Southwest Power Pool, Inc. BOARD OF DIRECTORS/MEMBERS COMMITTEE MEETING SPP Corporate Offices, Little Rock, AR December 8, 2015

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1 Southwest Power Pool, Inc. BOARD OF DIRECTORS/MEMBERS COMMITTEE MEETING SPP Corporate Offices, Little Rock, AR December 8, Approved Consent Agenda Items a. Corporate Governance Committee - Summary of Action Items - i. Recommendation for Bylaws Section 6.2 Revisions (Expansion of SPC) ii. Recommendation for Bylaws Section 8.4 Revisions (Monthly Assessments) iii. Recommendation for Mountrail-Williams & Central Power Membership Agreement Amendments 2. Approved Finance Committee Recommendations a. Recommendation for 2016 Budget b. Recommendation for 2016 Admin Fee 3. Strategic Planning Committee discussion on 111(d). 4. Oversight Committee 5. Organizational Effectiveness Review and Discussions a. Board of Directors Evaluation b. Organizational Group Report and Annual Assessments c. Regional Entity Survey Results d. Stakeholder Satisfaction Survey Results e. SSAE 16 Controls f. Business Continuity Update g. Metrics Review

2 SPP Board of Directors/Members Committee Minutes December 8, 2015 Minutes No. 166 Southwest Power Pool, Inc. BOARD OF DIRECTORS/MEMBERS COMMITTEE MEETING SPP Corporate Offices, Little Rock, AR December 8, 2015 MINUTES Agenda Item 1 Administrative Items SPP Chair Mr. Jim Eckelberger called the meeting to order at 10:16 a.m. The following Board of Directors/Members Committee members were in attendance or represented by proxy: Mr. Larry Altenbaumer, director Ms. Phyllis Bernard, director Mr. Julian Brix, director Mr. Nick Brown, director Mr. Greg McAuley, proxy for Phil Crissup, Oklahoma Gas and Electric Mr. Scott Heidtbrink, proxy for Mike Deggendorf, Kansas City Power and Light Mr. Jim Eckelberger, director Mr. Jon Hansen, Omaha Public Power District Mr. Bob Harris, Western Area Power Administration Upper Great Plains Region Mr. Kelly Harrison, Westar Energy Mr. Bruce Walkup, proxy for Mr. Duane Highley, Arkansas Electric Cooperative Mr. Bill Grant, proxy for Mr. David Hudson, Xcel Energy Mr. Rob Janssen, Dogwood Energy Mr. Thomas Kent, Nebraska Public Power District Mr. Jeff Knottek, City Utilities of Springfield Mr. Brett Leopold, ITC Great Plains Mr. Stuart Lowry, Sunflower Electric Power Corporation Mr. Josh Martin, director Mr. Dave Osburn, Oklahoma Municipal Power Authority Mr. Mike Risan, Basin Electric Power Cooperative Mr. Harry Skilton, director Mr. Kevin Smith, Tenaska Mr. Jim Jacoby, proxy for Mr. Stuart Solomon, American Electric Power Ms. Kelly Walters, The Empire District Electric Company Mr. Mike Wise, Golden Spread Electric Cooperative Mr. Eckelberger asked for a round of introductions. There were 68 people in attendance either in person or via the phone representing 30 Members (Attendance List Attachment 1). Mr. Nick Brown reported proxies (Proxies Attachment 2). Agenda Item 4 Finance Committee Mr. Harry Skilton provided the Finance Committee (FC) presentation and report (Board Budget Presentation - Attachment 3) and (2016 Budget Draft Attachment 4). Mr. Skilton briefly mentioned the SOC I Audit provided by KPMG. The audit was unqualified with no exceptions. Mr. Skilton congratulated the Process Integrity, IT, and Internal Audit staff for assisting with the audit process. Mr. Skilton stated that this year the budget renewal is being voted on in December and that the concept of the Operating Plan is being presented. The Operating Plan is a way of trying to synchronize the strategic objectives that are being put together with the information about the resources and from that information the budget is developed. This concept came out of the combined meeting of the Strategic Planning and Finance Committees earlier in the year. 2

3 SPP Board of Directors/Members Committee Minutes December 8, 2015 The recommendation of the FC is to decrease the Admin Fee from 39 to 37. From 2013 to the current date the Admin Fee had increased. The decrease is due to the increase in load from the Integrated System (IS) integration. Staffing is expected to remain stable. The major project initiatives that have been completed since 2012 are the implementation of the day ahead and TCR markets, Market-to- Market, Order 1000, and the integration of the IS. Planned projects for the future are enhanced combined cycle, gas day harmonization, enhanced reliability tools, and system enhancements for efficiencies of market systems. Mr. Eckelberger stated that he would like to see additional review and analysis to ensure IT spending on hardware and software assets is efficient. Mr. Larry Altenbaumer commented that the staff did a great job with getting the information together and working with a brand new process. Mr. Kelly Harrison echoed those comments. Mr. Larry Altenbaumer made a motion to establish an assessment rate and tariff administrative fee (schedule 1-A) of 37 MWh beginning on January 1, 2016 (Recommendation 2016 Admin Fee Attachment 5). Mr. Harry Skilton seconded the motion. The Members Committee voted in unanimous approval. The Board voted; the motion passed. Mr. Larry Altenbaumer made a motion to approve the 2016 SPP operating and capital budgets as submitted (Recommendation 2016 Budget Attachment 6). Ms. Phyllis Bernard seconded the motion. The Members Committee voted in unanimous approval. The Board voted; the motion passed. Agenda Item 2 Consent Agenda Mr. Eckelberger asked if there was any discussion or opposition to the consent agenda recommendations (Consent Agenda Attachment 7). Mr. Nick Brown moved to approve the consent agenda. Mr. Josh Martin seconded the motion. The Members Committee voted in unanimous approval. The Board voted; the motion passed. Agenda Item 5 Strategic Planning Committee Mr. Mike Wise provided the Strategic Planning Committee (SPC) report. The committee has not met since the last Board meeting but Mr. Lanny Nickell and Mr. Michael Desselle have been working hard with the SPCTF Clean Power Plan (SPCTF CPP). The Environmental Protection Agency (EPA) filed in the federal register their view of the federal plan and all comments are due by January 21, 2016 (Comments on Proposed Federal Plan Attachment 8). The whitepaper will go for a vote at the January 2016 SPC meeting. Mr. Wise asked everyone to read over the information and provide feedback. Mr. Lanny Nickell provided additional information on the SPCTF CPP. He explained that SPP s intent is to take the whitepaper and convert that into the form of comments that could then be filed with the EPA related to the federal plan that is currently in draft form. The federal plan is a plan for compliance with the final clean power plan rule that would be imposed by the EPA on each state that does not develop their own state plan. Two issues of focus are reliability and impacts to the marketplace. Some concerns are the federal plan does not contain a reliability safety valve or a reliability assurance provision that is in the clean power plan that would apply to the state plan. In addition to the whitepaper, the committee, with the staff s input, came up with some talking points that could be used in discussions with interested parties, anyone in the region, or the footprint (Talking Points Attachment 9). Agenda Item 6 Oversight Committee Mr. Josh Martin provided an update on the Order 1000 expert panel. The industry expert panel is now in place to consider proposals for the Walkemeyer transmission project. When a schedule is put in place for consideration of these proposals by the industry expert panel SPP s tariff allows for an additional 30 days upon request. The Oversight Committee has now added that 30 days to the review process for the 3

4 SPP Board of Directors/Members Committee Minutes December 8, 2015 industry experts. The panel now has a total of 90 days to do the work and still remain on schedule to have a proposal for the meeting in April. Agenda Item 7 Organizational Effectiveness Review Board of Directors Evaluation Mr. Nick Brown provided the report on the Board of Director s Evaluation (Board of Directors Evaluation Attachment 10). There was a response rate of 64%, down from the 77% participation from last year. One hundred percent of the Board members participated. Thirteen of the 14 responses to the questions contained an increase in rating and one was unchanged. The two widest gaps between the Board members and Members are in the areas of: The board effectively represents the organization to the stakeholder community and The board regularly evaluates and provides development plans for the chief executive officer. Mr. Julian Brix explained that the Board meets regularly with Mr. Brown to discuss these areas. Mr. Brown also explained that after every board meeting there are robust discussions between the Board and the CEO to review not only Mr. Brown s performance and goals, but those of the organization. Mr. Eckelberger would like some suggestions on how the Board can better represent the organization to the stakeholder community. Mr. Brown referred to the comments part of the survey and will review this information with the staff while setting goals for the 2016 year. Organizational Group Report and Annual Assessments Mr. Nick Brown reported on the organizational group self assessments (CGC Organizational Effectiveness Report 2015 Attachment 11). This is a report card for the individual working groups and committees as to the number of meetings missed, the proxies provided, the dollars spent, and the number of actions taken. Mr. Brown indicated that this information will be reviewed by the Corporate Governance Committee prior to a recommendation being made available for the Members Committee and Board in January. The response rate was down a bit from last year, but 70% is still good. Mr. Eckelberger pointed out the overall improvement with the increase in attendance. Some of the more technical organizations are showing a lot of proxies. A couple of comments indicated a duplication in responsibilities. Mr. Eckelberger suggested this be looked at more closely. The comments are quite positive and there was some constructive criticism. He asks that the Markets and Operations Policy Committee look at some of the responses. Regional Entity Survey Results Mr. Ron Ciesiel provided the Regional Entity (RE) survey results (2015 SPP RE Survey Results Attachment 12 and 2015 SPP RE Stakeholder Survey Report Attachment 13). There was a 65% response rate to the survey which was slightly better than last year. There is a wide variety of interaction with the stakeholders. Overall the responses for the six programs were in the meets expectations range. The areas of customer service and responsiveness were between the good to excellent range. The survey that is of the most importance is the one that compares the interaction with the other regional entities. The SPP RE regularly performs better and is ranked higher. It shows that the SPP RE employees are doing a good job. The next steps is for the RE management and staff to discuss the survey results and for management and staff to develop action plans to address any concerns. Stakeholder Satisfaction Survey Results Mr. Michael Desselle reported on the stakeholder survey (Stakeholder Satisfaction Survey Results Attachment 14). This year the number of surveys that were sent out increased pretty significantly. Roughly over 2000 surveys were sent out and over 400 were completed. Most of the categories went up in satisfaction. The area of meeting or exceeding expectations satisfaction went up one percentage point. The comments are the most helpful. Mr. Jim Eckelberger said he sees comments he has not seen before. There is a level of unhappiness with the settlement process and the RMS ticket is not an effective way to get responsiveness. SSAE 16 Controls 4

5 SPP Board of Directors/Members Committee Minutes December 8, 2015 Mr. Michael Desselle reported on SSAE 16 Controls. SPP has KPMG perform a service organization control audit. SPP had an unqualified opinion with no exceptions this year. The Market-to-Market is a control that was added this past year. The audit also looks at the Information Technology controls specific to physical security, logical access, program changes, and several other areas. Additional controls added this year include: event monitoring, settlement variance Issues, and market settlements. Business Continuity Update Mr. Michael Desselle provided an update on the business continuity plan (SPP 2015 Emergency Management & Business Continuity (EMBC) Update Attachment 15). The areas of Business Continuity and Emergency Management were combined into one document. It coordinates the management of resources, personnel, communications and costs in an emergency situation. The plans have been updated and staff has been trained. The employee safety plans have also been updated. A new EMBC plan was implemented with greater emphasis on Emergency Management. Incident Command Structure (ICS) overview education was conducted. Mr. Desselle stated that a tabletop drill including an after action report was also conducted. Key future plans are to finalize the enhanced plan to recover SPP critical cyber assets in support of the Bulk Electric System (BES) in accordance with CIP-009 requirements in the first quarter of 2016 and will continue development of EMBC relationships within the community with SPP Member organizations and other RTOs/ISOs. Metrics Review Mr. Carl Monroe provided the metrics review and introduced some new dashboards. Mr. Monroe would like some feedback on the dashboards that will be presented today (Corporate Metrics and Dashboards Attachment 16). Agenda Item 8 Future Meetings (Future Meetings Attachment 17) 2016 RET/RSC/BOD January Oklahoma City RET/RSC/BOD April Sante Fe, NM BOD June Little Rock RSC July 18 Dallas RET/BOD July (noon to noon) Rapid City, SD RET/RSC/BOD October Little Rock (Annual Meeting of Members) October th Anniversary Celebration/Dinner BOD December 6 Little Rock Adjournment With no further business, Mr. Eckelberger thanked everyone for participating and adjourned the meeting at 1:39 p.m. Executive Session The Board took action on a SPP Human Resources Committee recommendation. Documentation will be maintained by the HRC Staff Secretary. The Board approved two waiver requests. Respectfully Submitted, Paul Suskie, Corporate Secretary 5

6 Southwest Power Pool BOARD OF DIRECTORS/MEMBERS COMMITTEE MEETING December 8, 2015 SPP Corporate Office, Little Rock, AR AGENDA 8:00 a.m. 3:00 p.m. 1. Call to Order... Mr. Jim Eckelberger 2. Executive Session (8:00 9:30 a.m.) 3. Consent Agenda a. Recommendation for Bylaws Section 6.2 Revisions (Expansion of SPC) b. Recommendation for Bylaws Section 8.4 Revisions (Amendments to Bylaws) c. Recommendation for Mountrail-Williams & Central Power Membership Agreement Amendments 4. Finance Committee... Mr. Harry Skilton a. Recommendation 2016 Budget b. Recommendation 2016 Admin Fee 5. Strategic Planning Committee... Mr. Mike Wise a. 111(d) 6. Oversight Committee... Mr. Josh Martin 7. Organizational Effectiveness Review a. Board of Directors Evaluation... Mr. Nick Brown b. Organizational Group Report and Annual Assessments... Mr. Nick Brown c. Regional Entity Survey Results... Mr. Ron Ciesiel d. Stakeholder Satisfaction Survey Results... Mr. Michael Desselle e. SSAE16 Controls... Mr. Michael Desselle f. Business Continuity Update... Mr. Michael Desselle g. Metrics Review... Mr. Carl Monroe 8. Future Meetings... Mr. Jim Eckelberger 2016 RET/RSC/BOD January Oklahoma City, OK RET/RSC/BOD April Santa Fe, NM BOD June Little Rock, AR RSC July 18..Dallas, TX RET/BOD July (noon to noon) Rapid City, SD RET/RSC/BOD October Little Rock, AR BOD December 6.Little Rock, AR 2017 RET/RSC/BOD January Austin, TX RET/RSC/BOD April Tulsa, OK BOD June Little Rock, AR RET/BOD July Denver, CO RET/RSC/BOD October Little Rock, AR BOD December 5.Little Rock, AR

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12 Shaun, I am designating Bill Grant as my proxy for this upcoming meeting. Thank you, David T. Hudson Xcel Energy Responsible By Nature President, Southwestern Public Service Company (SPS) 600 S. Tyler St., Suite 29B01 Amarillo, TX P: E: david.hudson@xcelenergy.com XCELENERGY.COM Please consider the environment before printing this This , and any attachments, may contain confidential orprivate material for the sole use of the intended recipient(s). If you are not the intended recipient, please contact the sender by reply mail and delete all copies of this message and any attachments.

13 From: To: Subject: Date: Duane Highley Shaun Scott PROXY - Bruce Walkup for Duane Highley Thursday, December 03, :46:11 PM Shaun, Our coop board meeting is that morning. As soon as it ends I plan to rush over to the SPP MC meeting. My expectation is that I will arrive shortly prior to lunchtime. That said, I would prefer that Bruce Walkup serve as our proxy for the MC on Tuesday. Sincerely, Duane Highley (501)

14 From: Crissup, Phil To: Nick Brown; Shaun Scott Subject: RE: SPP Board of Directors-Members Committee Meeting - 12/8/15 Date: Monday, December 07, :19:45 PM Importance: High Nick and Shaun; Greg McAuley will have my proxy for the SPP Members Committee meeting on December 8 th, Thank you, Phil Crissup Oklahoma Gas and Electric Company

15 From: J S Solomon [mailto:jssolomon@aep.com] Sent: Wednesday, November 18, :45 PM To: Shaun Scott <smscott@spp.org> Cc: Nick Brown <NBrown@spp.org>; Paul Suskie <psuskie@spp.org>; Jacoby, Jim <jwjacoby@aep.com>; Ross, Richard C. (AEP) <rross@aep.com> Subject: RE: NOTICE - Board of Directors-Members Committee Meeting - 12/8/15 Shaun: We have rate case hearings that begin that day, so I will be unable to participate in the Board meeting. I hereby give my proxy to Jim Jacoby. Stuart Solomon AEP

16 From: Deggendorf Michael Sent: Wednesday, December 02, :40 PM To: Bundren Gail Subject: Fwd: Proxy for December From: Nick Brown Date: December 1, 2015 at 8:14:38 AM CST To: "Deggendorf. Mike" Subject: RE: Proxy for December -----Original Message----- From: Deggendorf Michael Sent: Sunday, November 29, :22 PM To: Nick Brown Cc: Heidtbrink Scott Subject: Proxy for December Nick; I will not be able to attend the December Board meeting in person. I will be giving my proxy to Scott Heidtbrink. Mike Deggendorf Kansas City Power and Light

17 Finance Committee Report December 8, 2015 Harry Skilton Director, Committee Chair

18 Finance Committee Harry Skilton, Director, Committee Chair Larry Altenbaumer, Director Sandra Bennett, American Electric Power Kelly Harrison, Westar Energy Laura Kapustka, Lincoln Electric Michael Wise, Golden Spread Electric Co-op 2

19 SPP BUDGET

20 Budget Process Synchronization 4

21 Administrative Fee and Load Trends $ $ $ $ $/MWh $0.32 $0.30 $ MWh (Millions) $0.26 $0.24 Fee declines in 2016 to $0.37 from $0.39 in $ $ Approved Admin Fee ($/MWh) Actual Load (MWh) 5

22 Legacy and Integrated System Load MWh (Millions) SPP Legacy Load (MWh) IS Load (MWh) 6

23 Net Revenue Requirement Trends $160.0 $140.0 $120.0 $123.3 $137.0 $137.6 $146.8 $100.0 $million $80.0 $60.0 $40.0 $20.0 $ NRR ($million) 7

24 Staffing Expected to Remain Stable Headcount 8

25 Major Project Initiatives COMPLETED SINCE 2012 Implementation of day ahead and TCR markets Market to Market and Order 1000 WAPA, Basin, Heartland (Integrated Systems) PLANNED FOR THE FUTURE Enhanced combined cycle Gas day harmonization Enhanced reliability tools (including utilization of synchrophasor data) System enhancements for efficiencies of market systems 9

26 Future Investments $80.0 $70.0 Millions $60.0 $50.0 $40.0 $41.6 Project expenditures have ramped down significantly from 2012, while base expenditures will increase in order to enhance and support existing systems. $30.0 $34.8 $20.0 $30.5 $8.6 $5.6 $7.0 $10.5 $5.3 $10.0 $- $7.3 $9.2 $18.4 $19.2 $15.3 $15.7 $6.2 $7.7 $ Actual 2013 Actual 2014 Actual 2015 Forecast 2016 Budget 2017 Budget 2018 Budget Base ($M) Project ($M) Integrated Marketplace ($M) 10

27 Administrative Fee Projection $0.50 $0.45 $0.40 $0.35 $0.37 $0.37 $0.389 $0.422 $0.432 $0.30 MWh ($) $0.25 $0.20 $0.15 $0.10 $0.05 $0.00 $0.09 $0.09 $0.10 $0.12 $ Debt Cost / MWh ($) Admin Fee ($) 11

28 Continuous Improvement Efforts The Finance Committee reviews process improvement initiatives twice annually.

29 Finance Committee Recommendation Approve the 2016 SPP Operating and Capital Budgets as submitted Total Expenses Debt Repayment FERC Assessment Capital Expenditures $217.1 million $24.2 million $17.0 million $22.2 million Establish an assessment rate and tariff administrative fee (schedule 1-A) of 37 /MWh beginning on January 1,

30 DRAFT

31 TABLE OF CONTENTS I. EXECUTIVE SUMMARY... 4 SPP Value... 4 Operating Plan... 4 Net Revenue Requirement (NRR)... 6 Capital Expenditures... 7 SPP Headcount... 8 II. SPP VALUE... 9 III NET REVENUE REQUIREMENT (NRR) Net Revenue Requirement Components of 2016 NRR and Administrative Fee NRR Sensitivities Future Forecasting IV. BUDGET OVERVIEW Budget Guidance and Assumptions Alignment of 2016 Budget with SPP s Strategic Plan V. CAPITAL PROJECTS Major Capital Projects Foundation Capital Expenditures VI BUDGET: RESOURCE UTILIZATION VIEW Staffing: Valuing Work at SPP Maintenance Outside Services Administrative and Leasing Expenses Communications Infrastructure Travel and Meetings VII BUDGET: DIVISION VIEW Information Technology Operations BUDGET DRAFT SOUTHWEST POWER POOL PAGE 2

