September 30, 2016 VIA ELECTRONIC FILING

Transcription

1 September 30, 2016 VIA ELECTRONIC FILING The Honorable Kimberly D. Bose Secretary Federal Energy Regulatory Commission 888 First Street, N.E. Washington, D.C Re: Southwest Power Pool, Inc., Docket No. ER Informational Filing to Notify the Commission of Implementation of Year- Five Reallocation of Revenue Requirements Pursuant to Attachments J and O for the Balanced Portfolio Dear Secretary Bose: Southwest Power Pool, Inc. ( SPP ) hereby submits this informational filing to notify the Federal Energy Regulatory Commission ( Commission ) of SPP s implementation of the year-five reallocation of revenue requirements in accordance with the Balanced Portfolio process described in Attachments J and O of the Open Access Transmission Tariff ( Tariff ). 1 SPP will implement the year-five reallocation of revenue requirements on October 1, 2016, which date is consistent with the Commission s order in Docket No. ER , et seq., wherein the Commission approved an October 1 st effective date for the initial reallocation of revenue requirements and for all subsequent reallocations for years two through five. 2 SPP previously has submitted a similar filing to notify the Commission of the implementation of the year-four reallocation of revenue requirements under the Balanced Portfolio process in Docket No. ER Southwest Power Pool, Inc., Open Access Transmission Tariff, Sixth Revised Volume No. 1. See Sw. Power Pool, Inc., 141 FERC 61,149 (2012) ( November 20 Order) at P 25. See Informational Filing to Notify the Commission of Implementation of Year-Four Reallocation of Revenue Requirements Pursuant to Attachments J and O for the Balanced Portfolio of Southwest Power Pool, Inc., Docket No. ER (October 1, 2015) ( Year-Four Reallocation Filing ).

2 The Honorable Kimberly D. Bose September 30, 2016 Page 2 I. Background A. SPP SPP is a Commission-approved Regional Transmission Organization ( RTO ). 4 It is an Arkansas non-profit corporation with its principle place of business in Little Rock, Arkansas. SPP has 94 Members, including 16 investorowned utilities, 14 municipal systems, 20 generation and transmission cooperatives, 8 state agencies, 13 independent power producers, 12 power marketers, 10 independent transmission companies, and 1 federal agency. As an RTO, SPP administers open access Transmission Service over approximately 60,000 miles of transmission lines covering portions of Arkansas, Iowa, Kansas, Louisiana, Minnesota, Missouri, Montana, Nebraska, New Mexico, North Dakota, Oklahoma, South Dakota, Texas, and Wyoming across the facilities of SPP s Transmission Owners, 5 and administers the Integrated Marketplace, a centralized day ahead and real-time energy and operating reserve market with locational marginal pricing and market-based congestion management. 6 B. Balanced Portfolio Related Filings On August 15, 2008, SPP submitted revisions to the Tariff to add a Balanced Portfolio cost allocation process for economic planning upgrades, including a regional postage-stamp rate design for recovery of the costs of such upgrades. 7 The Balanced Portfolio process described in the Balanced Portfolio Filing was the result of extensive stakeholder process wherein the Balanced Portfolio process was developed over a two year period with overwhelming support from SPP s Southwest Power Pool, Inc., 109 FERC 61,009 (2004), order on reh g, 110 FERC 61,137 (2005). See Sw. Power Pool, Inc., 89 FERC 61,084 (1999); Sw. Power Pool, Inc., 86 FERC 61,090 (1999); Sw. Power Pool, Inc., 82 FERC 61,267, order on reh g, 85 FERC 61,031 (1998). Sw. Power Pool, Inc., 146 FERC 61,130 (2014) (order approving the start-up and operation of the Integrated Marketplace effective March 1, 2014). Submission of Revisions to Open Access Transmission Tariff to Add Balanced Portfolio Cost Allocation Process for Economic Planning Upgrades of Southwest Power Pool, Inc., Docket No. ER ( Balanced Portfolio Filing ) (Aug. 15, 2008).

