Southwest Power Pool REGIONAL TARIFF WORKING GROUP January 20, 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 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 Regional Tariff Working Group (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.

2 Regional Tariff Working Group 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

3 Regional Tariff Working Group 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. 3

4 Regional Tariff Working Group January 20, 2005 Agenda Item 11 Task Force Reports Generation Interconnection Task Force 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

5 Southwest Power Pool REGIONAL TARIFF WORKING GROUP January 20, 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 December 15, 2004 and January 5 & 6, 2005 Minutes 4. SPC and RSC (including CAWG) Activities Report 5. Current and Pending Filings Update 6. Order 2003-B Compliance Filing 7. Schedule 1 Charge Restructure 8. Attachment AA Status Report Waiver of Prepayment Cap 9. Implementation of RSC s Cost Allocation Policy Final Tariff Development 10. Incorporation of Market Protocols in the Tariff 11. Task Force Reports Generation Interconnection Task Force Assignment of Credit Responsibility for Generation Interconnection Upgrades Multi-Owner Compensation Task Force 12. Review of Proposed Future Meeting Schedule 13. Adjournment

6 Southwest Power Pool REGIONAL TARIFF WORKING GROUP December 15, 2004 DFW Airport Hyatt Dallas, TX 9:30 a.m. 4:00 p.m. Agenda Item 1 Call to Order, Introductions and Receipt of Proxies Dennis Reed (Vice-Chair) called the Regional Tariff Working Group (RTWG) meeting to order at 10:00 a.m. with a round of introductions. Other RTWG members in attendance were: Gene Anderson (OMPA), Robert Pennybaker for Dennis Bethel (AEP), Robert Shields for Ricky Bittle (AECC), Mike Lavanga for David Brian (ETEX), Bill Dowling (Midwest Energy), Mark Foreman (TNSK), John Gunesch (OG+E), Bernie Liu (Xcel Energy), Charles Locke (KCPL), Mike Proctor (MOPSC), Tracey Hannon for Jim Sherwood (SWPA), Jim Stanton (Calpine), Bary Warren (Empire), Pat Bourne (SPP), Roy Sundman (SPP). Others in attendance included: Pat Mosier and Richard House (APSC); Gary Newell (Thompson Coburn LUS); Wes Berger (Xcel Energy); Bill Wylie, David Kays (OG+E) Walt Shumate (Shumate & Assoc. - OG+E); Terri Gallup and Raj Rana (AEP); Rick Walker (The Wind Coalition); Pamela Kozlowski (BDR - SPP), Carl Monroe, Les Dillahunty and Bruce Rew (SPP). Those attending by phone include Orlando Martinez (InterGen); Dave Christiano (CUS); Larry Wilkus (Aquila); and Tom DeBaun (KCC). Agenda Item 2 Review of Agenda and Additional Agenda Items The agenda was amended to include discussion of the proposed waiver of the prepayment cap prescribed in Tariff Attachment AA. The agenda, as amended, is attached (Attachment 1 RTWG Agenda amended). Agenda Item 3 Approval of Minutes The minutes of the December 2, 2004 meeting were approved (Attachment 2 December 2, 2004 Minutes). Agenda Item 4 RSC (including CAWG) Activities Les Dillahunty (SPP) provided the following report of SPC and CAWG activities: Following the RSC s unanimous approval of the Cost Allocation Policy on November 16 th their focus has been on the Tariff language to implement the Policy and the Cost/Benefit Study.

