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RTWG Tariff update to the BOD, MOPC, SPC, and RSC

RTWG Tariff update to the BOD, MOPC, SPC, and RSC. January 4, 2005. RTWG Tariff Update. Where are we in the process What is the expected timeline for completion Review of the proposed tariff changes. Overview.

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RTWG Tariff update to the BOD, MOPC, SPC, and RSC

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  1. RTWG Tariff update to the BOD, MOPC, SPC, and RSC January 4, 2005

  2. RTWG Tariff Update • Where are we in the process • What is the expected timeline for completion • Review of the proposed tariff changes

  3. Overview • RTWG is making changes to the tariff to implement the RSC approved Participant Funding plan • Clarifications or fundamental questions regarding the plan are referred back to the RSC/CAWG • RTWG is NOT discussing the merits of the plan

  4. A Review of the RSC Plan • 100% of the costs of approved Base Plan upgrades are recovered through the tariff • The Plan defines the rules for how an upgrade is included in the Base Plan • RTO approved reliability upgrade • Upgrades required by a Network Customers to receive power from a new DNR if upgrades meet certain criteria

  5. RSC Plan (cont) • Conditions for Base Plan Treatment of upgrades for new DNRs • Minimal cost (<$100,000) • DNR must be a 5yr or longer firm entitlement • Customer can not exceed a 125% reserve margin • Upgrade costs capped at $180,000/MW • The Plan does allow for SPP to waive some or all of the above conditions

  6. RSC Plan (cont) • Waiver requirements • Customer must request the waiver and give supporting documentation • SPP staff will review the waiver request • SPP staff will then present the waiver request and its recommendation to the MOPC • MOPC will pass the waiver, the SPP staff recommendation and its recommendation to the BOD • SPP BOD will decide on the waiver request • The customer has the right to present their position at all levels

  7. Required Tariff Changes • The RSC Plan calls for major changes in rate design • Will have a two tiered rate: • Current Zonal Charge – For customers that take service under the tariff • Base Plan Charge –applied to all load in SPP for recovery of Base Plan upgrade costs with regional and zonal components • Facilities not eligible for Base Plan treatment directly assigned with revenue credits • A new schedule is required to implement the plan • The remaining changes are primarily in rewriting Attachments H, J, L & S

  8. Issues Still Before the RTWG • Outstanding questions posed to the RSC/CAWG • Can a customer recover any directly assigned costs as a credit pursuant to Attachment Z? • How should the Credits for delayed or deferred Base Plan Projects be calculated? (RR or Cost) • Should project costs of < $100,000 be directly assigned to the host zone or split between the Regional and zonal rates? • Finalize remaining tariff language

  9. Possible Reasons forDelaying a Filing • Delayed response from RSC/CAWG to outstanding questions • Responses from RSC/CAWG require major changes to proposed language • A problem in the proposed tariff language is discovered at the last minute • RSC/CAWG request changes to the proposed tariff language • Proposed Language is not approved by the MOPC and/or the BOD

  10. Time Table • RTWG meets this week to try and finalize the tariff language • Targeted to get language to MOPC and BOD for their review and approval at their respective January meetings • December FERC filing provides for January policy review and February implementation of any directives • SPP committed to file by March 1

  11. Questions???

  12. Transmission Cost Allocation Proposal – SPP Tariff Modifications January 4, 2005

  13. Implementation of Proposal • Need to modify the Tariff to: • Allocate costs for new transmission upgrades • Establish rates for collecting the costs • Recover and distribute the TOs revenue requirement • Document new defined terms

  14. Major Tariff Changes for Implementation of Cost Allocation Proposal • Modify Attachment J – Recovery of Costs Associated with New Facilities • Presently includes sunset provision for roll-in • Allocates costs for new upgrades • Add Part V & Schedule 11 – Base Plan Charge • Establishes rates and applicability of the rates to recover TOs revenue requirement for new upgrades • Modify Attachment L – Treatment of Revenues • Distributes revenues collected under Schedule 11 to the TOs

  15. Attachment JCost Allocation Provisions • Base Plan Upgrades • Economic Upgrades • Requested Upgrades • Provides a link to existing Attachment Z, Aggregate Transmission Service Study Procedures • Generation interconnection related Network Upgrades • Provides a link to existing Attachment V, Large Generator Interconnection Procedures

  16. Attachment JOther Provisions • Review of the regional allocation factor & zonal allocation methodology at least once every 5 years • Conditions for including future DNRs as Base Plan Upgrades (Safe Harbor) • Waiver process for DNRs that do not meet the Safe Harbor conditions • Intra-zonal allocation review process • Cost allocation provision for Network Upgrades that defer or displace the need for a Base Plan Upgrades

  17. New Part V – Recovery of Costs for Base Plan Upgrades • Establishes a “new” charge (Base Plan Charge) to collect the revenue requirement for Base Plan Upgrades & any portion of other Network Upgrades that are eligible for Base Plan Upgrade treatment • Sets out applicability of the charge • Provides a link to new Schedule 11 that sets out the rate/charge

  18. Applicability of Base Plan Charge • The intent is to apply this charge to ALL load within the SPP footprint: • Load currently taking network service under the SPP Tariff; and • To all other load that is not currently taking service under the SPP Tariff • Bundled retail load for which Transmission Owners have not requested service under the SPP Tariff • All load being served under Grandfathered Agreements • To Transmission Customers taking P-to-P under the SPP Tariff

  19. New Schedule 11 – Base Plan Charge • Charge to Network Customers & TOs for load is assessed on a load ratio share basis • Charge to Transmission Customers taking P-to-P under the SPP Tariff is based on Reserved Capacity • Zonal component & regional component assessed for load & for P-to-P

  20. Attachment L – Treatment of Revenues • Currently establishes distribution of revenues to TOs collected by SPP for transmission service and other services • Adds new provision for distribution of revenues to TOs collected by SPP under new Schedule 11 • In proportion to their respective ATRRs for new transmission upgrades

  21. Other Tariff Changes • Section 1 – Definitions • Attachment H – Annual Transmission Revenue Requirement • Attachment S – Procedure for Calculation of MW-Mile Impacts • Provisions governing revenue distribution in the event of customer non-payment

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