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Executive Summary of Future Market Settlement Charge Types

Executive Summary of Future Market Settlement Charge Types. Future Market Settlement Charge Types. Future Market Settlements are classified by 51 individual Charge Types, which can be categorized into 3 groups, though there is some crossover of input Bill Determinants between categories

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Executive Summary of Future Market Settlement Charge Types

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  1. Executive Summary of Future Market Settlement Charge Types

  2. Future Market Settlement Charge Types • Future Market Settlements are classified by 51 individual Charge Types, which can be categorized into 3 groups, though there is some crossover of input Bill Determinants between categories • 15 Day-Ahead Market • 7 Energy & Operating Reserves • 1 Make Whole Payment • 7 Cost Allocation & Fees • 11 Transmission Congestion Rights • 2 Daily Transmission Congestion Rights Funding • 3 Transmission Congestion Rights Monthly & Yearly True-Up • 3 Daily TCR / ARR auction settlement • 3 TCR Auction Revenue Monthly & Yearly True-Up • 25 Real-Time Balancing Market • 7 Energy & Operating Reserves • 5 Penalty & Make Whole Payment • 10 Cost Allocation & Penalty Distribution • 3 Miscellaneous

  3. Day-Ahead Market Charge Types • Energy & Operating Reserves • DaEnergyHrlyAmt Day-Ahead Asset Energy • DaNEnergyHrlyAmt Day-Ahead Non-Asset Energy • DaVEnergyHrlyAmt Day-Ahead Virtual Energy • DaRegUpHrlyAmt Day-Ahead Regulation-Up • DaRegDnHrlyAmt Day-Ahead Regulation-Down • DaSpinHrlyAmt Day-Ahead Spinning Reserve • DaSuppHrlyAmt Day-Ahead Supplemental Reserve • Operating Reserve Cost Allocation • DaRegUpDistHrlyAmt Day-Ahead Regulation-Up Distribution • DaRegDnDistHrlyAmt Day-Ahead Regulation-Down Distribution • DaSpinDistHrlyAmt Day-Ahead Spinning Reserve Distribution • DaSuppDistHrlyAmt Day-Ahead Supplemental Reserve Distribution • Make Whole Payment • DaMwpCpAmt Day-Ahead Make-Whole-Payment • DaMwpDistHrlyAmt Day-Ahead Make-Whole-Payment Distribution • Over-Collected Losses and Virtual Transaction Fee • DaOclDistHrlyAmt Day-Ahead Over-Collected Losses Distribution • DaVTxnFeeAoAmt Day-Ahead Virtual Energy Transaction Fee

  4. Day-Ahead Asset Energy • DaEnergyHrlyAmta, s, h= • DaLmpHrlyPrcs, h* ( DaClrdHrlyQtya, s, h- S t DaEnFinHrlyQtya, s, h, t ) • Settlement of the net DA Market energy position at an Asset Owner’s Resources and loads • Calculated hourly at each Resource or load Settlement Location • Input Bill Determinants • DaLmpHrlyPrc s, h – hourly DA Market Locational Marginal Price at Settlement Location s • DaClrdHrlyQty a, s, h – hourly DA Market Cleared Quantity at Settlement Location s for Asset Owner a • DaEnFinHrlyQty a, s, h, t – hourly DA Market bilateral transaction t at Settlement Location s for Asset Owner a represented by Financial Schedules which resolve to Resource or load assets

  5. Day-Ahead Non-Asset Energy • DaNEnergyHrlyAmta, s, h = • DaLmpHrlyPrcs, h • * ( (S i S t DaImpExp5minQtya, s, i, t / 12) - S t DaNEnFinHrlyQtya, s, h, t ) • Settlement of the net DA Market energy position at locations other than an Asset Owner’s Resources and load (i.e. interfaces) • Calculated hourly at each Settlement Location where an Asset Owner has Determinants • Input Bill Determinants • DaLmpHrlyPrc s, h – hourly DA Market Locational Marginal Price at Settlement Location s • DaImpExp5minQty a, s, i, t – 5-minute DA Market Cleared Import / Export transaction t Quantity at Settlement Location s for Asset Owner a • DaNEnFinHrlyQty a, s, h, t – hourly DA Market bilateral transaction t at Settlement Location s for Asset Owner a represented by Financial Schedules which do not resolve to Resource or load assets

  6. Day-Ahead Virtual Energy • DaVEnergyHrlyAmta, s, h = DaLmpHrlyPrcs, h * S t DaClrdVHrlyQty a, s, h, t • Settlement of the net DA Market energy position of an Asset Owner’s Cleared Virtual Bids and Offers • Calculated hourly at each Settlement Location where an Asset Owner Clears a Virtual Bid or Offer • Input Bill Determinants • DaLmpHrlyPrc s, h – hourly DA Market Locational Marginal Price at Settlement Location s • DaClrdVHrlyQty a, s, h, t – hourly DA Market Cleared Virtual Bid / Offer transaction t Quantity at Settlement Location s for Asset Owner a

  7. Day-Ahead Regulation-Up • DaRegUpHrlyAmta, s, h = • (DaRegUpMcpHrlyPrcz, s, h* DaRegUpHrlyQtya, s, h ) * (-1) • Settlement of DA Market Cleared Regulation-Up at an Asset Owner’s Resources • Calculated hourly at each Resource Settlement Location Clearing Regulation-Up • Input Bill Determinants • DaRegUpMcpHrlyPrc z, s, h – hourly DA Market Clearing Price for Regulation-Up in Reserve Zone z at Settlement Location s • DaRegUpHrlyQty a, s, h – hourly DA Market Cleared Regulation-Up capacity at Settlement Location s for Asset Owner a

