2013 Wind Conference

Transmission Service Study Process Steve Purdy

Transmission Service Transmission Service Reservation (TSR) reserves a specific amount of –capacity in megawatts (MW) –across a specific transmission system path –for a given timeframe A Transmission Service Agreement (TSA) is a –legal contract between the customer and SPP –filed with the Federal Energy Regulatory Commission (FERC) –publicly available from FERC or SPP website 3

Transmission Service Parameters Term –Short-term (hourly, daily, weekly, monthly) –Long-term (yearly) Firmness (priority) –Firm –Non-Firm Class –Network (“NITS”) –Point-to-Point (“PTP”) 4

Network and Point-to-Point NITS service is charged a cost based on the customer’s “load-ratio share”, or the customer’s load as a percentage of SPP’s total network load –Network Load –Network Resources PTP service is charged based on the amount of reserved capacity and the path Designated Resources serve any load within the SPP region –Network Resources serve specifically Network Load 5

First-come, first-served Short-term – SPP Operations – AFC (Available Flowgate Capacity) process Long-term – SPP Engineering – Study Process Evaluation of Transmission Service Requests 6

Study Processes for LT Transmission Service 7 Aggregate Study Attachment Z1 Aggregate Study Attachment Z1 Delivery Point Transfer Study Attachment AR Delivery Point Transfer Study Attachment AR Delivery Point Addition Study Attachment AQ Delivery Point Addition Study Attachment AQ Transfer of an existing delivery point from one SPP Network Customer to another SPP Network Customer All new PTP requests and re-directs, all requests to designate new resources, any other requests that don’t fit one of the other processes New network delivery points, facility modifications to existing delivery points, and new “block” load additions to existing delivery points

Feb - MayOct - JanJune - Sept Aggregate Study Process Open Seasons All long-term transmission service requests submitted within a 4-month “open season” are aggregated for purposes of evaluation Three aggregate studies are started each year AG-1AG-2AG-3 8

Aggregate Study is an iterative process that continues until no customers withdraw Open Season (4 months) Open Season (4 months) Facilities Study (60 days) Facilities Study (60 days) Letter of Intent Response Period (15 days) Restudy Needed ? Write Service Agreement YES NO Aggregate Study Process 9

10 Model Build Contingency Scan Constraint Analysis Cost Allocation 28 Models 7 Seasons: Years 1, 2, 5 Summer/Winter peak; Year 10 Summer peak 2 Cases: Base and Transfer 2 Scenarios: Projected Dispatch; Contractual Dispatch Contingencies and Monitored Elements N-1 Facilities in SPP Flowgates for First-Tier areas and beyond Identify Upgrades Least-cost Solution Utilize expansion-plan upgrades where possible Attachment J, Z1, and Z2 Allocate Upgrade Costs by Flow Impact, including Crediting Re-dispatch Calculation Aggregate Facilities Study Stages

NPPD AEP NPPD OPPD KCPL SUNC WR WFEC OKGE 11 AEP Decrease Generation Increase Generation Aggregate Study Process MISO AECI 100 MW SPP

Aggregate Study Process Upgrade Costs –Transmission System upgrades are determined for the entire aggregate group of requests –Upgrade costs are allocated to each request, based on its positive MW impact on the upgrade –The MW impact must meet at least a 3% Transfer Distribution Factor (TDF) to be allocated to a request Study Costs –Study costs are allocated to all requests in the first study iteration –Subsequent re-study costs are allocated to the withdrawing customer that drives the need for the re-study 12

Upgrade Funding for Service Upgrades Designated Resources –Base Plan “Highway/Byway”  Safe Harbor Cost Limit of $180,000/MW  Qualifications – 5-year term – Designated Resources ≤ 125% Designated Loads – Wind Resources ≤ 20% Designated Loads –Excess = Directly Assigned Upgrade Costs (“And” Charge) –Waiver Process PTP service –PTP revenue –Excess = Directly Assigned Upgrade Costs (“Or” Charge) 13

Documents Posted on SPP OASIS 14

Documents Posted on SPP OASIS 15 Informational Documents

SPP Aggregate Study Exploder 16

Frequently-Asked Questions What is a Letter of Credit and when do I have to provide it? –Financial Instrument provided to SPP to cover the cost of upgrades in case of customer default –Typically 1-2% of the amount of the LOC –Required prior to confirmation of service Can I request to be a Designated Resource for a Network Service Customer? –Only the Network Customer can request to designate a new resource 17

Frequently-Asked Questions What are the steps in finalizing service? –SPP sends to customer with instructions –Customer updates OASIS request as needed –Customer provides documentation as needed  Attestation for Designated Resources  Re-dispatch Agreements  Letter of Credit –SPP accepts OASIS request –Customer confirms OASIS request –SPP tenders service agreement 18

Current Study Queue Study Currently Active Iteration Due Date Requests Currently in Study MW Currently in Study Currently Posted Study Date Posted 2011-AG2AFS-10 LOI6/8/ ,252AFS-93/13/ AG3AFS-97/15/ ,069AFS-85/1/ AG1AFS-410/17/2013* 44 2,870AFS-34/5/ AG2AFS-59/15/2013* 40 4,756AFS-43/4/ AG3AFS-47/8/ ,435AFS-34/24/ AG1AFS-26/17/ ,584AFS-14/3/ AG2Open Season ends 5/31/2013 Total , As of May 30, 2013

Retract requests outside the parameters Open Season Aggregate Facilities Study Tender Service Agreements 105 Days Day 1105 Overview of the Proposed Process Feb 1 Example Dates Remove requests outside parameters from analysis Aggregate Facilities Study Agreement Accept/Confirm all requests within parameters June 1 Process continues without customer intervention until all remaining requests are within the specified parameters 1.Customer defines maximum acceptable directly-assigned upgrade cost & 3 rd party upgrade cost estimates 2.Customer defines acceptable deferred start date 3.Customer defines acceptable re- dispatch criteria 4.Execute study agmt. with obligation to take service. 5.Submit attestation for DR requests 1.Customer defines maximum acceptable directly-assigned upgrade cost & 3 rd party upgrade cost estimates 2.Customer defines acceptable deferred start date 3.Customer defines acceptable re- dispatch criteria 4.Execute study agmt. with obligation to take service. 5.Submit attestation for DR requests Prohibit “mutually- exclusive” requests Post study results with cost estimates for all requests, including removed

Questions 21