32 Engineering Process Integrity Market Design and Interregional Relations Legal, Regulatory and Market Monitoring Corporate Communications and Government Affairs Finance and Corporate Services Officer and Administrative VIII. DEBT SERVICE Future Debt Repayments Schedule IX. SUPPLEMENTAL ANALYSIS AND SCHEDULES Income Statement Comparison Income Statement Balance Sheet Cash Flow Forecast Capital Projects List Outside Services by Function Analysis of 2015 Fees & Assessments Net Revenue Requirement Variance History Prior Year Budget Comparisons X. SPP OPERATING PLAN DOCUMENT BUDGET DRAFT SOUTHWEST POWER POOL PAGE 3

33 I. EXECUTIVE SUMMARY SPP VALUE Southwest Power Pool remains committed to producing great value for all of its stakeholders. SPP provides its customers increased options and greater efficiency to meet the needs of electric customers, both reliably and affordably. Through centralized and leveraged services, SPP: Reduces overall costs by operating as a region; Provides reliability assurance and predictable operations of the bulk electric system; Facilitates effective transmission planning processes resulting in building and maintaining an economically optimized transmission system; Offers an open and transparent marketplace with economic benefits; Optimizes market efficiencies and transmission expansion along the seams of other markets and the emerging seam associated with the natural gas supply; and Ensures fair and equitable allocation of transmission expansion costs. OPERATING PLAN The 2016 Operating Plan was drafted by SPP staff and vetted at a joint meeting of the SPP Finance Committee and Strategic Planning Committee to ensure alignment with SPP s current Strategic Plan. SPP s 2016 Operating Plan documents the specific activities SPP contemplates completing during 2016, along with linking those activities to the 2014 Strategic Plan initiatives. The 2016 Operating Plan segregates the work across three platforms: 1. Major Project Investments represents investments driven by i) customers, ii) regulators, or iii) SPP staff; which generally have broad impacts to the services provided by SPP 2. Major Technology Investments represents investments in technology to adapt to changes in scope, scale, and/or security for SPP s technology infrastructure 3. Keeping The Lights On represents ongoing and incremental investments in SPP foundation activities BUDGET DRAFT SOUTHWEST POWER POOL PAGE 4

34 Highlights from the 2016 Operating Plan include: Finalizing the Enhanced Combined Cycle project expected to be implemented in March This project will facilitate better modeling and dispatch of combined cycle generation facilities in SPP s Integrated Marketplace and lead to realization of $3.0 $5.0 million in reduced production costs for those facilities annually. Increased focus on cyber security, particularly aspects requiring compliance with the Critical Infrastructure Protection Version 5 standards (CIP V5). Initial implementation of Phasor Measurement Unit (PMU) data exchange and analysis capabilities. This capability is expected to enhance knowledge of system stability and improve system operation and planning. The Operating Plan document is included following the supplementary schedules in section X BUDGET DRAFT SOUTHWEST POWER POOL PAGE 5

35 NET REVENUE REQUIREMENT (NRR) The proposed administrative fee rate for 2016 is 37.0 /MWh. The 2015 rate was established at 39.0 /MWh which is equal to the current admin fee tariff cap. The rate for 2016 was projected to be 37.0 /MWh during the 2015 budget process. The reduction in the admin fee rate is primarily associated with increased transmission volume due to the successful addition of the Integrated System (IS) to the SPP footprint. The addition of the IS results in a 12% increase in transmission service to million MWh in 2016 compared to the The 2016 proposed admin fee rate of 37.0 /MWh is based on a net revenue requirement (NRR) of $146.8 million budget of million MWh. The 2016 proposed admin fee rate of 37.0 /MWh is based on a net revenue requirement (NRR) of $146.8 million, compared to the 2015 budgeted NRR of $138.6 million and the 2015 forecasted NRR of $ BUDGET DRAFT SOUTHWEST POWER POOL PAGE 6

36 CAPITAL EXPENDITURES The 2016 budget identifies capital expenditures totaling $73.0 million for These projects represent investments in various initiatives that are federally required or requested by stakeholders, as well as capital spending targeted to improve and strengthen information technology and operations foundation BUDGET DRAFT SOUTHWEST POWER POOL PAGE 7

37 SPP HEADCOUNT The number of staff positions for 2016 is expected to remain relatively level with 2015, including a net increase of only one position over the 2015 budget. The 2016 staffing level is budgeted at 599, compared to 598 projected in previous year s budget for SPP management continues to diligently evaluate staffing levels and responsibilities in response to SPP s evolving array of services and the challenges of the regulatory landscape BUDGET DRAFT SOUTHWEST POWER POOL PAGE 8

38 II. SPP VALUE SPP provides its customers increased options and greater efficiency to meet the needs of electric customers. Investment in transmission infrastructure throughout the SPP region enhances reliable delivery of electricity and optimizes SPP s markets to ensure electricity is delivered in the most economical fashion. Southwest Power Pool, Inc. (SPP) manages the electric grid and wholesale energy market for the central United States. As a regional transmission organization (RTO), the nonprofit corporation is mandated by the Federal Energy Regulatory Commission (FERC) to ensure reliable supplies of power, adequate transmission infrastructure, and competitive wholesale electricity prices. Investments in the power grid are leading to savings in fuel and purchased power costs, which can account for as much as 25 percent of a residential customer s monthly electricity costs. David Hudson President of Southwestern Public Service Company SPP and its diverse group of customers coordinate the flow of electricity across approximately 56,000 miles of high voltage transmission lines spanning 14 states with the successful addition in October 2015 of the Integrated System in the Upper Great Plains region of the United States. SPP projects member benefits totaling approximately $334.0 million over a 10 year period from the inclusion of the Integrated System. SPP s integrated energy market launched in March During the first year of operation, it generated approximately $210.0 million in total net savings for the region, in addition to $170.0 million in savings from the energy imbalance service market. SPP is improving reliability and facilitating the integration of renewable energy, specifically wind, through an integrated transmission planning process. In 2014, SPP members completed 148 transmission expansion projects totaling more than $1.9 billion. As a result, a robust, modern transmission system and efficient energy market are delivering increased value to SPP members and their customers. Southwestern Public Service Company and Oklahoma Gas & Electric both highlighted the benefits of their SPP memberships while announcing cost saving initiatives for their customers in BUDGET DRAFT SOUTHWEST POWER POOL PAGE 9

39 Southwestern Public Service Company, an Xcel Energy company, announced Sept. 10, 2015, it planned to refund $18.6 million to Texas retail customers. In its news release, the company said its investments in the transmission system were leading to savings in fuel and purchased power costs, which can account for as much as 25 percent of a residential customer s monthly electricity costs. Oklahoma Gas & Electric announced Sept. 1, 2015, its Oklahoma customers would see lower monthly electric bills beginning that month. The company said in a news release that the savings were the result of lower costs for the fuel used to generate electricity combined with the benefits of SPP s integrated energy market. The reduction is expected to lower the average residential bill by about $5 a month. As SPP prepares to celebrate its 75th anniversary in 2016, the company remains committed to its five point value proposition that is central to its strategy: 1. Relationship based 2. Member driven 3. Independence through diversity 4. Reliability and economics are inseparable 5. Evolutionary versus revolutionary change 2016 BUDGET DRAFT SOUTHWEST POWER POOL PAGE 10

40 III NET REVENUE REQUIREMENT (NRR) NET REVENUE REQUIREMENT Operating expenses are expected to increase by 3% over the 2015 budget while transmission volume is projected to increase 12%. SPP continues to focus on its core mission of reliable planning and operation of the wholesale electric grid. The Strategic Plan established during 2014 positions SPP to fulfill its mission over the next decade and beyond. SPP s activities and initiatives are guided by the four foundational strategies identified in the Strategic Plan which are reliability assurance, optimization of interdependent systems, maintenance of an economical and optimized transmission system, and enhanced value and affordability of SPP services. These four strategies are interdependent, with reliability assurance serving as the basis of these strategies, and enhancement of the value and affordability of SPP s services serving as the discipline NRR is $146.8 million, and the proposed administrative fee is $ Operating expenses are expected to be $217.1 million in 2016, an increase of $7.1 million compared to the 2015 budget. Growth in operating expenses results primarily from 1) salary and benefits increases due to changing the vacancy rate assumption to 4.0% as compared to 5.0% assumed in 2015 budget and a 2.5% merit increase applied to base salaries; and 2) IT maintenance expense increases as SPP continues to expand the quality and quantity of its services through IT intensive capital projects and investments in SPP s IT infrastructure. Approved staffing levels for the 2016 budget is 599 compared to 598 in the forecast for 2016 during the budget cycle. The budgeted headcount for 2015 was 598; however, the end of year projection was reduced to 596 due to the elimination of two positions in the Regional Entity. Although six new positions are planned for 2016, a net of three incremental positions are included in the budget. Three of the six positions are expected to be filled by repurposing other approved positions. The 2016 NRR component of the administrative fee rate is $146.8 million versus a $138.6 million NRR for the 2015 budget and a $137.6 million NRR for the 2015 forecast (before nonrecurring items). The $146.8 million NRR in 2016 is calculated before an expected cost overrecovery for 2015 and creation of a reserve fund in The increase in the NRR is also partially attributed to increases in operating expenses as explained above BUDGET DRAFT SOUTHWEST POWER POOL PAGE 11

41 2015 Budget 2015 Forecast 2016 Budget Income Tariff Administration Service $141.1 $145.4 $150.7 Fees & Assessments Contract Services Revenue Miscellaneous Income Total Income $174.6 $178.4 $182.1 Expense Salary & Benefits $80.0 $82.5 $85.2 Depreciation & Amortization Communications, Leases & Maintenance Outside Services Administrative / Other Assessments & Fees Travel & Meetings Total Expense $210.0 $206.5 $217.1 Net Income (Loss) ($35.4) ($28.1) ($35.0) Debt Repayment $24.3 $24.9 $24.2 MW/h Forecast (in millions) Net Revenue Requirement $138.6 $137.6 $146.8 NRR Adjustments $2.5 $7.2 $3.7 Recommended Admin Fee / MWh $0.390 $0.390 $0.370 Another component used in setting the administrative fee is transmission volume, which SPP projects will increase 12.0% to million MWh in 2016 as compared to the 2015 budget of million MWh. The increase in transmission volume results from the addition of Integrated System (IS). The Integrated System, consisting of the Western Area Power Administration (WAPA) Upper Great Plains region, the Basin Electric Power Cooperative, and the Heartland Consumers Power District, announced in early 2014 its intention to join SPP following a lengthy evaluation process comparing SPP, MISO, and a standalone process. SPP began the IS reliability coordination service in June 2015 and fully integrated its markets in October With the addition of IS, SPP added to its region over 5,000 MW of peak demand, all or parts of six additional states, the first federal agency (WAPA) as an RTO member, and 9,500 miles of transmission infrastructure. SPP s 2015 budget estimated the 2016 administrative cost/mwh to be 37.0 /MWh based on an expected NRR of $147.1 million and load of million MWh. SPP s 2016 budget reflects an 2016 BUDGET DRAFT SOUTHWEST POWER POOL PAGE 12

42 administrative cost of 37.0 /MWh based on an expected 2016 NRR of $150.5 million (with adjustments) and load of million MWh. The 2016 budget identifies capital expenditures totaling $73.0 million for , with $22.2 million expected to be incurred in These costs are not directly included in SPP s NRR; however, annual principal and interest payments (net of capitalized interest) for borrowings that fund these capital projects are a component of the NRR. COMPONENTS OF 2016 NRR AND ADMINISTRATIVE FEE The following table shows the components and calculation of the administrative fee. The 2016 calculation includes an adjustment to NRR for to account for expected over recovery in 2015 and the creation of a reserve fund in Net Revenue Requirement (NRR) & Administrative Fee ($ millions) 2015 Budget 2015 Forecast 2016 Budget 2016 Prior Estimate (1) Operating Expenses (excl. Depreciation) $148.7 $146.2 $157.3 $158.2 Debt service Gross revenue requirement $173.0 $171.1 $181.5 $181.8 Less: FERC expense (16.4) (13.9) (17.0) (16.7) NERC revenue (11.7) (9.9) (10.4) (12.4) Other revenues (6.3) (6.1) (4.7) (5.5) Non Cash Adjustments 0.0 (3.6) (2.6) 0.0 NRR prior to non recurring $138.6 $137.6 $146.8 $147.1 Billing Determinants (MWh millions) (2) Calculated Admin Fee / MWh $0.381 $0.369 $0.360 $0.370 Non recurring & NRR Adjustments / MWh (3) $0.007 $0.019 $0.009 $0.000 Current/Calculated Admin Fee/MWh $0.389 $0.388 $0.370 $0.370 Proposed Admin Fee / MWh $0.390 $0.390 $0.370 $0.370 Admin Fee Tariff Cap $0.390 $0.390 $0.390 $0.390 (1) 2016 Prior Year Estimate refers to the 2016 estimate made during the 2015 budget presentation (2) Defined as coincident peak for network service and capacity for point to point service in MWh (3) Refer to section below 2016 BUDGET DRAFT SOUTHWEST POWER POOL PAGE 13

43 Non recurring Items & NRR Adjustments ($ millions) 2015 Budget 2015 Forecast 2016 Budget Net Revenue Requirement (NRR) $138.6 $137.6 $ Under recovery Under recovery Fund transfer (post retirement healthcare) (1.0) (1.0) 2015 Schedule 1A Adjustment Capital expenditure reserve Over recovery (0.6) Adjusted NRR $141.1 $144.8 $150.5 Billing Determinants (MWh millions) Non recurring items / MWh $0.007 $0.019 $0.009 NRR SENSITIVITIES SPP s administrative fee rate is calculated by dividing SPP s budgeted (or forecasted) net revenue requirement by SPP s estimate of transmission service use throughout its 14 state region. The net revenue requirement is largely driven by the nature and quantity of services required of SPP by the utilities within SPP s region, as well as in response to regulatory and/or legislative requirements. SPP s management team makes decisions on the allocation of resources to best provide the services required in an economical manner. Use of the transmission system within the SPP footprint is responsive to the demand for electricity experienced by the utilities within the SPP region. Measurement of transmission service use is based on reserved capacity for point to point transmission service and prior year average monthly peak demand for network transmission service. Interestingly, as illustrated in the table to the right, year over year variations in delivered energy do not strongly correlate to variations in average monthly peak demand. Energy delivery appears to be more predictable than average monthly peak demand likely because the average peak is only representing one hour per month, which can be impacted more significantly by weather events. Year over Year Change Energy Load % 3.6% % 5.9% % 1.1% % 1.8% SPP has attempted to forecast its administrative fee rates into the future. SPP has used a basecase model which includes several assumptions: Utilizes the budget data as starting point Expenditures (excluding depreciation) grow at a 2% annual rate beyond BUDGET DRAFT SOUTHWEST POWER POOL PAGE 14

44 New debt equal to 80% of expected capital expenditures is issued annually, notes are 5 year term Load remains flat at million MWhs per year SPP demonstrates changes from the base case based on load growth or reduction versus the base year as well as changes in expenditures beyond the 2% included in the base year. The models indicate a sharp increase in the administrative fee rate in followed by a gradual reduction. The causes of the increase begin with expense growth outpacing flat transmission service usage and extend to the increase in net revenue requirements as SPP retires an additional $100 million in new term debt issued to fund capital expenditures. The chart below depicts the sensitivities. $0.50 Administrative Fee Sensitivity Chart Administrative Fee Rate ($/MWh) $0.48 $0.46 $0.44 $0.42 $0.40 $0.38 $ Base Case Load Inc. 1% Load Dec 1% Load Dec 2% No Load Growth FUTURE FORECASTING SPP constructs a three year budget plan each year in accordance with the tariff. The budget was used as the starting point to create a five year forecast. Consistent with the original three year budget, the load for 2019 and 2020 remained equal to the MW/h forecast for 2016 thru 2018 and only minimal inflationary adjustments were applied to the operating expenses. Capital expenditures were also assumed to be consistent with the 2018 forecast. SPP has included in its rate recovery in 2019 and 2020 collection of 20% of the forecast capital expenditures for each year. This collection will serve to reduce interest costs going forward BUDGET DRAFT SOUTHWEST POWER POOL PAGE 15

45 Budget Forecast Forecast Forecast Forecast Income Tariff Administration Service $150.7 $151.0 $153.9 $172.0 $176.0 Fees & Assessments Contract Services Revenue Miscellaneous Income Total Income $182.1 $182.1 $185.7 $206.0 $211.0 Expense Salary & Benefits $85.2 $86.8 $88.8 $91.0 $92.0 Depreciation & Amortization Communications, Leases & Maintenance Outside Services Administrative / Other Assessments & Fees Travel & Meetings Total Expense $217.1 $192.9 $187.5 $190.8 $191.8 Net Income (Loss) ($35.0) ($10.7) ($1.8) $15.2 $19.2 Debt Repayment $24.2 $23.2 $29.6 $35.0 $39.0 MW/h Forecast (in millions) Net Revenue Requirement $146.8 $148.5 $158.6 $167.8 $172.0 NRR Adjustments $3.7 $2.2 $0.0 $4.2 $4.0 Recommended Admin Fee / MWh $0.370 $0.370 $0.389 $0.422 $0.432 IV. BUDGET OVERVIEW This budget document provides an overview and outlines details of the cost of services and components of the net revenue requirement, which consists of the following: Capital projects (section V) Operating expenses (section VI) Debt Service (section VIII) Operating expenses represent the largest component of the net revenue requirement and consist of budgeted costs for ongoing operations. Operating expenses are presented in two different views: By resource type (e.g., staffing, facilities) (section VI) By division (e.g., Operations, Engineering) (section VII) 2016 BUDGET DRAFT SOUTHWEST POWER POOL PAGE 16

46 Capital projects are investments in long term assets required by SPP to meet its strategic goals and operational requirements. These capital expenditures represent costs incurred to enhance or expand current systems and services, and to maintain existing capabilities. The budget identifies 14 capital projects impacting 2016, in addition to the foundation projects. Capital projects are discussed in section V. Debt service costs are principal payments and interest expense related to various borrowings obtained to fund SPP s capital expenditures. The term of different sources of funding is matched to the estimated useful life of these specific projects. Debt service is discussed in section VIII. BUDGET GUIDANCE AND ASSUMPTIONS New this year, an operating plan was documented and used as a guide for the budgeting process. At the request of the Finance Committee, SPP created an operating plan to document SPP s 2016 tactical scope and provide a forum to generate broad understanding of SPP s 2016 plans, environment, assumptions, and costs. Along with planning for technology investments, the following major project investments are identified in the operating plan: Enhanced Combined Cycle Integrated Marketplace Functionality Gas Electric Harmonization Z2 Credit: Priority II and Priority III Functional Requirements PMU Data Exchange and Analysis Identity and Access Management (IAM) Dispatcher Training Simulator Upgrade More information on these initiatives can be found in the Capital Projects section V. SPP s longstanding policy has been to fund capital expenditures through issuance of notes with terms somewhat consistent with the expected useful life of the assets acquired. This policy is 2016 BUDGET DRAFT SOUTHWEST POWER POOL PAGE 17

47 designed to best recover the cost of the assets from the customers who are benefiting from the assets. SPP s capital expenditure program has been significant over the past several years, dominated by the Integrated Marketplace and corporate campus projects. Looking forward, SPP s capital expenditure requirements are forecast to decline from recent levels to an average of $24 million per year. Planning meetings were held during June 2015 to provide guidance in developing the 2016 budget. Under the direction of the executive team, each department director was required to create an incremental based budget for operating expenses as opposed to the zero based methodology applied in previous years. Justifications were required for significant changes from the 2015 forecast. ALIGNMENT OF 2016 BUDGET WITH SPP S STRATEGIC PLAN The operating plan was presented to the Strategic Planning Committee (SPC) and Finance Committee (FC) as a basis for the 2016 budget and to ensure alignment with SPP s Strategic Plan. The energy industry remains in a period of dynamic transformation. SPP considered several of the evolving factors affecting demand, generation resources, and transmission requirements of SPP and its members while developing the Strategic Plan in The increase in demand, generation, and transmission in the SPP footprint is related to growth in oil and natural gas drilling and transportation industries, as well as the surge in the addition of renewable resources (mostly wind energy) to the generation mix. These trends present significant operational and planning challenges for SPP and are critical to the four foundational strategies identified in the Strategic Plan BUDGET DRAFT SOUTHWEST POWER POOL PAGE 18

48 These foundational strategies are aimed at creating the capabilities and operational processes to fulfill SPP s mission, and maintain or improve its value propositions in the face of a rapidly changing environment. These four strategies are interdependent, with reliability assurance as the basis and the enhancement of member value and affordability as the discipline to drive all SPP strategies. A comprehensive list of the foundational strategies, related initiatives, and how the 2016 Operating Plan and budget supports each initiative can be found in the Operating Plan document in section X of the supplementary schedules BUDGET DRAFT SOUTHWEST POWER POOL PAGE 19