  8. Day-Ahead Regulation-Down • DaRegDnHrlyAmta, s, h = • (DaRegDnMcpHrlyPrcz, s, h* DaRegDnHrlyQtya, s, h ) * (-1) • Settlement of DA Market Cleared Regulation-Down at an Asset Owner’s Resources • Calculated hourly at each Resource Settlement Location Clearing Regulation-Down • Input Bill Determinants • DaRegDnMcpHrlyPrc z, s, h – hourly DA Market Clearing Price for Regulation-Down in Reserve Zone z at Settlement Location s • DaRegDnHrlyQty a, s, h – hourly DA Market Cleared Regulation-Down capacity at Settlement Location s for Asset Owner a

  9. Day-Ahead Spinning Reserve • DaSpinHrlyAmta, s, h = • (DaSpinMcpHrlyPrcz, s, h* DaSpinHrlyQtya, s, h ) * (-1) • Settlement of DA Market Cleared Spinning Reserve at an Asset Owner’s Resources • Calculated hourly at each Resource Settlement Location Clearing Spinning Reserve • Input Bill Determinants • DaSpinMcpHrlyPrc z, s, h – hourly DA Market Clearing Price for Spinning Reserve in Reserve Zone z at Settlement Location s • DaSpinHrlyQty a, s, h – hourly DA Market Cleared Spinning Reserve capacity at Settlement Location s for Asset Owner a

  10. Day-Ahead Supplemental Reserve • DaSuppHrlyAmta, s, h = • (DaSuppMcpHrlyPrcz, s, h* DaSuppHrlyQtya, s, h ) * (-1) • Settlement of DA Market Cleared Supplemental Reserve at an Asset Owner’s Resources • Calculated hourly at each Resource Settlement Location Clearing Supplemental Reserve • Input Bill Determinants • DaSuppMcpHrlyPrc z, s, h – hourly DA Market Clearing Price for Supplemental Reserve in Reserve Zone z at Settlement Location s • DaSuppHrlyQty a, s, h – hourly DA Market Cleared Supplemental Reserve capacity at Settlement Location s for Asset Owner a

  11. Day-Ahead Regulation-Up Distribution • DaRegUpDistHrlyAmt a, z, h = • DaRegUpDistHrlyRate z, h* DaRegUpAoObligHrlyQty a, z, h • Cost Allocation of DA Market Cleared Regulation-Up to an Asset Owner’s zonal Obligation • Calculated hourly for each Reserve Zone into which an Asset Owner’s load or Exports fall • Input Bill Determinants • DaRegUpDistHrlyRate z, h – hourly DA Market Cost Allocation Rate for Regulation-Up in Reserve Zone z • Rate is determined as a weighted average of the Obligation served at the local MCP and that served from other zones at the exchange rate • DaRegUpAoObligHrlyQty a, z, h – hourly DA Market Regulation-Up Obligation for Asset Owner a in Reserve Zone z • Asset Owner Obligation is zonal load and Exports scaled by the ratio of total zonal load to zonal Obligation • Total zonal Obligation is simply a zonal LRS of the footprint total • Obligation can be shifted with bilateral Financial Schedules or Contacts For Supply

  12. Day-Ahead Regulation-Down Distribution • DaRegDnDistHrlyAmt a, z, h = • DaRegDnDistHrlyRate z, h* DaRegDnAoObligHrlyQty a, z, h • Cost Allocation of DA Market Cleared Regulation-Down to an Asset Owner’s zonal Obligation • Calculated hourly for each Reserve Zone into which an Asset Owner’s load or Exports fall • Input Bill Determinants • DaRegDnDistHrlyRate z, h – hourly DA Market Cost Allocation Rate for Regulation-Down in Reserve Zone z • Rate is determined as a weighted average of the Obligation served at the local MCP and that served from other zones at the exchange rate • DaRegDnAoObligHrlyQty a, z, h – hourly DA Market Regulation-Down Obligation for Asset Owner a in Reserve Zone z • Asset Owner Obligation is zonal load and Exports scaled by the ratio of total zonal load to zonal Obligation • Total zonal Obligation is simply a zonal LRS of the footprint total • Obligation can be shifted with bilateral Financial Schedules or Contacts For Supply

  13. Day-Ahead Spinning Reserve Distribution • DaSpinDistHrlyAmt a, z, h = • DaSpinDistHrlyRate z, h* DaSpinAoObligHrlyQty a, z, h • Cost Allocation of DA Market Cleared Spinning Reserve to an Asset Owner’s zonal Obligation • Calculated hourly for each Reserve Zone into which an Asset Owner’s load or Exports fall • Input Bill Determinants • DaSpinDistHrlyRate z, h – hourly DA Market Cost Allocation Rate for Spinning Reserve in Reserve Zone z • Rate is determined as a weighted average of the Obligation served at the local MCP and that served from other zones at the exchange rate • DaSpinAoObligHrlyQty a, z, h – hourly DA Market Spinning Reserve Obligation for Asset Owner a in Reserve Zone z • Asset Owner Obligation is zonal load and Exports scaled by the ratio of total zonal load to zonal Obligation • Total zonal Obligation is simply a zonal LRS of the footprint total • Obligation can be shifted with bilateral Financial Schedules or Contacts For Supply

  14. Day-Ahead Supplemental Reserve Distribution • DaSuppDistHrlyAmt a, z, h = • DaSuppDistHrlyRate z, h* DaSuppAoObligHrlyQty a, z, h • Cost Allocation of DA Market Cleared Supplemental Reserve to an Asset Owner’s zonal Obligation • Calculated hourly for each Reserve Zone into which an Asset Owner’s load or Exports fall • Input Bill Determinants • DaSuppDistHrlyRate z, h – hourly DA Market Cost Allocation Rate for Supplemental Reserve in Reserve Zone z • Rate is determined as a weighted average of the Obligation served at the local MCP and that served from other zones at the exchange rate • DaSuppAoObligHrlyQty a, z, h – hourly DA Market Supplemental Reserve Obligation for Asset Owner a in Reserve Zone z • Asset Owner Obligation is zonal load and Exports scaled by the ratio of total zonal load to zonal Obligation • Total zonal Obligation is simply a zonal LRS of the footprint total • Obligation can be shifted with bilateral Financial Schedules or Contacts For Supply