3 The Honorable Kimberly D. Bose September 30, 2016 Page 3 stakeholders and state regulatory commissions. 8 Balanced Portfolio Filing on October 16, The Commission accepted the On August 2, 2012, as amended on September 26, 2012, SPP submitted revisions to the Tariff to implement the reallocation of revenue requirements pursuant to the Balanced Portfolio cost allocation methodology. 10 In the November 20 Order, the Commission granted an effective date of October 1, 2012 for the initial reallocation of revenue requirements and a October 1 effective date for all subsequent annual reallocations for years two through five. 11 The Commission has previously accepted SPP s notice of implementation for its year-two, year-three, and year-four reallocations on October 1, 2013, 12 October 1, 2014, 13 and October 1, 2015, 14 respectively. II. Implementation of the Incremental Transfer of the Zonal Revenue Requirements Reallocated Pursuant to Attachments J and O With this filing, SPP is notifying the Commission of the implementation of the year-five reallocation of revenue requirements consistent with the Balanced Portfolio methodology and SPP s year-five obligations pursuant to the Balanced Portfolio Order. As stated herein, the Commission has previously approved the effective date of October 1 for years two through five reallocations of revenue requirements necessary to achieve a Balanced Portfolio. Therefore, SPP s implementation of the year-five reallocation of revenue requirements, effective October 1, 2016, is consistent with the effective date granted in the November 20 Order. As discussed in the November 20 Order, Balance to the Total Balanced Portfolio Region-wide Annual Transmission Revenue Requirement Total ( Reallocated Revenue Requirements ) shall occur in increments. The Commission See Balanced Portfolio Filing at 2. Sw. Power Pool, Inc., 125 FERC 61,054 (2008) ( Balanced Portfolio Order ). See Submission of Tariff Revisions to Implement the Initial Reallocation of Revenue Requirements Pursuant to Attachments J and O of Southwest Power Pool, Inc., Docket ER (Aug. 2, 2012). See also Motion to Amend Filing and Amend Answer of Southwest Power Pool, Inc., Docket ER (Sept. 26, 2012) (together the Initial Transfer Filings ). See supra at n. 2. See Sw. Power Pool, Inc., 144 FERC 61,244 (2013) at P 6. See Sw. Power Pool, Inc., Letter Order, Docket No. ER (April 22, 2015). See Sw. Power Pool, Inc., Letter Order, Docket No. ER (November 23, 2015).

4 The Honorable Kimberly D. Bose September 30, 2016 Page 4 has found that SPP properly implemented the Balanced Portfolio Process to reallocate revenue requirements associated with the Balanced Portfolio projects. 15 As such, SPP will not provide detailed explanation of the Balanced Portfolio process in this filing. However, consistent with previous informational filings regarding the implementation of the Balanced Portfolio process, SPP provides the following figures to identify the Reallocated Revenue Requirements necessary to achieve a Balanced Portfolio (with year-five transfers highlighted in bold): 1. Initial Allocation in Year 2012 is 20% of $102,624,740= $20,524, Year % = $41,049,896 (Initial allocation + $20,524,948) Year %=$61,574,844 ((Initial Allocation + Year 1-2) + $20,524,948) Year % = $82,099,792 ((Initial Allocation + Year 1-3) + $20,524,948) Year % = $102,624,740 ((Initial Allocation + Year 1-4) + $20,524,948) 20 Five years total equaling $307,874,220 of Reallocated Revenue Requirements 21 III. Additional Information A. Documents Submitted with this Filing: In addition to this transmittal letter, the following documents are included with this filing: Exhibit No. SPP-1: Year Reallocated Revenue Requirements by Zone See November 20 Order at P 25. Exhibit SPP-1, Table Year 1 Attachment H Balancing Transfer Adjustments. Exhibit SPP-1, Table Year 2 Attachment H Balancing Transfer Adjustments. Exhibit SPP-1, Table Year 3 Attachment H Balancing Transfer Adjustments. Exhibit SPP-1, Table Year 4 Attachment H Balancing Transfer Adjustments. Exhibit SPP-1, Table Year 5 Attachment H Balancing Transfer Adjustments. See Tariff at Attachment J, Section IV.A.(2). After the fifth year transfers and/or once all the economic upgrades are complete and the revenue requirements for those upgrades are included in the rates under the Tariff, the Balanced Portfolio will be trued-up based on the applicable fixed-rate change rates and the actual costs for each upgrade measured against the benefits estimated at the time the upgrades were approved. At that time, the final amount of the Reallocated Revenue Requirements shall be determined and transferred over the subsequent 5 years.

