Page 1 of 4 - Southwest Power Pool minutes 091014.pdfIn executive session, ... The SPP Human Resources Committee has oversight of the plan and is responsible for reviewing ... Ms

Southwest Power Pool

HUMAN RESOURCES COMMITTEE MEETING

September 10, 2014

Southwest Power Pool Corporate Offices

Little Rock, Arkansas

• Summary of Action Items •

1. Approved minutes of the June 12, 2014 meeting and August 19, 2014 teleconference.

2. In executive session, approved a recommendation to select a 401(k) Investment Manager. Malinda See with SPP staff will maintain records of this action.

• Summary of Follow-Up Items •

1. Staff will gather information from committee members regarding meeting availability in 2015. Staff will examine member availability and propose a 2015 meeting schedule at the October 22, 2014 meeting.

Page 1 of 4


September 10, 2014

Southwest Power Pool Corporate Offices Little Rock, Arkansas

• M I N U T E S •

Agenda Item 1 – Call to Order Julian Brix called the meeting to order at 8:00 am, CDT, on September 10, 2014. The following members were in attendance: Mr. Julian Brix, Chair Director

Mr. Josh Martin Director Mr. Duane Highley Arkansas Electric Cooperative Corporation Ms. Kelly Walters Empire District Electric Company Mr. Noman Williams Sunflower Electric Power Corporation Mr. Kevin Burke ITC Holdings

Southwest Power Pool staff in attendance: Mr. Nick Brown

Ms. Malinda See Mr. Steve Davis

Julian welcomed everyone to the meeting and thanked them for their commitment. Kevin was welcomed as a new member to the committee. Julian conducted a brief overview of the agenda for the day, asking for any changes to the agenda. The “Future Meetings” agenda item was moved to the second item on the agenda. Agenda Item 2 – Future Meetings Malinda requested committee members provide dates that they are not available in 2015, recognizing that committee members have other meeting obligations that have predetermined meeting dates. Based on information gathered from the committee, a proposed 2015 meeting scheduled will be presented to the committee at the October 22, 2014 meeting. Staff is working on meeting arrangements for a January 20, 2015 meeting. October 22nd, 2014 (Wednesday) Location: Chicago, Illinois – Admirals Room at O’Hare Airport Time: 10:00 am – 3:00 pm (CDT) Agenda Items:

• Review SPP Fraud Prevention Report • Annual review of committee activities and Scope review • Employee engagement survey update • Update on HR activities – succession planning and job rotation programs • Approve 2015 meeting schedule and agendas • Action: Approve proposed metric changes to SPP Performance Compensation Plan

January 20th, 2015 (Tuesday) Location: TBD Time: 10:00 am – 3:00 pm Agenda Items:

• Action: Approve funding for 2014 Performance Compensation Plan • Action: Review SPP President 2014 performance and propose 2015 compensation