49 V. CAPITAL PROJECTS SPP expects capital expenditures to be approximately $73.0 million. Beginning in January, a comprehensive list of new and on going projects was compiled for consideration for the budget under the direction of the Project Review and Prioritization Committee (PRPC) and in collaboration with staff from the Project Management Office (PMO), Accounting and IT departments. The PRPC worked closely with project managers, IT directors, and vendor managers to create scope requirements and estimate anticipated workload associated with the implementation of the projects. The PRPC received 16 project requests for the budget cycle. Additionally, three carryover projects were taken into consideration given they were anticipated to continue into 2016 requiring ongoing budget and staffing support. The PRPC reviewed, ranked, and assessed the value of the submitted projects and ultimately submitted its recommendation to the SPP officers for approval in July Capital Expenditures ($ millions) Prior Total Carry Over Projects Enhanced Combined Cycle and Gas Day $2.1 $5.0 $0.7 $0.0 $7.7 Transmission Settlements Upgrade Z2 Crediting Process Phase New Projects EMS Software and OS Upgrade $0.0 $2.8 $2.4 $5.2 Dispatcher Training Simulator Upgrade PMU Data Exchange Identity and Access Management Z2 Crediting Tool Priority 2 & Other Total Non Foundation Projects $3.7 $7.0 $10.5 $5.3 $26.6 Foundation Capital Expenditures Total Capital Budget $3.7 $22.2 $29.7 $21.0 $76.7 The three year budget identifies $73.0 million (excluding prior year costs) in total capital expenditures with $22.8 million tied to specific projects and initiatives and $50.2 million in foundation related capital expenditures. SPP expects 2016 capital expenditure spending to be approximately $22.2 million, with $7.0 million in specific projects and $15.3 million related to foundation capital spending. For the 2016 budget cycle, three major projects were classified as either mandated by FERC (Gas/Electric Harmonization), requested by SPP members (Enhanced Combined Cycle), or required for tariff compliance (Z2 Crediting Tool) BUDGET DRAFT SOUTHWEST POWER POOL PAGE 20

50 The following section describes noteworthy projects in greater detail. A complete list of initiatives and associated capital budgets appears in the supplementary schedules section IX. MAJOR CAPITAL PROJECTS Enhanced Combined Cycle (Member Requested) Economic dispatch expected to increase $3.0 million annually. These enhancements to the Integrated Marketplace will allow market participants to submit resource offers for several configurations of a combined cycle generating unit. Each configuration will be modeled in the market clearing engine as a separate resource. This increased flexibility will allow optimization of the combined cycle resource configuration throughout the unit commitment processes. SPP expects to be able to increase economic dispatch (measured as reduced generation costs) by $3.0 million annually. New combined cycle plants are expected to join the SPP market in the future which will serve to increase the economic benefits. Gas/Electric Harmonization (FERC Mandated) Investment required to comply with FERC Section 206 Order. Compatibility within the gas and power markets has become an important concern in the past few years as the electric grid s dependence on gas fired generation has steadily increased. This project addresses timeline changes to the Day Ahead Market and Day Ahead Reliability Unit Commitment ( RUC ). This investment is necessary to comply with FERC s Section 206 Order in Docket No. RM14 2 to adjust the market timelines and explain how the proposed scheduling modifications are sufficient. These timeline changes are an incremental improvement over the existing timeline for improving coordination between the market results and the timely and evening nominations. Z2 Crediting Tool Priority 2 and 3 (Tariff Compliance) Implementation of the stakeholder designed Z2 credit stacking solution to meet current tariff requirements. Attachment Z2 of the tariff requires SPP to identify creditable upgrades of the transmission network, calculate revenue credits associated with creditable upgrades, and distribute revenue credits to upgrade sponsors. Priority 1 requirements are on schedule for implementation in January Priority 2 and 3 work is expected to start in April 2016 after SPP has worked through the legacy credits. Implementation of the Priority 2 and 3 functionality is planned for December This investment will implement the stakeholder designed Z2 credit stacking 2016 BUDGET DRAFT SOUTHWEST POWER POOL PAGE 21

51 solution and streamline workflows in order to meet current tariff requirements. Although no monetary benefits are expected, soft benefits include reductions in error probabilities, reduced dispute and resettlement activities, and reduced future staffing needs. Identity and Access Management Enhance controls over system access and improve audit evidence processes. This project includes the implementation of an identity and access management (IAM) system that would automate the vast majority of manual IAM activities in place at SPP today. Some of the noteworthy functionality/capabilities of an automated IAM system include the following: 1) ability to develop role based access models to suit individual business owners, 2) automation of user access provisioning/de provisioning, and 3) standardization/automation of periodic access reviews. Additionally, ad hoc access reviews can be generated to help satisfy CIP V5 transfer and termination processes for SPP employees and contractors. All identities and their access entitlements currently existing in the SPP environment will be discovered and will reduce compliance and cyber security risks associated with orphan user accounts and excess user entitlements. In summary, improved access management processes will result in enhanced controls over system access as well as provide notable improvements to audit evidence processes which will be critical going forward under the CIP V5 standards. Phasor Measurement Unit (PMU) Data Collection and Analysis Capabilities to better identify system issues. Completion of this project will provide SPP with the capability to enhance after the fact event analysis as well as improve system model validation efforts. Additionally, PMU data can assist in 1) real time situational awareness, 2) identifying generator trips and island situations, and 3) enhancing State Estimator accuracy. This project will commence with the purchase of a starter system (less than 50 PMUs) in 2016 to be utilized in a non production environment thru Deployment of a highly available configuration into production environment will occur in Full implementation of the project is expected to equip SPP with predictive capabilities to identify system disturbances before they occur and allow SPP and affected utilities to take action prior to an event occurring. Dispatcher Training Simulator Upgrade Enhanced tool to better prepare operators in the region. This project is a phased evolution of the current Dispatcher Training Simulator (DTS) to a more fully integrated Training and Testing Simulated Environment (TTSE) that incorporates the EMS and the Market Systems. This fully integrated simulator will provide a platform to help simulate 2016 BUDGET DRAFT SOUTHWEST POWER POOL PAGE 22

52 the operations environment and to prepare SPP Operators on the SPP region in normal and emergency situations. Phase I will establish an independent, stand alone DTS environment for EMS in Future phases will look to add market simulators, visualization capabilities, and other additional functionality in the timeframe. FOUNDATION CAPITAL EXPENDITURES The following section describes the various categories of foundation capital expenditures in greater detail. Foundation Capital Expenditures ($ millions) Total Foundation (1) IT Systems Admin Foundation $2.8 $4.0 $2.9 $10 IT Network Telecom Foundation IT Applications Foundation IT Ops Service Management Other (Non IT) Department Foundation (2) Ops Foundation Marketplace Enhancements Facilities Foundation Settlements Foundation Total $15.3 $19.2 $15.7 $50.2 (1) Foundation projects are reforecast each budget cycle and do not include any carry over funds (2) Other (Non IT) represents the IT based projects of other departments across SPP 2016 BUDGET DRAFT SOUTHWEST POWER POOL PAGE 23

53 IT Systems Administration Foundation The Systems Administration Foundation encompasses all hardware and software infrastructure, including servers, storage, backup systems, operating systems, and systems management tools. The major initiatives included in the 2016 budget include: Technology refresh of aged systems Additional data storage (production and backup capacity) CIP V5 infrastructure requirements Technology Refresh In projecting future needs, SPP consistently reviews the existing hardware portfolio and plans for hardware replacements (where appropriate). Although hardware maintenance is often extended to 5 years, technology refreshes become mandatory once these components reach the end of their usable life and/or maintenance for older hardware becomes unavailable or unaffordable. SPP has approximately 65 physical servers (dedicated and virtualized) targeted for replacement during 2016, contributing to roughly 41% of the total Systems Administration Foundation budget. As part of the server refresh, SPP will continue to deploy virtualization technology to maximize the utilization of computer hardware and software wherever possible. Data Storage Technology refresh, data storage and CIP V5 make up 74% of the Systems Administration Foundation budget. SPP has detected a higher than anticipated growth of data across the various systems. Additional projects, such as the IS Integration and CIP V5 compliance, have also contributed to additional data storage needs. During 2016, the plan is to implement isolated Flash Storage into the Electronic Security Perimeter (ESP), as well as increase backup capacity (shelves) at the 3rd party data storage site. Evaluation will continue for storage virtualization technologies as well as tiered storage disciplines to minimize storage costs. Data storage accounts for approximately 16% of the total Systems Administration Foundation budget BUDGET DRAFT SOUTHWEST POWER POOL PAGE 24

54 CIP V5 As part of the CIP V5 mandatory compliance deadline of April 1, 2016, additional environments will be implemented during the first part of the year for accessing the ESP. CIP V5 requires physical isolation/separation of ESP assets, and thus certain assets must be de leveraged to fulfill this requirement. Implementation of a baseline management tool will also be complete for purposes of tracking changes to ESP assets. The budget for meeting CIP V5 requirements is roughly 17% of the total Systems Administration Foundation budget. Additional items accounted for in the Systems Administration budget include anti virus Linux software, server security software, additional storage virtualization licenses, and licenses associated with backup/recovery from our remote site(s). IT Network Telecom Foundation The Network Telecom Foundation encompasses all SPP s hardware and software network, which includes the core data network as well as voice, telephony, firewall, and network security solutions. As part of a three year upgrade project that began in 2015, the core network infrastructure will continue to be overhauled, including the upgrade to 40GB capacity for core switch modules, firewall modules, cabinet switch technology, and the data center cabling infrastructure. This upgrade will alleviate existing network/performance bottlenecks and position SPP to absorb the additional data traffic/processing that is anticipated in upcoming years. The cost for this network refresh project is approximately 86% of the total Network Telecom Foundation budget. The remaining budget is targeted for network authentication software, a Voice over IP (VOIP) CCX refresh, and IP Address software. IT Applications Foundation The IT Applications Foundation encompasses capital cost associated with the development, testing and support of SPP s key business and data services applications. One of the primary components of the 2016 budget includes hardware and software licenses to sustain the growth and demand for SPP s Enterprise Analytic Data Store (EADS) and Data Warehouse. EADS has become a critical system relied upon by many of SPP s real time Operations systems (e.g., Integrated Marketplace) as well as the systems used for after the fact processing such as Settlements and Market Monitoring. SPP will implement a virtualization architecture with tiered storage (aka, Big Data ), which will allow SPP to store a vast amount of 2016 BUDGET DRAFT SOUTHWEST POWER POOL PAGE 25

55 data needed by the business users across multiple, lower cost platforms, while providing a single/transparent interface for the user. This initiative accounts for roughly 60% of the IT Applications Foundation budget. Additional funding within this budget area will support software enhancement projects for CMS, POPS, Settlements and Data Services. Foundation Other (Non IT) Department Foundation Items included in this foundation budget encompass all other software and hardware needs for departments outside of IT. A significant amount of the 2016 budget relates to anticipated enhancements to the TCR system in addition to compliance driven initiatives. Operations Marketplace Enhancements The Integrated Marketplace implemented in 2014 is still considered to be in the nascent stage of operation and will continue to experience the need for higher levels of modification as both staff and market participants identify opportunities for continuous improvement of market efficiency. The trend will continue for at least the next few years where design changes are needed to improve upon certain assumptions made during the earlier stages of market rules development. These changes include expected enhancements to the Market Operator Interface (MOI), the Market User Interface (MUI), the Market Clearing Engine (MCE) applications, and the Market Database (MDB) BUDGET DRAFT SOUTHWEST POWER POOL PAGE 26

56 VI BUDGET: RESOURCE UTILIZATION VIEW SPP s 2016 budget encompasses utilization of various resources allowing SPP to carry out strategic goals and organizational objectives. The chart below shows SPP s resources and the corresponding 2016 budget amounts in comparison to 2015 budget and forecast. The following section discusses each component in detail. $90.0 $80.0 $70.0 $60.0 $50.0 $40.0 $30.0 $20.0 $10.0 $ Operating Expenses by Resource ($ millions) Salary, Benefits & Taxes Maintenance Outside Services & Consulting Admin & Leasing Communications Travel & Meetings 2015 Budget $ Forecast $ Budget $ Operating Expense Budget by Resource ($ millions) 2015 Budget 2015 Forecast 2016 Budget 2016 Prior Salary, Benefits & Taxes $80.0 $82.5 $85.2 $83.7 Maintenance Outside Services & Consulting Admin & Leasing Communications Travel & Meetings Total Expense $123.3 $120.8 $129.8 $131.0 * Excludes depreciation, FERC fees, and interest 2016 BUDGET DRAFT SOUTHWEST POWER POOL PAGE 27

57 STAFFING: VALUING WORK AT SPP SPP s employees are the most valued resource and the single largest component of the operating budget. Staffing costs include salaries, benefits, and taxes. The budget includes assumptions for vacancy rates, merit increases, and promotions. These assumptions are discussed in detail in the staffing components section below. Staffing Levels SPP strives to attract and retain an educated, skilled employee base to provide the highest level of service and value for its members. SPP s management continuously evaluates SPP s staffing levels across all areas of the organization. In addition, the SPP Human Resources Committee is responsible for the review and approval of employee and executive benefit plans, organizational structure, and Compensation and benefits are regularly monitored to ensure SPP remains a competitive and attractive employer. compensation programs. The committee periodically engages consultants to benchmark SPP compensation and benefit programs, and annually reviews these plans to ensure they are competitive in the marketplace within a cost effective budget. SPP benefit plans support the organization s goal of attracting and retaining career employees that are suited to the SPP corporate culture. SPP administers an in house Engineer in Rotation program, which seeks the most talented engineering graduates for an expansive training program. The rotating staff of engineers gain experience through on the job training and are placed in permanent roles as positions become available through normal employee turnover. The 2015 headcount forecast was reduced from 598 to 596 with the elimination of two positions in the Regional Entity (RE). The RE positions remained open for more than 12 months, and existing staff was able to maintain the workload. Various other positions were reprioritized, and responsibilities were reassigned throughout the year as positions became vacant due to staff turnover, retirements, or internal transfers BUDGET DRAFT SOUTHWEST POWER POOL PAGE 28

58 Approved Staffing Levels Budget 598 Regional Entity positions eliminated (2) 2015 Forecast 596 Engineering Planning 2 Engineering Modeling 1 Market Monitoring 1 PMU Data Exchange (IT, Ops) 2 Proposed reductions due to turnover (3) 2016 Budget 599 Operations reductions due to turnover (2) Engineering Planning Budget 598 PMU Data Exchange (IT) Budget 599 Prior Budget Forecast n/a The table below shows the staff numbers by executive division: APPROVED POSITIONS BY DIVISION 2015 Budget 2015 Forecast 2016 Budget 2017 Budget 2018 Budget Operations Information Technology Engineering Finance & Corporate Services Process Integrity Regulatory, Legal & MMU Interregional Relations & Market Design Officer & Administrative Communications & Government Affairs RTO Total Regional Entity SPP Total Staffing Components The base salary budget assumes a merit increase of 2.5%, a promotion increase of 0.75%, and a 4.0% vacancy factor BUDGET DRAFT SOUTHWEST POWER POOL PAGE 29

59 The staffing budget for 2016 includes funding for staff compensation (base salary, performance compensation, and overtime pay), benefits and payroll taxes, relocation, and tuition reimbursement. Salary Expenses ($ millions) 2015 Budget (1) 2015 Forecast 2016 Budget (2) 2016 Prior Base salaries at beginning of year $54.5 $54.5 $55.6 $55.9 Incremental staff Merit Increase Promotions Premium Pay Vacancy (2.8) (2.3) (2.3) (2.3) Total Salary Expenses $54.3 $55.0 $56.6 $56.2 (1) 2015 vacancy 5.0%, merit 2.0% (2) 2016 vacancy 4.0%, merit 2.5% Salaries, Benefits and Taxes ($millions) $60.0 $50.0 $40.0 $30.0 $20.0 $10.0 $ 2015 Budget 2015 Forecast 2016 Budget Salary $54.3 $55.0 $56.6 Benefits and payroll taxes Continuing Education The 2015 salary forecast exceeds 2015 salary budget as a result of variations from the vacancy rate assumed in the original budget. The 2015 budget assumed a 5.0% vacancy rate; however, the 2015 forecast reflects a vacancy rate of 4.0% based on the current year trend BUDGET DRAFT SOUTHWEST POWER POOL PAGE 30

60 Vacancy and Merit Assumptions During the 2015 budget planning process, 2014 vacancy levels fluctuated between 4.0% and 5.0%. The 2015 budget included a vacancy factor of 5.0% based on this trend, and 4.0% was applied to By the end of 2015, headcount is expected to be within 4.0% of the projected 2015 level (575 of 598). SPP anticipates staff turnover in 2016 to be consistent with trends experienced in Budget 2015 Forecast 2016 Budget 2016 Prior Vacancy rate 5.0% 4.0% 4.0% 4.0% The 2016 budget includes a 4.0% vacancy rate which is reflective of the 2015 trend and contributes to the overall increase in staffing costs in This equates to turnover averaging 24 positions during the calendar year (575 of 599 positions). The Human Resources Committee (HRC) recommends an overall merit increase of 2.5% for 2016 based on a review of several regional and industry factors, including SPP members. A merit increase of 2.5% is included in the 2016 salary budget. The promotion pool budget is also based on the HRC recommended percentage and remains consistent with the past several years at 0.75%. Benefits and Taxes Merit Increase 5 Year Trend HRC Approved 2.5% 2.0% 2.4% 1.7% 2.5% SPP Budget 2.5% 2.0% 2.4% 2.0% 2.5% CPI Growth 2.5% 1.5% 2.4% 2.3% 0.0% The budget for benefits and payroll taxes includes performance compensation; retirement plan contributions; medical, dental, and life insurance benefits; relocation expenses; employee events; payroll taxes; and continuing education. Below is a breakdown of employee benefits and taxes: 2016 BUDGET DRAFT SOUTHWEST POWER POOL PAGE 31

61 Benefits, Taxes & Con't Ed ($ millions) 2015 Budget 2015 Forecast 2016 Budget 2016 Prior Performance Compensation $8.6 $8.6 $8.9 $8.8 Retirement Plans (401k and Pension) Payroll Taxes Medical Benefits Continuing Education Other Employee Benefits Dental Benefits Life Insurance Benefits Total Benefits, Taxes & Con't Education $25.7 $27.5 $28.6 $27.5 Performance compensation comprises the largest component of benefits, followed by retirement plans, payroll taxes and medical benefits. Performance compensation is budgeted at the target level of 15.0% of base salary and is paid in March of the following year. SPP total compensation targets the 50 th percentile inclusive of performance compensation. For the pension and retiree healthcare expense, the 2015 forecast and 2016 budget amounts are based on the actuarial calculated pension expense, whereas the 2015 budget and 2016 prior forecast was based on anticipated cash funding. This change in methodology creates a $3.0 million and $1.8 million unfavorable variance when compared to 2015 budget and 2016 forecast amounts, respectively. Funding for 401(k) matching contribution is estimated at 4% of the salary expense based on recent company trends. Insurance benefits are budgeted based on projected per participant costs, with medical benefits as the primary component. The healthcare plan is discussed in detail in the following section. Medical Benefits Costs The net cost of the self funded medical plan in the 2016 budget is $4.4 million which is in line with the 2015 forecast, and represents a decrease of 14% or $0.7 million compared to the 2015 budget of $5.1 million BUDGET DRAFT SOUTHWEST POWER POOL PAGE 32

62 Healthcare Costs ($ millions) 2015 Budget 2015 Forecast 2016 Budget Gross Claims $5.4 $4.7 $4.7 Admin Fees Employee Contributions (1.3) (1.3) (1.3) Net Expenses $5.1 $4.4 $4.4 Number of employee participants Net monthly cost per participant $800 $697 $696 Following an increasing trend starting in 2012, SPP has experienced a decline in its medical plan costs since Total gross claims are estimated to be $4.7 million in 2016, which is in line with the 2015 forecast as well as the national healthcare cost trends. Approximately 91% of employees currently participate in the medical plan which is in line with previous years. The total estimated number of employee participants in 2016 is 522, compared to 532 in The decrease in the number of participants is primarily due to the fact that SPP retirees were removed from SPP s self funded plan in late Eligible retirees will now be provided monies through a tax free health reimbursement account to pay for individual Medicare supplement health insurance plans or other eligible health care expenses. Fees are paid to the insurance provider to cover administrative costs and insure against excessive losses at both the participant and corporate level. These fees are estimated to be $1.0 million in 2016, which is in line with For 2016, SPP is planning to mitigate the increase in fees that normally would have been incurred by increasing the deductible on per participant losses. Employee contributions to the medical plan offset the overall cost and are estimated to be $1.3 million in 2016, unchanged from The net cost of the medical plan to SPP per participant is expected to be approximately $696 per month in 2016, compared to $697 per month in The slight decrease is due to the estimated decrease in projected number of participants. SPP s Human Resource Committee targets an 80/20 cost share between employer and employee for the medical benefit costs. MAINTENANCE Maintenance expense is largely driven by new capital projects requiring annual support agreements to sustain the health and operation of the system BUDGET DRAFT SOUTHWEST POWER POOL PAGE 33