  15. Day-Ahead Make-Whole-Payment • DaMwpCpAmt a, s, c= • Max (0, S h ( DaMwpCostHrlyAmt a, h, s, c+ DaMwpRevHrlyAmt a, h, s, c ) ) * (-1) • Revenue Guarantee to Resources Committed economically in the DA Market • Calculated for the contiguous “Market” status hours of a Commitment Period within a single Operating Day for Resources committed by SPP in the DA Market • Input Bill Determinants • DaMwpCostHrlyAmt a, h, s, c – hourly production cost for Asset Owner a’s Resource at Settlement Location s based on the Offer parameters effective at the time of the DA Market Commitment c • Start-Up (subject to eligibility), No-Load & Incremental Energy (area under the Offer curve) • Availability Cost for each of the Operating Reserve products Cleared • Transition Cost (for Combined Cycle Resources moving to higher configurations during the Commitment Period) • RUC Start-Up Remainder (for DA Commitment Periods adjacent to a RUC Commitment Period in which the Start-Up was not fully recovered) • DaMwpRevHrlyAmt a, h, s, c – hourly revenue for Asset Owner a’s Resource at Settlement Location s during DA Market Commitment c • DA Market Energy (absent Financial Schedules) & the value of each of the Operating Reserve products Cleared in the DA Market

  16. Day-Ahead Make-Whole-Payment Distribution • DaMwpDistHrlyAmta, s, h= • DaMwpSppDistRate d * DaMwpDistHrlyQtya, s, h • Cost Allocation of Make Whole Payment for Resources Committed in the DA Market to an Asset Owner’s DA Market Cleared load & Exports • Calculated hourly for each Settlement Location where an Asset Owner has DA Market load or Exports • Input Bill Determinants • DaMwpSppDistRate d – daily rate achieved by dividing the total of all DA Market Make Whole Payments for the Operating Day by the sum of all hourly Cost Allocation Determinants over the Operating day • DaMwpDistHrlyQty a, s, h – hourly Cost Allocation Determinants at each Settlement Location s where Asset Owner a has DA Market Cleared load or Exports

  17. Day-Ahead Over-Collected Losses Distribution • DaOclDistHrlyAmt a, s, lp, h = • DaNormLossRbtHrlyFcta, s, lp, h * DaOclHrlyAmt h * (-1) • Rebate of surplus collected as a result of the marginal pricing of losses • Calculated hourly for each Settlement Location where an Asset Owner has a DA Market withdrawal position due to the net of all Resource or load activity, Financial Schedules and Interchange Transactions – excludes Virtual Bids and Offers • Approach groups Settlement Locations into Loss Pools, which are dynamically defined as all of each AO’s transactional activity regardless of the SL. Transactions by multiple AO’s at a common SL will be included in separate Loss Pools • Input Bill Determinants • DaNormLossRbtHrlyFct a, s, lp, h – hourly factor for Asset Owner a’s net withdrawal at Settlement Location s in Loss Pool lp valued by the difference between the local MLC and that of the “source” of the service • Positive loss factors (payment for losses) are normalized • “source” of the service is determined by assuming that generation in a Loss Pool first serves withdrawal in the Loss Pool, then is used to satisfy withdrawal outside the Loss Pool to the extent available • DaOclHrlyAmt h – hourly over collection for the footprint • Achieved by summing the product of the (MEC and MLC) with (DA Market injection & withdrawal) over all Settlement Locations

  18. Day-Ahead Virtual Energy Transaction Fee • DaVTxnFeeAoAmt a, m, d= DaVTxnDlyCnt a, d* DaVTxnFeeDlyRt d • Fee for Virtual Bids and Offers • The total count of all Virtual Bids and Offers an AO makes, regardless of whether they Clear or not, is charged a flat rate fee as an incentive to be sensible about how much Virtual activity an MP undertakes. • Structuring Virtual Bids and Offers as curves rather than a stack of price points is thought to largely manage the data SPP must process to solve the DA Market. This charge type would encourage MP’s to be selective about the Settlement Locations at which they choose to make Virtual Bids and Offers. • Input Bill Determinants • DaVTxnDlyCnt a, d – total count of Virtual Bids and Offers placed for Asset Owner a • DaVTxnFeeDlyRt d – tariff filed rate, open to change with up to daily frequency

  19. Transmission Congestion Rights Charge Types • Daily Settlement of TCRs • TcrFundHrlyAmt Transmission Congestion Rights Funding • TcrUpliftDlyAmt Transmission Congestion Rights Daily Uplift • Monthly & Yearly True-Up of TCRs • TcrPaybackMnthlyAmt Transmission Congestion Rights Monthly Payback • TcrPaybackYrlyAmt Transmission Congestion Rights Annual Payback • TcrCloseoutYrlyAmt Transmission Congestion Rights Annual Closeout • Daily TCR Auction Settlement • TcrAucTxnDlyAmt Transmission Congestion Rights Auction Transaction • ArrAucTxnDlyAmt TCR Auction Revenue Rights Funding • ArrUpliftDlyAmt TCR Auction Revenue Rights Uplift • Monthly & Yearly True-Up of ARRs • ArrPaybackMnthlyAmt Auction Revenue Rights Monthly Payback • ArrPaybackYrlyAmt Auction Revenue Rights Annual Payback • ArrCloseoutYrlyAmt Auction Revenue Rights Annual Closeout

  20. Transmission Congestion Rights Funding • TcrFundHrlyAmt a, h = • S t (TcrHrlyQtya, h, t* (DaMccHrlyPrc source, h - DaMccHrlyPrc sink, h ) ) • Hedge against congestion incurred by load Bid into the DA Market • Traditionally the MCC at the sink of a TCR would be higher than at the source, which results in credits to TCR holders, but it is possible that the reverse is true in some hours and at least some TCRs held by an AO would create a charge. The settlement result is a sum of the value of all TCRs. TCRs are fully funded. • Input Bill Determinants • TcrHrlyQty a, h, t – hourly quantity for TCR t owned by Asset Owner a • DaMccHrlyPrc source, h – hourly DA Market congestion component on LMP at the source of TCR t • DaMccHrlyPrc sink, h – hourly DA Market congestion component on LMP at the sink of TCR t

