Southwest Power Pool STRATEGIC PLANNING TASK FORCE June 10-11, 2003 Meeting Minutes Renaissance Hotel St. Louis, MO

Transcription

1 MINUTES NO. 7 Southwest Power Pool STRATEGIC PLANNING TASK FORCE June 10-11, 2003 Meeting Minutes Renaissane Hotel St. Louis, MO Agenda Item 1& 2 Call to Order & Introdutions, Approval of Minutes Riky Bittle (AREC) alled the meeting of the SPTF to order at 2:10 p.m. (Agenda Attahment 1). Other SPTF members in attendane during all or parts of the two-day meeting were Co-Chair Rihard Spring (KCPL), Co-Chair Dik Dixon (Westar), Mel Perkins (OKGE), Mihael Desselle (AEP), David Christiano (SPRM), Mihael Gildea (DENA), and John Marshewski (SPP). SPP Staff in attendane inluded Nik Brown, Carl Monroe, Tom Dunn and Pat Bourne. Guests partiipating in the meeting inluded Jim Sherwood (SWPA), David Lemmons (Xel), Clair Moeller (Translink/SPS), Gene Anderson (OMPA), Shah Hossain (Westar), Kyle Clem (KCC), Bary Warren (Empire Distrit), Tom Stuhlik (Westar), Rihard House (APSC) and David Potts (The Struture Group). Mihael Desselle moved that the minutes of the May 28, 2003 meeting be approved as written. Mel Perkins seonded this motion, whih passed unanimously. Agenda Item 3 Member Outreah / Regional Coordination / Dialogue w/ States SPTF members shared thoughts regarding their individual and joint partiipation in several reent meetings and onferenes, inluding: the SPTF hosted a onferene on Friday, June 6 with FERC Chair Pat Wood and Commission Massey with many representatives of the states either in person or via phone; the MARC onferene held in Omaha, Nebraska Tuesday, June 10 with a ompare/ontrast panel of ISO/RTOs hosted by APSC Chair Sandy Hohstetter, and the Kansas Transmission Summit in Lawrene, KS hosted by Kansas state representative, Tom Sloan. General outome of these meetings was strong support for SPP s pursuit of RTO/ISO status with ontinued enouragement to reonsider governane. Agenda Item 4 Update on RTWG Ativities Riky Bittle provided an update on ativities and plans of the RTWG (RTWG Report Attahment 2). Agenda Item 5 Edit Draft Seondary Strategi Plan Report Disussion and editing produed a seondary draft of the Strategi Plan Report for presentation to the Board of Diretors June 24 (Draft Seondary Strategi Plan Report Attahment 3). Agenda Item 6 Review of Governane The SPTF readdressed the issue of SPP governane, partiularly with respet to struture of the Board of Diretors, and following muh disussion, Mel Perkins moved that the SPTF endorse the following reommendation to the Board of Diretors: The SPTF has reahed the onlusion that SPP governane affirmed at the last Board meeting does not meet the expeted requirements of independene expressed by

2 SPP Strategi Planning Task Fore Minutes June 10-11, 2003 Meeting FERC. SPP needs to hange its governane suh that only non-stakeholder Diretors will vote on Board ations. The SPTF reommends that Board aept this onlusion and direts the SPTF to submit further governane reommendations, inluding bylaw hanges, to the Board in August reognizing the need to maintain the urrent level of stakeholder input at all Board meetings. The SPTF will inlude ative state involvement in the development of these reommendations. Riky Bittle seonded the motion whih passed unanimously. Agenda Item 7 RTO/ISO Filing Date Dik Dixon stated that muh attention has been given to the questions of whether and when SPP should submit a filing seeking FERC reognition as an independent regional organization. Following signifiant disussion, Dave Christiano moved that the SPTF reommend to the Board of Diretors at their June 24 meeting that the SPTF be direted to prepare neessary filing douments for Board onsideration at their August 26, 2003 meeting. Mihael Desselle seonded the motion, whih passed unanimously. Agenda Item 9 Disussion of RSC Proposal Nik Brown reported that the states, during their weekly alls, had requested that he develop a strawman proposal on details for more ative regulatory involvement in SPP deision-making proesses. Nik stated that he also understood that OCC staff may also be preparing a similar strawman proposal and he requested guidane from state representative at the meeting to avoid dupliation. Rihard House of the APSC stated that he would seek larifiation. Kyle Clem of the KCC affirmed Nik s understanding of diretion and the SPTF supported Nik s ontinued work on the strawman doument for distribution this week. Agenda Items 10 ITC Disussion Rihard Spring asked Clair Moeller to disuss proposals for independent transmission ompany partiipation in SPP. Clair proposed that SPP onsider MISO s membership agreement Appendix I and tariff shedules for ITC involvement. Clair mentioned that the triky debate would be on unbundling SPP osts for those ISO servies provided by Translink. Clair agreed to provide Nik Brown the MISO douments for distribution to the SPTF. Agenda Items 8 Review Transmission Expansion Proposal Carl Monroe and Pat Bourne presented a proposal for transmission expansion developed in response to the harges from the initial strategi plan adopted by the Board of Diretors on April 14, Carl disussed the determination of need for additional transmission, the planning proess, transmission expansion, and transmission rates (Transmission Expansion Proposal Slides Attahment 4). Following the presentation, Carl stated that this proposal would be disussed with the states and the RTWG at their next meetings. 2

3 SPP Strategi Planning Task Fore Minutes June 10-11, 2003 Meeting Agenda Item 11 Finalize Report Reommendations Nik Brown reviewed the SPTF reommendations to be inluded in the seondary strategi plan report to the Board of Diretors on June 24, 2003, that were previously agreed to by the SPTF. Agenda Item 12 Review of Ation Items and Future Meetings Clair Moeller will send MISO/Translink douments to Nik Brown for distribution to the SPTF. Pat Bourne will edit the BPWG sope to larify ambiguity of responsibility with the RTWG. Nik Brown will edit the organization hart in the seondary strategi plan report to add the market monitor reporting to the Board of Diretors. Nik Brown will distribute meeting minutes by Friday, June 13. Nik Brown will draft and distribute the regional state ommittee strawman proposal by Friday, June 13. Dik Dixon will report results of the Finane Working Group meeting to SPTF exploder on Friday, June 13. Nik Brown will distribute the SPTF seondary strategi plan report to the Board of Diretors on Friday, June 13. John Marshewski and Riky Bittle will pursue the issue of Setion 203 filings with FERC ommissioners. Future Meetings Future meetings are sheduled for July and August with a teleonferene sheduled on July 30 from 8:30 a.m. until 11:30 a.m. (Meeting loations to be determined) Agenda Item 13 Adjournment With no further business, Dik Dixon thanked everyone for partiipating and adjourned the meeting at 3:07 p.m. Respetfully Submitted, Niholas A. Brown 3

4 Southwest Power Pool STRATEGIC PLANNING TASK FORCE MEETING Tuesday & Wednesday, June 10-11, 2003 Renaisane Hotel St. Louis, MO - A G E N D A - Tuesday, June 10, 2 p.m. 6 p.m. 1. Call to Order & Introdutions... Riky Bittle 2. Approval of 5/28/03 Meeting Minutes... Riky Bittle 3. Member Outreah / Regional Coordination / State Dialogue Update... All 4. Update on RTWG Ativities... Riky Bittle 5. Edit Draft Seondary Strategi Plan Report... All Wednesday, June 11, 8 a.m. 3 p.m. 6. Review of Governane...Dik Dixon/Rihard Spring 7. RTO/ISO Filing Date...Dik Dixon/Rihard Spring 8. Review Transmission Expansion Proposal... Carl Monroe 9. Disussion of RSC Proposal... Nik Brown 10. ITC Disussion...Clair Moeller 10. Finalize Report Reommendations... Nik Brown 10. Review of Ation Items... Nik Brown 11. Adjournment...Rihard Spring/Dik Dixon

5 Southwest Power Pool REGIONAL TARIFF WORKING GROUP June 5, 2003 Embassy Suites Outdoor World, Grapevine, TX 9:30 a.m. - 4:00 p.m. Meeting Summary Revisions to Shedule 1 Inluding Proposed Shedule 1A Pat Bourne (SPP Staff) distributed proposed Shedules 1 and 1A and explained that proposed Shedule 1 was idential to the draft distributed at the last meeting. However, Shedule 1A had been modified to parallel the hanges to the membership dues assessment proess refleted in the SPP Bylaws hange proposed by the SPTF. The hanges to the proposed Shedule 1A provide for the alulation of an administration harge appliable for the insuing alendar year based on projeted budgeted expenses for that year divided by the projeted annual Shedule 1A billing units for the same alendar year, with any over or under reovery of suh expenses to be arried into the subsequent year alulation. The revised Tariff language also indiates that SPP shall reover 100% (rather than 80%) of its total expenses through the administration harge. The $.20 per MW per hour ap was retained. In addition to this hange, the billing determinant to be used for the administration harge for network servie was larified to be the 12 month average of the Transmission Customer s oinident Zonal Demands used to determine the Demand Charges under Shedule 9 multiplied by the number of hours of the appliable month. Changes to Tariff setion 1.16 and Shedule 9 were proposed by SPP Staff to larify other aspets of the network servie billing proess. Subsequent to disussion of this set of hanges, a motion was made and seonded to approve these Tariff modifiations, ontingent upon approval of the Board of Diretors that the ost reovery perentage be modified from 80% to 100%. The motion passed with 8 in favor, 2 against and 4 abstaining. Task Fore Reports and Disussion of Issues Transmission Failities Definition Task Fore Les Dillahunty, SPP and Task Fore Chair, summarized the reent disussions of the Task Fore. He presented a onsensus definition that refleted the evergreen approah and stated that the primary issues of ontention remain the inlusion of radials and 34.5 kv failities and the question of whether qualifying failities must experiene two-way power flows. In this report, Les also indiated that the task fore is seeking the diretion of the RTWG onerning a larifiation of its mission. The primary question is whether the task fore is to remain within the onfines of the urrent rate design or onsider a hange in rate design as a part of the definition development proess. If a hange in rate design is not part of the task fore s harge, then it reommends the onsensus language proposal. Substantial disussion was had on the adequay of the evergreen approah definition. A number of those in attendane agreed that the urrent definition may not meet the SPTF goals and that work must ontinue to further define transmission failities in order to remove the opportunity for dispute prior to the upoming filing. Les indiated that he believes suh larifiation work an be ompleted; however, the time needed may well be signifiant, espeially given the fat that other issues, suh as partiipant funding, impat the effort. The RTWG unanimously agreed that the onsensus language forwarded by the TDTF should be reported to the SPTF as an interim onlusion with a reommendation that the task fore ontinue its work toward a learer definition.