7 Regional Tariff Working Group December 15, 2004 The CAWG continues to meet and discuss the next steps that they wish to take and to overview the progress being made on the Tariff language. The CAWG has asked the RTWG to specifically address the Waiver process and to ensure that a sanity or reasonableness check are included in the information that moves forward to the RSC, MOPC and SPP Board for final approval. At least one other item that remains on the issue list for the CAWG, although not a requirement for the present filing, will deal with proposals related to Economic Upgrades. The voluntary nature of the Economic Upgrades as compared to the cost sharing proposed in the Base Plan, the reliance on Attachment Z for cost recovery in lieu of specific transmission rights, work with the TWG on the qualifications for economic projects and continued work with the MWG on congestion management and transmission rights are the issues that the CAWG has identified. The RSC is considering options for inclusion of the Cost Allocation Plan in the Cost/Benefit Study. One option would of course be to take no action. A second option would be to incorporate the cost developed by the RTWG and incorporate those in the cost benefit report with minimal additional comment. A third option would require the development of another transmission expansion plan that would assume that there was no RTO. The anticipated result would be that the non-rto plan would be lower cost in terms of the transmission expansion plan as it would not contain regional projects. Hence, a cost comparison could be made between the two plans and the consultants would undertake a qualitative discussion of the offsetting benefits, i.e. capacity market efficiencies, reliability benefits, dispatch savings. The final option would be to evaluate the third option through the GE MAPS model in order to quantify the dispatch savings rather than the subjective approach in option 3. SPP Staff and the CBTF consultants CRA/TCA have been asked by the RSC to develop these options in terms of explanation, timing and cost for their consideration. Media reports received earlier this week suggest that Commissioner David King, under pressure from the New Mexico Attorney General, will withdraw from the SPP Regional State Committee. The MOPC will meet on January 11 th & 12 th followed by the SPC on the 13 th. The RSC meets on January 24 th with the SPP Board meeting on January 25 th. Agenda Item 5 Current and Pending Filings Update Pat Bourne (SPP) reported that SWPA s rate change application has been forwarded to the FERC. SPP will file a corresponding rate change in the Tariff, in anticipation of concluding a coordination agreement. SPP and SWPA are currently discussing an extension of the interim agreement and continue to expect positive conclusion of a new long term coordination agreement. The Calpine Oneta case has been moved from a settlement track to Track II hearing procedures. The next settlement conference is scheduled for December 22, FERC issued a tolling order in the JOA case on December 6, MISO conducted hold a stakeholder meeting on related issues on December 9 th. Approved changes in Attachments J and P to the Tariff were filed on Monday, December 13 th. 2

8 Regional Tariff Working Group December 15, 2004 The agenda for FERC s open meeting, to be held today, includes expected orders in the Aquila complaint against SPP regarding application of the weekly cap when service is redirected and orders associated with market power tests and market-based rates for several regional companies. Mike Proctor (MOPSC) stated that FERC is also scheduled to issue a white paper on transmission and ancillary service pricing today. Agenda Item 6 Implementation of the RSC s Cost Allocation Policy Pamela Kozlowski (BDR SPP) described each of the major changes to the December 2 nd draft Tariff modifications that give rise to the December 8, 2004 draft developed to implement the RSC s new transmission upgrade cost allocation policy. There was additional discussion of the proposed language and suggested language modifications. Issues raised included the following: 1. Language modifications for several definitions were discussed with language revisions concluded. 2. Definition 11.1.a Existing facilities was modified to specifically reference Transmission System facilities placed in service on or before December 31, 2005 and facilities identified as necessary to meet reliability standards for the Summer of Upon extended discussion of the issue, the group concluded that all load within the SPP transmission footprint must pay the SPP Tariff charges associated with Base Plan Upgrades in order to fully compensate the owner of such transmission upgrades. Loads responsible for such charges must include all customers taking service under the SPP Tariff and loads within the SPP footprint not taking service under the Tariff, including bundled retail load and load served under grandfathered agreements. As a remedy, there was general consensus that a new Tariff Part V and a new Schedule 11 be developed to provide for the recovery of Base Plan Upgrade costs from all load. 4. Waiver criteria for Base Plan treatment of DNR-related upgrade costs would need to be more specific for inclusion in the Tariff. 5. A calculation method for base plan upgrade deferral and displacement credits will require additional consideration. 6. Attachments S, Z and O will require additional review and modification. Agenda Item 7 Incorporation of Market Protocols in the Tariff Discussion of this topic was deferred. Agenda Item 8 Issue of Unpancaked Schedule 1 Rehearing Order P. 103 Discussion of this topic was deferred. Agenda Item 9 Waiver of Prepayment Cap Tariff Attachment AA Discussion of this topic was deferred. 3

9 Regional Tariff Working Group December 15, 2004 Agenda Item 10 Task Force Reports Task force reports were deferred. Agenda Item 11 Review of Proposed Future Meeting Schedule The times and places for future meetings were established as follows: 1. January 6, 2005 in Dallas starting at 9:30 a.m. central time. 2. January 20, 2005 in Dallas starting at 9:30 a.m. central time. 3. Tentative February 10, 2005 starting at 9:30 a.m. central time. 4. Tentative February 24, 2005 starting at 9:30 a.m. central time. The possibility of adding the afternoon of January 5 th to the currently scheduled January 6 th meeting was discussed. Two meetings have been reserved in February 2005 for the specific purpose of developing Tariff modifications to accommodate the imbalance market protocols. The RTWG has been asked to complete this work by March 1, 2005, to permit sufficient time for stakeholder review. Agenda Item 12 Adjournment Dennis Reed (Vice-Chair) adjourned the meeting at 4:00 p.m. 4