  21. Transmission Congestion Rights Daily Uplift • TcrUpliftDlyAmt a, d = • ShortFallDlyAmt d* [ TcrUpliftRatioAoDlyAmt a, d / TcrUpliftRatioSppDlyAmt d] • Allocation of the deficit between congestion collections and TCR funding • When fully funded TCRs result in a greater amount of credits paid than funds collected through the DA Market MCC, the difference is uplifted to TCR holders pro rata by the absolute value of TCRs. Excess is carried forward to use in month and year end processes. • Input Bill Determinants • ShortfallDlyAmt d – daily total of the deficit between TCR value and DA Market congestion collections • TcrUpliftRatioAoDlyAmt a, d – daily absolute value of TCRs owned by Asset Owner a • TcrUpliftRatioSppDlyAmt a, d – daily total absolute value of TCRs owned by all Asset Owners

  22. Transmission Congestion Rights Monthly Payback • TcrPaybackMnthlyAmt a, mn = (-1) * • Min { • TcrUpliftAoMnthlyAmt a, mn , • ECFMnthlyAmt mn* [ TcrUpliftAoMnthlyAmt a, mn / TcrUpliftSppMnthlyAmt a, mn ] • } • Use of Excess Congestion in a month to payback uplift in that month • On the last day of the month, to the extent funds were carried forward and uplift was paid during that month, the total is used to pay back the uplift. The payback is limited to the total uplift paid in the month. Funds remaining carry forward to the end of the year. • Input Bill Determinants • TcrUpliftAoMnthlyAmt a, mn – monthly uplift paid by Asset Owner a • ECFMnthlyAmt mn – total excess congestion available at the end of the month • TcrUpliftSppMnthlyAmt mn – total monthly uplift paid by all Asset Owners

  23. Transmission Congestion Rights Annual Payback • TcrPaybackYrlyAmt a, yr = (-1) * • Min {  • TcrNetUpliftAoYrlyAmt a, yr , • ECFYrlyAmt yr * [ TcrNetUpliftAoYrlyAmt a, yr / • TcrNetUpliftSppYrlyAmt yr] • } • Use of Excess Congestion in a year to payback remaining uplift in that year • On the last day of the year to the extent funds were carried forward and uplift was paid during that year and not paid back in the monthly process the remaining total is used to payback the uplift. The payback is limited to the total uplift paid in the year less monthly payback already made. Funds remaining are allocated to ARR holders – the fund is closed out. • Input Bill Determinants • TcrNetUpliftAoYrlyAmt a, yr – yearly uplift, less monthly payback, paid by Asset Owner a • ECFYrlyAmt yr – total excess congestion available at the end of the year • TcrNetUpliftSppYrlyAmt yr – total yearly uplift, less monthly payback, paid by all Asset Owners

  24. Transmission Congestion Rights Annual Closeout • TcrCloseoutYrlyAmt a, yr = • (-1) * [ ECFYrlyAmt yr + TcrPaybackSppYrlyAmt yr ] * • [ ArrNominationCapAoYrlyQty a, yr / ArrNominationCapSppYrlyQty yr ] • Allocation of the Excess Congestion remaining after Monthly and Yearly Payback processes have eliminated all payback for the year • On the last day of the year, to the extent funds in excess of payback during the year exist, the remaining total is allocated to ARR holders – the fund is closed out. The remaining amount is distributed among ARR holders pro rata by sum of the Nomination Cap in effect on each day in the year. • Input Bill Determinants • TcrPaybackSppYrlyAmt yr – total yearly payback paid to all Asset Owners • ECFYrlyAmt yr – total excess congestion available at the end of the year • ArrNominationCapAoYrlyQty a, yr – sum of daily Nomination Cap of Asset Owner a • ArrNominationCapSppYrlyQty yr – total sum of daily Nomination Cap of all Asset Owners

  25. Transmission Congestion Rights Auction Transaction • TcrAucTxnDlyAmt a, aid, d = • St { ( TcrAucQty a, t, aid, source, sink* TcrAucPrc aid, source, sink) • * TcrAucBuySellFlg a, t / NumDaysInPeriod aid } • Settlement of the purchase or sale of a TCR instrument at auction • On each day during the life of the instrument the transacting party is settled a fraction of the total auction value of the instrument based on the difference in price between the source and sink of the instrument from the auction to which it corresponds • Separate results are maintained for each auction • Input Bill Determinants • TcrAucQty a, t, aid, source, sink – quantity of TCR purchased or sold by Asset Owner a in TCR Auction aid • TcrAucPrc aid, source, sink – difference in price between source and sink in TCR Auction aid • TcrAucBuySellFlg a, t – 1 for a buyer / -1 for a seller of TCR t by Asset Owner a • NumDaysInPeriod aid – number of days in the month or season TCR Auction aid

  26. Auction Revenue Rights Funding • ArrAucTxnDlyAmta, aid, d = • Ssource-sink {((ArrQty a, aid, source, sink* TcrAucPrc aid, source, sink) • / NumDaysInPeriod aid ) * (-1)} • Settlement of an ARR instrument by the TCR auction price • On each day during the life of the instrument the holder is settled a fraction of the total auction value of the instrument based on the difference in price between the source and sink of the instrument from the auction to which it corresponds • Separate results are maintained for each auction • Input Bill Determinants • ArrQty a, aid, source, sink – quantity of ARR held by Asset Owner a on path source to sink associated with TCR Auction aid • The portion of an AO’s ARR total Award on a path settled at each auction price is determined by a combination of Self-Conversion, static minimum percentages and the declined quantity remaining • TcrAucPrc aid, source, sink – difference in price between source and sink in TCR Auction aid • NumDaysInPeriod aid – number of days in the month or season of TCR Auction aid