6 Generation Interonnetion Agreement Task Fore Bob Tumilty, AEP and Task Fore Chair, summarized the status of the work assigned to the Task Fore. This task fore presented as its joint motion its final draft of the new proposed Generation Imbalane Servie Shedule 4-A. The features of the servie shedule were presented and disussed. It was onluded that this draft be aepted as the reommendation of the task fore and that ation on it be deferred until the next RTWG meeting in order to provide time for review. Thereafter, Bob indiated that the task fore is seeking guidane from the RTWG on the question of whether the pro forma Generation Interonnetion and Operating Agreement to be used by SPP should inlude the language urrently refleted in paragraph 3.5 that generally obligates the interonneting generator to provide anillary servies, prior to the existene of a suitable anillary servies market. On the one hand, it an be argued that there is onern that suh obligation is important to proper management of the transmission system and that there be an adequate supply of anillary servies. On the other hand, it an be ontended that this requirement should not be a ondition of interonnetion. Rather, the Transmission Provider should ontrat for suh anillary servies from those willing to provide it outside the IA itself. Bob observed that the obligation to provide reative power is otherwise provided for in the draft IA under onstrution by the task fore and that all agree that it is an appropriate requirement of the generator in the IA. At the onlusion of disussion on this matter it was the onsensus of the RTWG that there was no ompelling reason to retain in the IA an obligation for the generator to offer to provide anillary servies and that the GIATF should move forward on that premise. Bob reported that general progress on the projet was good and that his urrent estimate of time to omplete the task of developing the draft IA is approximately four weeks. Formula Rates Task Fore Jay Toungate, AEP and Task Fore Chair, stated that this task fore is in the proess of modifying the templates in aordane with the hanges that it had identified as required and reported to the RTWG at its last meeting. He expets that these hanges will be ompleted within two weeks. Jay also reported that the task fore has disussed the issue of whether SPP should file a request for a single return on equity appliable to all Transmission Owners that make use of the formula rate option. The onsensus view of the RTWG was that guidane from the SPTF on this matter would be helpful. Substantial disussion was had on the question of the flexibility that should be permissible for any speifi Transmission Owner s use of the template option. Several inputs to the formula are not derived diretly from the FERC Form 1 or other standard regulatory reports (inludible revenue redit amounts and alulation of the rate denominator are examples); therefore, supplemental work papers will be needed to support these inputs. The degree to whih a speifi Transmission Owner might substitute diret assignments and alternatives to standard alloators remained unresolved. It was suggested that disussions with FERC Staff might help resolve this issue. Queuing Improvement Task Fore Although there was no report provided to the RTWG at this meeting, Brue Rew, SPP and Task Fore Chair, has stated that his expetation that the task fore will omplete a proposal for generation interonnetion request proessing by the end of June and a proposal for transmission servie queue request proessing by the end of July. Partiipant Funding Task Fore The failities onstrution senarios that the task fore had developed were disussed further. Several partiipants offered their views at the meeting and additional responses are being forwarded to SPP Staff by .

7 Strategi Plan Seondary Report June 1124, 2003 (Initial Report adopted by the SPP Board of Diretors on April 14, 2003) Southwest Power Pool, In. (SPP) is a group of 50 eletri utilities serving more than 4 million ustomers aross all or parts of eight southwestern states. This membership is omprised of investor-owned utilities, muniipal systems, generation and transmission ooperatives, state authorities, federal agenies, wholesale generators, and power marketers. SPP serves as a regional reliability ounil of the North Amerian Eletri Reliability Counil and, sine 1997 has provided independent seurity oordination and tariff administration, pursuant to a FERC approved tariff, aross its servie area with over 33,000 miles of transmission lines with a gross plant investment approahing $4 billion. Developed by the Southwest Power Pool Strategi Planning Task Fore

8 SPP Strategi Plan June 11, 2003 Bakground On Marh 20, 2003, the Strategi Planning Task Fore (SPTF) was formed to report to the Board of Diretors to ompletely review the SPP organization onsidering the urrent industry environment and to make appropriate reommendations to the Board of Diretors. The Initial Report from the SPTF was presented and aepted by the Board of Diretors at its April 14 meeting. This Seondary Report provides an update on all the omponents of the Plan. It also requests ation by the Board of Diretors neessary to effet some omponents of the Plan. Strategi Planning Task Fore The SPTF is omprised of a diverse group of representatives from SPP members: Rihard Dixon, Co-Chair Sr. VP Operations Strategy Westar Energy, In. Mihael Gildea Manager Regulatory Poliy Duke Energy North Ameria Mel Perkins Diretor Transmission Poliy Oklahoma Gas & Eletri, Co. Mihael Desselle Diretor Publi Poliy Amerian Eletri Power John Marshewski President Southwest Power Pool, In. Rihard Spring, Co-Chair VP Transmission Servies Kansas City Power & Light Trudy Harper VP & General Manager Tenaska Riky Bittle Vie-President Arkansas Eletri Cooperatives David Christiano Diretor Eletri Systems Control City Utilities of Springfield, MO Nik Brown & Carl Monroe, Failitators Sr. VP & VP Operations Southwest Power Pool, In. 1

9 SPP Strategi Plan June 11, 2003 The Strategi Plan ACTIVE STATE INVOLVEMENT Initial Reommendation: SPP should work very losely with its states on the omponents of the Strategi Plan in ontinuing SPP s evolutionary approah to the provision of servies to its members and ustomers. Representatives from the SPP state regulatory bodies are meeting weekly via teleonferene to disuss issues related to SPP. State representatives have also taken an ative role in working group meetings. SPP Staff has had one-on-one meetings dialog with the Arkansas, Kansas. Louisiana, Missouri, and Oklahoma Commissions; others are being sheduled. SPTF representative and SPP staff hosted a onferene on June 6 in Atlanta that inluded representatives from the state ommissions as well as FERC Chair Pat Wood and Commissioner Massey. On June 23, SPP is hosting an Imbalane and Congestion Workshop for state regulators in Kansas City for State Commissioners and their staffs. [Disussion of proposal from SPP Staff for formalizing State involvement. More formal than PJM MOU and less than the OMS.] ORDER 2000 COMPLIANCE Initial Reommendation: SPP should evaluate with the states options for and a phased implementation of a real-time balaning market, market monitoring, and market-based ongestion management. These ations were assigned to the ombination of the Market Settlement Working Group and the Congestion Management Working Group (the Market Working Group). The Group met several times and provided a reommended plan to the SPTF that was aepted on May 28. The detailed plan is provided as Attahment #1. Summary of the plan: The plan is to be implemented in three phases: Phase 1 - Real-Time Balaning Market with Market Monitoring and Market Power Mitigation; Phase 2 - Market Based Congestion Management; Phase 3 - Anillary Servies Market. Implementation is to begin with the prior market system design developed by SPP during 2001, and perform a detail design for Phase I and a high-level design for the other phases. Changes in Phase I to support other phases will be inorporated with an objetive of November 2004 implementation for all of Phase I. Phase 1 will be broken down into three distint inrements: 1a) Settlement of Imbalane at tariff filed rates of eah Transmission Owner with an objetive of February 2004; 2b) Enhaned Reliability Data and Net Shedule Interhange with an objetive of April 2004; and 3) Offerbased energy imbalane market resulting in the use of market-based rates for imbalane settlement with an implementation objetive of November The objetive for Phases 2 Market Based Congestion Management is for implementation in November 2005 and Phase 3 2