10 Southwest Power Pool REGIONAL TARIFF WORKING GROUP January 5 & 6, 2005 DFW Airport Hyatt Dallas, TX 1:30 p.m. 8:00 p.m. January 5 th 8:00 a.m. 3:00 p.m. January 6 th Agenda Item 1 Call to Order, Introductions and Receipt of Proxies Dennis Reed (Vice-Chair) called the Regional Tariff Working Group (RTWG) meeting to order at 1:30 p.m. with a round of introductions. Other RTWG members in attendance were: Gene Anderson (OMPA), Dennis Bethel (AEP), Robert Shields for Ricky Bittle (AECC) (Day 1), Ricky Bittle (AECC) (Day 2), Bob Bowser (KEPCo), David Brian (ETEX), Bill Dowling (Midwest Energy), John Gunesch (OG+E), Bernie Liu (Xcel Energy), Charles Locke (KCPL), Mike Proctor (MOPSC), Tracey Hannon for Jim Sherwood (SWPA), Bary Warren (Empire), Alan Derichsweiler for Mitch Williams (WFEC), Pat Bourne (SPP), Roy Sundman (SPP). Others in attendance included: Tim Soles (OEV); Pat Mosier and Richard House (APSC); Ron Gary (LUS) and Gary Newell (Thompson Coburn LUS); Christine Ryan (Brickfield, Burchette, Ritts & Stone - ETEX); Wes Berger (Xcel Energy); David Kays (OG+E) and Walt Shumate (Shumate & Assoc. - OG+E); Terri Gallup, Michael Desselle, Robert Pennybaker and Raj Rana (AEP); Pamela Kozlowski (BDR - SPP), Carl Monroe, Les Dillahunty and Bruce Rew (SPP). Those attending by phone include Bill Wylie (OG+E) and Orlando Martinez (InterGen). Agenda Item 2 Review of Agenda and Additional Agenda Items The approved agenda is attached (Attachment 1 RTWG Agenda 0105&062005). Agenda Item 3 Approval of Minutes Approval of the minutes of the December 15, 2004 meeting was deferred. Agenda Item 4 RSC (including CAWG) Activities The RSC / CAWG report was deferred. Agenda Item 5 Current and Pending Filings Update The current and pending filings update was deferred.

11 Regional Tariff Working Group January 5 & 6, 2005 Agenda Item 6 Waiver of Prepayment Cap Tariff Attachment AA Orlando Martinez (InterGen) recapped his request for consideration of a waiver of the prepayment cap specified in Attachment AA to the SPP OATT, set out in his letter to the RTWG dated December 10, 2004, previously distributed to the RTWG. Discussion of this issue centered around two primary mechanisms that might be used to deal with this request: a one-time waiver of the cap, or an increase in the cap specified in Attachment AA. These alternatives were discussed with no preference being concluded by the group. Recognizing the urgency of the issue, Les Dillahunty suggested that SPP Staff consult with SPP s FERC attorney on a preferred mechanism and suggested that the issue might be concluded by ballot of the MOPC and Board, once the RTWG had acted on the issue. Les agreed to have SPP Staff work up something for the next meeting. Agenda Item 7 Implementation of the RSC s Cost Allocation Policy Pamela Kozlowski (BDR SPP) led discussion of December 28, 2004 draft of the Tariff modifications made to implement the RSC s new transmission upgrade cost allocation policy. There was substantial discussion of RSC intent and language alternatives necessary to implement that intent. Primary issues worked through included the following: 1. Allocation of the zonal portion of a base plan upgrade whose total engineering and construction cost is less than $ 100, Whether in the computation of base plan upgrade avoided costs, engineering and construction cost or revenue requirements should be used. 3. The specific language to be used for the reasonableness test to be applied to the outcome of the application of the base plan cost allocation process. 4. Interaction of the provisions of Attachment J and Attachment Z. 5. Base plan upgrade treatment for Point-To Point transactions that meet base plan treatment criteria. 6. Clarification of the application of the incremental MW-Mi. provisions of Attachments S. See the attached presentation on the development and application of the incremental MW-Mi allocation (Attachment 2 CAWG MW-Mi presentation). Ricky Bittle (Chair) summarized the points of the report he will make to the MOPC: 1. Modifications to key Tariff sections and attachments necessary to implement the RSC s upgrade cost allocation plan were approved at the January 5 & 6, 2005 RTWG meeting. 2. This new Tariff language properly represents the intent of the RSC cost allocation plan. 2