  27. Auction Revenue Rights Uplift • ArrUpliftDlyAmt a, aid, d = TcrArrUnderDlyAmt aid,d  * • [ ABS (ArrAucTxnDlyAmt a, aid, d ) / ArrAucTxnSppDlyAmt aid, d] • Allocation of the net difference between ARR value and the daily settlement of TCR auctions • TCR auction may result in a net deficit or excess when compared to the payments to ARR holders. The net deficit amount is distributed among ARR holders pro rata by the daily absolute value of ARR settlement amount, while excess is carried forward to the end of the year • Separate results are maintained for each auction • Input Bill Determinants • TcrArrUnderDlyAmt aid, d – daily net deficit between ARR funding and TCR auction settlement for TCR Auction aid • ArrAucTxnDlyAmt a, aid, d – ARR settlement amount of Asset Owner a for TCR Auction aid • ArrAucTxnSppDlyAmt aid, d – absolute value of ARR settlement amount of all Asset Owners for TCR Auction aid

  28. Auction Revenue Rights Monthly Payback • ArrPaybackMnthlyAmt a, mn = (-1) * • Min { • ArrUpliftAoMnthlyAmt a, mn , • ARFMnthlyAmt yr * [ ArrUpliftAoMnthlyAmt a, mn / • ArrUpliftSppMnthlyAmt mn ] • } • Use of Excess Auction Revenue in a year to payback uplift in that year • On the last day of the month, to the extent funds were carried forward and uplift was paid during that month, the total is used to pay back the uplift. The payback is limited to the total uplift paid in the month. Funds remaining carry forward to the end of the year • Excess and Uplift from all TCR auctions contribute to a single pay back calculation • Input Bill Determinants • ArrUpliftAoMnthlyAmt a, mn – monthly uplift paid by Asset Owner a • ARFMnthlyAmt yr – total revenue excess, from all TCR Auctions, available at the end of the month • ArrUpliftSppMnthlyAmt mn – monthly uplift paid by all Asset Owners

  29. Auction Revenue Rights Annual Payback • ArrPaybackYrlyAmt a, yr = (-1) * • Min { • ArrNetUpliftAoYrlyAmt a, yr , • ARFYrlyAmt yr * [ ArrNetUpliftAoYrlyAmt a, yr / • ArrNetUpliftSppYrlyAmt a, yr ] • } • Use of Excess Auction Revenue in a year to payback uplift in that year • On the last day of the year to the extent funds were carried forward and uplift was paid during that year and not paid back in the monthly process the remaining total is used to payback the uplift. The payback is limited to the total uplift paid in the year less monthly payback already made. Funds remaining are allocated to ARR holders – the fund is closed out. • Excess and Uplift from all TCR auctions contribute to a single pay back calculation • Input Bill Determinants • ArrNetUpliftAoYrlyAmt a, yr – yearly uplift, less monthly payback, paid by Asset Owner a • ARFYrlyAmt yr – total revenue excess, from all TCR Auctions, available at the end of the year • ArrNetUpliftSppYrlyAmt a, yr – yearly uplift, less monthly payback, paid by all Asset Owners

  30. Auction Revenue Rights Annual Closeout • ArrCloseoutYrlyAmt a, yr = • (-1) * [ ARFYrlyAmt yr + ArrPaybackSppYrlyAmt yr ] * • [ ArrNominationCapAoYrlyQty a, yr / ArrNominationCapSppYrlyQty yr ] • Allocation of the net difference between ARR value and the daily settlement of TCR auctions • On the last day of the year to the extent funds in excess of payback during the year exist the remaining total is allocated to ARR holders – the fund is closed out. The remaining amount is distributed among ARR holders pro rata by sum of the Nomination Cap in effect on each day in the year • Input Bill Determinants • ArrPaybackSppYrlyAmt yr – total yearly payback paid to all Asset Owners • ARFYrlyAmt yr – total revenue excess, from all TCR Auctions, available at the end of the year • ArrNominationCapAoYrlyQty a, yr – sum of daily Nomination Cap of Asset Owner a • ArrNominationCapSppYrlyQty yr – total sum of daily Nomination Cap of all Asset Owners

  31. Real-Time Market Charge Types • Energy & Operating Reserves • RtEnergy5minAmt Real-Time Asset Energy • RtNEnergy5minAmt Real-Time Non-Asset Energy • RtVEnergy5minAmt Real-Time Virtual Energy • RtRegUp5minAmt Real-Time Regulation-Up • RtRegDn5minAmt Real-Time Regulation-Down • RtSpin5minAmt Real-Time Spinning Reserve • RtSupp5minAmt Real-Time Supplemental Reserve • Operating Reserve Cost Allocation • RtRegUpDistHrlyAmt Real-Time Regulation-Up Distribution • RtRegDnDistHrlyAmt Real-Time Regulation-Down Distribution • RtSpinDistHrlyAmt Real-Time Spinning Reserve Distribution • RtSuppDistHrlyAmt Real-Time Supplemental Reserve Distribution • Make Whole Payment • RtMwpCpAmt RUC Make-Whole-Payment • RtMwpDistHrlyAmt RUC Make-Whole-Payment Distribution • Over-Collected Losses and Revenue Neutrality • RtOclDistHrlyAmt Real-Time Over-Collected Losses Distribution • RtRnuHrlyAmt Real-Time Revenue Neutrality Uplift Distribution