10 SPP Strategi Plan June 11, 2003 Anillary Servies Market studied for implementation in November 2006 will be implemented on an annual yle basis thereafter. The implementation of eah suessive phase will proeed working with the state and federal regulators based on ost benefit analysis impliations. Eah suessive phase of SPP or neighboring entity requires seams management/oordination. Initial Reommendation: SPP should ontinue to work with neighboring entities on regional membership expansion opportunities and should develop seams agreements and/or joint markets with neighboring ompanies who hoose not to partiipate in SPP and with neighboring regional entities. At the April 15 meeting of the SPTF, members of the task fore were assigned entities they were to ontat as part of the member outreah and interregional oordination efforts. These ontats are on going with updates provided at the SPTF meetings. Interregional oordination and seams management is required with eah neighboring entity. SPP Staff is in disussions with AECI resolving seams issues. SPTF has begun disussions with SeTrans with providing a proposal for seam management. SPP Staff is engaged with the MISO/PJM seams oordination efforts through the Joint and Common Market as stated below. [Mike Desselle to add a statement on Seams Management oordination with NAESB. Nik to add statement on Kansas summit.] Initial Reommendation: SPP should ontinue to partiipate in the Joint and Common Market development with MISO and PJM. In a May 19 report to FERC, SPP provided the following regarding its partiipation in the Joint and Common Market development: SPP ommits to ontinue its partiipation in the Joint and Common Market development with the Midwest ISO and PJM and to ontinually evaluate this partiipation based on SPP s approah to market struture, timing, and state regulatory input. While SPP s initial partiipation in the Joint and Common Market was prediated on the merger with the Midwest ISO, SPP will now pursue partiipation as a separate regional entity. Just as with the merger attempt, the Joint and Common Market effort has produed signifiant proesses enabling all the parties to better manage seams between marketto-nonmarket regions, and market-to-market regions. SPP s ultimate partiipation in the Joint and Common Market will, onsistent with FERC s April 28, 2003 White Paper on Wholesale Power Market Platform, depend on a timetable and budget for implementation established in onjuntion with SPP s stakeholders and state regulatory authorities. 3

11 SPP Strategi Plan June 11, 2003 Initial Reommendation: SPP should file an attahment to its tariff failitating independent transmission ompany partiipation by interested transmission owners. SPP SPTF has started disussions with Translink to determine what agreements need to be modified or reated to inlude their partiipation. These inlude more than just attahments to the SPP regional tariff.the RTWG has been meeting to onsider various tariff revisions. See REGIONAL TRANSMISSION SERVICE TARIFF. Initial Reommendation: SPP should visit with FERC ommissioners and senior staff regarding this strategi plan and seek their partiipation in related development ativities. SPTF representatives and SPP staff have met and ontinue to meet with Commissioners and Commission staff regarding SPP ativities. On April 22, SPTF representatives and SPP staff met with Rob Gramlih (Chairman Wood's Speial Assistant on Markets), Commissioner Brownell and Commissioner Massey. SPTF representatives and SPP staff hosted a onferene on June 6 in Atlanta that inluded representatives from the state ommissions as well as FERC Chair Pat Wood and Commissioner Massey. Initial Reommendation: Provided that the previous ations are suessfully implemented, SPP should seek RTO reognition by the FERC. [The SPTF will disussed in its June10-11 meeting a reommendation regarding the timing of a filing seeking reognition as an RTO/ISO.] REGIONAL TRANSMISSION SERVICE TARIFF Initial Reommendation: All load, inluding native load and grandfathered load should be subjet to Shedule 1 fees of the regional tariff. See the sixth Initial Reommendation under ADMINISTRATIVE PROCESSES. Initial Reommendations: SPP should develop a reommendation on formula rates to whih all transmission owners may transition. This will require SPP to develop a onsistent definition of transmission failities to be inluded in regional tariff harges and an equitable revenue distribution methodology. SPP should implement hanges to streamline the queue for generation interonnetion and transmission servie requests. SPP should review its partiipant funding methodology and explore enhanements in onjuntion with its regional transmission planning proess. SPP should also explore and develop transmission expansion inentives and a mehanism for allowing investment by all interested stakeholders. These ations are assigned to the Regional Tariff Working Group with support from senior SPP staff and the Transmission Assessment Working Group. The RTWG has met 4

12 SPP Strategi Plan June 11, 2003 several times to date. Various task fores have been assigned some of the issues pending. Related tariff modifiations will be reommended to the Board of Diretors from the RTWG through the Poliy Committee at its August meeting. ADMINISTRATIVE PROCESSES Initial Reommendation: SPP should affirm its Board governane struture with ontinued meaningful stakeholder partiipation on the Board of Diretors and state regulatory partiipation. This ation was aomplished by the Board of Diretors adoption of the Initial Strategi Plan. [Cover with agenda today.] Initial Reommendation: SPP should add a state regulatory advisory ommittee reporting to the Board of Diretors as designed in onsultation with the state regulatory authorities within the SPP footprint. As noted above, representatives from the State ommissions are meeting weekly via teleonferene and sending representatives to working group meetings. SPP staff is working with the state representatives to propose a proess to enhane their involvement. Related modifiations to the Bylaws will be reommended to the Board of Diretors at its August meeting. [Nik s work] Initial Reommendation: SPP should ombine its Engineering & Operating Committee with its Commerial Praties Committee to have only one full representation ommittee reporting to the Board of Diretors. The SPTF proposes that the Poliy Committee be formed to replae the two ommittees. Revisions to Setions 5.1 and 5.2 of the SPP Bylaws are required to aomplish this. The proposed revisions are noted in Attahment #2. Initial Reommendation: SPP should assess its working groups and task fores to ensure effiient and effetive administration of SPP servies. The SPTF has reviewed the organizational struture of SPP s ommittees, working groups and task fores and proposes some restruturing to more effiiently address the needs of the organization. As noted above, the EOC and CPC should be ombined into the Poliy Committee. Further, the SPTF reommends the modifiations shown in the attahed organizational group struture hart that deletes the Anillary Servies, Blak Start Study, Control Area Implementation, and Sheduling Task Fores, and adds the Strategi Planning Committee reporting to the Board of Diretors, and the Business Praties, Operation Model Development and the Critial Infrastruture Protetion Working Groups reporting to the Poliy Committee. In 5

13 SPP Strategi Plan June 11, 2003 addition, the SPTF reommends that the responsibilities of the Congestion Management System and Market Settlement Working Groups be ombined and managed by the Market Working Group, reporting to the Poliy Committee. Sope douments for eah of the added groups are also attahed. The proposed sope statements of eah of these groups, as well as an organizational hart for the revised struture are provided in Attahment #3. The SPTF also reommends that SPP s remaining organizational groups review their sope statements and present any neessary modifiations for Board of Diretors onsideration at their August 2003 meeting. Initial Reommendation: SPP should immediately reassess its 2003 administration budget based on these reommendations and make appropriate modifiations. A revised budget for the remainder of 2003 refleting adoption of the ation items in this Plan hais beening presented to the Finane Working Group for onsideration and will be subsequent presentedation at the June 24 Board of Diretors meeting. Initial Reommendation: SPP should evaluate the ost alloation of SPP expenses to tariff versus membership assessment. SPP may refund to members funds advaned via assessments to support tariff operations. The SPTF reommends a signifiant hange in the methodology SPP utilizes to assess its membership for operating and apital expenses. SPP s existing assessment methodology does not equitably share the expenses inurred by SPP to provide its servies. The reommendation to the Board of Diretors is as follows: Effetive January 1, 2004, members with Net Energy for Load will pay an annual membership fee of $ multiplied by their annual net energy for load; members without Net Energy for Load will pay an annual membership fee of $6,000; Effetive July 1, 2003, members will share in SPP s NERC assessment utilizing the existing SPP membership assessment formula; Effetive July 1, 2003, monthly assessments will be levied against those members whose transmission failities are in the regional transmission tariff, as well as those members embedded within the transmission failities that are in the regional transmission tariff, equal to eah member s peak demand per hour per month multiplied by the Shedule 1 fee under the SPP regional tariff. Members with an assessment will be redited for Shedule 1 fees paid by that member in that month under the SPP regional tariff. The Shedule 1 fee will be determined at least annually by the SPP Board of Diretors based upon budgeted expenditures and projeted peak demand. A letter has been sent to members advising them of the proposed hanges. A spreadsheet showing the impat of this hange to eah member organization as well as the neessary revisions to Setion 7 of the SPP Bylaws are provided in Attahment #4. 6

14 SPP Strategi Plan June 11, 2003 Initial Reommendation: SPP should immediately fill the independent diretor vaany on the Board of Diretors. The Nominating Task Fore is onsidering this vaany and will have a nominee to present at the June 24 Board of Diretors meeting. REGIONAL RELIABILITY COUNCIL STATUS Initial Reommendation: SPP should retain its own Regional Reliability Organization status and not pursue partiipation in the Midwest Reliability Organization. This ation was aomplished by the Board of Diretors at the April 14 meeting by its adoption of the Initial Strategi Plan. John Marshewski has resigned as a diretor of the MRO. Reommendations for Ation The SPTF reommends that the SPP Board of Diretors: Aept the Market Implementation Plan as proposed by the Market Working Group and the SPTF as the approah for SPP to beome ompliant with FERC Order Aept the proposed revisions to the ommittee struture of the organization and the related sope douments for newly formed ommittees/groups effetive immediately; diret that the inaugural members of the new Strategi Planning Committee inlude those urrent members of the Strategi Planning Task Fore; aept the revisions to Setion 5 of the SPP Bylaws neessary to effet the re-organization of the ommittees/working groups effetive immediately; and, diret that SPP s remaining organizational groups review their sope statements and present any neessary modifiations for Board of Diretors onsideration at the November 2003 meeting Aept the Market Implementation Plan as proposed by the Congestion Management Systems and Market Settlement Working Groups and the SPTF as the approah for SPP to beome ompliant with FERC Order Aept the proposed hanges in the methodology SPP utilizes to assess its membership for operating and apital expenses effetive July 1, 2003 and January 1, 2004 as proposed, and the requisite revisions to Setion 7 of the SPP Bylaws to effet these hanges. Aept that SPP governane affirmed at the last Board meeting does not meet the expeted requirements of independene expressed by FERC and direts the SPTF to submit further governane reommendations, inluding bylaw hanges, to the Board in August reognizing the need to maintain the urrent level of stakeholder input at all Board meetings. The SPTF will inlude ative state involvement in the development of these reommendations. 7