Page 2 of 4

Southwest Power Pool Human Resources Committee Minutes September 10, 2014

Agenda Item 3 – Approval of Minutes The minutes of the June 12, 2014 meeting were reviewed. Duane Highley moved that the minutes be approved. The motion was seconded by Josh Martin and approved via unanimous voice vote. The minutes of the August 19, 2014 teleconference were reviewed. Josh Martin moved that the minutes be approved. The motion was seconded by Kevin Burke and approved via unanimous voice vote. Agenda Item 4 – 401(k) Investment Manager Interviews SPP employee Steve Davis was asked to attend during the investment manager interviews. Steve is the chair of the employee 401(k) group. This group is comprised of 10 employees throughout the organization with an interest in retirement and investing that serves as a conduit for information and education to employees. The investment manager serves as an ERISA 3(38) investment manager for the 401(k) plan and is responsible for, and has discretion for, selection, monitoring and allocation of plan assets consistent with the Investment Policy Statement. The committee heard presentations from two vendors, First Security Bank and Smith Capital. Each vendor was allocated one hour for a presentation and discussion with committee members. The committee evaluated the proposed services provided to employees and the committee and the associated fees. Agenda Item 5 – 2014 Investment Manager Report Jay White with Smith Capital presented the annual plan report for the Southwest Power Pool 401(k) Savings Plan. The report covered the 2013 year as well as a 2014 current update. As of August 1, 2014 the plan has 574 participants and $63,200,428 in assets. The current percentage of participation in the plan is 94%. The report included an assessment of portfolio performance, investment manager performance and fees paid. Agenda Item 6 – Executive Session The committee met in executive session to discuss selection of a 401(k) Investment Manager. Agenda Item 7 – Employment Practices Insurance Tom Dunn provided a report from the SPP Finance Committee on employment practice insurance coverage for Southwest Power Pool. Agenda Item 8 – Discussion on Performance Compensation Plan Operational Metrics Malinda See provided a historical overview of the SPP employee Performance Compensation Plan. The plan was adopted by the SPP Board of Directors in October 2005. It was designed to increase commitment of employees to attain corporate goals, promote management of corporate performance, and encourage retention of qualified and trained employees. The goal of the plan is to distribute compensation to individual employees in recognition of their contribution to the factors leading to corporate performance, relative to all other employees. The SPP Human Resources Committee has oversight of the plan and is responsible for reviewing performance metrics and analysis and making plan funding recommendations annually to the SPP Board of Directors. SPP management evaluates metrics in three major areas to determine annual corporate performance. Those areas include cost control, SPP Members Committee survey of satisfaction with staff, and operational effectiveness. The operational metrics have not changed since plan inception. SPP management is reviewing these parameters based on SPP market implementation and current industry standards. Bruce Rew provided a report on work staff is conducting to propose changes to the operational metrics. These changes are contemplated to reflect the importance of the operation of the SPP Integrated Marketplace in overall corporate performance. Bruce detailed the components of operational metrics and the impact of those metrics on overall plan funding. The proposed changes to these metrics include

Page 3 of 4

Southwest Power Pool Human Resources Committee Minutes September 10, 2014

incorporating a measurement of market performance. Market performance is an important component in overall corporate performance. The committee discussed the report and requested staff consider the metric weighting and the importance of each in further evaluations. Staff will present a formal recommendation on changes to the SPP Performance Compensation Plan operational metrics at the October 22, 2014 meeting. Agenda Item 9 – Other Items None noted. Agenda Item 11 - Adjourn Julian Brix adjourned the meeting at 2:45 pm on Wednesday, September 10, 2014. Respectfully Submitted, Malinda See Secretary

Page 4 of 4

Southwest Power Pool, Inc. HUMAN RESOURCES COMMITTEE MEETING

September 10, 2014 Southwest Power Pool Corporate Offices


• A G E N D A • 8:00 am –3:00 pm (Central Daylight Time)

1. Call to order, Introductions and Agenda changes (8:00 – 8:30a) ............................................ Julian Brix

2. Approval of Minutes from June 12, 2014 and August 19, 2014 (8:00 – 8:30a) ....................... Julian Brix

3. 401(k) Investment Advisor Interviews

a. First Security Bank (8:30 – 9:30a) .................................................................... Andy Arnold

b. Smith Capital (10:00 – 11:00 a) ............................................................................ Jay White

4. 401(k) Investment Advisor Report (11:15a – 12:00) ................................................................ Jay White

Report on 401(k) plan performance and efforts at participant education and participation.

Lunch

5. Executive Session to discuss Investment Manager Interviews (12:45 – 1:30p) .................... Julian Brix

6. Employment Practices Insurance (1:30 – 1:45p) .................................................................... Tom Dunn

Report from SPP Finance Committee on employment practices insurance levels

7. Discussion on Performance Compensation Plan Operational Metrics (1:45 - 2:45p) ............ Bruce Rew

SPP staff presentation on proposed changes to performance compensation plan metrics, post market implementation

8. Other Items ........................................................................................................................................... All

9. Future Meetings .................................................................................................................................... All

Meeting schedules and agendas for 2014 and proposed schedules for 2015

10. Adjourn .................................................................................................................................... Julian Brix

Relationship-Based • Member-Driven • Independence Through Diversity

Evolutionary vs. Revolutionary • Reliability & Economics Inseparable



June 12, 2014

Southwest Power Pool Corporate Offices



1. Approved minutes of the January 21, 2014 meeting.

2. Approved issuing a Request for Proposal for 401(k) Investment Manager. SPP staff was tasked with issuing and reviewing bids in time for the committee to select finalists for in-person interviews at the September 10, 2014 committee meeting.