12 Regional Tariff Working Group January 5 & 6, The new Tariff language is workable within the SPP RTO and does not create conflicts with or violate other Tariff provisions 4. There will be no major changes to the provisions provided to them for review 5. Additional minor modifications will need to be made to the Tariff language prior to filing. The group expressed general concurrence with this report. Agenda Item 8 Review of Proposed Future Meeting Schedule The times and places for future meetings were established as follows: 1. January 20, 2005 in Dallas starting at 9:30 a.m. central time. 2. February 3, 2005 starting at 9:30 a.m. central time. 3. February 17, 2005 starting at 9:30 a.m. central time. 4. March 3, 2005 starting at 9:30 a.m. central time. All scheduled meetings are to be held in Dallas, in the vicinity of the DFW airport. A tentative meeting date of March 17, 2005 was also discussed. Agenda Item 9 Adjournment Dennis Reed (Vice-Chair) adjourned the meeting at 3:35 p.m. 3

13 SPP Tariff Attachment AA Summary of Upgradeable SPP Flowgates NOTICE: Removal of an existing limit does not guarantee an increase in ATC for a particular path (POR/POD) for a particular timeframe. The increase would depend on the next limiting facility, which may not be listed on this document. Removal of an existing limit does not guarantee approval of a transmission service request. Control Area Existing Rating Potential Rating Leadtime Flowgate From To Summer Winter Summer Winter Months Cost Comment BluBriRivRed OGE OGE Feb. 05 $0 CatLlaNesOne AEPW AEPW $0 re-rated by T.O. DraXfrDraXfr OGE OGE Aug. 04 $0 completed IpcLieWilLon AEPW AEPW May 05 $0 LacNeoLacSti KCPL WR Fall 04 $0 FG removed LacNeoLanWic KCPL WR Fall 04 $0 MusClaMusRss OGE AEPW Jun. 05 $0 PitSemPitSun AEPW OGE Nov. 04 $0 completed SilDivNwsCim OGE OGE May 05 $0 ScoDeaDelNeo AEPW WR $10,000 study 1 CroXfrTenLeb AEPW AEPW $12,000 study 1 ValLydEldLon AEPW AEPW $12,000 study 1 MidFrnPhaWet OGE WFEC $24,000 study 1 BvsNbvNesDel AEPW AEPW $47,000 study 1 CorCorSwsAna AEPW WFEC $47,000 study 1 & 2 SwsAnaSwsFtc AEPW WFEC $47,000 study 1 & 2 ValHugValLyd AEPW AEPW $47,000 study 1 ElkXfrTucOku AEPW AEPW $80,000 study 2 ValLydEldLon AEPW AEPW $87,000 study 1 HppValPitVal WFEC AEPW $142,000 study 1 MorStiSprNor OGE OGE $250,000 SabSemPirDia AEPW AEPW $250,000 BriKeyRivRed OGE OGE $350,000 study 3 BluBriRivRed OGE OGE $500,000 PitSemPitSun AEPW OGE $500,000 BeaEurMonBrk SPA AEPW $600,000 WdrCimSprNrw OGE OGE $650,000 ElpFarWicWdr WR WR $820,000 added CT cost CraAshValLyd AEPW AEPW $1,300,000 RedArcRedArc OGE OGE $1,300,000 CatLlaNesOne AEPW AEPW $1,500,000 StiRedStiPhi KCPL KCPL $2,000,000 TucXfrTucCar SPS SPS $2,250,000 add 2nd Trf. WdrCimSprNrw OGE OGE $2,500,000 OneBa1OneRss AEPW AEPW $3,000,000 RssTpsRssJen AEPW AEPW $3,000,000 PecXfrMusCla OGE OGE $5,000,000 add 2nd Trf. SunXfrPitSem OGE OGE $5,500,000 SemXfrSemXfr OGE OGE $6,000,000 add 3rd Trf. CreKilWicWoo WR OGE $6,220,000 KilCreWooWic OGE WR $6,220,000 DyeEroFliGen AEPW AEPW $6,750,000 FG removed SphWmcSumEmc WR WR $6,800,000 SwsFtcOkuTuc AEPW AEPW $7,200,000 NwtPatLydVal AEPW AEPW $7,250,000 OsaCanBusDea SPS SPS $7,883,713 parallel line LacWgrLacSti KCPL KCPL $15,000,000 WelFixRivRed AEPW AEPW $16,000,000 NesOneNesTul AEPW AEPW $35,000,000 BrkClaValPit SPA AEPW $36,000,000 LonSarPitVal AEPW AEPW $36,000,000 Attachment3AttAAFlowgateSummary 1 of 1

