Tariff Change Recommendations to the Commercial Practices Committee

2. Tariff Change Recommendations to the Commercial Practices Committee From the Regional Tariff Working Group April 9, 2001

3. RTWG Roster • Company Representative • AEP-West Mr. Dennis Bethel Member (TO) • Arkansas Electric CooP. Corp.Mr. Ricky Bittle Chair (TC) • Coral Power TradingMr. Rick Rucker Member (TC) • Dynegy Marketing and TradeMs. Kim Casey Member (TC) • Empire District Elect. Co.Mr. Rick McCord Member (TO) • ENRON Power Marketing, Inc.Mr. Ron McNamara Member (TC) • East Texas Electric CooperativeMr. Wayne Miller Member (TC) • Jonesboro City Water and Light Mr. Rick Henley Member (TC) • Kansas City Power & LightMr. Ron Kite Member (TO) • KPL, Western Resources, IncMr. Dennis Reed Vice-Chair (TO) • Missouri Public Svc. Comm.Mr. Mike Proctor Member • OG+E Electric ServicesMr. John Gunesch Jr.Member (TO) • Oklahoma Municipal Power Mr. Gene Anderson Member (TC) • Southwest Power PoolMr. Pat Bourne Secretary • Southwestern Power Admin.Mr. James Sherwood Member (TO) • Southwestern Public Service Co.Mr. David Grover Member (TO) • Tenaska Power Services Co.Mr. Mark Foreman Member (TC) • Western Farmers ElectricMr. Gary Roulet Member (TO)

4. Two Sets of Changes • Tariff Changes to Accommodate Retail Access • Preparation for Retail Access in Texas • Pilot phase begins June 1, 2001 • Permanent program begins January 1, 2002 • Applicable to retail access elsewhere • Tariff Changes to Improve Clarity

5. Retail Access Changes • Modifications to the Base Tariff • To establish retail provider eligibility • To reflect billing and payment impacts • Estimated and adjusted billings • One year period and 2% threshold for billing adjustments other than meter error • To revise service application and contractual requirements for Network Service • SPP may waive certain information requirements • Minimum term reduced to one month for the Texas Pilot

6. Retail Access Changes • Modifications to The Network Service Agreement • To tie availability of service to status as an Eligible Customer • To allow the statement of a term of service consistent with the Tariff changes for the Texas Pilot Program • To recognize the use of energy-only metering and demand profiles

7. Retail Access Changes • Modifications to The Network Operating Agreement • To enable SPP to waive certain information and metering requirements • To revise metering requirements to accommodate use of energy-only metering and customer class demand profiles when necessary

8. Clarification Changes • Revise Sections 2.2 and 22 – Reservation Priority and Right of First Refusal • Revise Creditworthiness Standards to Apply Specifically to Entities Applying for Service • Revise Extensions for Commencement of Service to require 120 day Notice • Revise Attachment J - Recovery of Costs Associated With New Facilities • Revise Attachment L – Treatment of Revenues

9. Sections 2.2 and 22 Reservation Priority Issues • Background • Reservation priority issues discussed extensively at the RTWG • These revisions clarify the rights and obligations of both incumbent and new customers

10. Sections 2.2 Reservation Priority Issues • Change time frame to respond to a competing request • New Customer with a competing must make a contractual commitment via a contingent service agreement • Current user with reservation priority must respond within 60 days of notification of a contingent service agreement • Studies are paid for by requesting party

11. Section 22 Reservation Priority Issues • Clarify that requesting a change in path for an existing firm transmission reservation with remaining term of less than 1 year has reservation priority on the original reservation

12. Sections 2.2 and 22 Reservation Priority Issues • Recommendation • Approve the proposed revisions to Sec.2.2 and Sec. 22

13. Section 11 Creditworthiness • Change • Modified to clarify when the credit requirements contained in the tariff apply • Background • An entity applying for service may not (yet) be an Eligible Customer • Anyone seeking service must be willing to demonstrate their creditworthiness • The proposed change applies to an “entity seeking service” as well as a Customer.

14. Section 17.7 Commencement of Service Extension • Change • Modified to require that a customer must request an extension of the start of service at least 120 days prior to the start of service. • Background • An extension for commencement of service less than 120 days may leave capacity unused • Proposed notice gives other market participants time to react to availability of the capacity • Transmission Owner revenue opportunity increased

15. Attach. J - Recovery of Costs Associated With New Facilities • Change • Modified to clarify cost recovery issues • Background • Transfer language to Attachment L • Eliminate roll-in of facilities paid for previously

16. Attach. L - Treatment of Revenues • Change • Modified to clarify revenue allocation • Background • Include language moved from Attachment J • Clarify how revenue is allocated to Transmission Owners when Network Upgrades are involved

17. Ongoing Consideration of Major Issues • Investigate changing Network Service pricing from a load ratio share basis to a stated rate • Develop Pro Forma Generation Interconnection Agreement • Deposit policy reevaluation • Improving the standards for putting transmission facilities in the rate base • Ultimate rate design for SPP Tariff • Zone vs Postage Stamp vs ???