3. In executive session, approved a recommendation from the SPP Board. Malinda See with SPP staff will maintain records of this action.

• Summary of Follow-Up Items •

1. The committee requested staff examine the cost of outsourcing the Southwest Power Pool employee engagement survey. Staff had previously brought this service in-house as a cost savings. The committee requested a cost comparison, considering that a third party might enhance employee comfort in confidentiality.

Agenda Item 2A Page 1 of 4


June 12, 2014

Southwest Power Pool Corporate Offices Little Rock, Arkansas


Agenda Item 1 – Call to Order Julian Brix called the meeting to order at 8:05 am, CDT, on June 12, 2014. The following members were in attendance: Mr. Julian Brix, Chair Director

Mr. Josh Martin Director Mr. Duane Highley Arkansas Electric Cooperative Corporation Ms. Kelly Walters Empire District Electric Company Mr. Noman Williams Sunflower Electric Power Corporation

Southwest Power Pool staff in attendance: Mr. Brian Smith Ms. Donna Freeman

Ms. Malinda See Guests in attendance: Ms. Kristine Schmidt ITC Great Plains Mr. Kevin Burke (via teleconference) ITC Great Plains Julian welcomed everyone to the meeting and requested attendees introduce themselves. Kelly and Josh were welcomed to their first committee meeting and thanked for their commitment. Julian conducted a brief overview of the agenda for the day, asking for any changes to the agenda. Hearing no changes, the meeting proceeded. Agenda Item 2 – Approval of Minutes The minutes of the January 21, 2014 meeting were reviewed. Noman Williams moved that the minutes be approved. The motion was seconded by Duane Highley and approved via unanimous voice vote. Agenda Item 3 – 2013 Performance Compensation Process Review The committee reviewed the assessment process and distribution of 2013 performance compensation funds. The committee review included assessing a distribution graph for the compensation awards by rankings. SPP management allocates performance compensation funds to individual staff members based on employee performance during the preceding fiscal year, recognizing that SPP either fails or succeeds as a team, without creating an entitlement mentality among employees. Employees are rewarded for their cultural fit with the organization in how they perform their work. SPP managers evaluate their employees and schedule meetings with the CEO or COO to discuss the evaluations. Proposed compensation payouts undergo a rigorous review by the SPP officer team and are adjusted for equity as needed prior to finalization of the awards. Agenda Item 4 – 2014 Investment Manager Review Process and Update Malinda See presented a history of the current 401(k) Investment Manager’s engagement with SPP. SPP engaged Jay White in February 2005 when the 401(k) plan had 140 participants and $9 million in assets. Currently, the plan has 580 participants and $60,444,640 in assets. Mr. White serves as an ERISA 3(38) investment manager for the plan and is responsible for, and has discretion for, selection, monitoring and allocation of plan assets consistent with the Investment Policy Statement. He reports annually to the SPP HR Committee on the portfolio performance, investment manager performance and costs. In addition, he


Southwest Power Pool Human Resources Committee Minutes June 12, 2014

meets with the SPP Employee 401(k) group to keep them informed of plan performance and assist them in serving as conduits to the employee base. The current percentage of participation in the plan is 94%. SPP has not issued a “Request for Proposal” for investment manager services since engaging Mr. White in 2005. The committee determined that it should solicit bids for this service and review applicants as part of their due diligence. Noman Williams made a motion that SPP staff issue a formal Request for Proposal for investment manager services for the 401(k) Plan. The motion was seconded by Duane Highley and approved via unanimous voice vote. SPP staff was tasked with issuing and reviewing bids in time for the committee to select finalists for in-person interviews at the September 10, 2014 committee meeting.