63 The maintenance budget includes expenses to maintain SPP s IT hardware and applications and for maintaining corporate facilities (general plant maintenance). Maintenance Expense ($ millions) 2015 Budget 2015 Forecast 2016 Budget Prior 2016 IT Software & Equipment $13.9 $13.1 $15.7 $15.8 General Plant Maintenance Total $14.7 $13.8 $16.8 $16.6 Realizing the considerable impact of maintenance costs, the IT Sourcing team is highly focused on this area and engages in efforts to minimize maintenance costs through various measures including leveraging multi year term agreements, aligning product purchases, pursuing priceprotection agreements, and right sizing the level of support with the criticality of the environment. The IT maintenance budget includes anticipated expenses to support SPP s operating environment. Maintenance agreements include necessary components such as product support, security patches, product updates, and software version upgrades. In particular, this budget includes: Maintenance and support agreements for hardware (servers, storage, network, etc.) Maintenance and support agreements for software (operating system, databases, tools, office products, usage licenses, etc.) Maintenance and support agreements for business applications (market, reliability, transmission, leveraged services, etc.) Service agreements for wind forecasting services The 2016 budget reflects an increase of $1.8 million and $2.6 million over the 2015 budget and forecast, respectively. This increase is driven primarily by new capital spending in 2016 of approximately $16.0 million which requires related annual support agreements to sustain the health and operations of the system. Capital spending in 2016 represents an estimated $1.4 million of the increase in maintenance expense over the 2015 forecast. Also contributing to the increase is the full year impact of maintenance expense associated with capital spending in 2015 (i.e. only a partial year of maintenance expense was incurred in 2015 depending on timing of purchase). Capital spending in 2015 represents an estimated $1.2 million of the increase in maintenance expense over the 2015 forecast BUDGET DRAFT SOUTHWEST POWER POOL PAGE 34

64 In some instances, the purchase of new capital equipment and software will replace existing products. Maintenance cost reductions are realized for new products that include a warranty; however, the majority of the 2016 capital spend is for incremental hardware and software, which results in overall increases of maintenance costs. Of the $15.7 million budgeted in 2016, maintenance expense is split approximately 80/20 between software and hardware, respectively. Maintenance Expense ($ millions) 2015 Budget 2015 Forecast 2016 Budget Prior 2016 Foundation $7.0 $6.4 $9.0 $6.7 Market Leveraged Services Reliability General Plant Maintenance Project/Other Transmission Total $14.7 $13.8 $16.8 $16.6 In addition to IT maintenance, various other facility expenses such as janitorial expense, landscape maintenance, and preventive maintenance are included in the maintenance budget BUDGET DRAFT SOUTHWEST POWER POOL PAGE 35

65 As SPP has occupied the facility for several years, trend analysis is used to estimate costs associated with general upkeep such as waste removal, landscape maintenance, janitorial services, etc. These costs remain fairly constant with only minimal increases projected. Costs associated with systems and equipment maintenance are generally defined within the multiyear service agreements (e.g. elevators, chillers, generators, etc.). These agreements are reviewed prior to the renewal dates for cost/benefit analysis. As the campus ages, additional cost are required for repairs and upkeep of the investment. Increases over 2015 are partially attributed to additional maintenance for coverage no longer included under the initial purchase agreements. The 2016 budget reflects such items including $0.3 million for repairs to the parking deck. OUTSIDE SERVICES Outside services expenses have increased from the 2015 forecast in various areas, but remain considerably lower than the 2015 budget and 2016 prior budget. Outside services consist of third party expertise to assist SPP in deploying various services, providing legal representation and advice, and satisfying audit requirements BUDGET DRAFT SOUTHWEST POWER POOL PAGE 36

66 Outside Services and Consulting by Division ($ millions) 2015 Budget 2015 Forecast 2016 Budget Prior 2016 Regulatory, Legal & MMU $4.5 $3.3 $3.9 $5.1 Information Technology Engineering Officer & Administrative Finance & Corporate Services Process Integrity Operations Corporate Communications & Governmen Interregional Relations & Market Design RTO Total $14.3 $11.9 $13.9 $16.0 Regional Entity SPP Consolidated Summary $16.1 $12.7 $15.1 $18.0 The largest component of the 2016 outside services budget is in the Regulatory and Legal department. Outside legal counsel is employed for various litigation matters throughout the year. Outside FERC counsel provides unique legal expertise on specific FERC matters and allows SPP to leverage the counsel s relationships with FERC staff, while also utilizing their knowledge of RTO specific matters. The 2015 budget included costs for Order 1000 Industry Expert Panel (IEP) of $1.3 million, with an offset in revenue to be recovered from the participants in the proposal process. This was based on the expectation SPP would issue multiple requests for proposals (RFPs); however, only one RFP was issued in The 2015 forecast reflects this reduction in costs. Due to the unpredictability of the number of proposals and given the costs associated with Order 1000 are offset by revenue (with no impact to the Admin fee calculation), no cost or revenue is included in the 2016 budget for new projects. Only cost and revenue for the proposal underway in 2015 are included in the 2016 budget. A provision in the Tariff (OATT) requires SPP to perform a Regional Cost Allocation Review (RCAR) to evaluate the reasonableness of the base plan allocation methodology and associated factors. Although the RCAR study was approved by the stakeholders and Board of Directors to begin 2015, the project was delayed at the request of the SPP Members. Incremental consulting costs to continue the review are again included in Plans are to engage the Rate Impact Task Force (RITF) for analysis to be completed in parallel with the RCAR BUDGET DRAFT SOUTHWEST POWER POOL PAGE 37

67 The Information Technology department incorporates outside services expense to engage consultants for various vendor support and staff augmentation needs. IT utilizes outside services for a variety of functions, including: o Software as a Service for WebOasis, Webtrans, and transmission reservation services o Third party data center services for hosting/storing remote data o Consulting for key projects and initiatives o Support for key application systems (e.g., CMS/POPS) o Staff augmentation for interim resource/skill requirements o IDC annual membership fees o Data Center cabling/wiring services, Asset disposal services o Vendor security/penetration testing, etc. Although the IT staff continually analyzes options and seeks opportunities to leverage existing staff, in many cases the utilization of external entities is more cost efficient based on the required skills or longevity of the project. SPP currently subscribes to a variety of services from one primary vendor which supports the facilitation of transmission, reliability, and compliance requirements. SPP upgrades or increases services as needs arise throughout the year. The agreement with the vendor serves as a continuation of those services and has been in place since The monthly fees cover upgrades and defect resolutions for all of the contracted products such as WebTrans, WebOASIS, webdata, WebCares, webimpact and premium service support fees. As a Reliability Coordinator, SPP is required by NERC to share in the cost of the Interchange Distribution Calculator (IDC) tool. The same vendor also supports the IDC tool, which was previously included in the Operations department budget. The Engineering department engages consultants for many aspects of the engineering planning processes including such areas as staff augmentation for Engineering studies, model building and reliability assessment for the Regional Entity, and administering the detailed project proposal (DPP) process related to FERC Order Generation Interconnection study requests are numerous, and consulting services are engaged to complete these studies when requests are greater than SPP staff can accommodate. As 2016 BUDGET DRAFT SOUTHWEST POWER POOL PAGE 38

68 appropriate, the consulting costs in these studies are passed through to the participants in the process. Engineering s existing Integrated Transmission Planning (ITP) efforts include the ITP Near Term (ITPNT), a new ITP10, and the Order 1000 requirements for the DPP windows in those studies. Many of the aspects of Order 1000, such as Detailed Project Proposals (DPP) and PROMOD support for ITP10, must be processed in a timely manner in order to stay within the ITP schedule and provide submitters the opportunity to cure any deficiencies in the proposals. With this short term duration and high volume of work, SPP will engage highly skilled technical analysts on a short term contract basis rather than hiring a permanent resource or issuing a long term consulting contract. The 2016 budget includes outside services and consultants in various other areas including the following: $1.6 million Officer and Administrative: BOD compensation, CIP/Cyber security, reporting analysis $1.2 million Finance & Corporate Services: facility and employee services, financial audits $1.1 million Regional Entity: audits and hearings $0.4 million Process Integrity: SOC Type 2 audit and CIP mock audit $0.3 million Operations: wind study $0.1 million Communications and Government Affairs: reporting and data services ADMINISTRATIVE AND LEASING EXPENSES Overall administrative and leasing expenses are expected to remain relatively consistent with the 2015 budget and forecast. Administrative expenses include items such as insurance premiums, small equipment purchases, property taxes, professional dues, utility and office expenses, and leases BUDGET DRAFT SOUTHWEST POWER POOL PAGE 39

69 Administrative & Leasing ($ millions) 2015 Budget 2015 Forecast 2016 Budget Prior 2016 Insurance $1.1 $1.1 $1.1 $1.2 Equipment Property tax Dues and donations Utilities Office Leases Total $5.1 $5.1 $5.2 $5.0 The largest component of the Administrative expense is insurance expense. The various components are listed below. Insurance Expense ($ millions) 2015 Budget 2015 Forecast 2016 Budget Prior 2016 Commercial excess liability $0.7 $0.7 $0.8 $0.7 Directors & Officers (D&O) liability General liability Workers compensation Total $1.1 $1.1 $1.1 $ BUDGET DRAFT SOUTHWEST POWER POOL PAGE 40

70 SPP s corporate insurance policies are used as a tool to transfer certain insurable risks from the corporation to third party insurers. The majority of SPP s premiums provide additional indemnification related to commercial excess liability and directors and officers liability. Commercial excess liability policies provide additional indemnification from claims arising from SPP s administration of its Open Access Transmission Tariff and other contractual arrangements. Director s and officer s liability policies provide additional indemnification to SPP s independent directors, management and employees from claims arising from certain actions taken in oversight of the corporation. Both policies include the insurer s obligation to pay for defense and legal costs for claims made, which can be very extensive. Dues are budgeted for professional or technical licenses and memberships in professional organizations which are related to employment by SPP, are required to maintain professional standing for employees, or are otherwise beneficial to SPP. In addition to such employee dues, Electric Power Research Institute (EPRI) membership dues are also included in the budget for access to research conducted on issues related to the electric power industry and account for half of the dues and donations expense. A three year contract with EPRI goes into effect in 2016 to expand participation in existing programs in grid operations, planning, renewable integration and HVDC applications. This $0.4 million per year agreement will include support for new markets initiatives, new tools to enable additional and more efficient NERC transmission planning compliance activities, and operational needs such as tools for system restoration. Engagement by SPP staff at EPRI provides value in terms of development of new tools and analytics such as case studies using SPP data to address ramping needs for the wind integration study. Utilities, office and leases expenses make up the remaining administrative expense and remain reasonably constant. SPP has historically leased printer/copier machines. Prior to the lease expiration in August 2015, SPP performed a thorough technical and financial review of replacement options considering multiple elements including technology lifecycle, print volume, purchase versus leasing price, residual values and maintenance costs. As a result of this analysis, SPP determined a sizeable cost advantage for purchasing the units rather than continuing the lease. The 2016 budget reflects zero leasing expense. COMMUNICATIONS INFRASTRUCTURE Communications infrastructure includes all expenditures related to SPP s internal and external networks and telecommunications. Network communications include frame relay and circuit costs, including components for bandwidth between data centers, as well as circuits to 2016 BUDGET DRAFT SOUTHWEST POWER POOL PAGE 41

71 members, market participants, etc. The increase in the 2016 communications budget over the 2015 forecast is based on projected growth of SPPnet and the addition of new members or market participants. Communications Infrastructure Communications ($ millions) 2015 Budget 2015 Forecast 2016 Budget Prior 2016 Network $4.0 $3.6 $3.9 $4.1 Cellular, Satellite, Long Distance Total $4.3 $3.8 $4.1 $4.4 TRAVEL AND MEETINGS In efforts to reduce travel and meeting expenses, SPP encourages the use of corporate facilities or member facilities when planning for external meetings. SPP also recommends organizational groups to include Little Rock in the rotation for working group meetings. Travel and meetings expenses are expected to increase in 2016 as compared to the 2015 forecast, but remain consistent with the prior year 2016 budget. The largest component of the increase is in the Regional Entity, where travel is budgeted at $0.3 million higher than the BUDGET DRAFT SOUTHWEST POWER POOL PAGE 42

72 forecast due to anticipated travel to utility sites to provide assistance with the new CIP compliance standards. Travel & Meetings ($ millions) 2015 Budget 2015 Forecast 2016 Budget Prior 2016 Travel expenses $2.1 $2.0 $2.4 $2.4 Board and committee metings Working group meetings Other meetings Total $3.1 $2.8 $3.4 $3.4 Travel & Meetings by Division ($ millions) 2015 Budget 2015 Forecast 2016 Budget Prior 2016 Finance & Corporate Services $0.6 $0.5 $0.7 $0.7 Officer & Administrative Process Integrity Operations Engineering Regulatory, Legal & MMU Information Technology Corporate Communications & Government Affairs Interregional Relations & Market Design RTO Total $2.4 $2.2 $2.7 $2.7 Regional Entity SPP Consolidated Summary $3.1 $2.8 $3.4 $ BUDGET DRAFT SOUTHWEST POWER POOL PAGE 43

73 VII BUDGET: DIVISION VIEW Total operating expense for each division is illustrated below and discussed in detail in the following section BUDGET DRAFT SOUTHWEST POWER POOL PAGE 44

74 INFORMATION TECHNOLOGY The primary mission of IT is to develop, deploy, integrate and support the applications and infrastructure that supply SPP's operational and corporate systems. IT is divided into three primary groups: IT Enterprise Operations, IT Applications, and IT Sourcing & Strategy. IT headcount remains relatively flat even though responsibilities have increased. The IT department has been able to absorb the increased workload without adding staff by increasing automation processes and by maintaining a highly qualified staff that is significantly leveraged across various technical platforms and disciplines BUDGET DRAFT SOUTHWEST POWER POOL PAGE 45

75 Information Technology Expense 2015 Budget 2015 Forecast 2016 Budget 2017 Budget 2018 Budget IT Sourcing & Strategy $15.4 $14.3 $16.9 $19.4 $21.3 IT Applications IT Enterprise Operations Information Technology $42.4 $38.9 $42.9 $45.7 $47.9 Headcount The IT Sourcing and Strategy department is responsible for overseeing the IT budget, including facilitating and negotiating business activities with major IT vendors. The team works closely with the other IT departments to assimilate an appropriate short and longterm budget and acquisition philosophy. This includes leveraging vendor relationships, managing asset lifecycles, and ensuring adequate maintenance coverage. The chief IT architect is responsible for IT s technical strategy and direction, including a technical roadmap that encompasses network, security, application, and operation infrastructures. The chief architect works closely with the IT management team, as well as other managers within the organization to coordinate and implement the overall IT strategy. In addition to staff expenses, the IT Sourcing and Strategy budget includes expenses for equipment and software maintenance for company wide IT systems, as well as outside services for wind and weather forecasting. The IT Applications department provides 24x7 support for existing systems including transmission, reliability, Integrated Marketplace, and Project Pinnacle applications. The department is responsible for coordinating all software development efforts related to these key business systems, as well as planning and supporting the integration of new members/entities such as Integrated System. The department plays an integral role in most new projects, including creating requirements, test and rollback plans; developing software; providing technical leadership; defining, implementing and reviewing architecture; and providing ongoing maintenance and support for the systems. The IT Applications group also tests and implements all software upgrades. During 2015, the department implemented a 24x7 support group known as the First Team, which consists of (6) IT programmers and analysts. This team provides immediate IT response to system issues by staffing a support desk within the Operations center, 24 hours a day. During 2016, the team will continue support of existing systems and applications, as well as the addition of new SPP members. IT has implemented the 2016 BUDGET DRAFT SOUTHWEST POWER POOL PAGE 46

76 plan to bring support in house for systems such as Credit Management System (CMS) and Post Operations Processing System (POPS) which were previously supported by outside entities. As a result, SPP s reliance and cost for outside services is reduced during SPP s decision to collect and utilize synchrophasor data to enhance its understanding of electric system stability results in the need to add a programmer/analyst position for 2016 and a database analyst position in The IT Enterprise Operations department provides 24x7 support for all communications and networking systems, and all computer hardware and environmental needs for the SPP data centers. Each of these activities is critical to SPP's transmission, market, reliability, and business processes. The department provides technical direction, leadership, and architectural design for the communications, network, storage, backup and recovery, and computing platforms for all aspects of the IT infrastructure utilized within SPP. IT Enterprise Operations has maintained a consistent headcount level for the past three years, while accepting a significant increase in workload (additional servers, increase in storage and capacity management, incremental software and security tools, etc.). In particular, the team inherited significant responsibilities related to CIP V5 and system security requirements. The department has been able to absorb the increased workload without adding staff by increasing automation processes and by maintaining a highly qualified staff that is significantly leveraged across various technical platforms and disciplines. The technical resources are cross trained in multiple areas allowing for both a primary and secondary level of support. The department historically has not utilized contractor resources to fulfill its responsibilities, and does not anticipate a need during the 2016 calendar year BUDGET DRAFT SOUTHWEST POWER POOL PAGE 47

77 Information Technology Expenses ($ millions) Expense 2015 Budget 2015 Forecast 2016 Budget 2017 Budget 2018 Budget Salary & Benefits $18.4 $17.6 $18.4 $18.9 $19.4 Maintenance & Leases Communications Outside Services Travel, Meetings & Admin Total Expense $42.4 $38.9 $42.9 $45.7 $47.9 Headcount Staffing expense is the main component of the IT budget. The next largest component is related to maintenance and communications, followed by outside services. These expenses are discussed in detail in Section VI. OPERATIONS The Operations group administers SPP s Tariff and performs reliability coordination throughout SPP s footprint, with a highly trained staff of engineers, certified system operators, and specialized support personnel to carry out this fundamental strategic goal BUDGET DRAFT SOUTHWEST POWER POOL PAGE 48

78 Operations staff are the front line employees who engage real time in the reliability and market aspects of SPP on a 24 hour a day, 7 days a week basis. Operations is divided into three primary groups: Systems Operations, Operations Support, and Markets Administration. Operations Expense 2015 Budget 2015 Forecast 2016 Budget 2017 Budget 2018 Budget Systems Operations $10.9 $10.4 $10.1 $10.4 $10.6 Operations Support Markets Administration Operations $22.0 $21.2 $22.0 $21.9 $22.4 Headcount BUDGET DRAFT SOUTHWEST POWER POOL PAGE 49

79 The Systems Operations department is responsible for ensuring 24x7 monitoring of the bulk grid in the SPP region and ensuring operators and support staff are properly trained and in compliance with NERC standards. The Markets Administration department is divided into two main groups that reflect the fundamental structure of real time and day ahead markets. Included are operators and engineers who oversee the operation of the Day Ahead market, while optimizing energy and capacity on a daily basis. Duties include providing data integrity in real time and performing data analyses after the fact to optimize the benefits for SPP s market participants. Staffing levels were assessed during the project planning phase for the PMU Data Exchange project. SPP s decision to collect and utilize synchrophasor data to enhance its understanding of electric system stability results in the need to add Senior Engineer position for This position will be responsible for the planning, implementation, and custom development to benefit real time operations and to increase the reliability of the electric grid. The Operations Support department provides support services to the Operations division in areas such as outage coordination, load forecasting, modeling and data validation, and market data and registration, as well as extensive customer interaction and support. Operations has committed to a reduction of two senior level positions by the end of As a result, two positions have been removed from the 2017 budget. This reduction will be achieved through efficiencies gained from a maturing staff, who will be able to absorb workload as turnover occurs. Staffing levels will be reduced by two positions in Operations Support by the end of BUDGET DRAFT SOUTHWEST POWER POOL PAGE 50

80 Expense Operations 2016 Budget ($ millions) 2015 Budget 2015 Forecast 2016 Budget 2017 Budget 2018 Budget Salary & Benefits $21.2 $20.1 $21.3 $21.5 $22.0 Travel, Meetings & Administrative Outside Services Total Expense $22.0 $21.2 $22.0 $21.9 $22.4 Headcount Staffing expense is the main component of the Operations budget, followed by travel, meetings & administrative expense. Outside services costs in Operations are declining in 2016 as a result of a reassignment of costs to the IT budget. Annual consulting expense associated with the shared cost of the interchange distribution calculator (IDC) tool was included in Operation s budget during 2015; however, this cost has subsequently been moved to the IT budget beginning in The Operations 2016 outside services budget does include cost for a wind study as recommended by the executive team. SPP will soon reach and exceed wind penetration levels studied in A new study is needed to ensure future reliable operations. Increases in travel, meetings and administrative expenses are driven primarily by stakeholder and working group meetings, technical training, and professional membership/licenses BUDGET DRAFT SOUTHWEST POWER POOL PAGE 51