14 Cap Waiver Alt-1 ATTACHMENT AA TRANSMISSION SERVICE PREPAYMENT (Experimental) 1.0 Transmission Service Prepayment This Attachment allows Transmission Customers to make Transmission Service prepayments for the Transmission Provider s use in expanding the Transmission System. The total individual Transmission Customer prepayment shall be capped at the greater of either $50,000 or the largest monthly aggregate charge paid by the Customer for services under Schedules 7 and 8 during the prior 6 months. Transmission Customers must have had at least $50,000 in total charges during the prior calendar year to participate. In the event a Transmission Customer desires to make a Transmission Service prepayment in an amount greater than that allowed under the capping provisions specified above, such Transmission Customer may do so; provided that the Transmission Service Credits created by such prepayment pursuant to these provisions shall be used by the later of the date twelve months from the date of such prepayment or the date twelve months from completion date of construction funded by the prepayment. Credits not used within such period shall be forfeited. In no event shall any single prepayment be in excess of $. [at what dollar level is the revenue redirection of these provisions outside the scope of stakeholder intent]. 2.0 Treatment of Service Prepayment The Transmission Provider shall use the prepayment made to improve the transmission system. The Transmission System improvements made shall relieve constraints that limit transmission service and shall be based on upgrading Available Transfer Capability. The Transmission Provider shall maintain a list of system upgrades that would improve Available Transfer Capability. The Transmission Customer can designate the system upgrades for which the service prepayment is requested to be used or allow the Transmission Provider and the Transmission Owners to determine which system upgrades to complete first. The Transmission Provider shall direct the Transmission Owner to construct the determined system upgrades. The Transmission Provider and the Transmission Owner will coordinate the timing, costs, payment schedule and conditions for the upgrade. The Funds provided by the Transmission Customer under this procedure shall be deposited in an escrow account.

15 Cap Waiver Alt Transmission Service Credit for Prepayment The Transmission Customers who make a prepayment shall receive future credit for transmission services provided under Schedules 7 and 8. The credit shall be provided at the same time and in the same amount as expenditures are made from the escrow account for the upgrades. If construction expenditures have not been made, the crediting shall begin one year after the date of receipt. The Transmission Customer shall receive a credit on all portions of schedule 7 and 8 service that do not already provide for system upgrades. This shall continue on a monthly basis until the Transmission Customer has received full credit back for the amount of prepayment made. Transmission Customers shall receive interest on the balance in the escrow account. 4.0 Experiment Description This Transmission Service Prepayment Procedure is hereby implemented on an experimental basis and will terminate one year after its effective date unless extended by further order of the FERC. Credits for prepayments will continue until such time as the Transmission Customer has been completely reimbursed. In the course of the experiment, SPP will assess the merit of continued offering of this service and will request FERC authorization for any proposed extension beyond the one year experimental term.

