Helping our members work together toHelping our members ... conference... · Helping our members work together toHelping our members work together to keep the lights on – today

SPP Mission

Helping our members work together toHelping our members work together to keep the lights on – today and in the future.

SPP.org 1

The SPP Difference

• Relationship - Based

• Member - Driven

• Independence Through Diversity

• Evolutionary vs. Revolutionary

• Reliability and Economics Inseparable• Reliability and Economics Inseparable

SPP.org 2

Members in nine states:

Arkansas Mississippi New MexicoArkansas

Kansas

Mississippi

Missouri

New Mexico

Oklahoma

Louisiana Nebraska Texas

SPP.org 3

60 SPP Members

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SPP Governance

SPP.org 5

SPP Governing Documents

• Articles of Incorporation• Articles of Incorporation• Bylaws

M b hi A t• Membership Agreement• Criteria• Open Access Transmission Tariff (OATT)• Business Practices

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F ilit ti H l i O M b W k T thFacilitation – Helping Our Members Work Together

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New Member Interest and On-Boarding Process

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Process for New Member Interest• SPP Strategic Planning Committee (SPC) responsible for

id SPP ff f b iguidance to SPP staff for new member interest

• Process triggered on interest of party

SPP staff informs SPC Chair

SPP staff provides updates to SPC

SPC d t i d f M b hi F t i t SPP t ffSPC determine need for Membership Forum to assist SPP staff

• SPP staff provides updates to SPP Markets and Operations Policy Committee y

• Any recommendations or changes presented by SPP staff to SPP organizational groups

SPP.org

• SPP staff to inform membership of all membership changes9

Overview of New Member On Boarding ProcessOverview of New Member On-Boarding Process• Initial Interest—education and conceptual analysis

Letter of Intent / Memorand m of Understanding• Letter of Intent / Memorandum of Understanding

• Steps

Analysis and designAnalysis and design

Development

Regulatory and Legal

Training

IT

• Execution of Membership Agreement

• Testing / Implementation

SPP.org

• Cutover / Post-Implementation10

Representative Project Schedule for New TORepresentative Project Schedule for New TOYear #2

Months Prior #1 #2 #3 #4 #5 #6 #7 #8 #9 #10 #11 #12 #13Year #1

Education and AnalysisInterested Party Negotiation Cost Allocation Implications Transmission Planning Implications Review with SPC Appointed GroupLetter of Intent/Memorandum of UnderstandingProject StartKi k ff d O i t ti Kickoff and Orientation

Analysis and Design New MPs Submit Requested Data SPP Functions ‐ Reliability, Market, Tariff Admin, Transmission Planning, Transmission Policy, Training, Settlements, and ITRegulatory NERC and RE Implications Regulatory, NERC, and RE Implications

Development SPP Development for Changes MPs and TO DevelopmentRegulatory and Legal FERC Filing State Filing(s)NERC Process NERC Process

SEAMS Agreement RevisionsTrainingMembership Agreement ExecutionTesting MPs and TO Readiness Testing Integrated TestingImplementation

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pCutoverPost‐ImplementationProject Ends

New Member On-Boarding Impacts

R l• Regulatory

• Planning

• Operation

IT• IT

• Markets

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SPP Regulatory Environment and Relationships

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Regulatory Environment - Federal• Incorporated in Arkansas as a 501(c)(6)

fi inon-profit corporation

• FERC - Federal Energy Regulatory CommissionRegulated public utility

Regional Transmission Organization

• NERC - North American Electric Reliability Corporation

Founding member

Regional Entity

SPP.org 141414

Regional State Committee (RSC)

• Retail regulatory commissioners:g y

Arkansas Missouri OklahomaKansas Nebraska Texas

Louisiana maintains active observer status

Kansas Nebraska TexasMississippi New Mexico

• Responsibilities:

Cost allocation

Ensure adequate supply

Market cost/benefit analyses

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y

15

R l t I t ti f N M bRegulatory Integration of a New Member

• Regional State Committee• Regional State Committee

Inclusion of representatives from new retail regulatory entitiesentities

Possible Bylaws revisions if there are unique circumstances; i.e., Nebraska Power Review Board d t t t il t tdoes not set retail customer rates

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Regulatory Integration of a New Member