81 ENGINEERING The Engineering division s mission is to facilitate SPP s strategic goal of continued development of a robust transmission system within the SPP footprint, while creating optimum value for stakeholders, members, and customers. Principal duties of SPP s engineering department include planning SPP s transmission system to meet future regional reliability, economic, and public policy needs in an optimized manner; tracking progress and costs of approved transmission expansion projects; and performing longer term studies necessary to process requests for generation interconnection, transmission service, and transmission congestion rights. The department performs data gathering and reliability assessment responsibilities in support of the Regional Entity. The predominance of these duties are required by SPP s open access transmission tariff (OATT) and business practices, the membership agreement (MA), NERC Reliability Standards, and SPP criteria. The Engineering division s mission is to facilitate SPP s strategic goal of continued development of a robust transmission system within the SPP footprint, while creating optimum value for stakeholders, members, and customers. The Engineering division is comprised of four departments: Engineering Planning, Modeling, R&D and Special Studies, and Support & Resource Coordination BUDGET DRAFT SOUTHWEST POWER POOL PAGE 52

82 Engineering Expense 2015 Budget 2015 Forecast 2016 Budget 2017 Budget 2018 Budget Engineering Planning $6.6 $6.2 $7.9 $7.7 $7.4 R&D and Special Studies Support & Resource Coord Engineering Modeling Engineering $11.9 $10.7 $13.3 $12.9 $12.9 Headcount BUDGET DRAFT SOUTHWEST POWER POOL PAGE 53

83 The primary focus of the Engineering Planning department involves transmission planning studies and the Integrated Transmission Planning (ITP) process. A key goal of the department in 2016 is increasing the skill and knowledge level of its staff through intensive training and development of employees to meet SPP s strategic goals and plans for The 2016 budget includes a three to five day training course for each staff member to attend. The cost of various studies conducted by the planning department are recovered from the customers requiring the studies. SPP expects $2.4 million in revenues in 2016 related to the studies performed. Generation interconnection studies have increased in volume over the last two studies as a result of the addition of new business processes and an increase in variable generation requests, such as wind and solar. The additional study request volume is covered by an increase in outside services, and the costs are passed through to the study participants. The costs associated with providing Order 1000 support within the studies varies, depending on inputs from stakeholders and stages of the ITP studies. Even though Engineering has been successful in reducing costs associated with certain extended contracts for outside services, SPP will engage highly skilled technical analysts in 2016 on a short term contract basis rather than hiring permanent resources or issuing longterm contracts for certain aspects of Order 1000 responsibilities. Outside Services costs are further defined in the next section. The Engineering Planning department added two positions in the 2016 budget. An Engineer II position on the Congestion Hedging team will be assigned primarily to the increasing work volume as a result of the TCR (Transmission Congestion Rights) auction process and enhancements to the Long Term Congestion Rights (LTRC) process. An Engineer I position on the Economic Planning team will support functions related to the ITP10, coordinated system planning, and RCAR assessments. The Modeling department creates and maintains the power flow models used by the transmission planning and tariff studies groups and coordinates with members to ensure accuracy of the models, which is a critical step in planning investments in the regional transmission grid. Some resources within the Modeling department perform functions for the Regional Entity (RE), including model building and reliability assessment, which are required by NERC. Time logged for these activities is ultimately reimbursed from the RE through the funding SPP receives from NERC. The budget assumes an estimated 4.5 FTEs dedicated to RE. NERC requirements for building models are identified by specific models on demand (MOD). The number of FTEs dedicated to RE could increase with changes to the standards outlined in the MODs. NERC MOD BUDGET DRAFT SOUTHWEST POWER POOL PAGE 54

84 is changing to planning coordinator based model building, which would move the charges to the RTO instead of the RE. An incremental Engineer II position is included in the 2016 budget as a result of MOD 033 which requires SPP to implement a documented process to perform model validation within its planning area. The main goal of the R&D and Special Studies department is to assess new approaches and tools to refine performance objectives that align with future needs. A new synchrophasor project was introduced as a result of earlier research performed by this department and will be coordinated with Operations and IT to further develop implementation needs and requirements. The use of synchrophasor data in event analysis and real time monitoring are expected to enhance SPP s knowledge of the electric system stability which will result in improved system operations and planning. The department budgets for research and information tools, such as publications and membership in Electric Power Research Institute (EPRI), and for industry expert consulting services to provide solutions for planning and operations process improvements. A goal of the department is to conduct centralized R&D activities to benefit SPP s stakeholders. For example, EPRI is currently engaging members KCPL and NPPD in their PMU pilot program. In addition staff supports several projects at multiple energy industry groups with projects that span 24 to 36 months. The Support and Resource Coordination department provides business solutions and efficiencies, and resource coordination and allocation for engineering projects. The resource coordination and time tracking initiative allows management visibility to assess workload assignments to ensure high quality and timely completion of Engineering department duties. The department is responsible for managing consultants for work on the Detailed Project Proposal (DPP) cost estimation process as outlined in the FERC Order 1000 and the ITP10 study process. The cost estimation process is a specific skillset and occurs in a short, high activity time span. As a result, the process is performed by consultants when called upon within the ITP study. Staffing expense is the main component of the Engineering budget, followed by outside services and travel, meetings & administrative expense BUDGET DRAFT SOUTHWEST POWER POOL PAGE 55

85 Engineering Expenses ($ millions) Expense 2015 Budget 2015 Forecast 2016 Budget 2017 Budget 2018 Budget Salary & Benefits $9.2 $8.5 $9.6 $9.9 $10.1 Outside Services Travel, Meetings & Administrative Total Expense $11.9 $10.7 $13.3 $12.9 $12.9 Headcount Outside services is the second largest expense behind salary and benefits. Travel, meetings & administrative costs are driven primarily by stakeholder and working group meetings, technical training, and professional membership and licenses. Engineering Outside Services ($ millions) 2015 Budget 2015 Forecast 2016 Budget 2017 Budget 2018 Budget Engineering Planning $1.0 $1.0 $2.2 $1.7 $1.3 Suport & Resource Coord R&D and Special Studies Modeling Total $1.8 $1.4 $2.8 $2.1 $1.9 Outside services are used to augment staff within Engineering for three main purposes: FERC Order 1000 process activities within the ITP planning studies, pass thru expenses for 2016 BUDGET DRAFT SOUTHWEST POWER POOL PAGE 56

86 Generation Interconnection, Transmission Service, and Attachment AQ studies, and skill specific consulting. There are two ITP studies planned for completion in 2016, resulting in higher costs in 2016 as compared to the 2015 forecast. In addition to the increase in the number of ITP studies, the stakeholders requested that an additional future be performed in connection with the ITP 10 study. Normally only two futures are considered with each ITP study. With stakeholder approval, three futures will be run with this year s ITP 10 resulting in higher consulting costs. The additional future, along with stricter business practices is expected to push the DPPs received from 1,600 in 2014 to 3,200 in 2016, which will increase the need for external resources during this time period in order to meet the approved schedules. Generation Interconnection, Transmission Service, and Attachment AQ studies are based on the volume of participants. Since that volume can vary, outside services are retained to support those studies over and above the current staff level. This is a pass thru expense, with revenue collected from the study participants. A significant increase in Generation Interconnection studies is anticipated in 2016 due to recent process changes which will increase the need for external consultants. At certain times, studies performed within Engineering require a specific type of service. These services may be short lived in nature but are necessary to the study process. Detailed project construction cost estimation and specific modeling techniques are examples of the skill sets consultants provide. PROCESS INTEGRITY The Process Integrity division provides leadership, expertise and value added services that drive increased organizational efficiency, effectiveness, and customer service excellence. Although the departments that comprise the Process Integrity Division are specialized in their focus and areas of expertise (as detailed below), they all provide facilitation services leveraged across all other SPP divisions to help create member value. The functions within Process Integrity range from primarily internally focused duties to those whose purpose is to deliver value added services directly to SPP members, customers, and other stakeholders. Departments within this group work closely with the SPP Oversight Committee BUDGET DRAFT SOUTHWEST POWER POOL PAGE 57

87 Process Integrity Expense 2015 Budget 2015 Forecast 2016 Budget 2017 Budget 2018 Budget Project Management $1.9 $1.8 $2.0 $2.0 $2.1 SPP Compliance Customer Training Internal Audit Customer Relations Interregional Affairs Business Process Improvements Process Integrity $8.7 $8.4 $8.7 $8.9 $9.1 Headcount BUDGET DRAFT SOUTHWEST POWER POOL PAGE 58

88 The Project Management Office (PMO) department is responsible for overseeing and coordinating the design, development, and implementation of projects within SPP. Although consulting costs for staff augmentation was included in the 2015 budget, the PMO does not anticipate a need for external support for the budget. The main goals for the Compliance department are assuring reliability standards and tariff compliance for the organization; overseeing physical and cyber security (including cyber vulnerability assessments, security monitoring, threat evaluation, and incident response); providing risk mitigation functions throughout the SPP organization; and facilitating member compliance outreach in coordination with the Board Oversight Committee. The Stakeholder Services group encompasses two departments, Customer Relations and Customer Training. Customer Relations builds and maintains mutually beneficial relationships in support of the critical functions of SPP. The department provides facilitation, coordination, issue resolution, planning and organization, and account management through targeted communication to SPP s customers, market participants and stakeholders. Interactions with and inquiries from stakeholders have increased significantly since the implementation of the Integrated Marketplace, with a monthly average of 460 inquiries from the Request Management System (RMS). In response to the increased activity, processes were implemented which have increased the first call resolution from 16% in September 2014 to 36% in August During the past 12 months, 97.4% of stakeholders indicated they were satisfied with the RMS as measured by the satisfaction survey administered when an issue is resolved and closed. Customer Training provides educational activities intended to further develop and train SPP Stakeholders to enhance the knowledge and skills they require for the reliable operation of the bulk power system and to participate effectively and efficiently in SPP s energy market within North America. Customer Training offers over 100 learning events for Marketplace Training, including online courses, instructor led classroom training, virtual (net conference) instructor led training, videos, learning bursts, Market Symposium, as well as additional reference materials and job aids. In addition, regional emergency operations training is offered including system operations conferences, regional emergency operations classroom sessions, train the trainer events, system restoration drills, emergency response drills, REOPS net conferences, self study courses, and learning bursts. In 2016, Customer Training is offering one additional system operations conference, one additional REOPS classroom session, two partial restoration drills (coordinated with MISO and TVA), and six member emergency response exercises BUDGET DRAFT SOUTHWEST POWER POOL PAGE 59

89 The mission of the Internal Audit department is to provide independent and objective assurance and advisory services that are designed to add value and improve SPP s operations. The department maintains and implements a risk based audit schedule covering all of SPP business units. A critical function of the Internal Audit department is the coordination of the annual SSAE 16 audit, which evaluates SPP s internal controls as a service organization. The focus going forward is ensuring the effectiveness and reliability of SPP s internal controls supporting Integrated Marketplace functions. The Business Process Improvement department functions as catalysts to help SPP departments increase member value in two distinct areas. BPI facilitates the identification of continuous improvement opportunities and mentors staff in applying a standard methodology for developing and implementing efficient and effective business processes. The Emergency Management and Business Continuity (EMBC) portion of BPI leads organization wide planning, training and testing efforts designed to protect human health and safety, and ensure the effective coordination and management of SPP resources to minimize risk and disruption of business operations in emergency situations. The Interregional Affairs department is involved in the industry wide standard development efforts by serving in leadership roles in both NERC and NAESB. The Reliability Standards staff provides SPP leadership in the national effort to develop meaningful and achievable reliability standards. Working with other SPP staff, members, and industry experts, the department works to ensure the standards necessary to maintain a reliable bulk electric system are in place, with clear, effective, reasonable, and measurable requirements. Staffing expense is the main component of the Process Integrity budget, followed by outside services and travel, meetings & administrative expense. The outside services expense is driven by staff augmentation in the SPP Compliance department for CIP V5 mock audits and in Business Process Improvements department for EMBC test exercises BUDGET DRAFT SOUTHWEST POWER POOL PAGE 60

90 Expense Process Integrity Expenses ($ millions) 2015 Budget 2015 Forecast 2016 Budget 2017 Budget 2018 Budget Salary & Benefits $7.9 $7.6 $7.9 $8.1 $8.3 Outside Services Travel, Meetings & Administrative Total Expense $8.7 $8.5 $8.7 $8.9 $9.1 Headcount BUDGET DRAFT SOUTHWEST POWER POOL PAGE 61

91 MARKET DESIGN AND INTERREGIONAL RELATIONS Two distinct departments are managed under the Market Design and Interregional Relations division. Interregional Relations & Market Design Expense 2015 Budget 2015 Forecast 2016 Budget 2017 Budget 2018 Budget Market Design $1.2 $1.3 $1.2 $1.2 $1.2 Interregional Relations Interregional Relations & Market Design $1.7 $1.8 $1.6 $1.7 $1.7 Headcount BUDGET DRAFT SOUTHWEST POWER POOL PAGE 62

92 The Market Design department is responsible for the evolution of the energy and capacity markets, which is achieved through interactions and cooperation with members and other stakeholders while creating and enhancing markets in a memberdriven way. Other goals of market design are to maintain reliability and pursue innovative ways to increase reliability through economics. The department has three key responsibilities: o Create and modify the current SPP regional market design through a memberdriven process o Conduct quality assurance functions to ensure implemented processes and systems are consistent with the market design o Support other market related initiatives for the development of new members and initiatives The Interregional Relations department works closely with SPP s members and neighboring entities to ensure interregional seams activities are coordinated across the SPP organization in accordance with requirements contained in SPP s seams agreements. Coordination with MISO and other neighbors on seams issues and joint operating agreements have become increasingly important due to the heightened operational and financial impacts to the seams parties. The department also continues to support efforts to bring new members into SPP BUDGET DRAFT SOUTHWEST POWER POOL PAGE 63

93 Expense Interregional Relations & Market Design Expenses ($ millions) 2015 Budget 2015 Forecast 2016 Budget 2017 Budget 2018 Budget Salary & Benefits $1.5 $1.5 $1.5 $1.5 $1.6 Travel, Meetings & Administrative Outside Services Total Expense $1.7 $1.8 $1.6 $1.7 $1.7 Headcount Staffing expense is the main component of the Market Design and Interregional Coordination budget, followed by travel, meetings & administrative expense and outside services expense. These costs are driven primarily by stakeholder and working group meetings, technical training, and professional membership and licenses. Although staff augmentation was required in 2015, none is anticipated for the budget. Minimal expense is included for an Inter RTO council (IRC) consulting contract for coordinated cross RTO/ISO analysis (e.g., market design comparison across North American RTO/ISOs) BUDGET DRAFT SOUTHWEST POWER POOL PAGE 64

94 LEGAL, REGULATORY AND MARKET MONITORING This division is comprised of four distinct departments including: Legal, Regulatory Policy, Market Monitoring, and Regional State Committee. Regulatory, Legal and MMU Expense 2015 Budget 2015 Forecast 2016 Budget 2017 Budget 2018 Budget Legal $3.9 $4.2 $4.3 $4.3 $4.3 Regulatory Market Monitoring Regional State Committee Regulatory, Legal & MMU $10.2 $8.9 $10.0 $9.1 $9.2 Headcount BUDGET DRAFT SOUTHWEST POWER POOL PAGE 65

95 The Legal department continues to evolve into a value added internal resource with the goal of reducing costs for and dependency on outside counsel, especially in FERC matters. Over the past 5 years the Legal department has internalized a significant amount of legal work. While these saving have already been achieved, the Legal department continues to seek ways to create efficiencies. The Regulatory Policy department has responsibility for all regulatory filings related to tariff implementation and revisions. The outside services expense budget includes costs for the Order 1000 Industry Expert Panel (IEP), which is recovered in revenue from the participants in the proposal process. No new IEP costs are included in the 2016 budget due to the unpredictability of the number of proposals which may be received and given the costs associated with Order 1000 are offset by revenue. The only costs included are for the RFP currently underway. A provision in the Tariff (OATT) requires SPP to perform a Regional Cost Allocation Review (RCAR) at least every three years. Although the latest review began in 2015, the project was delayed at the request of SPP members. Incremental consulting costs to continue the review are included in The main focus of the Market Monitoring department is to improve its capabilities by implementing enhanced analytic tools and new monitoring screens. The MMU continues to concentrate on improving the efficiency of reporting activities and ensuring compliance with Tariff requirements and FERC expectations. The MMU hired outside legal counsel to provide support for the MMU in 2015 in order to provide additional independence for the MMU. This is expected to be an annual expense and is reflected in the budget for Staffing levels were assessed in 2015 and one Senior Market Monitor position was added for This position will support increased market design issues, behavior studies of market participants, FERC requests, and other ad hoc studies. The SPP Regional State Committee (RSC) was established to provide both direction and input on all matters pertinent to the participation of the members in SPP. The SPP RSC provides collective state regulatory agency input on matters of regional importance related to the development and operation of bulk electric transmission. It is comprised of retail regulatory commissioners from agencies in Arkansas, Kansas, Missouri, Nebraska, New Mexico, Oklahoma, and Texas BUDGET DRAFT SOUTHWEST POWER POOL PAGE 66

96 Expense Regulatory, Legal & MMU Expenses ($ millions) 2015 Budget 2015 Forecast 2016 Budget 2017 Budget 2018 Budget Salary & Benefits $5.5 $5.2 $5.7 $5.8 $6.0 Outside Services Travel, Meetings & Administrative Total Expense $10.2 $8.9 $10.0 $9.1 $9.2 Headcount Staffing expense is the main component of the Regulatory, Legal and MMU budget, followed by outside services and travel, meetings & administrative expense BUDGET DRAFT SOUTHWEST POWER POOL PAGE 67

97 CORPORATE COMMUNICATIONS AND GOVERNMENT AFFAIRS This division, formerly called Communications, has been segregated into two separate departments with specific functions performed by each. Corporate Communications & Government Affairs Expense 2015 Budget 2015 Forecast 2016 Budget 2017 Budget 2018 Budget Corporate Communications $0.6 $0.6 $0.6 $0.6 $0.6 Government Affairs Corporate Communications & Gov't Affairs $0.6 $0.6 $0.8 $0.8 $0.8 Headcount The Corporate Communications department is responsible for directing the internal and external communications for SPP. The department develops and implements strategic communications plans to educate the public on SPP s mission and drive engagement among employees. The department also creates and preserves SPP s brand image 2016 BUDGET DRAFT SOUTHWEST POWER POOL PAGE 68

98 through its website, public presentations, collateral material, and social media. The Corporate Communications department executes this strategy through various means, including communicating the value of transmission to stakeholders, regulators, and the general public. A multi faceted public awareness campaign is planned for 2016 to promote a new value of transmission study, which is expected to be publicly released in January. The campaign will be coordinated with the company s The 2016 budget includes additional expense related to SPP s 75th anniversary events. 75th anniversary celebration. Additionally, the department plans to redesign in 2016 the company s intranet (The Circuit) to improve communication and collaboration between SPP staff. The redesign follows the successful transition to a new external website in October 2015, following months of planning, development and testing. The newly developed Government Affairs and Public Relations department was established to improve working relationships with customers throughout SPP s footprint and to facilitate the dissemination of information to local, regional, state and federal agencies; legislative committees; policymakers and elected officials; the general public; and business and industry trade organizations who are engaged with or interested in the bulk electric system. The Government Affairs and Public Relations department facilitates and coordinates these relationships to develop a communications strategy to provide educational information to governmental entities, trade organizations and the general public BUDGET DRAFT SOUTHWEST POWER POOL PAGE 69

99 Expense Communications & Government Affairs Expenses ($ millions) 2015 Budget 2015 Forecast 2016 Budget 2017 Budget 2018 Budget Salary & Benefits $0.5 $0.6 $0.6 $0.6 $0.6 Travel, Meetings & Administrative Outside Services Total Expense $0.6 $0.6 $0.8 $0.8 $0.8 Headcount Staffing expense is the main component of the Communications & Government Affairs budget, followed by travel, meetings & administrative expense and outside services expense. Outside services expense is primarily related to media outreach including news release distribution, media monitoring, and photography and videography services BUDGET DRAFT SOUTHWEST POWER POOL PAGE 70

100 FINANCE AND CORPORATE SERVICES In addition to Corporate Services, this division also includes Settlements, Credit and Risk Management, and Accounting and Purchasing departments. Finance & Corporate Services Expense 2015 Budget 2015 Forecast 2016 Budget 2017 Budget 2018 Budget Corporate Services $6.3 $5.8 $6.9 $6.4 $6.5 Settlements Accounting Credit Finance & Corporate Services $11.1 $10.6 $11.9 $11.6 $11.8 Headcount BUDGET DRAFT SOUTHWEST POWER POOL PAGE 71

