Southwest Power Pool REGIONAL TARIFF WORKING GROUP February 3, 2005 DFW Airport Hyatt Dallas, TX 9:30 a.m. 4:00 p.m.
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1 Southwest Power Pool REGIONAL TARIFF WORKING GROUP February 3, 2005 DFW Airport Hyatt Dallas, TX 9:30 a.m. 4:00 p.m. Agenda Item 1 Call to Order, Introductions and Receipt of Proxies Ricky Bittle (Chair) called the (RTWG) meeting to order at 9:35 a.m. with a round of introductions. Other RTWG members in attendance were: Gene Anderson (OMPA), Robert Pennybaker for Dennis Bethel (AEP), David Brian (ETEX), Bill Dowling (Midwest Energy), John Gunesch (OG+E), Bernie Liu (Xcel Energy), Charles Locke (KCPL), Mike Proctor (MPSC), Dennis Reed (Westar Energy), Jim Stanton (Calpine), Bary Warren (Empire), Pat Bourne (SPP), Roy Sundman (SPP). Others in attendance included: Ron Gary (LUS); Mark MacDonald (Cleco); John Seelke (NewEnergy Associates Cleco); Pat Mosier (APSC); Robert Shields (AECC); Wes Berger (Xcel Energy); David Kays (OG+E); Tim Soles (OEV); Bob Tumilty and Terri Gallup, (AEP); Tracey Hannon (SWPA); Shah Hossain (Westar / Generation); Walt Shumate (Shumate & Associates); Wayne Camp (BDR SPP), Les Dillahunty, Richard Dillon and Bruce Rew (SPP). Those attending by phone include Tom Debaun (KCC); Richard House (APSC); Dave Christiano and Howard Conus (CUS); Beth Martin (InterGen); Larry Wilkus (Aquila); Bill Wylie (OG+E); and Pamela Kozlowski (BDR - SPP). Agenda Item 2 Review of Agenda and Additional Agenda Items The approved agenda is attached (Attachment 1 RTWG Agenda ). Agenda Item 3 Approval of Minutes Draft minutes of the January 20, 2005 meeting were approved with the addition of the RTWG resolution recognizing the work of Pam Kozlowski (Attachment 2 Meeting Minutes). Agenda Item 4 Order 2003-B Compliance Filing (Including GITF Assessment) Bob Tumilty (AEP) reported that it is the recommendation of the GITF that SPP comply with Order 2003-B by filing revised Tariff sheets reflecting the changes prescribed in the order noting in the transmittal letter that SPP expects to file further modifications upon conclusion of its stakeholder process. Ricky Bittle (Chair) stated that the Board of
2 February 3, 2005 Directors and MOPC would be notified of the compliance filing, but the Tariff changes would not be submitted to them for approval. Agenda Item 5 Schedule 1 Charge Restructure Discussion of this issue was deferred Agenda Item 6 Implementation of the RSC s Cost Allocation Policy Final Tariff Development Pamela Kozlowski (BDR SPP) led the group through four changes to proposed Attachment J that had been recommended. First, it was proposed that language related to treatment of upgrades having a cost of less than or equal to $100,000 be moved to Section III. B., Conditions for Classifying Upgrades Associated with Designated Resources as Base Plan Upgrades. There was general agreement that this change is appropriate. Second, paragraph 3 of Section III.C.1. should be modified to convey that if the Transmission Customer wants to submit a request for a waiver that it must submit such request within 15 days of the notice. There was general agreement that this change is appropriate. Third, addition of the word significantly to Section III.C.2. was proposed to convey that the commitment to the Designated Resource must significantly exceed the 5-year minimum commitment in order for costs that exceed the Safe Harbor Cost Limit to be considered for a waiver. After extensive discussion, there was no motion to include this language. Fourth, a question arose concerning whether the last sentence of Section VII.D.3. required clarification. There was general agreement that no change in language was necessary. Other minor modifications were discussed. There was general agreement that a simple statement requiring a filing prior to any change in charges should be added to Schedule 11 and Attachment H. Language clarifying the meaning of the term project will also need to be added. Pam also led the group through a set of modifications to Attachment Z necessary to make it function properly in the context of the cost allocation modifications, pointing the way between Attachments J and Z. The group generally agreed that this version of Attachment Z should be included in the cost allocation tariff draft to be reviewed at the next meeting. Agenda Item 7 Incorporation of Market Protocols in the Tariff Initial Report and Discussion Wayne Camp (BDR SPP) led the group through the initial drafts of new Tariff attachments AE, AF, and AG. Wayne began the discussion by setting out the criteria used to determine which provisions from the protocols go into the Tariff. During discussion of the mapping of the revisions, the group agreed that it would be appropriate to place definitions used in more than one section of the Tariff in the general definitions section and definitions used only once reflected in the attachment. After extensive discussion, there was general agreement that Transmission Customers should be understood as market participants and that Market Participant should not be 2