  32. Real-Time Market Charge Types (cont’d) • Performance Penalties • RtRegNonPerf5minAmt Real-Time Regulation Non-Performance • RtCRDeplFailAmt Real-Time Contingency Reserve Deployment Failure • Regulation Adjustment & Out-Of-Merit adjustments • RtRegAdj5minAmt Real-Time Regulation Deployment Adjustment • RtOom5minAmt Real-Time Out-Of-Merit • Joint Operating and Reserve Sharing Group Agreements • RtJoaHrlyAmt Real-Time Joint Operating Agreement • RtRsg5minAmt Real-Time Reserve Sharing Group • Cost Allocation • RtRegNonPerfDistHrlyAmt Real-Time Regulation Non-Performance Distribution • RtCRDeplFailDistHrlyAmt Real-Time Contingency Reserve Deployment Failure Distribution • RtRsgDistHrlyAmt Real-Time Reserve Sharing Group Distribution • Miscellaneous • MiscDlyAmt Miscellaneous

  33. Real-Time Asset Energy • RtEnergy5minAmt a, s, i= • RtLmp5minPrc s, i * [ (RtBillMtr5minQty a, s, i - DaClrdHrlyQty a, s, h ) • - S t RtEnFinHrlyQty a, s, t, h ] / 12 • Settlement of the net RTBM incremental energy position at an Asset Owner’s Resources and loads • Calculated in 5-minute intervals at each Resource or load Settlement Location • Input Bill Determinants • RtLmp5minPrc s, i – 5-minute RTBM Locational Marginal Price at Settlement Location s • RtBillMtr5minQty a, s, i – 5-minute Billable Meter Quantity at Settlement Location s for Asset Owner a • DaClrdHrlyQty a, s, h – hourly DA Market Cleared Quantity at Settlement Location s for Asset Owner a • RtEnFinHrlyQty a, s, h, t – hourly RTBM bilateral transaction t at Settlement Location s for Asset Owner a represented by Financial Schedules which resolve to Resource or load assets

  34. Real-Time Non-Asset Energy • RtNEnergy5minAmt a, s, i= • RtLmp5minPrc s, i • * [S t RtImpExp5minQty a, s, i, t - S t DaImpExp5minQty a, s, i, t • - S t RtNEnFinHrlyQty a, s, h, t ] / 12 • Settlement of the net RTBM incremental energy position at locations other than an Asset Owner’s Resources and load (i.e. interfaces) • Calculated in 5-minute intervals at each Settlement Location where an Asset Owner has Determinants • Input Bill Determinants • RtLmp5minPrc s, i – 5-minute RTBM Locational Marginal Price at Settlement Location s • RtImpExp5minQty a, s, I, t – 5-minute RTBM Cleared Import / Export transaction t Quantity at Settlement Location s for Asset Owner a • DaImpExp5minQty a, s, I, t – 5-minute DA Market Cleared Import / Export transaction t Quantity at Settlement Location s for Asset Owner a • RtNEnFinHrlyQty a, s, h, t – hourly RTBM bilateral transaction t at Settlement Location s for Asset Owner a represented by Financial Schedules which do not resolve to Resource or load assets

  35. Real-Time Virtual Energy • RtVEnergy5minAmt a, s, i= • RtLmp5minPrc s, i* S t DaClrdVHrlyQty a, s, h, t /12 * (-1) • Settlement of the net RTBM energy position of an Asset Owner’s Cleared Virtual Bids and Offers • Calculated in 5-minute intervals at each Settlement Location where an Asset Owner Clears a Virtual Bid or Offer • Input Bill Determinants • RtLmp5minPrc s, i – 5-minute RTBM Locational Marginal Price at Settlement Location s • DaClrdVHrlyQty a, s, h, t – hourly DA Market Cleared Virtual Bid / Offer transaction t Quantity at Settlement Location s for Asset Owner a

  36. Real-Time Regulation-Up • RtRegUp5minAmt a, s, i= RtRegUpMcp5minPrc z, s, i • * ( RtRegUp5minQty a, s, i - DaRegUpHrlyQty a, s, h ) / 12 * (-1) • Settlement of RTBM incremental Cleared Regulation-Up at an Asset Owner’s Resources • Calculated hourly at each Resource Settlement Location Clearing Regulation-Up • Input Bill Determinants • RtRegUpMcp5minPrc z, s, i – 5-minute RTBM Clearing Price for Regulation-Up in Reserve Zone z at Settlement Location s • RtRegUp5minQty a, s, i – 5-minute RTBM Cleared Regulation-Up capacity at Settlement Location s for Asset Owner a • DaRegUpHrlyQty a, s, h – hourly DA Market Cleared Regulation-Up capacity at Settlement Location s for Asset Owner a

  37. Real-Time Regulation-Down • RtRegDn5minAmt a, s, i= RtRegDnMcp5minPrc z, s, i • * ( RtRegDn5minQty a, s, i - DaRegDnHrlyQty a, s, h ) / 12 * (-1) • Settlement of RTBM incremental Cleared Regulation-Down at an Asset Owner’s Resources • Calculated hourly at each Resource Settlement Location Clearing Regulation-Down • Input Bill Determinants • RtRegDnMcp5minPrc z, s, i – 5-minute RTBM Clearing Price for Regulation-Down in Reserve Zone z at Settlement Location s • RtRegDn5minQty a, s, i – 5-minute RTBM Cleared Regulation-Down capacity at Settlement Location s for Asset Owner a • DaRegDnHrlyQty a, s, h – hourly DA Market Cleared Regulation-Down capacity at Settlement Location s for Asset Owner a

  38. Real-Time Spinning Reserve • RtSpin5minAmt a, s, i= RtSpinMcp5minPrc z, s, i • * ( RtSpin5minQty a, s, i - DaSpinHrlyQty a, s, h ) / 12 * (-1) • Settlement of RTBM incremental Cleared Spinning Reserve at an Asset Owner’s Resources • Calculated hourly at each Resource Settlement Location Clearing Spinning Reserve • Input Bill Determinants • RtSpinMcp5minPrc z, s, i – 5-minute RTBM Clearing Price for Spinning Reserve in Reserve Zone z at Settlement Location s • RtSpin5minQty a, s, i – 5-minute RTBM Cleared Spinning Reserve capacity at Settlement Location s for Asset Owner a • DaSpinHrlyQty a, s, h – hourly DA Market Cleared Spinning Reserve capacity at Settlement Location s for Asset Owner a