Agenda Item 5 – HR Metrics Report Brian Smith presented the SPP Human Resources metrics as of May 31, 2014. These metrics reviewed employee turnover and vacancy rates. Brian discussed methodology utilized for these reports and how HR staff responds to data and trends. As part of the discussion on management to staff ratio, the committee discussed SPP’s duel career model that allows for staff advancement in non-managerial roles such as lead, principal and technical director. Brian noted that retirements have increased and SPP is monitoring this trend and responding with knowledge transfer and succession planning programs. Agenda Item 6 – Human Resources Staff Report Brian Smith and Donna Freeman presented a strategic overview of how the SPP HR department aligns programs, policies and procedures with SPP corporate strategy and goals. HR management staff conducted a “SWOT” analysis (Strengths, Weaknesses, Opportunities and Threats) of the department and programs. Staff has identified solutions and strategies based on this analysis. The report outlined 2014 key deliverables for the HR department and identified how these deliverables align with SPP corporate goals. The committee challenged HR staff to continue to develop metrics to measure the success of HR programs. Corporate training and professional development staff has developed training offered to SPP members. This training was well received and valued by participants. The committee asked that staff investigate ways to report to the SPP Board value added to members by HR programs. Agenda Item 7 – Executive Session The committee met in executive session to discuss compensation programs and a recommendation from the SPP Board. Agenda Item 8 – Employee Engagement Survey Process Malinda See presented an overview of the SPP employee engagement survey process and questions utilized in the survey. SPP performs this survey every other year and is scheduled to conduct a survey in September 2014. Included in the report were historical results on overall engagement and an overview of high and low scores. SPP has historically scored very high in employee engagement. The committee discussed the challenge of maintaining high levels of employee engagement. The committee requested staff examine the cost of outsourcing the Southwest Power Pool employee engagement survey. Staff had previously brought this service in-house as a cost savings. The committee requested a cost comparison, considering that a third party might enhance employee comfort in confidentiality.

Agenda Item 9 – Other Items None noted. Agenda Item 10 – Future Meetings and Agendas The committee reviewed 2014 agenda items and discussed meeting dates and locations. Julian Brix requested committee members to consider the benefits of setting meeting schedules for 2015 (and going forward) on predetermined schedules for consistency. Committee members were asked to examine their


Southwest Power Pool Human Resources Committee Minutes June 12, 2014

schedules for 2015 and bring suggestions for meeting schedules to the September 10, 2014 meeting. Remaining 2014 and January 2015 agendas and meetings are: September 10th, 2014 (Wednesday) Location: Little Rock, Arkansas Time: 8:00 am – 3:00 pm Agenda Items:

• Interview Investment Managers • Fiduciary training • Review SPP HR programs and benefit plans • Recommendation on Performance Compensation Plan Operational metric changes • Investment Manager Meeting • Action: Recommend 2015 SPP Compensation Pool funding • Action: Selection of 401(k) Investment Manager

October 22nd, 2014 (Wednesday) Location: Chicago, Illinois – Admirals Room at O’Hare Airport Time: 10:00 am – 3:00 pm Agenda Items:

• Review SPP Fraud Prevention Report • Annual review of committee activities and Scope review • Employee engagement survey update • Update on HR activities – succession planning and job rotation programs • Approve 2015 meeting schedule and agendas

January 20th, 2015 (Tuesday) Location: Atlanta Airport Time: 10:00 am – 3:00 pm Agenda Items:

• Action: Approve funding for 2014 Performance Compensation Plan • Action: Review SPP President 2014 performance and propose 2015 compensation

Agenda Item 11 - Adjourn Julian Brix adjourned the meeting at 2:15 pm on Thursday, June 12, 2014. Respectfully Submitted, Malinda See Secretary




August 19, 2014

Teleconference


1. Approved a recommendation to the Southwest Power Pool Finance Committee to include in the 2015 SPP budget a compensation adjustment pool equal to 2.3% of projected 2014 salaries paid.

2. Selected First Security Bank and Smith Capital to interview for the SPP 401(k) Investment Manager vendor. These interviews will be conducted in-person at the September 10, 2014 committee meeting.