• FERC• FERC

Application for permission to join SPP

SPP id t d l t d t d l i• SPP provides support and relevant data and analysis on costs and benefits

When SPP adds the new member’s Annual Transmission Revenue Requirement to the SPP Tariff, it files that information with FERC

Bylaws revisions, if needed, to allow for RSCBylaws revisions, if needed, to allow for RSC membership of a non-state regulatory entity

SPP.org 17

Regulatory Integration of a New Member

• State Jurisdictions• State Jurisdictions

Applications, where required, for permission to join SPP and participate in SPP marketsand participate in SPP markets

• SPP provides support and relevant data and analysis on costs and benefits

• SPP provides background and education sessions to assist Commissioners, staff and the new member

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SPP Regional Entity and Compliance

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C li E f t d Compliance Enforcement and Standards Setting

• The SPP Regional Entity (RE) enforces compliance with federal NERC reliability standardsstandards

• Creates regional reliability standards ith t k h ld i twith stakeholder input

• Provides training and education to users, d t f b lk idowners, and operators of bulk power grid

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G d b h i d d

SPP Regional Entity

• Governed by three independent trustees• General Manager and RE direct staff

ContractorsSPP, Inc. and RE share staff for data collection and technical studies

• SPP, Inc. provides overhead functions (e.g. IT, HR, Accounting)

SPP.org 21

NERC Compliance Registration

• SPP is a Regional Entity responsible for S g y pmonitoring compliance and enforcing NERC reliability standards

• SPP RE has a geographic footprint approved by NERC and FERC

• SPP RE is funded by a FERC-approved assessment to the Load Serving Entities in its f t i tfootprint

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C li R i t tiCompliance Registration• New Entity:

o A new entity located within the SPP RE footprint completes an SPP RE registration form listing its NERC functionsNERC functions

o SPP RE will process the entity registration

• Transferring Entity:• Transferring Entity:

o Entity may request transfer approval from NERC

o Current and proposed Regional Entities provide background information to NERC

o NERC approves or denies request

SPP.org

o NERC approves or denies request

23

Integrated Transmission Planning

SPP.org 24

What is Integrated Transmission Planning?

• Goal: Design transmission backbone to connect load to most reasonable generation alternatives

What is Integrated Transmission Planning?

most reasonable generation alternatives

Strengthen ties to Eastern and Western Interconnections

Improve connections between SPP’s east and west regionsImprove connections between SPP’s east and west regions

• Horizons: 20, 10, and Near Term

F R i l i t t d ith l l• Focus: Regional, integrated with local

• Resulting in: Comprehensive list of needed projects for SPP region over next 20 yearsneeded projects for SPP region over next 20 years

With 40 year financial/economic analysis

U d l i V l R li bilit d E i i bl

SPP.org

• Underlying Value: Reliability and Economics are inseparable

2525

Why expand the transmission system?Why expand the transmission system?M

ore

SPP Today

Expand Transmission

Minimum for Reliable Delivery to Customers

ent

More Transmission

Needed

In

vest

me

s

C t E C t

SPP.org 2626Less Amount of Transmission MoreLe

ss Customer Energy Cost

SPP.org 27

ITP OverviewITP Overview• 20 Year

Develop a versatile and cost-effective EHV backbone with 300 kV and above solutions for a 20 year horizon

10 Y• 10 Year

Identify 100 kV and above solutions to issues not resolved in 20 Year Assessmentresolved in 20-Year Assessment

• Near-Term

Mitigate near-term, local reliability issues not addressed by 20 or 10 year assessments

Land Use Policy Task Force land use corridors natural

SPP.org

Land Use Policy Task Force-land use corridors, natural resource stewardship, responsible land use, etc

28

Incorporating New Members

• A potential new member’s existing facilities p gmust meet SPP reliability standards

• Potential members would be treated the samePotential members would be treated the same as an SPP member in studies

• Upgrades would be determined as if theUpgrades would be determined as if the potential member’s facilities are integrated into the SPP Tariff

• Possible reworking of 20-year and/or 10-year ITP

SPP.org 29

Cost Allocation Methodology

SPP.org 30

Who pays for transmission?

TypeReliability Economic Sponsored Highway/

Who pays for transmission?

