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1/21/2010

1/21/2010. Cost Allocation for 2009 STEP, Appendix B: Comparison of Highway/Byway/Local v. Currently Effective Cost Allocation Methods. General Study Notes. Committed ATRRs Include: Legacy Tariff Rates, Attachment H, Column 3, ATRR $665M/yr

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1/21/2010

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  1. 1/21/2010 Cost Allocation for 2009 STEP, Appendix B: Comparison of Highway/Byway/Local v. Currently Effective Cost Allocation Methods

  2. General Study Notes • Committed ATRRs Include: • Legacy Tariff Rates, Attachment H, Column 3, ATRR $665M/yr • Previously Allocated Projects from the STEP plan, year 2006 to present, ATRR $342M/yr • Balanced Portfolio, E&C $770M, ATRR $131M/yr • Nebraska Transition Projects, E&C $171M, ATRR $23M/yr • Total Committed ATRR $1.16B/yr • 2009 STEP Projects Needing NTCs Allocated with Currently Effective Base Plan Funding Method: • 4-year economic commitment window: E&C $1.03B, ATRR $172M/yr • 2-year economic commitment window: E&C $791M, ATRR $102M/yr • Total ATRR Studied = Committed ATRR + 2009 STEP ATRR • 4-year window: $1.16B/yr + $172M/yr = $1.33B/yr • 2-year window: $1.16B/yr + $102M/yr = $1.26B/yr

  3. Cost Allocation Comparison • Currently Effective Rates and Base Plan Funding Method is used to Develop the Base Case • Highway/Byway/Local Method Applied to the 2009 Appendix B Projects is used to Develop the Change Case • Comparisons are calculated between the two

  4. Base Case: Currently Effective Method • 2009 STEP Appendix B projects are Allocated using the Currently Effective Base Plan Funding Method • Gross ATRR = Project E&C * Host Zone Carrying Charge • Zonal Allocation = 0.67 * Gross ATRR * Project’s MW-mi impact percentage for each Rate Zone • Regional Allocation = 0.33 * Gross ATRR * Load Ratio Share (LRS) for each Rate Zone

  5. Change Case: Highway/Byway/Local Method • Facilities over 300 kV (Highway), 100% Regionalized • Gross ATRR * LRS • Facilities between 100kV and 300kV (Byway), Split Allocation • 0.67 * Gross ATRR directly Rate host zone • 0.33 * Gross ATRR by LRS Rate region • Facilities under 100kV (Local), 100% Zonal • Gross ATRR directly assigned Rate host zone

  6. Change Case Notes (cont.) • Option 7: Comparative Cost Allocation for 2009 STEP Appendix B projects with NTCs needed in years 1 through 4 using the Highway/Byway/Local methodology v. Base. • Option 8: Comparative Cost Allocation for 2009 STEP Appendix B projects with NTCs needed in years 1 and 2 using the Highway Byway Methodology v. Base. Projects with NTCs needed in years 3 and 4 are not included. • Option 9: Comparative Cost Allocation for 2009 STEP Appendix B projects with NTCs needed: • In years 1 and 2 using Base Plan Funding methodology • In years 3 and 4 using the Highway/Byway/Local methodology

  7. Results (see attachments) • Graphical results and summary tables are presented for: • % Difference = (Change Case – Base Case) / Base Case * 100% • ATRR by Rate Zone = Committed ATRR + Allocation of the 2009 STEP • Base Case (Base Plan Funding Method) • Option 7: Highway Byway for years 1 through 4 of 2009 STEP, App. B • Option 8: Highway Byway for years 1 and 2 of 2009 STEP, App. B, do not consider years 3 and 4 • Option 9: Base Plan Funding years 1 and 2, Highway Byway for years 3 and 4 of 2009 STEP, App. B

  8. List of Attachments • Graph: Total ATRR Shown with Committed ATRR • Graph: Total ATRR Shown as Zonal and Regional Components • Graph: Total ATRR Shown as Highway, Byway, and Local Components • Graph: 2009 STEP Appendix B Total ATRR's 4-Year Economic Window: Currently Effective Method v. Highway/Byway/Local Method • Graph: % Difference Total ATRR 4-Year Economic Window: Currently Effective Method (Base) v. Highway/Byway/Local (Change) • Graph: 2009 STEP Appendix B Total ATRR's 2-Year Economic Window:Currently Effective Method v. Highway/Byway/Local Method • Graph: % Difference ATRR 2-Year Economic Window: Currently Effective Method (Base) v. Highway/Byway/Local (Change)

  9. List of Attachments, cont. • Graph: 2009 STEP Appendix B Total ATRR's 4-Year Economic Window:Year 1-4: Currently Effective Method v. Year 1-2 Currently Effective Method, Year 3-4: Highway/Byway/Local Method • Graph: 2009 STEP Appendix B Total ATRR's 4-Year Economic Window: • Option 7 v. Option 9 • Graph: % Difference Total ATRR, 4-Year Economic Window:Currently Effective Method (Base) v. Yr 1-2 Current, Yr 3-4 H/B/L(Change) • Summary Table: Base Case • Summary Table: Option 7 • Summary Table: Option 8 • Summary Table: Option 9

  10. List of Attachments, cont. • Project Data: 4-Year Window • Project Data: 2-Year Window • Summary Data for Charts • Area Data

  11. Questions?

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