2013 Wind Conference

1. 2013 Wind Conference

2. Transmission Service Study Process Steve Purdy

3. Transmission Service • Transmission Service Reservation (TSR) reserves a specific amount of • capacity in megawatts (MW) • across a specific transmission system path • for a given timeframe • A Transmission Service Agreement (TSA) is a • legal contract between the customer and SPP • filed with the Federal Energy Regulatory Commission (FERC) • publicly available from FERC or SPP website

4. Transmission Service Parameters • Term • Short-term (hourly, daily, weekly, monthly) • Long-term (yearly) • Firmness (priority) • Firm • Non-Firm • Class • Network (“NITS”) • Point-to-Point (“PTP”)

5. Network and Point-to-Point • NITS service is charged a cost based on the customer’s “load-ratio share”, or the customer’s load as a percentage of SPP’s total network load • Network Load • Network Resources • PTP service is charged based on the amount of reserved capacity and the path • Designated Resources serve any load within the SPP region • Network Resources serve specifically Network Load

6. Evaluation of Transmission Service Requests • First-come, first-served • Short-term • SPP Operations • AFC (Available Flowgate Capacity) process • Long-term • SPP Engineering • Study Process

7. Study Processes for LT Transmission Service All new PTP requests and re-directs, all requests to designate new resources, any other requests that don’t fit one of the other processes New network delivery points, facility modifications to existing delivery points, and new “block” load additions to existing delivery points Transfer of an existing delivery point from one SPP Network Customer to another SPP Network Customer Aggregate Study Attachment Z1 Delivery Point Addition Study Attachment AQ Delivery Point Transfer Study Attachment AR

8. Aggregate Study Process Open Seasons • All long-term transmission service requests submitted within a 4-month “open season” are aggregated for purposes of evaluation • Three aggregate studies are started each year Oct - Jan Feb - May June - Sept

9. Aggregate Study Process YES Restudy Needed? Open Season (4 months) Facilities Study (60 days) Letter of Intent Response Period (15 days) NO Aggregate Study is an iterative process that continues until no customers withdraw Write Service Agreement

10. Aggregate Facilities Study Stages Model Build • 28 Models • 7 Seasons: Years 1, 2, 5 Summer/Winter peak; Year 10 Summer peak • 2 Cases: Base and Transfer • 2 Scenarios: Projected Dispatch; Contractual Dispatch Contingency Scan • Contingencies and Monitored Elements • N-1 Facilities in SPP • Flowgates for First-Tier areas and beyond Constraint Analysis • Identify Upgrades • Least-cost Solution • Utilize expansion-plan upgrades where possible Cost Allocation • Attachment J, Z1, and Z2 • Allocate Upgrade Costs by Flow Impact, including Crediting • Re-dispatch Calculation

11. Aggregate Study Process NPPD NPPD OPPD SPP MISO Increase Generation KCPL 100 MW SUNC WR AEP AEP AECI WFEC OKGE Decrease Generation

12. Aggregate Study Process • Upgrade Costs • Transmission System upgrades are determined for the entire aggregate group of requests • Upgrade costs are allocated to each request, based on its positive MW impact on the upgrade • The MW impact must meet at least a 3% Transfer Distribution Factor (TDF) to be allocated to a request • Study Costs • Study costs are allocated to all requests in the first study iteration • Subsequent re-study costs are allocated to the withdrawing customer that drives the need for the re-study

13. Upgrade Funding for Service Upgrades • Designated Resources • Base Plan “Highway/Byway” • Safe Harbor Cost Limit of $180,000/MW • Qualifications • 5-year term • Designated Resources ≤ 125% Designated Loads • Wind Resources ≤ 20% Designated Loads • Excess = Directly Assigned Upgrade Costs (“And” Charge) • Waiver Process • PTP service • PTP revenue • Excess = Directly Assigned Upgrade Costs (“Or” Charge)

14. Documents Posted on SPP OASIS

15. Documents Posted on SPP OASIS Informational Documents

16. SPP Aggregate Study Email Exploder

17. Frequently-Asked Questions • What is a Letter of Credit and when do I have to provide it? • Financial Instrument provided to SPP to cover the cost of upgrades in case of customer default • Typically 1-2% of the amount of the LOC • Required prior to confirmation of service • Can I request to be a Designated Resource for a Network Service Customer? • Only the Network Customer can request to designate a new resource

18. Frequently-Asked Questions • What are the steps in finalizing service? • SPP sends email to customer with instructions • Customer updates OASIS request as needed • Customer provides documentation as needed • Attestation for Designated Resources • Re-dispatch Agreements • Letter of Credit • SPP accepts OASIS request • Customer confirms OASIS request • SPP tenders service agreement

19. Current Study Queue As of May 30, 2013

20. Overview of the Proposed Process Example Dates Feb 1 June 1 Customer defines maximum acceptable directly-assigned upgrade cost & 3rd party upgrade cost estimates Customer defines acceptable deferred start date Customer defines acceptable re-dispatch criteria Execute study agmt. with obligation to take service. Submit attestation for DR requests Day 1 105 105 Days Process continues without customer intervention until all remaining requests are within the specified parameters Open Season Aggregate Facilities Study Agreement Aggregate Facilities Study Remove requests outside parameters from analysis Accept/Confirm all requests within parameters Tender Service Agreements Retract requests outside the parameters Prohibit “mutually-exclusive” requests Post study results with cost estimates for all requests, including removed

21. Questions