  39. Real-Time Supplemental Reserve • RtRegUp5minAmt a, s, i= RtSuppMcp5minPrc z, s, i • * ( RtSupp5minQty a, s, i - DaSuppHrlyQty a, s, h ) / 12 * (-1) • Settlement of RTBM incremental Cleared Supplemental Reserve at an Asset Owner’s Resources • Calculated hourly at each Resource Settlement Location Clearing Supplemental Reserve • Input Bill Determinants • RtSuppMcp5minPrc z, s, i – 5-minute RTBM Clearing Price for Supplemental Reserve in Reserve Zone z at Settlement Location s • RtSupp5minQty a, s, i – 5-minute RTBM Cleared Supplemental Reserve capacity at Settlement Location s for Asset Owner a • DaSuppHrlyQty a, s, h – hourly DA Market Cleared Supplemental Reserve capacity at Settlement Location s for Asset Owner a

  40. Real-Time Regulation-Up Distribution • RtRegUpDistHrlyAmt a, s, h = • RtRegUpSppHrlyAmt h * RtLoadRatioShareHrlyFct a, s, h * (-1) • Cost Allocation of RTBM incremental settlement of Regulation-Up by Load Ratio Share • Calculated hourly for each Settlement Location with positive Billable Meter data (load) or Exports • Input Bill Determinants • RtRegUpSppHrlyAmt h – hourly aggregation of 5-minute RTBM incremental settlement of Regulation-Up for all Asset Owners • RtLoadRatioShareHrlyFct a, s, h – hourly positive value of the aggregation 5-minute Billable Meter data and Exports for Asset Owner a in Reserve Zone z divided by the footprint total • + & - values within the hour net before aggregation • Exports for Reserve Sharing Events are excluded

  41. Real-Time Regulation-Down Distribution • RtRegDnDistHrlyAmt a, s, h = • RtRegDnSppHrlyAmt h * RtLoadRatioShareHrlyFct a, s, h * (-1) • Cost Allocation of RTBM incremental settlement of Regulation-Down by Load Ratio Share • Calculated hourly for each Settlement Location with positive Billable Meter data (load) or Exports • Input Bill Determinants • RtRegDnSppHrlyAmt h – hourly aggregation of 5-minute RTBM incremental settlement of Regulation-Down for all Asset Owners • RtLoadRatioShareHrlyFct a, s, h – hourly positive value of the aggregation 5-minute Billable Meter data and Exports for Asset Owner a in Reserve Zone z divided by the footprint total • + & - values within the hour net before aggregation • Exports for Reserve Sharing Events are excluded

  42. Real-Time Spinning Reserve Distribution • RtSpinDistHrlyAmt a, s, h = • RtSpinSppHrlyAmt h * RtLoadRatioShareHrlyFct a, s, h * (-1) • Cost Allocation of RTBM incremental settlement of Spinning Reserve by Load Ratio Share • Calculated hourly for each Settlement Location with positive Billable Meter data (load) or Exports • Input Bill Determinants • RtSpinSppHrlyAmt h – hourly aggregation of 5-minute RTBM incremental settlement of Spinning Reserve for all Asset Owners • RtLoadRatioShareHrlyFct a, s, h – hourly positive value of the aggregation 5-minute Billable Meter data and Exports for Asset Owner a in Reserve Zone z divided by the footprint total • + & - values within the hour net before aggregation • Exports for Reserve Sharing Events are excluded

  43. Real-Time Supplemental Reserve Distribution • RtSuppDistHrlyAmt a, s, h = • RtSuppSppHrlyAmt h * RtLoadRatioShareHrlyFct a, s, h * (-1) • Cost Allocation of RTBM incremental settlement of Supplemental Reserve by Load Ratio Share • Calculated hourly for each Settlement Location with positive Billable Meter data (load) or Exports • Input Bill Determinants • RtSuppSppHrlyAmt h – hourly aggregation of 5-minute RTBM incremental settlement of Supplemental Reserve for all Asset Owners • RtLoadRatioShareHrlyFct a, s, h – hourly positive value of the aggregation 5-minute Billable Meter data and Exports for Asset Owner a in Reserve Zone z divided by the footprint total • + & - values within the hour net before aggregation • Exports for Reserve Sharing Events are excluded

  44. RUC Make-Whole-Payment • RtMwpCpAmt a, s, c= ( CncldStartAmt a, s, c • + Max (0, • (S i ( { ( IF ( CncldStartRatio a, s, c = 0, THEN 1, ELSE 0) } * • { RtStartUpElig5minFlg a, s, i, c * RtStartUp5minAmt a, s, i, c • + RtRucComStat5minFlg a, s, i, c * [ RtMwpCost5minAmt a, s, i, c • + RtTransition5minAmt a, s, i, c + RtMwpRev5minAmt a, s, i, c • + RtOom5minAmt a, s, i + RtRegAdj5minAmt a, s, i • – RtURDAdj5minAmt a, s, i, c– RtStatusAdj5minAmt a, s, i, c • – RtLimitAdj5minAmt a, s, i, c ] } ) ) • ) * (-1) • Revenue Guarantee to Resources Committed economically in the RTBM • Calculated for the contiguous “Market” status intervals of a Commitment Period within a single Operating Day for Resources committed by SPP in the RTBM