15 SPP Strategi Plan June 11, 2003 Diret the SPP staff to prepare filing materials for reognition of SPP as a RTO for the Board in August. 8

16 Southwest Power Pool, In. Phase 1 Order 2000 Desription Table of Contents Objetive...2 Assumptions...2 Types of Markets...2 Member/Customer/Regulatory Roles...2 Design and Implementation...3 Additional Assumptions...3 Phase Definitions and Impats...3 Implementation Phases...3 Phase 1 Partiipant Impats...4 Phase 2 Partiipant Impats...4 Phase 3 Partiipant Impats...4 Options Considered...4 Option 1: Enhane 2001 Market Design...4 Option 2: Utilize Off the Shelf Software...4 Option 3: Develop New Market Rules...4 Option 4: High-level Design of ALL phases and Full Phase 1 Implementation April Option 5: High-level Design of ALL phases and Inremental Implementation of Phase 1 finishing November Option Analysis...5 Deision Drivers Table...6 Critial Path Ativities...8 Shedule...8 Page 1 of 9

17 Southwest Power Pool, In. Phase 1 Order 2000 Desription Objetive Implement a real-time balaning market, market monitoring with market power mitigation, and marketbased ongestion management using a phased approah. Involve FERC and the state regulatory ommissions throughout the proess. Assumptions The following are some general assumptions for the development of SPP Market Systems. Types of Markets The SPP Market System will be ompliant with FERC Order Additional proposed requirements outlined in the FERC NOPR for Standard Market Design will be onsidered but not adopted unless approved by the stakeholder proess in ollaboration with the state regulatory ommissions. SPP will implement a Real-time Energy Balaning Market as quikly as possible as the first phase of Market Operations. The Energy Balaning market will be implemented using physial transmission rights. SPP will have an independent market monitor established in onjuntion with the RT Energy Balaning Market. The market monitoring ativities will inlude market power mitigation. SPP will transition from a physial transmission rights market to a finanial transmission rights market with Market-based Congestion Management as the seond phase of its Market Operations. SPP will have an Anillary Servies market as part of Phase 3 of its Market Operations. Member/Customer/Regulatory Roles SPP members and ustomers desire to pursue a market and are willing and able to dediate the resoures (monetary, time and staff) to the design and implementation of a market. SPP Control areas will ontinue to exist and operate at least until a Regional Anillary Servies market is reated. They will be responsible for Control Performane and Disturbane Control standards as well as sharing of operational data as they are today. Deisions on the Market Rules will be made through a stakeholder proess. Stakeholders will atively partiipate in development of readiness and implementation initiatives. The state regulatory ommissions are responsible for impats to ustomers within their states. The state regulatory ommissions of the states where SPP members serve ustomers will be invited to partiipate atively in the stakeholder proess to evaluate and advise SPP with regards to impats to ustomers. Partiipation in the offer-based dispath SPP market is voluntary. All load serving entities and generation owners onneted to the transmission systems of Transmission Owners that are signatories to the urrent SPP Regional OATT will be onsidered as the starting footprint for the SPP Market System. SPP may provide other entities Tariff Administration Servies, Sheduling Servies, and Reliability Authority servies without requiring them to be a part of the Market System footprint. Page 2 of 9

18 Southwest Power Pool, In. Phase 1 Order 2000 Desription The SPP Market System must be designed to aommodate additional entities that may wish to join SPP. It must also aommodate the formation of Independent Transmission Companies. Design and Implementation The seletion of implementation dates of the market phases should minimize testing, training and implementation in the summer months. This is in order to avoid additional risks to reliability, personnel unavailability, and potential prie instability assoiated with the summer peak onditions. SPP must have signifiant market rules deisions developed prior to system design starting. System Requirement douments will be developed following the market rules. This is to minimize the pitfalls of trying to do both simultaneously and having to redesign signifiant aspets due to major Market Rules deisions. Third party ontrators will be involved with the development of the SPP Market System. Transmission Servie Billing and Market Settlement will be maintained separately. Additional Assumptions SPP reognizes that seams issues exist and will need to be resolved by market implementation. SPP will ontinue to partiipate in the MISO/PJM/SPP joint and ommon market forum and atively partiipate in seams resolution efforts with MISO, non-miso MAPP members, Entergy, Assoiated Eletri Cooperative, ERCOT and WECC to ensure a smooth transition to energy markets. The SPP Regional Tariff Working Group will have liaisons in this proess to help failitate inorporation of the market rules into the Regional OATT where required. SPP will build on prior knowledge gained from the development proess for the initial SPP Market and the MISO/SPP market projet. The stakeholder proess will develop this market system from the top down utilizing the information from the previous two efforts and potentially onepts from other markets that have been enated. Some new hardware will be required for the Market System. Some omputer resoures purhased for the previous projet have been reformatted and deployed for other purposes in lieu of purhasing new equipment as needs in other departments have arisen requiring upgrades of outdated equipment or to provide neessary redundany of other systems. Phase Definitions and Impats Implementation Phases Eah of the options onsidered inluded a phased approah as listed below. Phase I - Real-Time Balaning Market with Market Monitoring and Market Power Mitigation Phase 2 - Market Based Congestion Management Phase 3 - Anillary Servies Market Page 3 of 9

19 Phase 1 Partiipant Impats Southwest Power Pool, In. Phase 1 Order 2000 Desription Submit energy shedules that inlude native load. Submit generator operating harateristis suh as limits and ramp rates. Reeive and at on real-time NSI (net-sheduled interhange) from SPP. Submit voluntary offers for the sale of generation. Reeive and at on real-time dispath instrutions from SPP. Phase 2 Partiipant Impats Subjet to Market Rules deisions. Phase 3 Partiipant Impats Subjet to Market Rules deisions. Options Considered Option 1: Enhane 2001 Market Design Implement the market design and supporting systems developed by SPP during 2001, with only minor hanges and the addition of market monitoring, in Spring 2004 for Phase 1. Implementing other phases on an annual yle basis thereafter. Option 2: Utilize Off the Shelf Software Adopt Off the Shelf software for an implementation in Spring 2004 of Phase 1, modifying market rules to adhere to the apabilities of that solution. Implementing other phases on an annual yle basis thereafter. Option 3: Develop New Market Rules Defer any implementation until Spring 2005 (Phase 1) and begin developing new market rules immediately. Implementing other phases on an annual yle basis thereafter. Option 4: High-level Design of ALL phases and Full Phase 1 Implementation April 2005 Begin with the system design developed by SPP during 2001 and perform a detail design for Phase 1 and high-level design for other phases. Changes in Phase 1 to support other phases will be inorporated with an objetive of implementation by spring Implement other phases on an annual yle basis thereafter. Page 4 of 9

20 Southwest Power Pool, In. Phase 1 Order 2000 Desription Option 5: High-level Design of ALL phases and Inremental Implementation of Phase 1 finishing November 2004 Begin with the prior market system design developed by SPP during 2001 and perform a detail design for Phase I and a high-level design for the other phases. Changes in Phase I to support other phases will be inorporated with an objetive of November 2004 implementation for all of Phase I. Phase 1 will be broken down into three distint inrements: 1) Settlement of Imbalane at tariff filed rates of eah Transmission Owner with an objetive of February 2004, 2) Enhaned Reliability Data and Net Shedule Interhange with an objetive of April 2004 and 3) Offer-based energy imbalane market resulting in the use of market-based rates for imbalane settlement with an implementation objetive of November Implement other phases on an annual yle basis thereafter. Option Analysis Deision Drivers used in the evaluation were: Systems Costs; Shedule; Partiipant Impats; Market Rule Flexibility; Market Partiipant experiene, and relevane of the market system work in An additional driver disussed but deferred to the SPTF efforts is the impat of any deision in the State and Federal Regulatory environments. In all options, there is reognition that the highest risk fators are the partiipants system development and readiness efforts and regulatory buy-in. Without both of these, a market system ould be built but would not beome operational. As a result, the Group emphasizes that implementation dates are subjet to hange as a result of sheduled milestone reviews. The sheduled milestone reviews inlude resolution of issues, e.g. inadvertent handling amongst SPP Control Areas. This requires ommitment of resoures for both partiipants and SPP to aomplish these tasks. Option 1 is the most feasible option to ahieve a Spring 2004 implementation. Use of Option 1 results in: (1) Knowledge from the MISO development efforts not being inorporated, (2) Risk of not having regulatory support, (3) Inreased risk to partiipant readiness. Option 1 is not reommended for these reasons. Option 2 has a very restritive timeline to implement by Spring 2004 and has a high risk for partiipant readiness and systems testing. It is improbable that an aeptable off the shelf produt ould be loated within a reasonable timeframe beause the off the shelf onept would require adoption of the underlying rules whih may not meet SPP requirements. All prior work for the initial 2001 implementation would also be disarded, inluding the apital invested in that effort. Option 2 is not reommended for these reasons. Option 3 would disard all prior work, inluding the apital invested in that effort. The earliest possible start-up of Phase 1 of the market under this option would be Spring 2005 and there is a high risk assoiated withahieving this date. It does provide the most flexibility for making sure the system design provides for smooth transitions from one phase to the next. Option 3 is not reommended due to the improbability of ahieving this timeline. Option 4 delays the start-up to Spring 2005 but by building on the prior work done in 2001 has a lower risk of meeting that timeline than option 3 while still providing most of the flexibility to make sure the Market Rules have gone through a thorough review. Starting in Spring 2005 also allows for all training and Market Trials to be onduted during the fall and winter off-peak time periods when resoures are readily available. The later start date also allows more time to ensure regulatory buy-in. It does require a big bang implementation with all new funtions starting at one time. Option 4 is not reommended due to the projeted start date of Spring 2005 and the big bang implementation. Option 5 is an effort to implement along the lines of Option 4 but target a start date in Fall 2004 by further instituting the SPP guiding priniple of evolution not revolution. Breaking the implementation of Phase I into three inrements will allow partiipants and SPP staff to test and implement neessary infrastruture Page 5 of 9