3 February 3, 2005 embedded as a defined term in these attachments unless the MWG recommends such change. Agenda Item 8 Task Force Reports Generation Interconnection Task Force Bob Tumilty (Task Force Chair) reported that the Task Force had met twice by teleconference since the last RTWG meeting and had made significant progress on the task of defining the interconnection services that work for the SPP parties involved. Bob also posed four questions to the RTWG that would serve to provide direction to the task force as it continues its deliberations. The questions posed and a summary of the answers given are attached (Attachment 3 GITF Questions). The MOCTF report was deferred. Multi-Owner Compensation Task Force Agenda Item 9 Board, MPOC, SPC and RSC (including CAWG) Activities This activities report was deferred. Agenda Item 10 Current and Pending Filings Update This activities report was deferred. Agenda Item 11 Review of Proposed Future Meeting Schedule The times and places for future meetings were established as follows: 1. February 16 and 17, 2005 a. Feb 16 starting at 9:30 a.m. to 4:00 p.m. b. Feb 17 starting at 8:00 a.m. to 4:00 p.m. 2. March 3, 2005 starting at 9:30 a.m. 3. March 17, 2005 starting at 9:30 a.m. 4. April 7, 2005 starting at 9:30 a.m. 5. April 21, 2005 starting at 9:30 a.m. All scheduled meetings are to be held in Dallas, in the vicinity of the DFW airport. Agenda Item 12 Adjournment Ricky Bittle (Chair) adjourned the meeting at 3:20 p.m. 3
4 Southwest Power Pool REGIONAL TARIFF WORKING GROUP February 3, 2005 DFW Airport Hyatt Dallas, TX 9:30 a.m. 4:00 p.m. - A G E N D A - 1. Call to Order & Introductions, Receipt of Proxies 2. Review of Agenda and Additional Agenda Items 3. Approval of January 20, 2005 Minutes 4. Order 2003-B Compliance Filing (Including GITF Assessment) 5. Schedule 1 Charge Restructure 6. Implementation of RSC s Cost Allocation Policy Final Tariff Development 7. Incorporation of Market Protocols in the Tariff Initial Report and Discussion 8. Task Force Reports Generation Interconnection Task Force Policy Questions Guidance to the Task Force Multi-Owner Compensation Task Force 9. Board, MOPC, SPC and RSC (including CAWG) Activities Report 10. Current and Pending Filings Update 11. Review of Proposed Future Meeting Schedule 12. Adjournment
5 Southwest Power Pool REGIONAL TARIFF WORKING GROUP January 20, 2005 DFW Airport Hyatt Dallas, TX 9:30 a.m. 4:00 p.m. Agenda Item 1 Call to Order, Introductions and Receipt of Proxies Ricky Bittle (Chair) called the (RTWG) meeting to order at 9:30 a.m. with a round of introductions. Other RTWG members in attendance were: Gene Anderson (OMPA), Robert Pennybaker for Dennis Bethel (AEP), Bill Dowling (Midwest Energy), John Gunesch (OG+E), Bernie Liu (Xcel Energy), Charles Locke (KCPL), Dennis Reed (Westar Energy) Bary Warren (Empire), Alan Derichsweiler for Mitch Williams (WFEC), Pat Bourne (SPP), Roy Sundman (SPP). Others in attendance included: Ron Gary (LUS) and Gary Newell (Thompson Coburn LUS); Christine Ryan (Brickfield, Burchette, Ritts & Stone - ETEX); David Kays (OG+E); Terri Gallup, (AEP); Pamela Kozlowski (BDR - SPP), Les Dillahunty, Richard Dillon and Bruce Rew (SPP). Those attending by phone include Tim Soles (OEV); Tom Debaun (KCC); Richard House (APSC); Robert Shields (AECC); Larry Wilkus (Aquila); Peter Esposito (CBC InterGen) Orlando Martinez (InterGen); Bob Tumilty (AEP); Wayne Camp (BDR SPP). Agenda Item 2 Review of Agenda and Additional Agenda Items The approved agenda is attached (Attachment 1 RTWG Agenda ). Agenda Item 3 Approval of Minutes Minutes of the December 15, 2004 and January 5 & 6 meetings were approved (Attachment 2 Meeting Minutes). Agenda Item 4 SPC and RSC (including CAWG) Activities Ricky Bittle (Chair) reported that the SPC had met twice since the last RTWG meeting. Among the topics discussed were SPP s interface with NERC and changes in the SPP Staff organization related to the position of the Compliance Manager. The Compliance Manager shall be selected by and report to the Board of Directors. Les Dillahunty (SPP) reviewed recent activities of the RSC, stating that it will be conducting discussions regarding openness in their processes related to their primary authorities and will be discussing reflection of the upgrade cost allocation plan in the cost/benefit study. He also reported that the CBTF will be reviewing the cost/benefit study model results at its meeting on January 21.