5 The Honorable Kimberly D. Bose September 30, 2016 Page 5 B. Service: Consistent with its internal policies regarding public notice of filings at the Commission, SPP has electronically served a copy of this filing on all its Members, Transmission Customers, and Market Participants. A complete copy of this filing will be posted on the SPP web site, and is also being served on all affected state commissions. C. Communications Correspondence and communications with respect to this filing should be sent to, and SPP requests the Secretary to include on the official service list, the following: Nicole Wagner Manager Regulatory Policy Southwest Power Pool, Inc. 201 Worthen Drive Little Rock, AR Telephone: (501) Fax: (501) jwagner@spp.org Matthew Harward Attorney Southwest Power Pool, Inc. 201 Worthen Drive Little Rock, AR Telephone: (501) Fax: (501) mharward@spp.org IV. Conclusion SPP respectfully requests the Commission accept this informational filing to notify the Commission and all interested parties of the October 1, 2016 implementation of the year-five reallocation of revenue requirements under the Balanced Portfolio process. Respectfully submitted, /s/ Matthew Harward Matthew Harward Southwest Power Pool, Inc. 201 Worthen Drive Little Rock, AR Telephone: (501) mharward@spp.org Attorney for Southwest Power Pool, Inc.

6 Year 1 Attachment H Balancing Transfer Adjustments - Annualized Exhibit No. SPP-1 Page 1 of 3 Year 2 Attachment H Balancing Transfer Adjustments - Annualized Year 1 10/1/2012 Scale Up 20% Year 2 10/1/2013 Scale Up 40% Out (Att, H Col 6) Regional Allocation of (Att. H, Table 2) Zonal ATRR Out (Att, H Col 6) Regional Allocation of (Att. H, Table 2) 1 AEPW -$3,995,516 $4,618,540 $623,025 1 AEPW -$7,991,031 $9,237,081 $1,246,050 2 EMDE -$1,261,849 $541,447 -$720,402 2 EMDE -$2,523,698 $1,082,895 -$1,440,804 3 GRDA -$714,679 $401,914 -$312,764 3 GRDA -$1,429,357 $803,829 -$625,528 4 KCPL -$1,821,147 $1,587,398 -$233,748 4 KCPL -$3,642,293 $3,174,796 -$467,497 5 MIDW $0 $147,825 $147,825 5 MIDW $0 $295,651 $295,651 6 GMO -$2,155,328 $831,686 -$1,323,642 6 GMO -$4,310,656 $1,663,372 -$2,647,285 7 MKEC $0 $230,355 $230,355 7 MKEC $0 $460,711 $460,711 8 OKGE -$1,095,441 $2,913,209 $1,817,768 8 OKGE -$2,190,882 $5,826,419 $3,635,537 9 SPRM -$730,073 $318,443 -$411,630 9 SPRM -$1,460,146 $636,886 -$823, SUNC $0 $219,477 $219, SUNC $0 $438,954 $438, SWPS $0 $2,372,209 $2,372, SWPS $0 $4,744,418 $4,744, WEFA $0 $649,647 $649, WEFA $0 $1,299,295 $1,299, WRI -$2,287,969 $2,373,798 $85, WRI -$4,575,937 $4,747,596 $171, NPPD -$2,520,076 $1,647,462 -$872, NPPD -$5,040,152 $3,294,924 -$1,745, OPPD -$2,375,909 $1,277,069 -$1,098, OPPD -$4,751,818 $2,554,138 -$2,197, LES -$1,566,962 $394,466 -$1,172, LES -$3,133,925 $788,932 -$2,344,992 Total per Year -$20,524,948 $20,524,948 $0 Total per Year -$41,049,896 $41,049,896 $0 Total PV -$20,524,948 $20,524,948 $0 Total PV -$61,574,844 $61,574,844 $0