16 Cap Waiver Alt - 2 ATTACHMENT AA TRANSMISSION SERVICE PREPAYMENT (Experimental) 1.0 Transmission Service Prepayment This Attachment allows Transmission Customers to make Transmission Service prepayments for the Transmission Provider s use in expanding the Transmission System. The total individual Transmission Customer prepayment shall be capped at the greater of either $50,000 or the largest monthly aggregate charge paid by the Customer for services under Schedules 7 and 8 during the prior 6 months. Transmission Customers must have had at least $50,000 in total charges during the prior calendar year to participate. Transmission Customers can prepay a larger amount than provided above under certain conditions as defined in Section 3 of this attachment. 2.0 Treatment of Service Prepayment The Transmission Provider shall use the prepayment made to improve the transmission system. The Transmission System improvements made shall relieve constraints that limit transmission service and shall be based on upgrading Available Transfer Capability. The Transmission Provider shall maintain a list of system upgrades that would improve Available Transfer Capability. The Transmission Customer can designate the system upgrades for which the service prepayment is requested to be used or allow the Transmission Provider and the Transmission Owners to determine which system upgrades to complete first. The Transmission Provider shall direct the Transmission Owner to construct the determined system upgrades. The Transmission Provider and the Transmission Owner will coordinate the timing, costs, payment schedule and conditions for the upgrade. The Funds provided by the Transmission Customer under this procedure shall be deposited in an escrow account. 3.0 Transmission Service Credit for Prepayment The Transmission Customers who make a prepayment shall receive future credit for transmission services provided under Schedules 7 and 8. The credit shall be provided at the same time and in the same amount as expenditures are made from the escrow account for the upgrades. If construction expenditures have not been made, the crediting shall begin one year after the date of receipt. The Transmission Customer shall receive a credit

17 Cap Waiver Alt - 2 on all portions of Schedule 7 and 8 service that do not already provide for system upgrades. This shall continue on a monthly basis until the Transmission Customer has received full credit back for the amount of prepayment made. Transmission Customers shall receive interest on the balance in the escrow account. If Customers have requested a prepayment exceeding the cap, the crediting shall continue for a period of no longer than 12 months at which time the Customer shall forfeit any additional credits. 4.0 Experiment Description This Transmission Service Prepayment Procedure is hereby implemented on an experimental basis and will terminate one year after its effective date unless extended by further order of the FERC. Credits for prepayments will continue until such time as the Transmission Customer has been completely reimbursed. In the course of the experiment, SPP will assess the merit of continued offering of this service and will request FERC authorization for any proposed extension beyond the one year experimental term.

18 Transitioning the Market Protocols to Tariff Language RTWG Meeting January 20, 2005 Overview and Assumptions Overview Review overall document structure Guiding principles What goes where question Review protocol content required in Tariff Schedule Assumptions Minimize the number of documents that have to be filed at FERC The Market Protocols and SPP Criteria are subject to SPP Member approval Not filed at FERC The Business Practices documents are internal RTO documents 2

19 Rules for Deciding What Goes Where Anything that deals with payments, charges or obligations of participants or authorities of RTO for the EIS must go in the Tariff. Business Practices documents describe internal RTO procedures for implementing specific processes. BUSINESS PRACTICES Rules that clarify specific areas of the Tariff that have been challenged and resolved. BY-LAWS Establishes Organizational framework, structure and purpose TARIFF Establishes services to be provided, and rights and obligations of the parties pursuant to those services MARKET PROTOCOLS Reference document for rules and procedures for participation in Energy Imbalance Service market offered under the Tariff MEMBERSHIP AGREEMENT Establishes obligations of SPP and Members pursuant to membership SPP CRITERIA Rules to promote and protect system reliability that members are obligated to follow The protocols need to be kept as information only. They describe the market and the various external interfaces between participants and the RTO. To avoid filing them, they need to be subordinate to the Tariff in terms of describing payments/charges, etc. 3 Tariff Structure Put hooks into main schedules of Tariff and keep details in separate attachment (Attachment BB) Modify Schedule 4 of Tariff to reference new attachment containing provisions for Energy Imbalance Service (EIS) Modify other Ancillary Service Schedules, Tariff Sections and Attachments as req d to reflect Attachment BB provisions Add hooks in for market monitoring and mitigation and keep details in separate attachment (Attachment CC) 4

20 Protocol Content Required in Tariff New schedule/attachment to the Tariff high level structure Introduction Definitions SPP responsibilities Participant responsibilities Day Prior Activities Submittal of resource plans and energy schedules Evaluation of resource plans Day ahead participant offers and bids Hour-Ahead and Real-Time period activities Revisions to resource plans and energy schedules RT offers and bids Dispatch process Locational Imbalance Price (LIP) Calculation Settlements and Billing Imbalance energy EIS charges/credits Uplift calculations Resettlement Disputes New attachment to the Tariff Market monitoring and mitigation 5 Schedule 6