21 Southwest Power Pool, In. Phase 1 Order 2000 Desription and data olletion proesses to support the market that have fewer design issues and Market impat while taking additional time to resolve any Market Rules issues regarding the offer submittal, entralized dispath and market priing. This also lowers the risk for partiipant and staff readiness by avoiding the big bang implementation that is inherent in eah of the other four options and does not require the omplete system to be available for market trials at one time. This targets part of the system to be tested and implemented prior to the Summer of 2004 reduing the amount of training and development efforts during the summer and early fall. Option 5 is reommended. The first inrement will be for the settlement of imbalane, using tariff filed rates of eah of the Transmission Owners. This inrement, targeted for implementation in February 2004, will require the market settlements system, SPP sheduling system hanges and after-the-fat meter data submission proesses to be in plae. The seond inrement, targeted for implementation in April 2004, will be an enhaned reliability implementation to ollet the unit ommitment and resoure plan information through the market system and also send out the net sheduled interhange to ontrol areas for inorporation into their systems. The final inrement, with an implementation objetive of November 2004, would be to roll out the submission of resoure offers, entralized dispath and use of market based priing for imbalane settlement. Market trials and training would be split aordingly into smaller efforts to test eah of the inrements prior to implementation inluding a final Market Trial prior to implementation of the resoure offers, entralized dispath and market priing for imbalane. The first inrement will primarily affet settlements personnel and the ommerial operations aspets of the market system with some impats to sheduling. The seond inrement will primarily involve operations personnel and the data input or front-end aspets of the market operations system. The final inrement will involve both operations and settlements to transition to the entralized dispath and market based priing for imbalane settlement. The market trial for the final inrement would start in September Use of the inremental proess does require development and prodution systems to be used on a parallel path. This may also result in some personnel issues due to part of the market system being implemented and other parts in development or testing. Deision Drivers Table System Costs Option 1 Option 2 Option 3 Option 4 Option 5 Takes advantage of investment to-date (estimated inrease in ost of $200-$500 K, ould be more depending upon modifiations.) Likely more ost than Option 1; adoption of Off the Shelf would require additional integration efforts and osts; likely sraps prior investment. More ostly than Options 1 or 2 sine totally new system build. At least the same ost as Option 1; likely more ostly due to modifiations resulting from Phase 2 impats. Same osts as 4 Additionally Requires prodution and development systems operating in parallel, whih may affet Partiipant osts. Page 6 of 9

22 Southwest Power Pool, In. Phase 1 Order 2000 Desription Option 1 Option 2 Option 3 Option 4 Option 5 Shedule High shedule risk. More shedule risk than Option 1; 2004 implementation questionable. Partiipant Impats Less resoure time required for rules development/revision. Development start would be immediate. May have more immediate budgetary impat for that development. Up front osts relative to market rules development. Development start would be delayed. Inreases budgetary impat implementation at earliest. Greater resoure ommitment to development of rules. Development start would be delayed. Lower shedule risk given lengthened design time. Greater resoure ommitment to development of rules. Easier budget management due to multiyear build. Development start would be immediate to delayed. Lower shedule risk than option 1 to meet overall by Nov 2004 Greater risk than Option 4 but inremental implementation allows some additional design /development time and avoids big bang implementation. Higher resoure ommitment to develop rules faster but some Market issues have additional time. Higher resoure ommitment than Option 4 to get partial system ready by Spring. Personnel and systems must over some implemented operations and some final development in parallel. Partiipants must budget for Spring Implementation items in 2003 Market Rules Flexibility Allows minimal flexibility for modifiations to design/rules and still meet shedule Development still starts immediately. No flexibility Flexible Flexible Less flexible than option 4 but does allow some additional time for signifiant Market issue resolution. Page 7 of 9

23 Southwest Power Pool, In. Phase 1 Order 2000 Desription Other Option 1 Option 2 Option 3 Option 4 Option 5 Earliest start of partiipant market experiene Early start of partiipant market experiene. Market design does not onsider gains from Later start of partiipant market experiene. Market design does not onsider gains from Later start of partiipant market experiene. Market design builds on 2001 effort and a plan for the future. Earlier start of partiipant market experiene than option 4 Market design still builds on 2001 effort and a plan for the future. Initial imbalane implementation will require review of SPP Tariff and individual Provider Tariffs for possible additional FERC filings. Critial Path Ativities Market Rule Development: Market Rules will be the primary requirements doument for implementation of the market phases. As suh, finalization of these market rules is ruial to providing an aurate estimate of shedule and ost and providing stable requirements for partiipant system development. Before finalization of market rules for eah phase, a hek against the overall market diretion must be ompleted to minimize risks of signifiant hanges in the following phases. Mitigation of risks in this area will inlude aligning speifi market rule versions with speifi software releases at agreed upon dates. Partiipant Readiness: Partiipants need to be prepared from an operational viewpoint and tehnial viewpoint. Operationally, partiipant staff will require proper and timely training in order to understand and develop their own business praties and business proess hanges. Tehnially, existing partiipant systems must be enhaned, and new systems must be designed and developed. Minimizing risk in the operational area will inlude phasing in training with two goals Overall Market Objetives and Foused Objetives. Minimizing risk in the tehnial area will inlude early releases of tehnial requirements and inremental releases of data exhange requirements as a result of market rule versions. Regulatory Approval: Cruial to the implementation of eah phase are regulatory approvals. In order to minimize the risk in this area, regulatory representatives will be inluded in the market rule development proess. Shedule Page 8 of 9

24 Option Southwest Power Pool, 2004In. Phase 1 Order 2000 Desription 2005 July Aug Sep Ot Nov De Jan Feb Mar Apr May Jun July Aug Sep Ot Nov De Jan Feb Mar Apr May Market Design Market Rules SPP System Review & Finalize Phase I - Imbalane/Reliability Inrement Review & Finalize Phase I - Realtime Imbalane Market Inrement Develop Overall Design for all Phases Identify & Prioritize Enhanements 1 Develop Rules for Phase 2 System Design and Test - Phase 2 Systems Develop & Test System System Issue Resolution Hardware Design & Configure Environments Data Market Monitoring and Market Power Mitigation Partiipant Readiness Training Tehnial Speifiations Market Trials Regulatory Filings Confirm Approah Convert & Populate Data Selet Market Monitor and Define Requirements Define Requirements Validation/Registration of Data Release Initial Imbalane Training Release Final Settlement of Imbalane Go-Live Develop & Test Reliability Training Partiipant System Dev/ Test - Reliability Partiipant System Dev/ Test - Imbalane 2 2 Tariff Filings Enhaned Reliability Monitoring Go-Live Summer (Blakout Period) Release Final Partiipant System Development/Test- Offer & Dispath Tariff Filings Offer & Dispath Training Market Trials 2 Real-time Imbalane Market Go-Live Define Requirements for Phase 2 1 Confirm Cost & Shedule 2 Confirm Go-live Page 9 of 9 Note: Requires both development and prodution environments

25 Attahment ## Proposed Revisions to Setion 5 of the SPP Bylaws To replae urrent setions 5.1 and 5.2 Proposed Revisions to Setion 5 of the SPP Bylaws Page 1 of Poliy Committee Representatives to the Poliy Committee shall be the offier or employee designated by of eah Member in harge of engineering and/or operating ativities. The Poliy Committee shall: a. Reommend praties for system design, regional transmission servie tariff, interonnetion, and operation that will help to assure effiient and reliable power supply among the systems in SPP, b. Continue oordination of its efforts with the efforts of NERC, inluding periodi review of NERC Poliies and Standards and their appliability to SPP and its Members,. Review Member operating plans and problems that are pertinent to SPP planning and operation, d. Maintain an annual series of load flow and short iruit models and assoiated stability data bases representing the urrent and planned eletri network of the region, and maintain a data base of all transmission failities within SPP, e. Review and assess the urrent and planned eletri system of the region, f. Make use of studies available from other regions, g. Reommend to the Board of Diretors riteria for planning and operations, h. Review Coordinatethe interaregional and intraregional plans submitted by the oordinated groups within SPP and failitate planning and operations between interaregional and intraregional entitiesgroups, i. Develop a oordinated plan for intraregional transmission for greater effiieny and reliability of eletri power supply, j. Reommend to the Board of Diretors and to Members, individual or joint ation to improve the operation of the systems omprising SPP, k. Respond to ativities as requested by the Commerial PratiesStrategi Planning Committee, and l. Monitor the urrent state and evolution of the eletri energy supply industry and proatively reommend ommerial praties that meet industry needs and promote ommere,. m. Work with all SPP Organizational Groups to promote a high standard of operational reliability, and n. Continue oordination of its efforts with the efforts of North Amerian Energy Standards Board (NAESB) and the ISO/RTO Counil (IRC), inluding periodi review of NAESB business praties and IRC poliies and their appliability to SPP and its members.