6 January 20, 2005 Agenda Item 5 Current and Pending Filings Update Pat Bourne (SPP) updated the group on the status of various filings. He stated that orders were voted out yesterday at the FERC open meeting related to, the Attachment Z filing, the Joint Operating Agreement with MISO and an order on the SPP s latest compliance filing. He also stated that SPP was in the process of planning a grandfathered contracts technical conference to be held in Little Rock during the last week in February. Agenda Item 6 Order 2003-B Compliance Filing Dennis Reed (Westar) moved and John Gunesch (OG+E) seconded a motion to file proforma compliance language in response to FERC Order 2003-B and state in the transmittal letter that SPP expects to file other modifications subsequently. During the discussion surrounding this issue, the GITF was asked to review the order and make compliance recommendations at the next RTWG meeting. The motion passed unanimously. Agenda Item 7 Schedule 1 Charge Restructure Ricky Bittle (Chair) stated that FERC has required SPP to eliminate the use of multiple charges under Schedule 1 of the OATT; that the RTWG needs to develop a method for doing that and that establishment of a task force may be the way to start the task. He also reminded the group that the February 10, 2005 filing will include a status report to FERC on control area consolidation as well as this issue. Currently, the expected time frame for resolution of this issue is Tariff language approval completed during the July, 2005 meeting cycle. The group expressed an interest in looking at a solution to the issue similar to the structure used by MISO where all revenue requirements are divided by all load. Agenda Item 8 Tariff Attachment AA Status Report and Waiver of Prepayment Cap Bruce Rew presented a report of activity to date under Tariff Attachment AA. He stated that several projects had been funded under the program and that, although none have been completed, he expects that all committed projects will be installed by Summer Additionally, he made it clear that most of the lower cost projects had been funded and that subsequent identified projects are in the range of $500,000 (Attachment 3 Attachment AA Flowgate Summary). After discussion of the issue Ricky Bittle (Chair) summarized the issues before the group: 1) Do we continue this process? 2) What is the upgrade size limit for use of this process? 3) Should there be a limit on the magnitude of a customer s prepayment and how long should the crediting process be permitted to take? and 4) Should there be pooling of prepayments to fund the more costly projects? Since InterGen had approached the RTWG, asking whether it would be willing to support an increase in the prepayment cap, SPP Staff developed two alternative modifications to Tariff Attachment AA for consideration (Attachment 4 Attachment AA Cap Waiver Alt 1 and Attachment 5 Attachment AA Cap Waiver Alt 2). Orlando Martinez (InterGen) recapped his request for consideration of a waiver of the prepayment cap specified in Attachment AA to the SPP OATT and stated that either of the alternatives would work for InterGen and that he expected to take sufficient transmission service to use the transmission service credits related to their first anticipated prepayment within a twelve month period; however, as the requested 2
7 January 20, 2005 upgrades become more costly, it may be difficult to take sufficient service within a twelve month period to use the credits. At the conclusion of general discussions Gene Anderson (OMPA) moved and Dennis Reed (Westar) seconded a motion to approve Alternative - 2 language with a modification to section 3.0 to provide that the twelve months of crediting begins at the in-service date of the system upgrade. The motion failed with two votes in support, four opposed and one abstention. Agenda Item 9 Implementation of the RSC s Cost Allocation Policy Final Tariff Development Pamela Kozlowski (BDR SPP) led the group through the remaining definitions that needed to be added or revised and the other miscellaneous modifications necessary throughout the Tariff. Upon review of the proposed new Section VIII in Attachment J, concern was expressed that the language, as written, infringes on transmission owners Section 205 filing rights. SPP Staff agreed to consult with its FERC counsel to revise the language. Proposed language on Uncompleted Network Upgrades (Attachment J Section IX) was determined to be acceptable with reinstatement of the third sentence that had been deleted. Pat Bourne (SPP) stated that the modifications to Attachment Z necessary for it to work in conjunction with the provisions of the cost allocation plan were unknown until it can be reviewed in conjunction with the FERC order issued in the Attachment Z filing. Given the fact that final revisions to Attachments J and Z remain to be done, Gene Anderson (OMPA) moved and Robert Pennybaker (AEP) seconded a motion to present the revised Tariff to the Board of Directors for approval, requesting