101 The fundamental purpose of the Settlements department surrounds two of the seven critical functions required to implement SPP s overall strategy, which are tariff and market administration. The department s primary goal is to settle transactions which occur under the tariff and subsequently calculate charges and revenues based on the tariff regulations. Much of the information collected and created throughout SPP is administered within the Settlements department processes, including operational decisions that impact customer settlement statements. Software upgrades, process improvements, efficiency metrics tracking, and the cross training of staff has resulted in the ability to maintain constant staffing levels without dependency on staff augmentation. The Credit and Risk Management department administers the extension of credit to market participants and works to protect the market participants and members from losses through diligent underwriting and collection efforts. The products within the Integrated Marketplace are much more complex and represent a significant increase in default risk due to a significant expansion in market participation and increasing settlement amounts. The department s goal is to carefully monitor the increased risk and respond as necessary to continually protect the market participants and members. The Accounting and Purchasing department is responsible for invoicing, cash management, payment processing, internal and external reporting, budgeting and forecasting, corporate accounting, and end to end procurement services. The Corporate Services department is comprised of Human Resources, Corporate Facilities, and Corporate Administrative Services departments. These teams provide support services to SPP employees and members and offer a work environment supporting SPP s business model and culture BUDGET DRAFT SOUTHWEST POWER POOL PAGE 72

102 Expense Finance & Corporate Services Expenses ($ millions) 2015 Budget 2015 Forecast 2016 Budget 2017 Budget 2018 Budget Salary & Benefits $7.7 $7.4 $8.0 $8.1 $8.3 Outside Services Maintenance & Leases Administrative Travel & Meetings Total Expense $11.1 $10.6 $11.9 $11.6 $11.8 Headcount Staffing expense is the main component of the Finance & Corporate Services division. Outside services, maintenance, and administrative expenses are primarily in the Corporate Services department related to support services for the facility and staff (i.e., building maintenance, security, office supplies, etc.) BUDGET DRAFT SOUTHWEST POWER POOL PAGE 73

103 OFFICER AND ADMINISTRATIVE The Officer department includes the executives who oversee the overall business operations and provide strategic direction to SPP. The Administrative department includes certain corporate administrative costs such as insurance, pension and retiree healthcare, and property taxes. These expenses are discussed in detail in section VI. Officer & Administrative Expenses ($ millions) * Expense 2015 Budget 2015 Forecast 2016 Budget 2017 Budget 2018 Budget Retiree Pension & Healthcare Expense $3.0 $6.0 $6.0 $6.1 $6.2 Salary & Benefits Insurance & Property Tax Outside Services Travel, Meetings & Administrative Vacancy (4.1) (1.0) (3.6) (3.6) (3.7) Total Expense Headcount * Excluding Interest, Deprec & FERC Fees Pension & retiree healthcare expense for the 2015 forecast and 2016 budget amounts are based on the actuarial calculated pension expense, whereas the 2015 budget was based on anticipated cash funding. This change in methodology creates a $3.0 million unfavorable variance when compared to 2015 budget amounts. The estimated vacancy rate is included in the salary and benefits budget of the Administrative department. Since this adjustment is reflected here instead of at the individual department level, the forecast is higher in comparison to the yearly budgets, as the forecast has been adjusted for vacancies at the department level with a minimal amount remaining in the Administrative department. The 2015 budget assumed a 5% vacancy rate while the 2015 forecast reflects a 4% rate. SPP is expecting vacancies of 4% for the budgets and forecasts BUDGET DRAFT SOUTHWEST POWER POOL PAGE 74

104 VIII. DEBT SERVICE SPP secures funds from financial institutions and investors to finance its capital projects. SPP s capital projects are funded from monies borrowed under medium and long term credit agreements, primarily with institutional investors. These costs are not directly included in SPP s net revenue requirement (NRR); however, annual principal and interest payments for borrowings (net of capitalized interest) are considered in the NRR calculation. SPP s outstanding borrowings are projected to equal $247.9 million as of Jan. 1, Interest and principal payments included in the 2016 NRR are shown in the table below. SPP s policy is to capitalize interest costs for assets meeting certain criteria to obtain a measure of acquisition cost that more closely reflects SPP s total investment in the asset, in accordance with U.S. Generally Accepted Accounting Principles (GAAP). Projects with anticipated costs exceeding $5.0 million with an anticipated duration of greater than 18 months are subject to interest capitalization. The Enhanced Combined Cycle and Gas Day project that began in 2015 and is slated to conclude by the end of 2016 is the only project in SPP s 2016 project portfolio that qualifies for interest capitalization. SPP signed a new credit agreement with a commercial bank in 2014 for a $33.0 million multiple advance term facility. The draw period on this facility expires during the first quarter of Funds from this credit facility are expected to cover SPP s capital expenditure purchases through Currently, SPP has not drawn on the facility but will do so prior to the expiration of the draw period. The schedule below shows the principal amounts outstanding for each borrowing at the beginning and end of the budget periods, as well as annual principal payments BUDGET DRAFT SOUTHWEST POWER POOL PAGE 75

105 FUTURE DEBT REPAYMENTS SCHEDULE Issue Date Issue Amount Due Date Balance 1/1/ Prin. Pmts Prin. Pmts Prin. Pmts. Balance 12/31/ % notes due /23/2009 $30.0 Jul 16 $3.0 ($3.0) $0.0 $0.0 $ % notes due /23/2007 $5.1 Feb 27 $3.3 ($0.2) ($0.2) ($0.2) $ % construction notes due 2042 (2010A, 2010B) 10/31 & 12/28/2010 Future Debt Repayments ($ millions) $65.0 Dec 42 $61.9 ($1.1) ($1.2) ($1.3) $ % integrated markets 3/30/2011 $70.0 Mar 24 $57.8 ($7.0) ($7.0) ($7.0) $36.8 notes due 2024 (2010C) 3.00% capital funding 5/30/2012 $50.0 Mar 24 $41.3 ($5.0) ($5.0) ($5.0) $26.3 notes due 2024 (2012D 1) 3.25% capital funding 11/30/2012 $50.0 Sep 24 $43.8 ($5.0) ($5.0) ($5.0) $28.8 notes due 2024 (2012D 2) 3.8% capital funding 3/21/2014 $37.0 Dec 25 $37.0 $0.0 $0.0 $0.0 $37.0 notes due 2025 (2014 E) 4.95% senior notes due 3/10/2014 $33.0 Mar 24 $0.0 ($2.3) ($3.0) ($3.0) $ * Capital lease obligation 2/1/2015 $6.9 Nov 19 $6.4 ($0.6) ($1.8) ($1.9) $2.1 New borrowing /1/2017 $25.0 Dec 21 ($6.3) $18.8 New borrowing /1/2018 $25.0 Dec 22 $25.0 Total $397.0 $254.3 ($24.2) ($23.2) ($29.6) $260.3 * 4.95% Senior Notes will be funded in the amount of $33 million in BUDGET DRAFT SOUTHWEST POWER POOL PAGE 76

106 IX. SUPPLEMENTAL ANALYSIS AND SCHEDULES INCOME STATEMENT COMPARISON ($ MILLIONS) Budget Forecast Budget Prior* Income Tariff Administration Service $141.1 $145.4 $150.7 $147.1 Fees & Assessments Contract Services Revenue Miscellaneous Income Total Income $174.6 $178.4 $182.1 $181.8 Expense Salary & Benefits $80.0 $82.5 $85.2 $83.7 Employee Travel Administrative Assessments & Fees Meetings Communications Leases Maintenance Services Regional State Committee Depreciation & Amortization Other Expense Total Expense $210.0 $206.4 $217.1 $220.6 Net Income (Loss) ($35.4) ($28.1) ($35.0) ($38.8) Debt Repayment $24.3 $24.9 $24.2 $23.6 MW/h Forecast (in millions) Net Revenue Requirement $138.6 $137.6 $146.8 $147.1 NRR Adjustments $2.5 $7.2 $3.7 $0.0 Calculated Admin Fee / MWh $0.389 $0.388 $0.370 $0.370 Recommended Admin Fee / MWh $0.390 $0.390 $0.370 $0.370 Tariff Cap on Admin Fee $0.390 $0.390 $0.390 $0.390 Capital Expense $28.9 $24.2 $22.2 $19.2 Headcount * 2016 projection as presented in the 2015 budget 2016 BUDGET DRAFT SOUTHWEST POWER POOL PAGE 77

107 INCOME STATEMENT (MILLIONS $) Budget Forecast Forecast Income Tariff Administration Service $150.7 $151.0 $153.9 Fees & Assessments Contract Services Revenue Miscellaneous Income Total Income $182.1 $182.1 $185.7 Expense Salary & Benefits $85.2 $86.8 $88.8 Employee Travel Administrative Assessments & Fees Meetings Communications Leases Maintenance Services Regional State Committee Depreciation & Amortization Other Expense Total Expense $217.1 $192.9 $187.5 Net Income (Loss) ($35.0) ($10.7) ($1.8) Debt Repayment $24.2 $23.2 $29.6 MW/h Forecast (in millions) Net Revenue Requirement $146.8 $148.5 $158.6 NRR Adjustments $3.7 $2.2 $0.0 Calculated Admin Fee / MWh $0.370 $0.370 $0.389 Recommended Admin Fee / MWh $0.370 $0.370 $0.389 Tariff Cap on Admin Fee $0.390 $0.390 $0.390 Capital Expense $22.2 $29.7 $21.0 Headcount BUDGET DRAFT SOUTHWEST POWER POOL PAGE 78

108 BALANCE SHEET ($ MILLIONS) 12/31/ /31/2016 ASSETS Current Assets Cash & Equivalents $39.5 $39.3 Restricted Cash Deposits Accounts Receivable (net) Other Current Assets Total Current Assets Total Fixed Assets Total Other Assets Investments TOTAL ASSETS $468.2 $456.7 LIABILITIES & EQUITY Liabilities Current Liabilities Accounts Payable (net) $29.6 $20.1 Customer Deposits Current Maturities of LT Debt Other Current Liabilities Deferred Revenue Total Current Liabilities Long Term Liabilities US Bank Maumelle Mortgage Campus 4.82% Senior Notes Integrated Marketplace 3.55% Senior Notes Capital Funding 3.00% Capital Funding 3.25% Capital Funding 3.8% Capital Funding 4.95% Capital Lease Obligation Other Long Term Liabilities Total Long Term Liabilities Net Income (28.1) (35.0) Members' Equity (86.9) (115.0) Total Members' Equity (115.0) (150.0) TOTAL LIABILITIES & EQUITY $468.2 $ BUDGET DRAFT SOUTHWEST POWER POOL PAGE 79

109 CASH FLOW FORECAST ($ MILLIONS) Operating Activities Net loss ($35.0) ($10.7) ($1.8) Items not requiring cash Depreciation and amortization Changes in assets and liabilities 4.4 Net cash provided by operating activities Investing activities Acquisition of property and equipment (22.2) (29.7) (21.0) Net cash used in investing activities (22.2) (29.7) (21.0) Financing activities Repayments of long term debt (24.2) (23.2) (29.6) Repayment of line of credit (5.0) Issuance of long term debt Net cash used in financing activities (4.6) Increase/(Decrease) in Cash and Cash Equivalents 10.7 (5.3) (3.5) Cash and Cash Equivalents, Beginning of Year * Cash and Cash Equivalents, End of Year * $13.3 $8.0 $4.5 * Operating and capital spending cash accounts BUDGET DRAFT SOUTHWEST POWER POOL PAGE 80

110 CAPITAL PROJECTS LIST ($ MILLIONS) Prior Year(s) 2016 Budget 2017 Forecast 2018 Forecast Total Capital Carry Over Projects Enhanced Combined Cycle and Gas Day $2.1 $5.0 $0.7 $0.0 $7.7 Transmission Settlements Upgrade Z2 Crediting Process Phase New Projects EMS Software and OS Upgrade $0.0 $2.8 $2.4 $5.2 Dispatcher Training Simulator Upgrade PMU Data Exchange Identity and Access Management Z2 Crediting Tool Priority 2 & Local Reliability Assessment Factor Authentication ICCP Hardware/Software Upgrade FERC Order 676 H NITS WebOasis Modifications Liferay Portal Replacement Circuit Redesign Other Total Non Foundation Projects $3.7 $7.0 $10.5 $5.3 $26.6 Foundation IT Foundation $11.7 $15.9 $12.1 $39.7 Ops Foundation Marketplace Enhancements Facilities Foundation Settlements Foundation Total Foundation Capital Expenditures Total Capital Budget $3.7 $22.2 $29.7 $21.0 $ BUDGET DRAFT SOUTHWEST POWER POOL PAGE 81

111 OUTSIDE SERVICES BY FUNCTION ($ MILLIONS) DESCRIPTION OF SERVICES Forecast Budget Inc / (Dec) Staff Augmentation Legal $2.5 $2.4 ($0.1) Information Technology (0.5) Market Monitoring Process Integrity (0.1) Regulatory (0.2) Market Design (0.2) Total Staff Augmentation $4.1 $3.2 ($1.0) Information Technology OATI Monthly service fee Operations Wind Forecasting Analysis, study IDC Tool (0.1) Misc. IT services (cabling, storage, asset disposal) (0.1) Total Information Technology $2.4 $3.0 $0.7 Other Engineering studies, other Board of Directors fees and expenses Regional Entity Trustees (fees and consulting) Corporate services Audits, special engagements (SSAE 16/other audits) (0.1) Regional Cost Allocation Review (RCAR) FERC Order Regional State Committee Communications and training Ops wind analysis moved to IT (0.6) Operations 2016 wind study Other (0.2) Total Outside Services and RSC $12.7 $15.1 $ BUDGET DRAFT SOUTHWEST POWER POOL PAGE 82

112 ANALYSIS OF 2015 FEES & ASSESSMENTS ($ MILLIONS) Variance Fees & Assessments, Revenue and Expense Forecast Budget Fav/(Unfav) Note SPP Regional Entity Revenue $9.9 $11.7 ($1.8) (a) FERC Fee Assessments (Sch.12) (b) Annual member assessments Fees & Assessments Revenue $27.5 $27.6 ($0.1) Fees & Assessments Expense $13.9 $16.4 ($2.5) (c) (a) Revenue for SPP RE is recognized on a monthly basis based on direct RE expenses and an hourly charge for indirect expenses. In 2015, the RE expects to be favorable in comparison to their total expense budget, resulting in lower corresponding revenues for SPP. (b) FERC Fee Assessment revenue is recognized monthly when billed to transmission customers. Revenue was adjusted to reflect the current rate charged under Schedule 12, which is $0.074 as compared to $0.066 assumed in the 2015 budget. (c ) FERC Fees & Assessments expense is estimated based on prior year assessment plus a growth rate. The current year monthly accrual amount is adjusted when the annual bill is received each year in June. The FERC bill received in 2015 was lower than the accrual, resulting in a true up for the prior year accrual and an adjustment to the accrual for BUDGET DRAFT SOUTHWEST POWER POOL PAGE 83

113 NET REVENUE REQUIREMENT VARIANCE HISTORY ($ MILLIONS) $150 Net Revenue Requirement (NRR) Variance Trend Actual vs. Budget Actual NRR Budget NRR Variance $130 $110 $90 $70 $50 $30 $10 ($10) Actual NRR $47.1 $48.0 $58.1 $59.8 $63.5 $75.8 $86.1 $123.3 $137.0 $137.6 * Budget NRR $45.7 $52.8 $61.5 $56.5 $68.4 $78.6 $89.6 $121.8 $132.6 $138.6 Variance $1.5 ($4.8) ($3.4) $3.4 ($4.9) ($2.9) ($3.5) $1.5 $4.4 ($1.0) 3% (9%) (6%) 6% (7%) (4%) (4%) 1% 3% (1%) The graph and table above highlight the range of variance between SPP's actual and budgeted Net Revenue Requirement (NRR) by year. As SPP's NRR has increased over the years, the variances between actual and budget remain relatively small. * The 2015 NRR represents the forecast as of August 2015 and excludes non recurring items of $7.2 million BUDGET DRAFT SOUTHWEST POWER POOL PAGE 84

114 PRIOR YEAR BUDGET COMPARISONS ($ MILLIONS) Net Revenue Required Estimations 2008 Budget NRR Estimations 2009 Budget NRR Estimations 2010 Budget NRR Estimations $ Budget NRR Estimations $86.7 $ Budget NRR Estimations $89.6 $98.6 $ Budget NRR Estimations $121.8 $141.4 $ Budget NRR Estimations $132.6 $148.5 $ Budget NRR Estimations $141.2 $147.1 $ Budget NRR Estimations * $146.8 $148.5 $158.6 Actual NRR $86.1 $123.3 $137.0 Billing Unit Estimations 2008 Budget Billing Units Estimations 2009 Budget Billing Units Estimations 2010 Budget Billing Units Estimations Budget Billing Units Estimations Budget Billing Units Estimations Budget Billing Units Estimations Budget Billing Units Estimations Budget Billing Units Estimations Budget Billing Units Estimations Actual Billing Units Administrative Fee Estimations 2008 Budget Admin Fee Estimations 2009 Budget Admin Fee Estimations 2010 Budget Admin Fee Estimations $ Budget Admin Fee Estimations $0.255 $ Budget Admin Fee Estimations $0.255 $0.280 $ Budget Admin Fee Estimations $0.338 $0.380 $ Budget Admin Fee Estimations $0.381 $0.426 $ Budget Admin Fee Estimations $0.390 $0.370 $ Budget Admin Fee Estimations $0.370 $0.370 $0.389 Actual Admin Fee $0.238 $0.344 $0.390 * Excluding non recurring items The purpose of this scheduleis to quantify the year to year changes in SPP s three year projections made during each budget cycle as required by the membership agreement. Accuracy of these projections can be significantly influenced by both internal and external pressures such as board and committee directives, incremental membership, environmental factors, etc BUDGET DRAFT SOUTHWEST POWER POOL PAGE 85

115 X. SPP OPERATING PLAN DOCUMENT The SPP Operating Plan is attached in its entirety as presented to the Finance Committee on Sept. 29, BUDGET DRAFT SOUTHWEST POWER POOL PAGE 86

116 SPP 2016 Operating Plan September 29, 2015 Finance

117 Southwest Power Pool, Inc. Major 2016 Project Investments Table of Contents Background Information...3 Purpose of SPP...3 Regulation...3 Governing Documents...3 Open Access Transmission Tariff ( OATT )... 3 Membership Agreement ( MA )... 4 Bylaws... 4 Protocols and Business Practices... 4 Organization Structure...4 Funding Expected Business Environment...5 Major 2016 Project Investments...6 Enhanced Combined Cycle Integrated Marketplace Functionality...6 Expected Benefits... 6 Strategic Plan Linkage... 6 Investment and Timeline... 6 Risks... 7 Gas-Electric Harmonization...7 Expected Benefits... 7 Strategic Plan Linkage... 7 Investment and Timeline... 7 Risks... 7 Z2 Credit: Priority II and Priority III Functional Requirements...8 Benefits... 8 Strategic Plan Linkage... 8 Investment and Timeline... 8 Risks... 8 Phasor Measurement Unit Data Exchange and Analysis...8 Benefits... 9 Strategic Plan Linkage... 9 Investment and Timeline... 9 Risks SPP Operating Plan 1

118 Southwest Power Pool, Inc. Major 2016 Project Investments Identity and Access Management ( IAM )...9 Benefits... 9 Strategic Plan Linkage Investment and Timeline Risks Dispatcher Training Simulator Upgrade...10 Benefits Strategic Plan Linkage Investment and Timeline Risks Deferred or Declined Projects Major Technology Investments...11 Data Growth and Performance...11 Benefits Investment and Timeline Security Enhancements...11 Benefits Investment and Timeline Application Enhancements and Support...12 Benefits Investment and Timeline CIP and ESP Compliance...12 Benefits Investment and Timeline Keeping The Lights On...13 Internal Work Groups...13 Operations Engineering Information Technology Corporate Process Integrity Appendix A...18 Appendix B SPP Operating Plan 2