Agenda Item 2B Page 1 of 3


August 19, 2014

Teleconference


Agenda Item 1 – Call to Order Julian Brix called the meeting to order at 2:00 pm, CDT, on August 19, 2014. The following members were in attendance: Mr. Julian Brix, Chair Director

Mr. Josh Martin Director Mr. Duane Highley Arkansas Electric Cooperative Corporation Ms. Kelly Walters Empire District Electric Company Mr. Noman Williams Sunflower Electric Power Corporation

Southwest Power Pool staff in attendance: Mr. Nick Brown

Ms. Malinda See Agenda Item 2 – Evaluation of Vendor Proposals A formal “Request for Proposal” for 401(k) Investment Manager Services was extended to six vendors in the Little Rock area. Two vendors could not meet the requirements of the RFP, and one vendor declined to bid. The committee received three proposals for evaluation. The three vendors included: Arvest Bank, First Security Bank and Smith Capital. Smith Capital is the current vendor for 401(k) Investment Manager Services to SPP and has served in that capacity since February 2005. Since that time, the SPP portfolio has grown from approximately $9 million in assets with 150 participants to approximately $60 million in assets with 600 participants. Malinda See discussed a vendor evaluation worksheet provided by SPP purchasing. The worksheet values were subjective and provided by Malinda See and Jason Gross (SPP Purchasing Manager) based on their review of the proposals. Julian Brix led the committee in a discussion of each proposal. Committee members provided their individual assessment of each vendor proposal. The merits of each proposal were discussed by committee members. The committee agreed to interview the top two vendor selections in-person at the September 10, 2014 committee meeting. Narrowing the selection to the top two proposals will allow the committee more time at the in-person interviews to discuss and evaluate each vendor. Josh Martin made a motion to invite First Security and Smith Capital for in-person interviews at the September 10, 2014 committee meeting. The motion was seconded by Duane Highley and approved via unanimous voice vote. The committee requested staff schedule First Security at 8:30 am with Smith Capital to follow. After conducting the interview with Smith Capital, the committee will then hear the annual 401(k) investment report from Smith Capital. The committee agreed to invite the chair of the SPP 401(k) employee group, Steve Davis, to attend the interviews as an observer and to provide his feedback to the committee. In the interest of time and to better evaluate each proposal, vendors will be asked to send no more than three representatives. Vendors will also be asked to send the representatives that will interface with SPP employees to the interviews.


Southwest Power Pool Human Resources Committee Teleconference Minutes August 19, 2014

Agenda Item 3 – 2015 Compensation Adjustment Pool Recommendation SPP staff presented a 2015 merit pool recommendation requesting a compensation adjustment pool of 2.3% of projected 2014 salaries paid to be included in the 2015 budget. SPP has typically recommended merit adjustments based on the Consumer Price Index for Urban Workers, (CPI-W index), which was 2.3% for the current year over year report for June 2014. Noman Williams moved that the recommendation be approved. The motion was seconded by Kelly Walters and approved via unanimous voice vote.

Agenda Item 4 – Update on Employee Engagement Survey Malinda See informed the committee that SPP has again been selected as one of the “12 Best Companies to Work for in Arkansas”. SPP was previously named in this category in 2013. As part of participation in this process, approximately 50% of randomly selected SPP employees are asked to complete an employee engagement survey. SPP had a survey response rate of 70%. SPP HR staff will be provided a copy of the survey results in late September. SPP staff recommended to the committee that this survey results be utilized in place of an additional employee survey in September. The questions asked in the “Best Places” survey are very similar to questions that would be asked in a survey by SPP. At the June 12, 2014 committee meeting the committee had asked staff to determine the cost of employing a third party vendor to conduct the SPP employee engagement survey. Malinda reported that cost would be approximately $12,000. Given the recent survey and the expense of utilizing a third party to conduct a SPP survey, the committee agreed to use the “Best Places” survey results and defer a 2014 SPP employee engagement survey. Agenda Item 5 – Other Items Malinda See reported that SPP staff is investigating ways to control the costs of employee medical insurance. Options will be presented to the committee at a later meeting. Julian Brix informed the committee that fiduciary training scheduled for September will be postponed until after the 401(k) Investment Advisor selection is determined. This is to allow the selected Investment Advisor to provide the training. Agenda Item 7 - Adjourn Julian Brix adjourned the meeting at 2:55 pm (CDT) on Tuesday, August 19, 2014. Respectfully Submitted, Malinda See Secretary



Performance Compensation PlanHistory

September 10, 2014

Employee Performance Compensation Plan

• Adopted by SPP Board of Directors – October 2005

• Revised by SPP Human Resources Committee – April 2008

• Designed to:– Increase commitment of employees to attain corporate

goals

– Promote management of corporate performance outcomes

– Encourage retention of qualified and trained employees

2


Goal:

Distribute performance compensation to individual employees in recognition of their contribution to the factors leading to corporate performance, relative to all other employees.