26 Proposed Revisions to Setion 5 of the SPP Bylaws Page 2 of Strategi Planning Committee The Strategi Planning Committee (SPC) reports to and is subjet to the ontrol of the Board of Diretors. The Strategi Planning Committee is responsible for the development and reommendation to the Board of Diretors of strategi diretion for the orporation. The SPC is to be omprised of at least eight and no more than twelve members, inluding a Chair and Vie Chair, who are appointed by the Board of Diretors pursuant to SPP Bylaws. At all times, a majority of the members must be eleted Diretors. Every attempt will be made to maintain a membership with balaned representation from Transmission Owning Members and Transmission Using Members. [Review after Governane disussions] At least two members will be non-stakeholder Diretors with one being the SPP President. Business shall be done in aordane with SPP Bylaws. There are no term limitations. The Strategi Planning Committee shall: a. Gather information from SPP members, ustomers, Staff, regulatory jurisditions, market monitors, and legislative bodies on industry trends, foreasts and diretions. b. Assess the industry environment in whih SPP will be operating.. Assess SPP s apabilities and ompetenies against the industry environment, inluding oordination with neighboring entities. d. Develop and reommend to the SPP Board of Diretors a mission and vision statement and aompanying goals and objetives as needed. e. Formulate strategies to ensure ahievement of SPP s mission statement, goals, objetives and responsibilities and reommend neessary modifiations to SPP proesses to arry out these strategies. f. Work with other SPP organizational groups in developing related ation plans, shedules and budgets.

27 Group Organizational Chart SPP Board of Diretors Chair - Al Streker Vie Chair - J. M. Shafer Sety - Nik Brown Membership Chair - Al Streker Vie Chair - J. M. Shafer Sety - Nik Brown Strategi Planning Committee Co-Chairs - Rihard Spring/Dik Dixon Sety - Nik Brown Poliy Committee Chair - TBD Vie Chair - TBD Sety - Carl Monroe SPP Staff President - John Marshewski Sr. VP - Nik Brown VP - Carl Monroe/Tom Dunn Compliane WG Chair - Dave Christiano Sety - Ron Ciesiel Market WG Chair - TBD Sety - Rihard Dillon Operating Reliability WG Chair - Sott Moore Sety - Robert Rhodes Employee Benefits WG Chair - J.M. Shafer Sety - Frank Royster Regional Tariff WG Chair - Riky Bittle Sety - Pat Bourne Transmission Assessment WG Chair - Ronnie Frizzell Sety - Keith Tynes COMBINED: Engineering & Operating Committee & Commerial Praties Committee Market Settlement Working Group & Congestion Management Systems Working Group DELETED: Anillary Servies Task Fore Blak Start Study Task Fore Control Area Implementation Task Fore Finane WG Chair - Harry Skilton Sety - Tom Dunn Nominating TF Chair - Dave Christiano Sety - Nik Brown Model Development WG Chair - Brent Wilson Sety - Harvey Sribner Operation Model Development WG Chair - TBD Sety - Bert Bressers Business Praties WG Chair - TBD Sety - Lanny Nikell Bandwidth WG Chair - Robert Shields Sety - Alex Lau Critial Infrastruture Protetion WG Chair - Larry Doli Sety - Kevin Perry Operations Data WG Chair - Mike Sauber Sety - Sott Alin Operator Training WG Chair - Allen Klassen Sety - Katie Dunan System Protetion & Control WG Chair - Maurie Robinson Sety - John Boshears Sheduling Task Fore ADDED: Generation WG Chair - Mith Williams Sety - Brue Walkup Disounting WG Chair - TBD Sety - Pat Bourne Strategi Planning Committee Operation Model Development Working Group Business Praties Working Group Critial Infrastruture Protetion Working Group

28 Southwest Power Pool Market Working Group Organizational Group Sope Statement June xx11, 2003 Purpose The Market Working Group (MWG) is responsible for the development and maintenane and oordination of the hanges neessary to support of any SPP administered wholesale market(s), inluding energy, ongestion management and market monitoring power mitigation onsistent with diretion from the Board of DiretorsPoliy Committee inluding FERC Order The MWG is also responsible for oordination of these markets both intra and inter regionally. Sope of Ativities In arrying out its purpose, the MWG will: 1. Develop and reommend the market rules for the wholesale market, inluding energy, ongestion management, and market monitoringpower mitigation. 2. Propose modifiations to SPP proesses and omputer systems neessary to implement any SPP administered wholesale market(s) to affeted SPP Committees. 3. Propose and oordinate modifiations to omputer systems and proesses on an ongoing basis, inluding oordination with SPP organizational groups. 4. Partiipate in oversight of any ongoing market development proess. 5. Coordinate with regulators and task fores in implementation of any SPP administered wholesale market(s). 6. Coordinate with other ommittees and working groups, as appropriate, in the development of market rules. 7. Coordinate the implementation of systems neessary for market monitoring and market power mitigation from the Independent Market Monitor. Representation The MWG is omprised of at least nine and no more than fifteen members, inluding a hair and vie-hair, whih are appointed by the Board of Diretors pursuant to SPP Bylaws. The MWG shall maintain a membership with balaned representation from the market partiipants. Reporting The MWG reports to the Poliy Committee for ativities related to the design and modifiation of any SPP administered market(s).

29 Southwest Power Pool Business Praties Working Group Organizational Group Sope Statement June 11, 2003 Purpose The Business Praties Working Group (BPWG) is responsible for disussing issues surrounding the development and implementation of SPP s Open Aess Transmission Servie Tariff Business Praties. The BPWG will propose new praties and hanges to existing praties that will failitate effetive and effiient administration of the SPP regional tariff. The BPWG will develop praties that supplement, larify, and enhane the understanding of tariff provisions and priniples without violating those provisions and priniples. Sope of Ativities In arrying out its purpose, the BPWG will: 1. Meet periodially to review existing business praties, disuss needed improvements, and propose new praties, 2. Evaluate existing or proposed business praties to determine their onsisteny with SPP tariff provisions, FERC Orders 888, 889, and 638, and other established FERC preedent, 3. Work losely with the Regional Tariff Working Group and SPP Staff to assess tariff revenue impats and/or the need for tariff hanges assoiated with new or modified business praties being proposed, 4. Work losely with the Operating Reliability Working Group and SPP Staff to assess reliability impats assoiated with new or modified business praties being proposed, 5. Submit new or modified business praties being proposed along with supporting rationale, implementation osts, reliability impats, and any tariff hanges or tariff revenue impats to the Poliy Committee for approval, 6. Develop solutions and reommendations to ommerial issues raised at other SPP forums, 7. Respond to speial assignments from the Board of Diretors, and 8. Work with Staff and other SPP organizational groups to prioritize ativities. Representation BPWG membership will onsist of a Chair, a Vie-Chair, and at least 6 but no more than 8 voting members. Representatives will onsist of transmission ustomers under SPP s tariff, half of whih will be merhant group affiliates of transmission owners with failities under the SPP regional tariff. Members will be representative of the diverse nature of the SPP membership. The Board of Diretors, following onsultation with Poliy Committee leadership, appoints BPWG membership and leadership. Reporting The BPWG reports to the Poliy Committee. The BPWG Chair will periodially report to the Poliy Committee and the Board of Diretors, as required, on BPWG ativities, assignments, and reommendations requiring approval. The BPWG Chair will report to other Working Groups when issues require their input and/or endorsement.

30 Southwest Power Pool Critial Infrastruture Protetion Working Group Organizational Group Sope Statement June 11, 2003 Purpose The purpose of the Critial Infrastruture Protetion Working Group (CIPWG) is to advane the physial and yber seurity of the eletriity infrastruture within the SPP Region. This group will serve as a forum for disussing seurity issues, for establishing seurity poliies and proedures for SPP Member-ommon resoures, and will serve as an interfae between the NERC CIP Advisory Group and the SPP membership. Sope of Ativities The CIPWG: a. Serves as an expert advisory panel to the SPP Board of Diretors, ommittees, and members. b. Provides a forum for disussion of physial and yber seurity issues within the SPP Region.. Serves as the interfae between the NERC CIP Advisory Group and the SPP membership, inluding 1. Serving as a onduit for information flow between the CIPAG and SPP members. 2. Developing guidane and reommendations to the NERC CIPAG members representing the SPP Region. d. Develops poliies and proedures for SPP-managed resoures, inluding: 1. Seurity of SPP Frame Relay Network (SPPNET) member onnetions. 2. Aeptable use poliies for SPP-managed wide area networks (SPPNET, Internet, et). 3. Seurity of SPP-managed systems and appliations, inluding ICCP, Automated Reserve Sharing (ARS), and sheduling data transfer. 4. Inident reporting and dissemination. e. Assist SPP Compliane Manager with the ondut and evaluation of ompliane selfertifiation and field audits of NERC seurity standards. Representation The voting membership of the CIPWG represents the SPP members employing ICCP, ARS, and/or sheduling data transfer systems onneted to the SPPNET Frame Relay Network. The voting Members of the CIP Working Group are nominated by SPP member ompanies and the hair, vie-hair and members are appointed by the Board of Diretors pursuant to SPP Bylaws. Representatives from other SPP member ompanies may partiipate as non-voting members. Reporting The CIPWG reports to the Poliy Committee.