7 Year 3 Attachment H Balancing Transfer Adjustments - Annualized Exhibit No. SPP-1 Page 2 of 3 Year 4 Attachment H Balancing Transfer Adjustments - Annualized Year 3 10/1/2014 Scale Up 60% Year 4 10/1/2015 Scale Up 80% Zonal ATRR Out (Att, H Col 6) Regional Allocation of Zonal ATRR (Att. H, Table 2) Out (Att, H Col 6) Regional Allocation of Zonal ATRR (Att. H, Table 2) 1 AEPW -$11,986,547 $13,855,621 $1,869,074 1 AEPW -$15,982,062 $18,474,161 $2,492,099 2 EMDE -$3,785,547 $1,624,342 -$2,161,205 2 EMDE -$5,047,397 $2,165,790 -$2,881,607 3 GRDA -$2,144,036 $1,205,743 -$938,292 3 GRDA -$2,858,714 $1,607,658 -$1,251,056 4 KCPL -$5,463,440 $4,762,195 -$701,245 4 KCPL -$7,284,587 $6,349,593 -$934,994 5 MIDW $0 $443,476 $443,476 5 MIDW $0 $591,302 $591,302 6 GMO -$6,465,985 $2,495,058 -$3,970,927 6 GMO -$8,621,313 $3,326,743 -$5,294,570 7 MKEC $0 $691,066 $691,066 7 MKEC $0 $921,422 $921,422 8 OKGE -$3,286,323 $8,739,628 $5,453,305 8 OKGE -$4,381,764 $11,652,838 $7,271,074 9 SPRM -$2,190,219 $955,329 -$1,234,890 9 SPRM -$2,920,292 $1,273,772 -$1,646, SUNC $0 $658,431 $658, SUNC $0 $877,908 $877, SWPS $0 $7,116,627 $7,116, SWPS $0 $9,488,836 $9,488, WEFA $0 $1,948,942 $1,948, WEFA $0 $2,598,590 $2,598, WRI -$6,863,906 $7,121,394 $257, WRI -$9,151,875 $9,495,192 $343, NPPD -$7,560,227 $4,942,386 -$2,617, NPPD -$10,080,303 $6,589,848 -$3,490, OPPD -$7,127,728 $3,831,207 -$3,296, OPPD -$9,503,637 $5,108,276 -$4,395, LES -$4,700,887 $1,183,398 -$3,517, LES -$6,267,849 $1,577,864 -$4,689,985 Total per Year -$61,574,844 $61,574,844 $0 Total per Year -$82,099,792 $82,099,792 $0 Total PV -$123,149,688 $123,149,688 $0 Total PV -$205,249,480 $205,249,480 $0

8 Exhibit No. SPP-1 Page 3 of 3 Year 5 Attachment H Balancing Transfer Adjustments - Annualized Year 5 10/1/2016 Scale Up 100% Out (Att, H Col 6) Regional Allocation of (Att. H, Table 2) 1 AEPW -$19,977,578 $23,092,702 $3,115,124 2 EMDE -$6,309,246 $2,707,237 -$3,602,009 3 GRDA -$3,573,393 $2,009,572 -$1,563,820 4 KCPL -$9,105,733 $7,936,991 -$1,168,742 5 MIDW $0 $739,127 $739,127 6 GMO -$10,776,641 $4,158,429 -$6,618,212 7 MKEC $0 $1,151,777 $1,151,777 8 OKGE -$5,477,205 $14,566,047 $9,088,842 9 SPRM -$3,650,365 $1,592,215 -$2,058, SUNC $0 $1,097,385 $1,097, SWPS $0 $11,861,045 $11,861, WEFA $0 $3,248,237 $3,248, WRI -$11,439,843 $11,868,990 $429, NPPD -$12,600,379 $8,237,310 -$4,363, OPPD -$11,879,546 $6,385,345 -$5,494, LES -$7,834,811 $1,972,330 -$5,862,481 Total per Year -$102,624,740 $102,624,740 $0 Total PV -$307,874,220 $307,874,220 $0