  45. RUC Make-Whole-Payment (cont’d) • Input Bill Determinants • CncldStartAmt a, s, c – prorated start-up due to cancellation, subject to eligibility • RtStartUp5minAmt a, s, i, c – subject to eligibility (RtStartUpElig5minFlg) • RtMwpCost5minAmt a, s, i, c – 5-minute interval recurring production cost for Asset Owner a’s Resource at Settlement Location s based on the Offer parameters effective at the time of the DA Market Commitment c • No-Load • Minimum Energy Cost (area under the As-Offered Offer curve between 0 & the applicable minimum limit) • Incremental Energy (area under the as dispatched Offer curve between the applicable minimum limit and metered output) • Availability Cost for each of the Operating Reserve products Cleared • RtTransition5minAmt a, s, i, c – Cost associated with a Combined Cycle Resource moving into a higher configuration • RtMwpRev5minAmt a, s, i, c – 5-minute interval revenue for Asset Owner a’s Resource at Settlement Location s during RUC Commitment c • RTBM incremental Energy (absent Financial Schedules) & the value of each of the incremental Operating Reserve product capacities cleared in the RTBM • RtOom5minAmta, s, i & RtRegAdj5minAmta, s, i – adjustments to Resource revenue for Out-of-Merit dispatch and Regulation deployment • RtURDAdj5minAmta, s, i, c , RtStatusAdj5minAmt a, s, i, c& RtLimitAdj5minAmta, s, i, c – clawback of cost components to prevent recovery during periods of ‘deviant’ behavior

  46. RUC Make-Whole-Payment Distribution • RtMwpDistHrlyAmt a, s, h= • RtMwpSppDistRate d * RtDevHrlyQty a, s, h • Cost Allocation of Make Whole Payment for Resources Committed in RUC to an Asset Owner’s RTBM ‘deviations’ • Calculated hourly for each Settlement Location where an Asset Owner has deviation quantities • Input Bill Determinants • RtMwpSppDistRate d – daily rate achieved by dividing the total of all RUC Make Whole Payments for the Operating Day by the sum of all hourly Cost Allocation Determinants over the Operating day • RtDevHrlyQty a, s, h – hourly ‘deviations’ at each Settlement Location s for Asset Owner a • Incremental load, Virtual Bid / Offer and Import / Export & through transaction quantities • The quantity change when a Resource raises it minimum limit • The quantity change when a Resource lowers it maximum limit • The quantity cleared in DA Market when a Resource cleared DA, but is off-line in RTBM • The difference between metered output and the optimal output based on LMP when a Resource is on Manual status • The difference between metered output and the DA market cleared quantity when a Resource self commits in RTBM • The optimal output based on LMP when a Resource is committed in RUC but are off-line in RTBM • The URD quantity when the Resource is beyond it operating tolerance

  47. Real-Time Over-Collected Losses Distribution • RtOclDistHrlyAmt a, s, lp, h = • RtNormLossRbtHrlyFcta, s, lp, h * RtIncrOclHrlyAmt h * (-1) • Rebate of surplus collected as a result of the marginal pricing of losses • Calculated hourly for each Settlement Location where an Asset Owner has an incremental RTBM energy position due to the net of all Resource or load activity, Financial Schedules and Interchange Transactions – excludes Virtual Bids and Offers • Approach groups Settlement Locations into Loss Pools, which are dynamically defined as all of each AO’s transactional activity regardless of the SL. Transactions by multiple AO’s at a common SL will be included in separate Loss Pools • Input Bill Determinants • RtNormLossRbtHrlyFct a, s, lp, h – hourly factor for Asset Owner a’s net withdrawal at Settlement Location s in Loss Pool lp valued by the difference between the local MLC and that of the “source” of the service • Positive loss factors (payment for losses) are normalized • “source” of the service is determined by assuming that generation in a Loss Pool first serves withdrawal in the Loss Pool, then is used to satisfy withdrawal outside the Loss Pool to the extent available • RtOclHrlyAmt h – hourly over collection for the footprint • Achieved by summing the product of the (MEC and MLC) with (RTBM incremental injection & withdrawal) over all Settlement Locations and netting off the value of SPP net Inadvertent

  48. Revenue Neutrality Uplift Distribution • RtRnuHrlyAmt a, s, h = • RtRnuSppDistRate d * RtRnuDistHrlyQty a, s, h * (-1) • Uplift of the imbalance from all other settlement charge types • Calculated hourly for each Settlement Location where an Asset Owner has a RTBM load or generation, Interchange or Virtual Bids & Offers. • Imbalance is categorized as: • Day Ahead Market Revenue Inadequacy • RTBM Revenue Inadequacy • Out-of-Merit Energy settlement • Regulation Deployment Adjustment settlement • Joint Operating Agreement settlement • Net Inadvertent • RTBM Congestion • Input Bill Determinants • RtRnuSppDistRate d – daily rate = the sum of all imbalance divided by the sum of all uplift determinants • RtRnuDistHrlyQty a, s, h – hourly uplift determinants for Asset Owner a at Settlement Location s

  49. Real-Time Regulation Non-Performance • RtRegNonPerf5minAmt a, s, i = Max ( 0, • ( DaRegUpHrlyQty a, s, h * DaRegUpMcpHrlyPrc z, s, h • + ( RtRegUp5minQty a, s, i- DaRegUpHrlyQty a, s, h ) • * RtRegUpMcp5minPrc z, s, i) / 12 • + ( DaRegDnHrlyQty a, s, h * DaRegDnMcpHrlyPrc z, s, h • + ( RtRegDn5minQty a, s, i- DaRegDnHrlyQty a, s, h ) • * RtRegDnMcp5minPrc z, s, i) / 12) • Clawback of Regulation Revenue • Calculated hourly for each Resource outside its Operating Tolerance when it has cleared Regulation-Up or Regulation-Down in RTBM • Input Bill Determinants • DaRegUpHrlyQty a, s, h , DaRegDnHrlyQty a, s, h , RtRegUp5minQty a, s, i , RtRegDn5minQty a, s, i – hourly and 5-minute cleared Regulation quantities for Asset Owner a at Settlement Location s • DaRegUpMcpHrlyPrc z, s, h , DaRegDnMcpHrlyPrc z, s, h , RtRegUpMcp5minPrc z, s, i , RtRegDnMcp5minPrc a, s, i –hourly and 5-minute Regulation clearing prices for Reserve Zone z at Settlement Location s

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