RTWG authority to modify the provisions of Attachment J as necessary and review Attachment Z in the light of the order issued and modify it as necessary at the February 3 rd RTWG meeting. The motion passed unanimously. Agenda Item 10 Incorporation of Market Protocols in Tariff Pamela Kozlowski (BDR SPP) led the group through a description of the process BDR intends to employ to direct key market protocol elements into the Tariff and other SPP documents (Attachment 6 Transitioning the Market Protocols to Tariff Language). Additionally, she briefed the group on the expected time line leading up to the filing of revised Tariff language. Pam stated that the first draft of revised tariff language will be available for RTWG review on Friday, January 28, prior to the next RTWG meeting on February 3 rd. Agenda Item 11 Task Force Reports Generation Interconnection Task Force 3
8 January 20, 2005 Bob Tumilty (Task Force Chair) reported that the task force had met several times by teleconference. He stated that one of the more difficult issues being addressed is the obligation to provide credits for upgrades on neighboring systems and that the task force would appreciate any guidance available from the RTWG on this issue. When asked about the time required by the task force to complete its recommendations, Bob stated that he thought the task is likely to take about two months. Multi-Owner Compensation Task Force Bill Dowling (Task Force Chair) stated that good progress had been made on the development of draft revisions to Tariff Attachment L. He stated that he expected the process to be concluded within two or three additional meetings. Agenda Item 12 Review of Proposed Future Meeting Schedule The times and places for future meetings were established as follows: 1. February 3, 2005 starting at 9:30 a.m. to 4:00 p.m. central time. 2. February 16 and 17, 2005 a. Feb 16 starting at 9:30 a.m. to 4:00 p.m. central time. b. Feb 17 starting at 8:00 a.m. to 4:00 p.m. central time. 3. March 3, 2005 starting at 9:30 a.m. central time. 4. March 17, 2005 starting at 9:30 a.m. central time. 5. April 7, 2005 starting at 9:30 a.m. central time. Location TBD. All scheduled meetings are to be held in Dallas, in the vicinity of the DFW airport. Special Resolution The members of the RTWG adopted the following resolution: By acclamation and with great appreciation the RTWG recognizes the knowledge, support and sacrifice of Pam Kozlowski, BDR, Inc., and expresses its appreciation for her support in the development of the RSC Cost Allocation Policy and the conversion of that Policy into Tariff language. Agenda Item 13 Adjournment Ricky Bittle (Chair) adjourned the meeting at 3:15 p.m. 4
9 RTWG Answers in RED Questions for the RTWG February 1, 2005 The SPP Large Generator Interconnection Agreement Task Force is seeking input and direction from the RTWG on the following issues: 1 What is the RTWG s opinion on requiring only minimal upgrades (e.g. upgrades near the point of interconnection) for generator interconnections and leaving additional upgrades (e.g. those further away) to be addressed when transmission service is requested? RTWG showed general agreement with this approach. Recommended looking for a recent filing by NEPOOL. 2. a How closely does the RTWG expect the cost allocation in the generator interconnection procedures to match the cost allocation plan that is soon to be filed at the FERC? For example, will a generator that has no LSE under contract for the output of its generating facility be allowed to designate its plant as a Network Resource for any LSE it deems appropriate? Not tightly bound to Cost Allocation for interconnection facilities. Beyond local facilities, follow Cost Allocation. 2. b Should an Interconnection Customer be able to request any type of transmission service, including network transmission service? Keep interconnection service separate from transmission service. Follow the rules for requesting transmission service. Questions were raised about future energy markets in SPP. Generator interconnection process must facilitate generators selling into that market. 3 Would the RTWG be willing to consider a direct assignment of interconnection costs to the requesting interconnection customers? Questions were raised about ownership: If a generator pays for interconnecting switching station, who owns it? Could the generator allow the transmission owner to operate it? Can we allocate to direct assignment or network upgrade based on benefits (or lack thereof) to the rest of the system? i.e., can we sell more transmission service as a result of the upgrades? 4 Would the RTWG agree that for study purposes Network Resource Interconnection Service is equivalent to Energy Resource Interconnection Service plus a Network Transmission Service Request? ERIS = no certainty on getting transmission service NRIS = better chance of getting transmission service ERIS + Transmission Request = Will be able to move power
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