119 Southwest Power Pool, Inc. Major 2016 Project Investments Purpose of SPP Background Information SPP Mission is Helping our members work together to keep the lights on...today and in the future. All the services that SPP performs are provided on a regional basis, independently, focused on reliability and cost effectiveness. The benefits of SPP are derived from this mission and the diligence to bring value to SPP members and their customers. SPP administers reliability coordination, transmission services and wholesale markets for the benefit of all electric utility operations in the region SPP serves that use members transmission systems. As a Regional Transmission Organization, SPP is mandated by the Federal Energy Regulatory Commission to ensure reliable supplies of power, adequate transmission infrastructure, and a competitive wholesale electricity marketplace. Regional Transmission Organizations are like air-traffic controllers of the electric power grid. They do not own the power grid, but independently operate the grid minute-by-minute to ensure reliable delivery of power to end users. SPP also serves as a Regional Entity of the North American Electric Reliability Corporation. SPP s primary services provided to members and customers include: Facilitation Reliability Coordination Tariff Administration Transmission Planning Market Operations Compliance Training Regulation SPP is directly regulated by the Federal Energy Regulatory Commission ( FERC ) and minimally regulated by the Arkansas Public Service Commission ( ArPSC ). All changes to the SPP regional tariff must be filed with, and approved by, FERC prior to implementation. Failure by SPP to comply with the provisions of the tariff and/or any directive received from FERC must be reported to the FERC and may be subject to penalties and fines. Governing Documents Open Access Transmission Tariff ( OATT ) The SPP OATT delineates the majority of the required workload for SPP s operations and engineering departments. Significant duties include, but are not limited to, the following: Tariff administration services, including scheduling Ancillary service provisions Market operations Balancing authority operations Settlement of all transactions under the OATT Administration of credit services for OATT customers Complete system impact studies Completion of the annual SPP Transmission Expansion Plan (ITPNT, ITP10, ITP20) Study generation interconnection requests 2016 SPP Operating Plan 3

120 Southwest Power Pool, Inc. Major 2016 Project Investments Evaluate long-term transmission service requests Administer the competitive process for transmission expansion Administer the Southwestern Power Administration transmission system beyond their tariff Monitor activities in SPP s energy markets and exercise plans to mitigate market power Operate a single balancing area for the entire SPP region Membership Agreement ( MA ) The MA is an agreement between each individual member and SPP. The MA obligates SPP to perform the services outlined including those in the OATT. Additionally, the MA describes other significant duties which include, but are not limited to, the following: Act as the reliability coordinator for the Electric Transmission System Develop regional reliability plans and emergency procedures Review and approve all planned maintenance of the Electric Transmission System Coordinate the maintenance of generation units Administer an Open Access Same Time Information System Bylaws The Bylaws describe the organizational operation of SPP, specifically outlining the duties of the Board of Directors and Committees advising the Board of Directors. SPP has a responsibility to facilitate meetings of each and every organizational group. Currently, the scope of the organizational structure is as follows: Board of Directors (1) Regional State Committee (1) Members Committee (1) Board level committees (6) Working Groups (19) Additionally, the Bylaws describe SPP s responsibilities as a Regional Entity. Duties associated with being the Regional Entity include, but are not limited to, the following: Investigate all reports or discoveries of non-compliance with ERO standards Perform reviews in conjunction with the Compliance Monitoring and Enforcement Program Recommend financial penalties and sanctions for non-compliance Administer the process for Regional Reliability standards Protocols and Business Practices SPP has well documented business practices which detail the administrative practices SPP will follow in administering the OATT including coordinating the sale of transmission service. SPP also has well documented market protocols which detail how customers will interact with SPP and how SPP will interact with customers. These documents are developed through SPP s stakeholder process. Organization Structure SPP operates via two distinct organizational structures. The first, which we ll refer to as the external structure, is actually the governance structure. It begins with the SPP board of directors and cascades into board level committees and then to working groups. This organizational structure is 2016 SPP Operating Plan 4

121 Southwest Power Pool, Inc. Major 2016 Project Investments populated largely with representatives from SPP s member companies. The output from this structure is generally directives on what work SPP is expected to accomplish. The second organizational structure, which we ll refer to as the internal structure, is the typical organizational chart illustrating reporting relationships between employees. The internal structure begins with the SPP president and cascades into vice presidents, departmental directors/managers, etc. The internal structure is generally aligned based on functional responsibilities. This structure receives the directives from the external structure and then goes forward in acting on the directives. Copies of the organizational structures can be found in Appendix A. Funding SPP funds its ongoing operating costs through charges to customers under the tariff and customers of specific non-tariff services. SPP s operating costs are inclusive of scheduled principal and interest payments on its outstanding debt but are exclusive of depreciation and amortization expenses incurred. SPP is able to collect up to 100% of its operating costs from charges to transmission customers up to a cap of 39 /MWh. SPP is charging customers 39 /MWh for service in SPP s capital expenditures are funded with borrowings from periodic debt issuances. SPP s debt issuances are generally unsecured, have a 1 to 2 year interest only payment period and then fully amortize by the maturity of the notes. SPP is required to obtain regulatory approvals prior to issuing new debt. SPP carries an A rating from Fitch Ratings. SPP staff believes SPP will have sufficient access to debt capital, if required, in Short-term liquidity is provided by managing SPP s cash float. In instances when working capital is insufficient, SPP has a confirmed credit facility at a commercial bank which it can access for cash up to $30 million. This facility will mature in mid-2016; SPP expects to be able to renew this facility along the same terms that currently exist Expected Business Environment The EPA s Clean Power Plan ( CPP ) is expected to have significant impacts in the near term and well into the future. The CPP establishes the first-ever national standards to limit carbon pollution from power plants. The final plan sets standards to reduce carbon dioxide emissions by 32% from 2005 levels by Compliance plans are due from states in 2016 and measurement against 2005 CO2 levels begins in 2022 and will increase to final compliance by Several states within the SPP region are participating in a coalition pursuing legal remedies to address flaws they see in the CPP. The lawsuits will muddy the water in terms of how SPP interacts with its stakeholders as they work to comply with the standards. Additionally, the CPP measures compliance at the state level, SPP is facilitating collaboration with its stakeholders to work towards a regional compliance solution. Acceptance of a regional approach by all of SPP s impacted members, states, and the EPA is still unknown. Gas electric coordination continues to be a focus at the national level. SPP has filed in compliance with FERC s directive to align electricity markets with natural gas markets. If approved SPP will move its day-ahead market to close earlier in the day and shorten the solution time for posting 2016 SPP Operating Plan 5

122 Southwest Power Pool, Inc. Major 2016 Project Investments results. This will require system changes and improved processing speed to reduce the solution time by 30 minutes. SPP s members are divided on the benefits of the approach SPP has filed to comply with the FERC directive. Another major impact on SPP includes compliance with NERC s CIPv5 standards which will affect both physical and cyber security protocols. These additional CIP requirements have impacts on several systems and processes performed by SPP. The electric industry continues to ramp up its focus on physical and cyber security. Though compliance with CIPv5 is not required until 2Q 2016, drafting teams in the NERC arena are already working on the CIPv6 standards. Cyber threats on utilities and energy companies are a growing threat with over 43% of companies in this space being attacked at least once each year according to a study published by Symantec. Other major impacts include a full year of operations with the Integrated System participating in SPP and expected Federal legislation. SPP incorporated the Integrated System in October of New challenges for operations will include managing a winter peaking system; significant hydro generation facilities, increased seams coordination; and a much larger geographic area to monitor for reliability impacts. The addition of the Integrated System into SPP has also opened opportunities to expand SPP s services to affiliated entities in the western interconnect. Any future additions, either through membership or contracted services, will have a visible impact on SPP s operation. Major 2016 Project Investments Enhanced Combined Cycle Integrated Marketplace Functionality These enhancements to the Integrated Marketplace will allow Market Participants to submit resource offers for several configurations of a combined cycle generating unit. Each configuration will be modeled in the market clearing engine as a separate resource. SPP will then be able to dispatch the most economic configuration for the combined cycle unit. Expected Benefits Once implemented in March 2017, this functionality will allow dispatch of combined cycle generation in a manner resulting in greater economic efficiency. Presently there are 18 combined cycle generating plants modeled in the commercial model. SPP expects to be able to increase economic dispatch (measured as reduced generation costs) by $3 million annually. New combined cycle plants are expected to join the SPP market in the future which will serve to increase the economic benefits. Strategic Plan Linkage Enhance and Optimize Interdependent Systems o Integrated Marketplace enhancements Investment and Timeline SPP began work on this project in early 2014; primarily requirements drafting and design. The project was suspended in July 2014 following meetings of the SPP MOPC and BOD where concerns about escalating cost estimates were debated. The SPP BOD approved moving forward with this 2016 SPP Operating Plan 6

123 Southwest Power Pool, Inc. Major 2016 Project Investments project following the integration of the Integrated System utilities in October 2015 with a total project budget of $6.7 million ($1.2 million had already been spent). Risks The vendors engaged have no significant experience in developing this functionality. This lack of experience can lead to slower development which may manifest into missed deadlines and delayed implementation. The lack of expertise can also result in significant errors in the code which will require extended testing and re-testing. Ultimately, if the risks materialized, the cost of the project will increase. Gas Electric Harmonization The project implements changes to the timeline of day-ahead market ( DAMkt ) and day-ahead reliability unit commitment ( DA RUC ) to comply with the FERC order for gas-electric coordination efforts. The Gas Electric Coordination Task Force recommendation was approved by the SPP Board of Directors at its July 28, 2015 meeting. A filing with the Federal Energy Regulatory Commission outlining SPP s compliance plan is expected in early August Pending FERC approval, MP s have requested an implementation date of fall Expected Benefits This investment is necessary to comply with FERC s Section 206 Order in Docket No. RM14-2 issued March 20, 2014 to adjust the market timelines and explain how the proposed scheduling modifications are sufficient. These timeline changes are an incremental improvement over the existing timeline for improving coordination between the market results and the Timely and Evening nominations. While the proposed timeline does not provide day-ahead market results prior to the 1300 Timely Gas Nomination, it does allow for day-ahead market and day-ahead reliability unit commitment results to be provided prior to the Evening Gas Nomination. This also allows sufficient time for price formation prior to the day-ahead market close. This is intended to be an incremental step, with a long-term goal being to post day-ahead market results prior to the Timely Gas Nomination. Strategic Plan Linkage Enhance and Optimize Interdependent Systems o Optimize natural gas pipeline system seams Investment and Timeline The SPP Board of Directors approved changes to the tariff and protocols at its July 28, 2015 meeting. These changes will be filed with the FERC with a requested effective date of October 1, The cost estimate presented to the SPP Board of Directors was $1.5 million. Work on this project will occur in coordination with the Enhanced Combined Cycle project as both will have significant impacts on the ability of the market operating system to solve in a timely manner. Risks The compliance plan is subject to approval by the FERC. Should the FERC find SPP s compliance plan to be inadequate or lacking, additional stakeholder meetings, approvals, system designs, and expenses may be required SPP Operating Plan 7

124 Southwest Power Pool, Inc. Major 2016 Project Investments Z2 Credit: Priority II and Priority III Functional Requirements Attachment Z2 of the SPP tariff requires SPP to identify creditable upgrades of the transmission network, calculate revenue credits associated with creditable upgrades, and distribute revenue credits to upgrade sponsors. Benefits Investment will implement the stakeholder designed Z2 credit stacking solution and streamline workflows in order to meet current tariff requirements. No monetary benefits are expected from full implementation of this project. Soft benefits include reductions in error probabilities, reduced dispute and resettlement activities, and reduced future staffing needs. Strategic Plan Linkage Enhance member value and affordability Maintain an economical, optimized transmission system o Fair and equitable cost/benefit allocation policies Investment and Timeline The Z2 P1 requirements are on schedule for implementation in January The P2 and P3 work is expected to start in April 2016 after SPP has worked through the legacy credits. Implementation of the P2 and P3 functionality is planned for December The rough estimate for cost is currently $0.5 million which is solely software development. SPP does not expect additional hardware assets will be required for this project. Risks The Z2 P2 and P3 requirements are anticipated to mitigate SPP s risk of tariff violations, audit qualifications, and customer disputes in addition to reducing the needs for additional staff to perform repeatable functions manually. Two major risks introduced with this project relate to performance of the credit stacking system and the cost to implement. The magnitude and probability of these risks will become clearer as the initial credit stacking system development progresses. Phasor Measurement Unit Data Exchange and Analysis The PMU Data Exchange and Analysis project will equip SPP with the capability to enhance both current operations and after-the-fact event analysis as well as system model validation efforts. Additionally, PMU data can assist in real-time situational awareness, identifying generator trips, island situations, and enhance State Estimator accuracy. The initiative will progress in three distinct phases, as follows: Phase I Installation of systems to provide capability to send and receive and archive synchrophasor data, develop real-time analytics engine, and perform after the fact analysis. Phase II expand the number of sites where SPP will collect PMU data, expand analytics and analysis capacity. Phase III Integrate PMU data collection and analytics into SPP s secure data network for use with State Estimator and real-time operations SPP Operating Plan 8

125 Southwest Power Pool, Inc. Major 2016 Project Investments Benefits The use of synchrophasor data in event analysis and real-time monitoring are expected to enhance SPP s knowledge of the electric system stability which will result in improved system operations and planning. Full implementation of the project (phase III) is expected to equip SPP with predictive capabilities to identify system disturbances before they occur and allow SPP and affected utilities to take action prior to an event occurring. Strategic Plan Linkage Reliability assurance o Integration of variable energy resources o Event analysis Investment and Timeline The project consists of 3 phase, each of which encompass a full calendar year. Phase I capital expenditure of $0.446 million; operating cost of $0.45 million, 2 incremental staff additions Phase II capital expenditure of $0.116 million; operating cost of $0.5 million Phase III capital expenditure of $1.3 million; operating cost of $0.64 million, 1 incremental staff addition SPP would incur ongoing operating costs beyond 2018 which would be approximately $0.70 million and would expect to incur capital costs to replace hardware and upgrade software every 3 to 5 years. Risks The use of PMU data in system monitoring, planning, and operating is gaining traction but is not universally adopted. The systems utilized to analyze the data are in their infancy and have not been proven to significantly improve system operation, design or monitoring. Therefore, there is a small probability that the investment in PMU capabilities may not yield long-term benefits. Additionally, a robust solution will require SPP utilities as well as neighboring regions to share synchrophasor data with SPP. These utilities/systems may need to invest in communication infrastructure to be capable of transmitting the data. Identity and Access Management ( IAM ) Implement an automated IAM system that automates the vast majority of manual IAM activities in place at SPP today. Role based access models can be developed to suit individual business owners, access provisioning and de-provisioning will be automated and periodic access reviews will be standardized and automated. Ad-hoc access reviews can also be generated to help satisfy CIP v5 transfer and termination processes for SPP employees and contractors. All identities and their access entitlements that exist in the SPP environment will be discovered and will reduce compliance and cyber security risks associated with orphan user accounts and excess user entitlements. Benefits Improved access management process will result in enhanced controls over system access as well as provide significant improvements to audit evidence processes which will be critical going forward under the CIPv5 standards SPP Operating Plan 9

126 Southwest Power Pool, Inc. Major 2016 Project Investments Strategic Plan Linkage Reliability assurance o Grid resiliency cyber and physical Investment and Timeline Initial capital costs of $0.49 million include acquisition of software, servers, and vendor implementation. Ongoing operating costs of $0.13 million/year cover licensing and support. Full implementing is anticipated within 12 months. Risks The project itself is designed to mitigate significant risks which currently exists around access to SPP s systems. With that said, the actual implementation of the IAM project comes with its own set of risks, not the least of which is that the solution does not work as seamlessly as advertised. Dispatcher Training Simulator Upgrade This is actually a 2 phase project. Phase I implements a stand-alone dispatcher training simulator within the operations analysis and support department (currently SPP shares a dispatcher training simulator between operations and the training department). The stand-alone simulator will ensure simulations are available for real-time operations personnel at all times. Phase II of the project will result in an enhanced Training and Testing Simulated Environment which incorporates SPP s market systems into the training environment. Benefits Establishing a stand-alone dispatcher training simulator will improve the capabilities of SPP s realtime operators by providing SPP s operators increased opportunity to participate in simulated training. Strategic Plan Linkage None Investment and Timeline Phase I requires $0.21 million in hardware, software, and licenses and is expected to be fully implemented in Phase II requires an additional $3.6 million in hardware, software, and licenses and will not be completed until At this time Phase II has not been approved to move forward. Risks The project is expected to mitigate risks which currently exist in SPP s training of its real-time operations staff. SPP underwent a peer review conducted by the North American Transmission Forum in December The review noted The current Dispatcher Training Simulator has limited availability to the OAPS department and does not meet the current needs of SPP operators due to the additional role of the BA function.". Implementation of Phase I of the project is expected to address this concern SPP Operating Plan 10

127 Southwest Power Pool, Inc. Major 2016 Project Investments Deferred or Declined Projects There are many project proposals SPP considers when determining its plan for the upcoming year. Numerous of these projects are not approved to begin work during the year due to i) a lack of staff resources to accomplish the work; ii) lack of funding to pay for the project; or iii) the project lacks sufficient detail to warrant moving forward at this time. Appendix B summarizes all of the projects reviewed by SPP for the 2016 fiscal year Major Technology Investments SPP s ability to provide the vast majority of its services is contingent on employing a robust and resilient technology infrastructure. SPP operates two data center facilities with full fail-over capacity in the event a single data center is unavailable. Within the data centers exist over 1,700 physical and virtual servers across multiple environments interconnected by a high availability network. Significant investments are made annually to not only maintain the existing capabilities of the technology infrastructure but to also enhance the structure to address new demands on the system, cyber security requirements, and incremental additions to SPP s service menu. Data Growth and Performance SPP began this initiative in 2014 when it identified a need to address exponential growth in the volume of date being received, processed, transferred, and stored. SPP replaced a large portion of its storage environment during 2015, incorporating both a technology refresh as well as support for data growth to accommodate Marketplace, Project Pinnacle, and Integrated Systems requirements. During 2016, SPP will invest in backup/archival data storage capacity, as well as additional storage virtualization solutions. Benefits The implementation of a 10GB network (as compared to the current 1GB level) will alleviate existing bandwidth constraints/congestion, and allow SPP to provide sufficient network capacity to meet production and backup requirements. It is imperative for SPP to be able to consume inputs from its customers, process those inputs according to the timelines dictated in the OATT and Protocols, and render solutions also in accordance with established timelines. Investment and Timeline The initiative began in 2014 and is set to conclude in Total capital expenditures for the project are $5.8 million with $2.8 million expected to be spent in 2016 to complete the work. Security Enhancements The quantity and sophistication of computer viruses and security threats continues to increase, including the ability for viruses to lay dormant for long periods of time and then permeate extensively through an organization. As a result, a security broach or malware insertion can have a 2016 SPP Operating Plan 11

128 Southwest Power Pool, Inc. Major 2016 Project Investments significant impact to SPP s operating environment. The inability to detect and quarantine security threats would greatly expose SPP systems, with potential performance implications to Reliability and Marketplace operations as well as result in mandatory compliance shortcomings and potential penalties. It is essential to stay current with best security practices to mitigate the impact to SPP. Benefits The 2016 security initiatives will strengthen SPP s network, server, and security infrastructure, thereby reducing SPP s exposure to unwelcomed access and adverse business impacts. Investment and Timeline Improvements include upgrading firewalls, authentication software, and anti-virus capabilities. These improvements will be implemented throughout Total capital investment is expected to be $2.1 million Application Enhancements and Support Primary focus is on design and implementation of data storage solutions which provide tiered levels of storage access resulting in reduction in costs of storage. Implementation allows real-time users to have a common interface for accessing current and historical data with minimal delays in system performance, while providing analytical and after the fact users access to data on a higher capacity and more cost efficient platform. Internally supported systems such as POPS and CMS have periodic requests from stakeholders/regulators for enhanced functionality. Benefits Enhancements to POPs and CMS systems are needed to support member requests for added functionality, as well as the ability to integrate and support upstream systems. The implementation of internal cloud solutions will provide leverage of physical resources for financial and technical benefits, and the tiered storage approach for data warehouse information will reduce storage costs as compared to previous storage methodologies. Investment and Timeline Data storage architecture consumes the majority of this $1.7 million budget. Implementation will complete prior to the end of CIP and ESP Compliance SPP must adhere to ongoing CIP requirements and regulations, including adherence to CIP Version 5 standards by April, Benefits SPP is required to comply with FERC/NERC regulatory requirements. As part of recent CIP regulations, SPP must further isolate the infrastructure designated within the Electronic Security Perimeter (ESP), as well as implement additional restrictions for accessing the ESP to/from the SPP corporate environment. As a result, SPP must acquire and implement isolated systems (Flash Storage, Networking, and Secure Access Software) within the ESP that are currently leveraged and shared across multiple 2016 SPP Operating Plan 12