Type

“Base Plan Funding” “Balanced Portfolio” Byway

Funded 33% / 67% Postage Stamp Directly assigned w/ revenue credits

Postage Stamp

ReasonCriteria or

Designated Resource

Benefits / Cost ≥ 1 Sponsor(s) nominate projects

EHV projects from ITP

Voltage Transmission 345 kV and above

Effective 2005 2008 2009 6/19/2010

Highway/BywayVoltage Paid for by Region Paid for by Local Zone

300 kV and above 100% 0%above 100 kV and below 300 kV 33% 67%

Highway/Byway

SPP.org 313131

100 kV and below 0% 100%

Operations

SPP.org 32

O ti F tiOperations Functions

• Reliability Coordination (RC)y C ( C)

• Tariff Administration (TA)

• Interchange Coordination (IC)

• Market Operations (MO)

• Reserve Sharing Group (RSG)

SPP.org 33

Relative Illustration of Operations Efforts(by Function)

Data Int Modeling App Dev Certification

Seams Coord Testing Training

RSG

MO

IC

RC

TA

SPP.org

RC

34

Relative Illustration of Operations Efforts(by Activity)

SPP.org 35

Reliability Coordination EffortsReliability Coordination Efforts• Data Integration

Acquire and map necessary real-time data

Add asset characteristics to applicable databases

• ModelingEnergy Management System (EMS)

NERC Interchange Distribution Calculator system

Operational planning models

• Application DevelopmentAdd displays

SPP.org

Tool enhancements

36

Reliability Coordination Efforts

• Certification

NERC on-site assessment

Preparation

• Seams Coordination

Negotiation of RC-RC agreement with new neighboring RCs

SPP.org 37

Tariff Administration EffortsTariff Administration Efforts• Data Integration

Add OASIS i f ti (d li / i t i tAdd necessary OASIS information (delivery/receipt points, sources/sinks, pricing data, etc.)

Post existing transmission service rights

• ModelingData necessary to calculate AFCsy

Flowgate modeling

• Seams CoordinationSeams CoordinationEstablish agreements with new neighboring Transmission Providers

SPP.org

AFC coordination with existing neighbors

38

I t h C di ti Eff tInterchange Coordination Efforts

• Data Integration

Establish new entity relationships in application databases

• Application Development

Make necessary software changes in scheduling y g gapplications


Develop coordination processes with new neighboring Balancing Authorities

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Market Operations EffortsMarket Operations Efforts• Data Integration

F ilit t t i t ti ith k t ti i tFacilitate asset registration with new market participants

Load forecast training

• Modeling

Model asset characteristics and owner relationships in market/commercial systemsmarket/commercial systems


Add displays


SPP.org

Calculate and verify market flow values40

R Sh i Eff tReserve Sharing Efforts

• Data Integrationg

Add asset characteristics and ownerships to applicable databases


Make necessary software changes in reserve sharingMake necessary software changes in reserve sharing applications

SPP.org 41

Seams Agreement Components• Reliability Coordinator

Data Exchange

Operations Coordination Activities

Emergency ProceduresEmergency Procedures

• Transmission ProviderData Exchange

Transmission Service Coordination

Joint/Collaborative Planning

Cost AllocationCost ocat o

• Market OperatorMarket Flow Calculation

SPP.org

Market-to-Market Congestion Management

42

Seams Agreement Status

Reliability Transmission MarketReliability Coordinator

Transmission Provider

MarketOperator Notes

AECI N/A N/A Does not include CMP

CLECOCLECO N/A N/A

Entergy N/A Does not include CMP

MISOHave not begun market-to-

MISO market

WAPA N/A N/A Progress Started on TP-TP

TVA N/A N/ASome TP coordination exists through CMPTVA N/A N/A through CMP

ERCOT N/A N/A

WECC N/A N/A

SPP.org 43

Comprehensive Some Elements Missing Update Needed Just Started

Information Technology

SPP.org 44

SPP Information Technology Efforts

• Reliability Coordination

E I b l M k t• Energy Imbalance Market

• Customer Registration / Settlements

• Interchange Scheduling

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SPP.org 46

SPP.org 47

IT High Level Functional DiagramETS

IT High Level Functional Diagram

Reserve Sharing

Scheduling System

TransSettlements

OASISSharing System

System (RTO_SS)

Market Settlements

Electronic Tagging System

LoadForecasting

Energy Imbalance Market System Energy Management

System (EMS)