31 Southwest Power Pool Operational Model Development Working Group Organizational Group Sope Statement June 11, 2003 Purpose The Operational Model Development Working Group (OMDWG) is responsible for developing a proedure to ensure ongoing, timely updates of SPP s state-estimator model. The OMDWG is also responsible for failitating periodi maintenane and review of the state-estimator model. The stateestimator model should ontain suffiient representation of the urrent eletrial network ontained within the SPP footprint and surrounding ontrol areas neessary to support SPP s Reliability Coordination, regional tariff administration, and any future market operation funtions. Sope of Ativities In arrying out its purposes, the OMDWG will: 1. Develop and review SPP Criteria related to the development and maintenane of the SPP stateestimator model. 2. Review and periodially monitor the impats of NERC Operating Poliies on the SPP state-estimator model. 3. Maintain a urrent state-estimator model that represents the urrent network of SPP and neessary external ontrol areas. 4. Ensure that the SPP state-estimator model adequately support the needs of the SPP Reliability Coordination, regional Tariff Administration, and any future market operation funtions. Representation The OMDWG is omprised of at least three and no more that eight members, inluding a hair and viehair, whih are appointed by the Board of Diretors pursuant to SPP Bylaws. Members should be experiened in power system network modeling. The representation should exhibit diversity in geography. Reporting The OMDWG reports to the Poliy Committee. The OMDWG Chair will periodially report to the Poliy Committee and Board of Diretors, as required, on the Working Group s ativities, assignments, and reommendations requiring Poliy Committee approval.

32 Southwest Power Pool Strategi Planning Committee Organizational Group Sope Statement June 24, 2003 Purpose The Strategi Planning Committee (SPC) is responsible for the development and reommendation to the Board of Diretors of strategi diretion for the orporation. Sope of Ativities In arrying out its purpose, the SPC will: 1. Gather information from SPP members, ustomers, Staff, regulatory jurisditions, market monitors, and legislative bodies on industry trends, foreasts and diretions. 2. Assess the industry environment in whih SPP will be operating. 3. Assess SPP s apabilities and ompetenies against the industry environment, inluding oordination with neighboring entities. 4. Develop and reommend to the SPP Board of Diretors a mission and vision statement and aompanying goals and objetives as needed. 5. Formulate strategies to ensure ahievement of SPP s mission statement, goals, objetives and responsibilities and reommend neessary modifiations to SPP proesses to arry out these strategies. 6. Work with other SPP organizational groups in developing related ation plans, shedules and budgets. Representation The SPC is to be omprised of at least eight and no more than twelve members, inluding a Chair and Vie Chair, who are appointed by the Board of Diretors pursuant to SPP Bylaws. At all times, a majority of the members must be eleted Diretors. Every attempt will be made to maintain a membership with balaned representation from Transmission Owning Members and Transmission Using Members. At least two members will be non-stakeholder Diretors with one being the SPP President. Business shall be done in aordane with SPP Bylaws. There are no term limitations. Reporting The SPC reports to the Board of Diretors.

33 ( A ) ( B ) ( C ) ( D ) ( E ) ( F ) ( G ) ( H ) ( I ) 2002 w/o July - Network Servie Deember Member 2002 Atual 2002 Proposed Impat in SPP 2002 Proposed Impat Proforma EMDE $637,617 $762,844 $125,226 $380,795 $762,844 $382,049 $462,026 $1,399,549 INDP $92,913 $187,864 $94,951 $147,477 $187,864 $40,388 $120,183 $342,275 KACP $798,584 $2,290,257 $1,491,674 $1,149,708 $2,290,257 $1,140,549 $1,439,434 $4,212,235 KACY $148,932 $352,563 $203,631 $231,924 $352,563 $120,639 $215,465 $636,994 Westar(KGE&KPL) $7,662,614 $3,236,463 ($4,426,150) $2,800,367 $3,236,463 $436,096 $2,038,523 $5,975,964 KEPCO $113,956 $180,152 $66,196 $183,013 $180,152 ($2,861) $109,733 $318,619 MIDW $90,962 $156,420 $65,457 $143,373 $156,420 $13,046 $93,799 $278,735 SPRM $665,217 $473,372 ($191,845) $528,445 $473,372 ($55,074) $301,195 $847,091 AREC $483,034 $513,878 $30,845 $732,229 $513,878 ($218,351) $271,000 $824,200 GRRD $225,687 $559,371 $333,684 $323,978 $559,371 $235,393 $350,572 $1,028,118 OKGE $1,122,654 $3,632,417 $2,509,763 $1,718,304 $3,632,417 $1,914,112 $2,243,568 $6,639,717 OMPA $162,857 $368,101 $205,244 $240,233 $368,101 $127,868 $241,109 $677,919 AEP $1,948,136 $5,271,422 $3,323,286 $2,827,191 $5,271,422 $2,444,231 $3,208,759 $9,596,824 NTEC $118,109 $460,137 $342,027 $197,989 $460,137 $262,147 $265,385 $864,277 ETEC $72,815 $69,754 ($3,061) $181,239 $69,754 ($111,485) $31,608 $102,826 TXLA $129,736 $78,251 ($51,485) $167,678 $78,251 ($89,427) $45,575 $142,220 SWPA $245,724 $805,893 $560,169 $507,686 $805,893 $298,207 $489,781 $1,469,470 SWPS $3,359,606 $2,887,950 ($471,656) $3,902,841 $2,887,950 ($1,014,891) $1,721,475 $5,174,345 WEFA $278,728 $784,154 $505,425 $420,518 $784,154 $363,635 $490,098 $1,483,267 AEMC $1,038,265 $495,378 ($542,887) $988,282 $495,378 ($492,905) CALP $74,127 $21,381 ($52,746) $109,305 $21,381 ($87,924) CELE $415,776 $87,710 ($328,066) $683,589 $87,710 ($595,879) CLWL $58,128 $5,704 ($52,424) $92,066 $5,704 ($86,362) CORP $840,122 $399,996 ($440,126) $875,300 $399,996 ($475,304) CPMT $49,988 $10,059 ($39,929) $85,166 $10,059 ($75,107) CPS $52,801 $11,152 ($41,648) $87,979 $11,152 ($76,826) CRGL $181,243 $70,457 ($110,785) $216,421 $70,457 ($145,963) DETM $292,091 $129,933 ($162,158) $327,269 $129,933 ($197,336) DYPM $85,424 $30,690 ($54,734) $120,602 $30,690 ($89,912) EMMT(Citizen) $49,983 $10,057 ($39,926) $85,161 $10,057 ($75,104) ENTE $49,898 $10,008 ($39,890) $85,076 $10,008 ($75,068) EPME $52,424 $11,434 ($40,990) $87,602 $11,434 ($76,168) EXGN $1,447,700 $699,621 ($748,079) $1,482,878 $699,621 ($783,257) LAFA $131,616 $13,755 ($117,861) $191,324 $13,755 ($177,569) LEPA $50,510 $15,144 ($35,367) $146,019 $15,144 ($130,876) LG&E $49,983 $13,208 ($36,775) $85,173 $13,208 ($71,965) MAEM $59,789 $14,280 ($45,508) $94,967 $14,280 ($80,686) MIPU-Aquila-STJO-MOPUB $356,599 $71,529 ($285,070) $706,393 $71,529 ($634,864) NRG $137,115 $48,492 ($88,623) $172,293 $48,492 ($123,801) PGET $57,725 $14,142 ($43,583) $92,903 $14,142 ($78,761)

34 SUNC $123,837 $27,583 ($96,254) $248,879 $27,583 ($221,296) RES $571,106 $257,377 ($313,729) $606,284 $257,377 ($348,907) TNSK $461,278 $214,555 ($246,724) $496,456 $214,555 ($281,902) TXU $76,031 $24,857 ($51,174) $111,209 $24,857 ($86,352) UCU $7,522 $3,636 ($3,886) $7,522 $3,636 ($3,886) WEPL $201,109 $27,265 ($173,844) $223,768 $27,265 ($196,503) WESC $55,032 $12,883 ($42,149) $90,226 $12,883 ($77,343) Non-members $863,240 $424,794 ($438,446) $863,240 $424,794 ($438,446) $26,248,341 $26,248,341 $26,248,340 $26,248,341

35 Proposed Revisions to Setion 7 of the SPP Bylaws To replae urrent Setion 7 Proposed Revisions to Setion 7 of the SPP Bylaws Page 1 of Operating Budget The SPP Staff and the Finane Working Group will prepare an annual budget of expenditures for the next fisal year and an estimate for an additional two years. The proposed budget shall be submitted to the Board of Diretors not less than two weeks prior to the meeting at whih the budget is to be onsidered for approval. One approved by the Board of Diretors, the budget shall onstitute the authority for expenditures for the ensuing year. Modifiations to the budget during the fisal year must be reommended to the Board of Diretors by the Finane Working Group. The President shall have the authority to approve unbudgeted expenditures of up to $250,000 individually or in the aggregate during the fisal year. The President may approve unbudgeted expenditures in exess of $250,000 but less than $1,000,000 with the onurrene of the Finane Working Group. Unbudgeted expenditures in exess of $1,000,000 require prior approval of the Board of Diretors. 7.2 Annual Membership Fee All SPP members will be subjet to an annual membership fee to reover the ost inurred by the SPP related to maintaining reliability riteria and related ompliane. Members without Net Energy for Load will pay an annual membership fee of $6,000, or as otherwise established by the Board of Diretors. The SPP Board of Diretors shall determine the annual membership fee for the upoming year at the Annual Meeting of Members. Those members serving load will be subjet to a fee based on their annual Net Energy for Load for the preeding year, all other members will be subjet to a flat fee. SPP will not refund membership fees. 7.3 NERC Assessment The NERC assessment is to be a diret pass-through and will be harged to the membership per the assessment formula outlined below at the time SPP is invoied by NERC: A = [ 0.25(1/N) (B/C) ] X, where; A = N = B = C = X = Member s Share of NERC Assessment, Total number of Members, The Member's previous year Net Energy for Load within SPP, Total of fator B for all Members, and Atual NERC Assessment to SPP 7.4 Monthly Assessments SPP will assess all osts not otherwise olleted via a monthly assessment. Costs reovered under the assessment will inlude all operating, finaning, and apital osts assoiated with the performane of SPP s funtions as assigned by the Board of Diretors. Signifiant among these are osts assoiated with regional seurity oordination and the provision of transmission servie. SPP shall determine the assessment rate based on its annual budgeted net expenditures divided by estimated annual Shedule 1-A billing units for servie sold under SPP s tariff and member load eligible to take, but not taking, Network Integration Transmission Servie under SPP s tariff. The SPP Board of Diretors may review the assumptions used in determining the assessment rate at any time and may adjust the assessment rate appropriately should onditions warrant. Eah load-serving member shall then be assessed the monthly assessment rate applied to its load eligible to take Network Integration Transmission Servie under the SPP tariff. Further, eah load-serving member shall reeive a redit against the

