers’ Attachment K has been accepted by FERC

Attachment K Coordinated, Open, and Transparent Transmission Planning required as part of Order 890 Attachment K describes the Southeastern Regional Transmission Planning Process and the Southeast Inter-Regional Process

Attachment K Provides detail on how Southern Companies intend on addressing the eight planning principles: - Coordination - Openness - Transparency - Information Exchange - Comparability - Dispute Resolution - Regional Participation - Economic Planning Studies

Attachment K Southeastern Regional Planning Process –Initiative started prior to Order 890 –Sponsors PowerSouth Dalton Utilities GTC MEAG SMEPA Southern Company –Currently have 40 registered participants

Attachment K Regional Planning Stakeholders Group Four meetings per year Next on June 25, Preliminary Expansion Plan Regional Planning Website:

Attachment K Per section – up to 5 economic studies to be performed –Stakeholders selected the following at the March 5, 2008 meeting: 1000 MW from Mobile, AL to Atlanta 1000 MW from Alabama to Florida 1000 MW from Entergy to Alabama 1000 MW from GA-ITS to SCPSA and SCEG 2000 MW from Entergy to GA-ITS

Attachment K Inter-Regional Planning Process –Coordination with transmission systems Provider is interconnected with. –Inter-Regional Planning Website:

Unreserved Use Penalties Penalty charges developed by FERC in Order 890 (P846) –Penalty for single hour will be based on daily, firm point-to-point service –More than one assessment for a given duration will increase the penalty period to the next longest duration

Unreserved Use Penalties Per FERC –P452 (890-A) - It is the obligation of the transmission customer, not the transmission provider, to ensure that the customer has reserved the transmission service that it uses. –P447 (890-A) - The Commission declines to distinguish between intentional and unintentional unreserved transmission uses and reiterates that all unreserved uses will be subject to operational penalties. –P448 (890-A) - The Commission continues to believe that it would not be appropriate to exempt any class of customers from unreserved use penalties. –P838 (890) – We will not limit unreserved use penalties to instances where the unreserved use jeopardizes the reliable operation of the transmission system.

Unreserved Use Penalties Penalty structure described in Business Practices – uthern Company Transmission General Business Practices.pdfhttps:// uthern Company Transmission General Business Practices.pdf

Unreserved Use Penalties Annual Report for Penalty Assessments posted on OASIS –Penalties assessed on 8 Pt-Pt customers and 4 network customers –For 2007 (July-Dec), $816, collected Report also includes how penalty will be distributed

Attachment C Describes methodology to assess Available Transfer Capability (“ATC”) Includes –ATC algorithms –Process Flow-Diagram –Detailed TRM and CBM descriptions

Attachment C Southern Companies Attachment C filed on Sept 11, 2007 FERC Accepted with modification on March 28, 2008 Southern Companies made a compliance filing on April 28, 2008

Business Practices Order 890 requires that all business practices that relate to transmission service be posted Southern Companies’ Business Practices can be found in General Information section of OASIS

Business Practices Includes –General Business Practices OASIS Registration Billing Practices Reservation and Scheduling Information –CFS Tagging and Tracking –Distribution of Penalties –Procedures for Changing Business Practices

Performance Metrics 890 Requires the Transmission Provider to make quarterly reports on performance metrics Provides details on study agreements, time to complete studies, etc. Differentiates between affiliate and non- affiliate

Generator Imbalance Service Described in Schedule 10 –Charges for generator imbalances –Description of incremental / decremental cost Attachment R –Service Agreement Template for generator imbalance

Generator Imbalance Service Questions about Generator Imbalance service should be directed to: Bryan Hill Interconnections Project Mgr

Creditworthiness Attachment Q outlines the credit worthiness requirements for conducting business under our Tariff The Credit Manual (posted on OASIS) provides additional implementation details These constitute our “Credit Policy”

Creditworthiness Attachment Q –Credit Evaluation –Unsecured Credit Line –Eligible Collateral Requirements –Total Credit Limit Amounts –Communication with Applicants and Customers