Constraint

Curtailment Adjustment

Tool

ICCPManager

OPS1

Portal SiebelOffer Cap System

Load & Capability

Outage Coord

SPP.org

Coord

48

Reliability CoordinationETS

Reliability Coordination

Reserve Sharing

Scheduling System

Trans Settlements

OASISSharing System

System (RTO_SS)

Market Settlements


LoadForecasting


System (EMS)

Constraint


Tool

ICCPManager

OPS1


Load & Capability

Outage Coord

SPP.org 49

Coord

Reliability Coordination• Add entity to short-term and mid-term

load forecast systemsy• Add entity’s weather data• Add entity’s historical load data to EMS• Loaded updated EMS models

LoadForecastingEnergy Management

System (EMS)

• Establish ICCP links / verify data exchange

• Model new entity’s generation and t i i t i f ti ICCPtransmission outage information

• Configure load and capability system with appropriate entity data

• Add entity to NERC’s Security DataOPS1

Add entity to NERC s Security Data Exchange

Load & Capability

Outage Coord

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Coord

EIS MarketETS

EIS Market

Reserve Sharing

Scheduling System

Trans Settlements

OASISSharing System

System (RTO_SS)

Market Settlements


LoadForecasting


System (EMS)

Constraint


Tool

ICCPManager

OPS1


Load & Capability

Outage Coord

SPP.org 51

Coord

EIS Market • Update market system models with entity’s asset information

• Establish data exchange with gentity for resource plans, Deployment instructions, offer curves, bids, etcC d t t i k t

Energy Imbalance Market System

Constraint

• Conduct extensive market testing and trials

• Provide IT-centric market training

Managertraining

Offer Cap System

SPP.org 52

Registration / SettlementsETS

Registration / Settlements

Reserve Sharing

Scheduling System

Trans Settlements

OASISSharing System

System (RTO_SS)

Market Settlements


LoadForecasting


System (EMS)

Constraint


Tool

ICCPManager

OPS1


Load & Capability

Outage Coord

SPP.org 53

Coord

Registration / SettlementsETS

Registration / SettlementsTrans

Settlements

Market Settlements

• Develop / deploy commercial model with entity registration data

• Establish connectivity to SPP’s Portal and other certificate based systemsother certificate based systems.

• Managed security / access needs• Support settlements testing and training

Portal Siebel

SPP.org 54

Interchange SchedulingETS

Interchange Scheduling

Reserve Sharing

Scheduling System

Trans Settlements

OASISSharing System

System (RTO_SS)

Market Settlements


LoadForecasting


System (EMS)

Constraint


Tool

ICCPManager

OPS1


Load & Capability

Outage Coord

SPP.org 55

Coord

Interchange SchedulingReserve Sharing

Scheduling SystemSharing

SystemSystem

(RTO_SS) • Model new entity in reserve sharing system and update allocation methodology


• Update RTOSS to reflect new entity and applicable customizations

• Update TSIN for Electronic Tagging System


Tool

System• Establish data exchange for energy

accounting and shadow settlements• Conduct significant RSS and RTOSS g

testing and training

SPP.org 56

IT Implementation Plan*• Analysis and Design – 6 weeks• Construction – 6 weeks• Testing / Training – 4 months

• Support comprehensive training sessions• Perform regression testing / performance testing• Perform connectivity testing• Perform data exchange verification• Conduct parallel operations• Promote enhancements / models through all environments

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* Based on Implementation of Nebraska Entities

Training and Performance Support

SPP.org 58

SPP On Boarding: Training ProcessSPP On-Boarding: Training Process

Project I iti ti

Analyze Design/DevelopmentInitiation

• Project plan includes Training

• SPP and Entergy analyze and assess training

• Design customized curriculum to meet identified needsTraining

timeline

• Training plan

assess training and performance support needs and audiences

identified needs

• Use and customize existing g p

development begins • Includes review of

services already in use by Entergy

curriculum where appropriate

• Develop new(e.g. Reserve Sharing, Tariff)

Develop new curriculum as needed

SPP.org 59

SPP On Boarding: Training ProcessSPP On-Boarding: Training ProcessDeliverSchedule Evaluate

• Net conference and face-to-face

C i t d i

• SPP and Entergy decide schedule

• Evaluation levels:

T i i• Communicated via SPP Learning Center

• Materials available

• Multiple 2-3 hour sessions focused on different topics

Training program

Individualprior to sessions

• Supplemental materials available

different topics or tasks

• Repeated

Individual sessions

Readiness for integrationmaterials available

• Delivery designed to optimize retention

psessions to accommodate shift schedules

integration

SPP.org 60

SPP On-Boarding: Functional Areas & Tasks

• Reliability *• Reliability *

Includes Reserve Sharing Group (RSG) **

• Tariff *

• Scheduling *g

• Settlements – Transmission *

S ( S)• Energy Imbalance Service (EIS) Market

• Settlements - Market

SPP.org 61* denotes areas where Entergy currently has some participation

SPP Regional Continuing EducationSPP Regional Continuing Education• SPP offers continuing education for operations personnel

at SPP and throughout regiong g

• In 2009, SPP awarded ~17,000 continuing education hours to 444 operators from 30 member or customer organizations

Summary of SPP Training and Performance

• On-boarding training and performance support customized

Support Offerings

• On-boarding training and performance support customized to Entergy’s specific needs

• Ad-hoc “just-in-time” training on additions or changes to

SPP.org

j g gSPP’s services and systems

62

Future Markets and New Member On-Boarding

SPP.org 63

Wh t ki d f k t d SPP h ?What kind of markets does SPP have now?• Transmission: Participants buy and sell use of

i l t i i li th t d bregional transmission lines that are owned by different parties

E I b l S i (EIS) P ti i t b• Energy Imbalance Service (EIS): Participants buy and sell wholesale electricity in real-time

Market uses least expensive energy from regional resourcesMarket uses least expensive energy from regional resources to serve demand (load) first

Sometimes it’s less expensive for a market participant to purchase power from another provider than to generate

SPP monitors resource/load balance to ensure system reliability

SPP.org 6464

y

64

What type of new markets is SPP implementing?What type of new markets is SPP implementing?

• Day Ahead: SPP determines what generating i h ld h d f iunits should run the next day for maximum

cost-effectiveness

• Operating Reserves: Market to buy and sell reserve energy that:

Meets emergency needs

Regulates instantaneous load and generation changes

Maintain electricity quality (keeping voltage up, etc.)

SPP.org 656565

Why develop new markets?• SPP conducts complex cost-benefit studies

before beginning any new market development

Under Regional State Committee oversight

2005 Charles River Associates analysis of the EIS market:

1. Estimated benefit of $86 million for first year

2. Actual benefit of $103 million for first year

N k t ill b i ti t d• New markets will bring estimated average additional net benefits of $100 million

A di t 2009 V t l i

SPP.org 66

According to 2009 Ventyx analysis

6666

Day Ahead Market Offers Regional Diversity Day Ahead Market Offers Regional Diversity

SPP.org 6767

Understanding Reliability Unit Commitment

Generation

Bid in Load and Operating Reserve cleared in DA Market

Generation committed in RUC

gaw

atts

cleared in DA MarketSPP Load Forecast and

Operating Reserve Requirements (RUC Input)

Meg

S lf C itt d R

Generation de-committed in RUC

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24

Self Committed Resources

SPP.org 68

Hour1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24

Benefits of Operating Reserves MarketBenefits of Operating Reserves Market• Greater access to reserve electricity

• Improve regional balancing of supply and demand

• Facilitate integration of renewable resourcesg

SPP.org 69696969

Future Energy and Operating Reserve Market FunctionsFuture Energy and Operating Reserve Market FunctionsDA Market Offers (Energy and Operating Reserve), Bids, Operating Reserve

Requirements

RTBM Offers, Load Forecast, Operating

Reserve Requirements



DA Market Offers (Energy and Operating Bids, Operating Reserve

Requirements





Day ‐Ahead Market

(DA Market)

Real ‐Time Balancing Market

Reliability Unit Commitment

(RUC)

Requirements

Dispatch Instruction, cleared Operating Reserve

(MW)

DA Market Commitment

RUC Commitment

Day ‐Ahead Market

(DA Market)

Real ‐Time Balancing Market

Reliability Unit Commitment

(RUC)

Requirements

Dispatch Instruction, cleared Operating Reserve

(MW)

rCommitm

RUC Commitment(DA Market) (RTBM)(RUC) (MW)

(5 minute)