3


Current Process:

• SPP management provides written analysis of corporate performance to the Human Resources Committee at their January meeting

• Human Resources Committee combines management analysis with their knowledge and makes funding recommendation to SPP Board of Directors

• SPP Board of Directors reviews recommendation and makes final funding decision for plan

4

Employee Performance Compensation PlanSPP management evaluates the following metrics to determine corporate performance:

• Cost Control– Measurement of SPP’s actual expenditures against the

approved budget

• Members Committee Survey– Confidential survey of committee to evaluate satisfaction

with SPP staff

• Operational Effectiveness - Reliability Parameters– Metrics designed to measure the reliability of SPP systems

and operations

5

Current Performance Compensation Plan Metrics Weighting

Metric Weighting Performance Calculation Value

Cost Control 33% 1.0 0.33

Members Comm. Survey 33% 1.0 0.33

Reliability Parameters 34% 1.0 0.34

Total 1.00

Reliability Parameters contain three components evaluated separately:

• System Availability• NERC Reliability Coordinator (RC) Violations• Transmission Reliability

6

Reliability Parameters breakdownMetric Weighting Perf. Calculation Value




Total 1.00

Metric Weighting Perf Calc. Value

System Availability 36% 1.0 0.36

NERC RC Violations 32% 1.0 0.32

Transmission Reliability 32% 1.0 0.32

Total Operational Metrics: 1.00

34% weighting 0.34

Reliability Parameter 0.34

7

System Availability ParameterMetric Weighting Perf Calc. Value





34% weighting 0.34


System Availability Metric (MOS, ICCP, RTOSS etc) Factor

All under 99.99% or greater 1.50

One under 99.95% 1.00

One under 99.8% 0.75

One Under 99.5% 0.25

Two Under 99.5% 0.00

All Under 99.5% -1.008

NERC RC Violations ParameterMetric Weighting Perf Calc. Value





34% weighting 0.34


NERC RC Violations Factor

0 1.0

1 0

>1 -1.0

9

Transmission Reliability ParameterMetric Weighting Perf Calc. Value





34% weighting 0.34


Transmission Reliability (Day Ahead and state Estimator) Factor

DA 100% and SE 95% 1.5

DA 99.8% and SE 95% 1.0

DA 99.5% and SE 90% 0.1

DA < 99.5% and SE 90% -1.0

10

Employee Performance Compensation Plan• Reliability Parameters and weighting have not changed

since plan inception.

• SPP management reviewed these parameters and weighting based on:– SPP Market Implementation

– Industry standards

11

Performance Compensation Operational Metrics

Bruce RewVice President, Operations

Performance Compensation Metrics

• Review of current Performance Compensation Metrics– Cost Control

– Members Committee Survey

– Reliability Parameters

• Proposed Reliability Parameter Changes to reflect Integrated Marketplace Integration

2

Current Performance Comp metrics tableMetric Weighting Performance Calculation Value