36 Proposed Revisions to Setion 7 of the SPP Bylaws Page 2 of 2 monthly assessment for that month s Shedule 1-A fees paid for Network Integration Transmission Servie and for Point-to-Point Transmission Servie that had a delivery point within the SPP region, under SPP s transmission servie tariff. 7.5 Fisal Agent The President shall serve as the Fisal Agent of SPP. The President shall keep an up-to-date reord of reeipts and disbursements and furnish reports to the Board of Diretors and the Finane Working Group. 7.6 Auditors The Finane Working Group shall annually engage an independent ertified publi aounting firm to perform an annual audit of SPP s finanial reords and prepare a report on the finanial ondition of SPP. The Finane Working Group shall present the audit report to the Board of Diretors upon ompletion. 7.7 Finanial Obligation of Withdrawing Members The finanial obligation of a withdrawing or a terminated Member, in onjuntion with terms and onditions of SPP s membership agreement, is alulated as follows: A = [ 0.25(1/N) (B/C) ] X, where; A = N = B = C = X = Member s withdrawal or termination obligation, Total number of Members, The Member's previous year Net Energy for Load within SPP, Total of fator B for all Members, and SPP long-term finanial obligations.

37 SPP Presentation Proposal for Transmission Planning, Expansion, and Funding Carl Monroe June 11, Proposal for Transmission Planning, Expansion, and Funding Need for Additional Transmission Planning Proess Transmission Expansion Transmission Rates Reommendation Need for Additional Transmission Load Growth 2.2 Rollover Rights Additional Generation in Footprint Redue Congestion Others??? 3 4 Planning Proess Determine Criteria for Planning Determine Approval of Planning TAWG working on an open proess for transmission planning and approval Transmission Expansion Criteria for deisions on entity to bid or build and any default builder Criteria for investors What rights do investors get: Revenue Requirement FTRs Credits on Servie 5 6 1

38 Transmission Rates Rate Struture Pooled Failities Zonal Failities Criteria for Inlusion Diret Assigned (Partiipant Funded) Pooled Failities Rate Struture New failities or improvements may be diretly assigned to ustomers onsistent with FERC poliy and the SPP OATT. Exept when diretly assigned, the revenue requirements for all qualifying inremental upgrades/failities will be pooled. All ustomers will pay harges based on a two-part rate design: Pooled failities Zonal failities (all load within the SPP footprint should be under the SPP OATT) 7 8 Pooled Failities Pooled Failities New transmission upgrades, meeting ertain riteria and plaed in servie within the SPP footprint after [a speified date], will be booked to an SPP-wide transmission rate base ( Pooled Failities Rate Base ). This will inlude new failities and new osts, as well as improvements or upgrades to existing failities onforming to the riteria for Pooled Failities. Revenue requirements of the pooled failities reovered from all loads taking servie under the SPP OATT. Revenues under this rate alloated to the TOs in proportion to their revenue requirement for the pooled failities Zonal Failities Existing zonal rate bases are depreiated with no new failities booked to them (or only failities not meeting riteria for the pooled failities rate base). Over time, due to the effet of retirements and depreiation, the zonal rate base will approah zero. The pooled failities rate base will inrease, transitioning to inlude all or almost all transmission failities and beoming the dominant or effetive rate Criteria for Pooled Failities Delivery servie out of new generation into the base for servie under the SPP OATT. 11 SPP transmission system 12 Failities whih meet the riteria for transfer to SPP s operational ontrol (see below) and are determined through the regional planning and transmission servie assessment proesses to be neessary for: Reliable servie within the SPP footprint onsistent with the SPP Criteria and Attahment O of the SPP OATT The provision of point-to-point transmission servie through and out of the SPP footprint The interonnetion of new generation to the SPP transmission system 2

39 Criteria for Diret Assignment of Network Upgrades Costs To Be Diretly Assigned Network upgrades may be diretly assigned in whole or in part by SPP to the party ausing the ost or benefiting from the faility pursuant to an assessment onduted in aordane with the proedures of Attahment O of the SPP OATT. The party bearing the ost of diretly assigned failities will reeive the revenue rights resulting from ATC or FTRs reated by the network upgrades in proportion to the amount supported by suh party. 13 Failities neessary for generation interonnetion Outlet failities for new generation Network upgrades for exports of power and energy from SPP Network upgrades for eonomy transations for loads within SPP footprint 14 Benefits Transmission Planning and Expansion Enhaned Transmission planning and expansion should be enhaned. Entry of new transmission owners an be aommodated. There is little or no reason for ontinuation of a zonal perspetive. Breaks from the histori zone-by-zone planning. Permits the regional redesign of the system. Cost for new failities an be spread very broadly, i.e. without a rate shok to any one zone. The ost of new failities will not need to be alloated between multiple zones. The planning and expansion of the whole SPP transmission system on a onsistent basis New TOs Aommodated The failities of new TOs will not ause a rate shok in any given zone. Multiple ownership of individual transmission failities an be aommodated. The ost of new merhant transmission failities an be easily rate-based in the regional rate. Constrution of new failities may be managed by any willing onstrutor. The lowest bidder may onstrut new failities. The role of a TO may be merely finanial and not funtional. O&M an be ontrated to a loal TO. The onstrution of new failities will not be onstrained by the apital limitations of any existing TO. Additional Benefits The natural effet of depreiation provides a transitional mehanism from zonal rates to postage stamp rates, or a speifi transition made to a postage stamp rate at a date ertain (i.e. 5 or 10 years out) with any residual osts remaining in the zonal ost of servie to be funtionalized as appropriate up to the pooled failities rate base or down to distribution

40 Additional Benefits The inentive ROE held forth by FERC should be oneded for the regional failities, espeially the pooled failities. The inonsistent TO standards for lassifiation of failities as transmission failities beome irrelevant for rate purposes. Failitation of system expansion should redue ongestion ost, but will not eliminate ongestion. Issues/Questions State jurisditional issues State jurisdition over transmission ost of servie to retail ustomers Loss of state ontrol over the performane of new entrants as TOs The erosion of the diret assignment attributes inherent in zonal rates State-by-state reognition of TOs as utilities and onession of the rights of eminent domain Issues/Questions (ontinued) Not all load within the SPP footprint is under the SPP OATT Criteria for inlusion in pooled failities rate base (i.e. definition of transmission for operational ontrol and planning and expansion) Should there be a speifi transition period after whih the zonal rates are eliminated Issues/Questions (ontinued) The urrent design of the through and out rate needs to be revisited The aounting praties of various TOs are not onsistent, partiularly with regard to depreiation The federal and state tax treatment for failities owned by differing types of enterprises are not onsistent Issues/Questions (ontinued) Define any qualifying riteria for a new TO. Define TO of last resort with an obligation to build. Define right of first refusal of the inumbent TO within a zone to math a lower ost bid for a transmission upgrade within its zone. Issues/Questions (ontinued) The oordination of O&M may beome more omplex with multiple TOs within a single rate zone. Adequay and onsisteny of the regional planning proesses. Ownership of individual failities by multiple entities

41 Criteria for Failities Transferred to SPP s Operational Control Bakup Slides SPP shall inlude under its operational ontrol all transmission failities used by the transmission provider to provide transmission servie under Part II and Part III of the Tariff, that are refleted in the rates for network integration, long-term firm, short-term firm and non-firm point-to-point transmission servie under the Tariff as stated in Attahments H and/or T, and that meet the following riteria: SPP Operational Control Criteria All failities operating at a nominal voltage of 60 kv [alternative, 100kV] or more that, onsistent with the FERC s Uniform System of Aounts, are properly inludable in FERC Transmission Plant Aounts 350, 352, 353, 354, 355, 356, 357, 358, or 359. Transformers inluded shall have at least two windings operating at a voltage of 60 kv [alternative, 100kV] or greater. Transformers not meeting this riterion shall be exluded exept as provided. SPP Operational Control Criteria (ontinued) Transmission failities used for voltage or stability ontrol, (i.e. shunt apaitors, synhronous ondensers, reators) regardless of operating voltage, will be inluded if they are onneted diretly to the transmission system at a voltage level of 60 kv [alternative, 100kV] or greater. Any transformer, not already qualified by provision #2, required for suh onnetion will also be inluded unless it primarily performs a distribution funtion SPP Operational Control Criteria (ontinued) Generator step-up transformers and generator leads shall be exluded. Radial lines otherwise meeting these riteria will be inluded. Failities operating at voltages lower than 60 kv [alternative, 100kV] are not inluded. While not part of the transmission system, servie over new failities rated below 60 kv that are booked to distribution aounts is available through the exeution of a Servie Agreement pursuant to Shedule 10. Criteria for Failities To Be Transferred to SPP s Operational Control Control equipment and failities neessary to ontrol those failities qualifying herein as transmission failities will be inluded

42 Contat SPP 6