Commitment Commitment (DA Market) (RTBM)(RUC) (MW) (5 minute)

Commitm Commitment

DA Market & Net RTBM

DA Market Commitment, Cleared Energy and Operating Reserve (MW and Price) (hourly)

Dispatch Instruction, cleared Operating Reserve (MW and Price)

(5 minute)DA Market & Net RTBM

DA Market Commitment, Cleared Energy and Operating Reserve (MW and Price) (hourly)

EMS

Dispatch

Operating R(MW and Price)

(5 minute)

Settlements

Resource d L d

TCR Markets

Settlements

Resource d L d

TCR Markets

SPP.org

and Load Meter Dataand Load Meter Data

70

SPP Will Balance Load/Supply for RegionSPP Will Balance Load/Supply for Region

SPP.org 71

Additional Registration Activities

I ddi i h EIS i i• In addition to the current EIS registration activities, Market Participants will:

C fCertify generation capability to provide regulation, spin, and supplemental reserves

Test to validate ability to provide regulationTest to validate ability to provide regulation

Test ability to interact with all of the systems

• Additional training for the Transmission• Additional training for the Transmission Congestion Rights, Day Ahead Energy and Reserve Markets

SPP.org 72

Future Markets Program Schedule - DRAFTFuture Markets Program Schedule - DRAFT

3Q09 4Q09 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12 1Q13 2Q13 3Q13 4Q13

Program Management

Analyze

Design

Build

Test

Deploy (Market Trials)

SPP.org 73

Future Markets Program TrackerFuture Markets Program Tracker

SPP.org 74

Future Markets Key MilestonesFuture Markets Key Milestones

SPP.org 75

FERC SPP-Entergy Cost-Benefit Analysisand APSC EAI Cost-Benefit Analysis

SPP.org 76

Background• FERC is funding a SPP-Entergy Corporation Cost-

Benefit Analysis to evaluate the merits and costs of Entergy joining, or not joining, SPP (FERC SPP-Entergy CBA)Entergy CBA)

• The FERC SPP-Entergy CBA provides a foundation for the APSC directed cost benefit analysis tofor the APSC-directed cost-benefit analysis to evaluate the merits and costs of Entergy Arkansas, Inc. (EAI) joining, or not joining, SPP (APSC EAI CBA)

• The APSC EAI CBA leverages models, data, and

SPP.org

assumptions in the FERC SPP-Entergy CBA77

Background, cont.

• “SPP Ready” costs - incremental investments S yrequired by Entergy (and EAI) to join SPP to meet SPP reliability requirements are zero

• SPP has not identified any reliability issues

Assuming completion of transmission expansion g p pprojects in the Entergy Construction Plan, including horizon projects

E t t i i i l th• Entergy transmission expansion plans are the same in all studies and scenarios

SPP.org 78

Study 1 3 General NotesStudy 1 – 3 General NotesStudy 1-All Regional Costs: Entergy and Cleco are exposed to regional recovery of SPP upgrades completed after March, 2006 g y pg p ,coincident with first regional recovery in SPP. (Same approach used when Nebraska entities joined SPP in April 2009)

Study 2- Regional Costs after 1/1/13: Entergy and Cleco are onlyStudy 2 Regional Costs after 1/1/13: Entergy and Cleco are only exposed to regional recovery of SPP upgrades needed after the proposed “bright line” date of January 1, 2013. (Prospective)

Study 3-Regional Costs (Excluding BP and PP) After 1/1/13:Study 3-Regional Costs (Excluding BP and PP) After 1/1/13: Entergy and Cleco, as in Study 2, are only exposed to regional recovery of SPP upgrades needed after the proposed “bright line” date of January 1, 2013. Additionally, Entergy and Clecowere not exposed to Balanced Portfolio or Priority Project regional recovery. (Modified Prospective)

• For all Studies, SPP members are exposed to regional recovery of

SPP.org

, p g yEntergy and Cleco projects beginning January 1, 2013

79

General Notes, cont.• Differential results subtract Base Case Annual

T i i R R i t (ATRR)Transmission Revenue Requirement (ATRR) from Change Case ATRR; where:

Diff ti l Ch C B CDifferential = Change Case – Base Case

Change Case: Entergy and Cleco join SPP and share in regional recovery SPP traditionalshare in regional recovery. SPP traditional Transmission Owners also support Entergy and Cleco upgrades.