Total 1.00

3

Reliability Parameters breakdownMetric Weighting Perf. Calculation Value




Total 1.00






34% weighting 0.34


4

System Availability ParameterMetric Weighting Perf Calc. Value





34% weighting 0.34


System Availability Metric (MOS, ICCP, RTOSS etc) Factor

All under 99.99% or greater 1.50

One under 99.95% 1.00

One under 99.8% 0.75

One Under 99.5% 0.25

Two Under 99.5% 0.00

All Under 99.5% -1.005

NERC RC Violations ParameterMetric Weighting Perf Calc. Value





34% weighting 0.34


NERC RC Violations Factor

0 1.0

1 0

>1 -1.0

6

Transmission Reliability ParameterMetric Weighting Perf Calc. Value





34% weighting 0.34


Transmission Reliability (Day Ahead and state Estimator) Factor

DA 100% and SE 95% 1.5

DA 99.8% and SE 95% 1.0

DA 99.5% and SE 90% 0.1

DA < 99.5% and SE 90% -1.0

7

Reliability Parameters Max to MinMetric Weighting Perf Calc. Max Value





34% weighting 0.34

Reliability Parameter Max 0.46

Metric Weighting Perf Calc. Min Value

System Availability 36% -1.0 -0.36


Transmission Reliability 32% -1.0 -0.32

Total Operational Metrics: -0.68

34% weighting 0.34

Reliability Parameter Min -0.238

Current Performance Comp metric with Reliability Parameter possible range




Reliability Parameters 34% 1.34 - (-.68) 0.46- (-0.23)

Total 1.12 - 0.43

9

Proposed Performance Comp metrics table





Total 1.00

10

Proposed Performance Comp Metrics Table

• Cost Control and Members Committee Survey unchanged

• Reliability Parameters weighting remains the same but the parameters change





Total 1.00

11

Proposed Reliability ParametersMetric Weighting Perf. Calculation Value




Total 1.00



NERC Standards Violations 25% 1.0 0.25


Market Performance 20% 1.0 0.20


34% weighting 0.34


12

Proposed System Availability ParameterMetric Weighting Perf Calc. Value





System Availability Metric (MOS, ICCP, EMS) Factor

All 3 systems >= 99.99% 1.50

2 or 3 systems >= 99.99% and none <=99.85% 1.00

2 or 3 systems >= 99.85% and none <=99.50% 0.75

1 system <=99.50% 0.25

2 systems < 99.50% 0.00

3 systems < 99.50% -1.0013

Proposed NERC Standards Violations Parameter

NERC Standards Violations Factor

0 1.0

1–2 0.75

3-4 0.25

5 0.0

>5 -1.0

*Self-reports factored at 50%

*Includes only High or Critical Standards






14

Proposed Transmission Reliability Parameter

Transmission Reliability (Real-Time Contingency Analysis and State Estimator)

Factor

RTCA >=97% and SE >=95% 1.5

RTCA >=95% and SE >=95% 1.0

RTCA >=90% and SE >=90% 0.1

RTCA < 90% and SE <90% -1.0






15

Proposed Market Performance Parameter

Market Performance Factor

DARUC >= 97% and STLF >= 97% and RTLODF, DAM >=95% 1.5

DARUC >=95% and STLF >=95% and RTLODF, DAM >=93% 1.0

DARUC >=90% and STLF >=93% and RTLODF, DAM >=91% 0.5

DARUC < 90% and STLF <93% and RTLODF, DAM <91% 0.0






16

Proposed Reliability Metrics Max to MinMetric Weighting Max Perf

Calc.Value





Max Total 1.375

Metric Weighting Min PerfCalc.

Value

System Availability 30% -1.0 -0.30

NERC Standards Violations 25% -1.0 -0.25

Transmission Reliability 25% -1.0 -0.25


Min Total -0.8017

Comparison of current/proposed Reliability Parameters ranges

Proposed Metric Weighting Performance Calculation Value




Total 1.13 - 0.39

Current Metric Weighting Performance Calculation Value




Total 1.12 - 0.43

18

Acronym tableAcronym Description

DA Day Ahead

DAM Day Ahead MarketDARUC Day Ahead Reliability Unit CommitmentEMS Energy Management SystemICCP Inter-Control Center Communications Protocol

MOS Market Operations System

NERC North American Electric Corporation

RC Reliability Coordination

RTCA Real-Time Contingency Analysis

RTLODF Real-Time Line Outage Distribution Factor

RTOSS Real-Time Operations Scheduling System

SE State Estimator

STLF Short-Term Load Forecast19

Documents

Page 1 of 4 - Southwest Power Pool minutes 091014.pdfIn executive session, ... The SPP Human Resources Committee has oversight of the plan and is responsible for reviewing ... Ms