Base Case: Entergy and Cleco do not join SPP and therefore do not share in regional recovery. Entergy and Cleco fund their own upgrades

SPP.org

Entergy and Cleco fund their own upgrades without SPP Transmission Owner support.

80

M th dMethods• ATRR forecast was constructed for SPP Transmission

Owners Entergy and Cleco incorporating severalOwners, Entergy, and Cleco incorporating several upgrade types with several simplifying assumptions, e.g., maintain MW-MIs & BP balancing transfers, 3% d i ti t f ll d tdepreciation rate for all upgrades, etc.

• Host zone Net Plant Carrying Charge was applied to each upgrade to develop total ATRR for each upgradeeach upgrade to develop total ATRR for each upgrade

• Cost allocation was performed for each upgrade

• Focus was reallocation of regional, not zonal, ATRRs and the differential amounts ($M) between the base and change case over the 2013-2020 period

SPP.org

and change case over the 2013 2020 period

81

Key Inputs• Net Plant Carrying Charges

Entergy = 17.49% (self reported)

Cleco = 16.87% (self reported)( p )

• Load Ratio Shares

Entergy = 35 42% (calculated using ETR’s 2009 hourly loads)Entergy = 35.42% (calculated using ETR s 2009 hourly loads)

Cleco = 3.21% (calculated using CLE’s 2009 hourly loads)

E t d Cl d lf li d t SPP ITC• Entergy and Cleco upgrades self-supplied to SPP ITC

SPP.org 82

Key Inputs, cont.

SPP.org 83

Study 1 – All Regional Costs

SPP.org 84

Study 2 – Regional Costs After 1/1/13

SPP.org 85

Study 3 – Regional Costs (ExcludingStudy 3 – Regional Costs (Excluding BP and PP) After 1/1/13

SPP.org 86

Concluding Remarks• Focus of these transmission cost allocation

studies have been exclusively costs notstudies have been exclusively costs, not benefits

It h ld b t d th t PP t• It should be noted that PP costs assume double circuit 345 kV, not 765 kV, projects in plainsp

• End effects and depreciation are driving results for 2017 +

• Results for 2020 will be extrapolated for 2021 and 2022 to complete 2013-2022 impacts

SPP.org

and 2022 to complete 2013 2022 impacts

87

APSC EAI Cost-Benefit Analysis Update

SPP.org 88

APSC Order

APSC D k N 08 136 U O d N 10• APSC Docket No. 08-136-U, Order No. 10, dated May 29, 2009, ordered the EAI CBA:

“ C S“The Commission directs the Southwest Power Pool (SPP) to conduct, with the assistance of an independent third party, a comprehensive cost/benefit evaluation of full SPP membership by both Entergyevaluation of full SPP membership by both Entergy Arkansas, Inc. (EAI) (as a stand alone entity) and Entergy versus the existing ICT services arrangements as opposed to the status quo ante ”arrangements, as opposed to the status quo ante.

SPP.org 89

Scope of APSC EAI CBA• EAI joining SPP RTO on a standalone basis

• Utilizes same underlying assumptions as FERC SPP-Entergy CBA

• Stand-alone EAI will be compared to EAI as part of SPP RTO

• Transmission cost allocations for EAI projects should EAI join SPP under the APSC EAI CBA

• Study timeframe is 2014 – 2022

EAI is scheduled to exit Entergy System Agreement in

SPP.org

gy y gDecember 2013

90

Upcoming APSC EAI CBA Milestones

S h d l d b l d i hi 30 d f hScheduled to be completed within 30 days of the final FERC SPP-Entergy CBA:

S CSeptember 7 – Charles River Associates update to EAI and stakeholders

September 10 – GE MAPS base and change casesSeptember 10 GE MAPS base and change cases completed

September 30 – DRAFT final report due

October 15 – Final report complete

SPP.org 91

APSC EAI CBA Ongoing Process

S k h ld i• Stakeholder input process

Open

Transparent

• Additional sensitivity analysis

Scope

Timingg

Funding

SPP.org 92

2010 Strategic Plan

SPP.org 93

Our Vision of the Future

SPP.org 94

Three Foundational StrategiesThree Foundational Strategies

SPP.org 95

Wrap-Up

SPP.org 96