129 Southwest Power Pool, Inc. Major 2016 Project Investments environments. While the impact may be viewed to be beneficial from a security perspective by FERC/NERC, this additional isolation results in increased complexity and operating costs for SPP, including a formal baseline management process for monitoring and reporting configuration changes within the ESP. Investment and Timeline Work on this project began in 2015 and is on track to complete in time to meet the compliance deadline of April investment will be $1.4 million, the total cost of compliance is $2.4 million. Keeping The Lights On Reliability is job #1 at SPP. It is the central focus of every decision and action undertaken within the organization. Internally, this is known as keeping the lights on or KTLO. It is the central theme of the organization s mission statement Helping our Members work together to keep the lights on today and in the future. SPP s responsibility toward reliability, and other important services, is delineated in numerous agreements, contracts, tariff, protocols, standards, etc. Significant resources are dedicated directly to fulfilling these obligations and significant support resources are invested in helping the direct satisfaction of these obligations. Internal Work Groups SPP s internal organization structure is designed to ensure appropriate focus and leadership is deployed to address the KTLO work described above. Many groups have direct responsibilities to accomplish the work while others are available to provide necessary support. Operations Operations Department Investment and Resources Salary & Benefits Travel Services Other CapEx Approved Staff $ 20.9 $ 0.4 $ 0.3 $ 0.1 $ SPP s Operations Department is responsible for many of the duties and responsibilities outlined in the OATT and MA. Operations staff are the front line employees who engage real-time in the reliability and market aspects of SPP on a 24 hour a day, 7 days a week basis. Staff consists of engineers, certified system operators and specialized support personnel. The Department is organized across three distinct subgroups: 1. System Operations 2. Markets 3. Engineering Support Significant duties include: regional reliability coordination, tariff administration, transmission service, real-time and day-ahead market operations, maintain the models for the state estimator and the commercial modeling tools, training, and balancing authority operations. Additionally, staff from this group work with numerous stakeholder groups including; MOPC, Business Practices WG, Balancing Authority Operating Committee, Generation WG, Operating Reliability WG, and Operations Training WG. Finally, staff represents SPP and its members at numerous NERC working groups SPP Operating Plan 13

130 Southwest Power Pool, Inc. Major 2016 Project Investments 2016 Priorities Strategic Plan Linkage Wind Study refresh of 6 year old wind integration study Reliability Assurance Optimize Interdependent Systems Enhance operator tools improve the types of information Reliability Assurance utilized by the operations staff in monitoring system stability and status Market to Market Dedicated effort to address seam and congestion issues highlighted since start of Market to Market process Gas Coordination participate in advancing solution to extend a gas pipeline as an alternative to construction of new generation to eliminate electric system contingency Internal Model Coordination establish process to coordinate between real time operations and long-term planning. Optimize Interdependent Systems Optimize Interdependent Systems Reliability Assurance Engineering Engineering Department Investment and Resources Salary & Benefits Travel Services Other CapEx Approved Staff $ 9.4 $ 0.3 $ 2.8 $ 0.6 $ Principal duties of SPP s engineering department include planning SPP s transmission system necessary to meet future regional reliability, economic, and public policy needs in an optimized manner; tracking progress and costs of approved transmission expansion projects; and performing longer term (longer than one year) studies necessary to process requests for generation interconnection, transmission service, and transmission congestion rights. The department also performs data gathering and reliability assessment responsibilities in support of the Regional Entity. The predominance of these duties are required by SPP s OATT and business practices, the Membership Agreement, NERC Reliability Standards, and SPP Criteria Priorities Strategic Plan Linkage Increased Compliance Focus on new compliance Reliability Assurance requirements resulting from changes to several NERC standards including TPL-001 and 007, MOD-31, MOD-33, and CIP-002. SPP task forces and working groups such as TWG, MDWG, and TPLTF have been working in 2015 to define how SPP should comply. Integrated System Support addition of the IS will increase the volume of generation interconnection and transmission Reliability Assurance Maintain Economical, 2016 SPP Operating Plan 14

131 Southwest Power Pool, Inc. Major 2016 Project Investments service requests as well as the scope of the ITP studies. Capacity Margin Refinement expect recommendation to reduce the capacity margin required for the region accompanied with establishing a process for assurance monitoring to ensure fair and equitable capacity provision. Optimized Transmission System Reliability Assurance Enhance Member Value Clean Power Plan Assessments continued support for utilities and regulators to inform, guide, and facilitate implementation of the CPP. Transmission Planning Improvements includes more efficient structure to studies, enhanced processes to determine assumptions, improvements to data validation and collection Z2 Crediting Support new process to ensure accurate inputs into the crediting system, and validation efforts on the outputs from the system Optimize Interdependent Systems Reliability Assurance Maintain Economical, Optimized Transmission System Enhance Member Value Enhance Member Value Maintain Economical, Optimized Transmission System Maintain Economical, Optimized Transmission System Information Technology Information Technology Department Investment and Resources Salary & Benefits Travel Services Other CapEx Approved Staff $ 18.0 $ 0.1 $ 3.5 $ 20.9 $ The primary mission of IT is to develop, deploy, integrate and support the applications and infrastructure that supply SPP's operational and corporate systems. IT is divided into three primary groups (IT-Operations, IT-Applications, and IT-Sourcing), along with a Chief Architect. The IT-Applications department provides 24x7-support for existing systems including transmission, reliability, and Integrated Marketplace. The department is responsible for coordinating all software development efforts related to these key business systems, as well as planning and supporting the integration of new members/market participants such as Integrated Systems. IT-Applications plays an integral role in nearly all new projects, including the creation of requirements/test/rollback plans; developing software; providing technical leadership; defining, implementing and reviewing architecture; and providing ongoing maintenance and support for systems. The IT-Operations department provides 24x7-support for all communications and networking systems, and all computer hardware and environmental needs for the SPP data centers. Each of these activities is critical to SPP's transmission, market, reliability and business processes. IT- Operations also provides technical direction, leadership, and architectural design for the communications, network, storage, backup/recovery, and computing platforms for all aspects of the IT infrastructure utilized within SPP SPP Operating Plan 15

132 Southwest Power Pool, Inc. Major 2016 Project Investments The IT-Sourcing and Strategy team has responsibility for managing the IT budget and facilitating/negotiating business activities with major IT vendors. The team works closely with the other IT departments to incorporate an appropriate short and long-term budget and acquisition philosophy, which incorporates vendor leveraging/relationships, asset lifecycles, and adequate maintenance coverage Priorities Strategic Plan Linkage Enterprise Data Management ensure SPP capability to transport data, both internally and externally, and appropriately store data based on need and value Enhance Member Value Cyber Security enhance SPP s processes for responding to and recovering from cyber events Efficiency - improve the identification, evaluation and implementation of technologies to improve services and reduce costs of delivering service to customers Reliability Assurance Enhance Member Value Corporate Corporate Department Investment and Resources Salary & Benefits Travel Services Other CapEx Approved Staff $ 20.8 $ 0.6 $ 6.4 $ 5.3 $ The corporate group has responsibility for many broad aspects of the organization. The group encompasses the following support areas: Executive Legal Settlements Communications Human Resources Facilities Accounting Regulatory Credit Gov t Affairs Administration Market Monitoring Additionally, this group holds the budget for several expenses which are not allocated across the company such as, pension expense, corporate liability insurance, and board of director compensation Priorities Strategic Plan Linkage Western expansion effort to expand SPP s services to Optimize Interdependent utilities west of SPP s current footprint. Systems Settlements focus on upgrading reliability and capability of settlement systems Outreach & Education - Increase one-on-one meetings with SPP members, regulators, and legislators to build relationship and better understand regional needs and issues Tariff Compliance Continue drive to ensure SPP is knowledgeable of its specific requirements and duties under None None None 2016 SPP Operating Plan 16

133 Southwest Power Pool, Inc. Major 2016 Project Investments the tariff and capable of performing those responsibilities Process Integrity Process Integrity Department Investment and Resources Salary & Benefits Travel Services Other CapEx Approved Staff $ 7.8 $ 0.3 $ 0.4 $ 0.1 $ Primary responsibilities within the Process Integrity group include audit, compliance, external member training and customer service, project management, and interregional activities. Departments within this group work closely with the SPP Oversight Committee Priorities Strategic Plan Linkage Security and Compliance Continue to strengthen SPP s security posture, both cyber and physical, while ensuring an active role in development and implementation of future standards Reliability Assurance Stakeholder Project Prioritization Mature a process to engage stakeholders in prioritizing the project work SPP undertakes Distributed Process Improvement Move from a centralized process to a distributed process empowering more staff to engage in process improvement development and implementation Enhance Member Value Enhance Member Value 2016 SPP Operating Plan 17

134 Southwest Power Pool, Inc. Major 2016 Project Investments Appendix A 2016 SPP Operating Plan 18

135 Southwest Power Pool, Inc. Major 2016 Project Investments 2016 SPP Operating Plan 19

136 Southwest Power Pool, Inc. Major 2016 Project Investments Appendix B Capital Investment Operating Total Project Project 2016 Total Expense Investment Source Owner Strategic Plan Linkage A P P R O V E D Gas/Electric FERC GECTF Enhance & Optimize Interdependent Systems Enhanced Combined Cycle MOPC MWG Enhance & Optimize Interdependent Systems FERC 676 H NITS Web Oasis FERC Staff None Z2 Credit Stack (P1,2,3) FERC Staff Economical, Optimized Transmission System 2.8 Enhance Member Value and Affordability 2 Factor Authentication Staff Staff Reliability Assurance Identity & Access Mgmt Staff Staff Reliability Assurance Voltage Stability Tools Staff Staff Reliability Assurance Enterprise Records Mgmt ph II Staff Staff Enhance Member Value and Affordability Portal Replacement Staff Staff Enhance Member Value and Affordability Pro law Upgrade 0.0 Staff Staff Enhance Member Value and Affordability Intranet Redesign Staff Staff Enhance Member Value and Affordability DTS Upgrade Staff Staff None PMU Data Exchange Staff Staff Reliability Assurance D E F E R R E D / D E L A Y E D Transmission Settlement Upgrade Staff Staff Local Reliability Assessment Staff Staff R E J E C T E D Mitigated Offer Design phase II Staff Staff Enhanced EMS Export Staff Staff 2016 SPP Operating Plan 20

137 Southwest Power Pool, Inc. FINANCE COMMITTEE Recommendation to the Board of Directors December 8, Administrative and Assessment Fee Rate Organizational Roster The following persons are members of the Finance Committee: Harry Skilton Larry Altenbaumer Mike Wise Sandra Bennett Kelly Harrison Laura Kapustka Director Director Golden Spread Electric Coop American Electric Power Westar Energy Lincoln Electric Background Section 8.4 of the SPP Bylaws requires SPP to annually develop an assessment rate based on budgeted expenditures for the upcoming fiscal year and estimated billing determinants for that year. Analysis The 2016 SPP operating budget indicates a net revenue requirement ( NRR ) for the year of $150.5 million (inclusive of expected under-recovery of $1.1 million in 2015) and estimated billing determinants of 407,200,000 MWh. NRR is derived by adjusting SPP s gross cash outflows (exclusive of capital expenditures) by all non administrative fee revenue forecast to be earned in the year. The billing determinants are calculated by analyzing the current year to date transmission usage and estimating usage through the remainder of the year. Billing determinants are estimated based on the billing criteria detailed in the SPP tariff. Presently, network integration transmission service is charged the SPP schedule 1A administrative fee based on the average 12 monthly peaks from the previous year; point-to-point transmission service is charged the SPP schedule 1A administrative fee based on the reserved transmission capacity. Through September 2015, SPP has realized year-over-year reduction in average monthly peaks of 1.6%, though peaks through the summer months were generally higher than those experienced in The behavior of the monthly peaks within the Integrated System is largely unknown at this point. The reported 2014 peaks which are used in billing network transmission service for the Integrated System starting October 2015 were slightly higher than SPP had forecast last year but slightly lower than forecast earlier in For purposes of forecasting SPP s 2016 billing determinants, the 2014 average peaks in the Integrated System will be used. Recommendation The Finance Committee recommends the SPP Board of Directors establish an assessment rate and tariff administrative fee (schedule 1-A) of 37 /MWh beginning on January 1, Approved: Finance Committee November 10, 2015 Action Requested: Approve Recommendation

138 Southwest Power Pool, Inc. FINANCE COMMITTEE Recommendation to the Board of Directors December 8, Budget Organizational Roster The following persons are members of the Finance Committee: Harry Skilton Larry Altenbaumer Mike Wise Sandra Bennett Kelly Harrison Laura Kapustka Director Director Golden Spread Electric Coop American Electric Power Westar Energy Lincoln Electric Background Section 6.5 of the SPP Bylaws identifies establishment of annual and long-term budgets as a primary duty of the Finance Committee. Analysis SPP s management proposed a 2016 budget to include expenditures as follows: $000,000 Total Expenses $217.1 Debt Repayment $24.2 FERC Assessments $17.0 Capital Expenditures $22.2 SPP management utilized a incremental approach to prepare the 2016 budget. Management documented an Operating Plan for 2016 outlining the significant initiatives and plans for the company during This Operating Plan was presented to the Finance Committee, Strategic Planning Committee, and SPP Board of Directors to seek input and consensus. SPP s 2016 budget was developed to accomplish the plan. Recommendation The Finance Committee recommends the SPP Board of Directors approve the 2016 SPP operating and capital budgets as submitted. Approved: Finance Committee November 10, 2015 Action Requested: Approve Recommendation

139 Southwest Power Pool, Inc. CORPORATE GOVERNANCE COMMITTEE Recommendation to the Board of Directors-Members Committee December 8, 2015 Revision to Bylaws/Strategic Planning Committee Expansion Organizational Roster The following persons are members of the Corporate Governance Committee: Nick Brown, Chair SPP Jim Eckelberger Director Jason Atwood NTEC Robert Janssen Dogwood Energy John McClure NPPD Jason Fortik LES Denise Buffington KCP&L Robert Harris WAPA - UGPR Brett Leopold ITC Background Following the recent addition of the Integrated System, which expands the SPP footprint to fourteen states and includes the Dakotas and parts of Iowa, Minnesota, Montana, and Wyoming, the Corporate Governance Committee considered revisions to expand representation on the Strategic Planning Committee to ensure the appropriate geographical representation. Analysis The Strategic Planning Committee is comprised of equal representation from the Transmission Owning Member sector and Transmission Using Member sector and three directors. With the recent addition of the Integrated System, the Corporate Governance Committee considered the addition of two seats, one Transmission Owning and one Transmission Using, to ensure appropriate geographical representation on the Strategic Planning Committee. The revisions propose that the Strategic Planning Committee be comprised of thirteen members; five Transmission Owning members, five Transmission Using members, and three directors. Section 10 of the SPP Bylaws states that modifications to the Bylaws, except for Sections 4, 5, 8.75, 9 and 10, may be made by the Board of Directors following 30 days written notice to the Membership, which was provided by Assistant Corporate Secretary Shaun Scott on 11/6/15. Recommendation Approval of the expansion of the Strategic Planning Committee as outlined above and as reflected in the changes to SPP Bylaws Section 6.2 (attached). Approved: Corporate Governance Committee October 27, 2015 Action Requested: Approve recommendation.

140 Governing Documents Tariff --> Bylaws, First Revised Volume No. 4 --> Bylaws 6.0 Committees Reporting to the Board of... --> Bylaws 6.2 Strategic Planning Committee 6.2 Strategic Planning Committee The Strategic Planning Committee (SPC) is responsible for the development and recommendation of strategic direction for the company in accordance with its scope as approved by the Board of Directors. The SPC shall be comprised of thirteeneleven members. Three representatives shall be from the Board of Directors; fivefour representatives from the Transmission Owning Member sector as nominated by the Corporate Governance Committee; and fivefour representatives from the Transmission Using Member sector as nominated by the Corporate Governance Committee. The Board of Directors shall appoint the representatives of the SPC. Each representative of the SPC shall continue to be a representative thereof until the Board of Directors appoints his/her successor. Where a vacancy occurs, the Corporate Governance Committee will fill the vacancy on an interim basis until the next meeting of the Board of Directors. The SPC shall meet at least twice per calendar year, and additionally as needed, provided that a quorum, as defined in these Bylaws, is present. The SPC shall report to the Board of Directors following each SPC meeting with respect to its activities and with such recommendations, as the SPC deems necessary. Effective Date: 9/23/ Docket #: ER Page 1

141 Southwest Power Pool, Inc. CORPORATE GOVERNANCE COMMITTEE Recommendation to the Board of Directors-Members Committee December 8, 2015 Revisions to Bylaws/Monthly Assessments Organizational Roster The following persons are members of the Corporate Governance Committee: Nick Brown, Chair SPP Jim Eckelberger Director Jason Atwood NTEC Robert Janssen Dogwood Energy John McClure NPPD Jason Fortik LES Denise Buffington KCP&L Robert Harris WAPA - UGPR Brett Leopold ITC Background In March 2015, SPP reviewed Bylaws Section 8.4 and determined that SPP was not billing based on the intent as SPP understood the Bylaws by issuing credits for Schedule 1-A in excess of the monthly assessment amounts. Analysis Staff believes that the language should clarify the intent to collect the monthly assessment from each Member for the portion of their Member load eligible for service but not currently taking Network Integration Transmission Service or Point-to-Point Transmission Service under the SPP OATT. The intent is that each Member be obligated to pay, at a minimum, the amount due under its monthly assessment as calculated. This amount should be paid through the monthly assessment and/or Schedule 1-A. SPP Staff proposed the language changes in SPP Bylaws Section 8.4 for this purpose. Section 10 of the SPP Bylaws states that modifications to the Bylaws, except for Section 4, 5, 8.7.5, 9 and 10, may be made by the Board of Directors following 30 days written notice to the Membership, which was provided by Assistant Corporate Secretary Shaun Scott on 11/6/15. Recommendation Approval of modifications to the Monthly Assessments provision as outlined above and as reflected in the changes to SPP Bylaws Section 8.4 (attached). Approved: Corporate Governance Committee October 2, 2015 Action Requested: Approve Recommendation 3 of 344

142 Governing Documents Tariff --> Bylaws, First Revised Volume No. 4 --> Bylaws 8.0 Fiscal Administration --> Bylaws 8.4 Monthly Assessments 8.4 Monthly Assessments SPP will assess certain Members described herein on a monthly basis all costs not otherwise collected. Costs recovered under the assessment will include but are not limited to all operating costs, financing costs, debt repayment, and capital expenditures associated with the performance of SPP s functions as assigned by the Board of Directors. Significant among these are costs associated with regional reliability coordination and the provision of transmission service. SPP shall determine the assessment rate based on its annual budgeted net expenditures divided by estimated annual Schedule 1 billing units for service sold under SPP s OATT and Member load eligible to take, but not taking, Network Integration Transmission Service under SPP s OATT. The Board of Directors may review the assumptions used in determining the assessment rate at any time and may adjust the assessment rate appropriately should conditions warrant. The monthly assessment shall be assessed on Eeach load-serving Member for the portion of their Member load eligible for service but not currently taking Network Integration Transmission Service or Point-to-Point Transmission Service under the SPP OATT. The intent is that each Member be obligated to pay, at a minimum, the amount due under its monthly assessment as calculated above. This amount shall be paid through the monthly assessment and/or Schedule 1-A. shall then be assessed the monthly assessment rate applied to its load eligible to take Network Integration Transmission Service under the SPP OATT. Further, each load-serving Member shall receive a credit against the monthly assessment for that month s Schedule 1-A fees paid for Network Integration Transmission Service and for Point-to-Point Transmission Service that had a delivery point within the SPP region, under the SPP OATT. Effective Date: 3/17/ Docket #: ER Page 1

143 Southwest Power Pool, Inc. CORPORATE GOVERNANCE COMMITTEE Recommendation to the Board of Directors and Members Committee December 8, 2015 Amendments to Membership Agreement Mountrail Williams Electric Cooperative and Central Power Electric Cooperative Background Central Power Electric Cooperative has signed the SPP Membership Agreement as a Transmission Owner. Mountrail-Williams Electric Cooperative plans to sign the SPP Membership Agreement as a Transmission Owner, effective March 1, They are both members of Basin Electric Power Cooperative. They have requested certain amendments be made to SPP s Membership Agreement that are materially the same as previously approved amendments for Basin Electric Power Cooperative. Analysis The amendments proposed are designed to address the interconnected nature between these Basin Electric members and the Integrated System. These two cooperative are imbedded within the Integrated System. The terms contained in both amendments are identical to each other. The Corporate Governance Committee considered and approved Membership Agreement Amendments for these two entities as follows: 1) Dispute Resolution: Disputes under the Membership Agreement or SPP Bylaws will be subject to binding dispute resolution under Section 3.13 of the SPP Bylaws only with consent of the entity s Board and subject to terms and conditions the entity s Board may impose. 2) Withdrawal Rights: Allows the entity to terminate membership with less notice than prescribed in Section of the Membership Agreement if: Basin Electric withdraws; or Western UGP withdraws; or FERC finds SPP has not complied with the Membership Agreement Amendments of the Entity, Basin or Western. If Basin Electric or Wester UGP withdraws, the entity s withdrawal is effective the same date and the entity is subject to the financial withdrawal obligations of Membership Agreement. 3) Obligation to Build: The entity s obligation to construct transmission facilities is subject to the discretionary authority of its Board of Directors. The entity s Board will not supplant any state regulatory authority over siting or permitting under state law. Recommendation Approval of the SPP Membership Agreement Amendments of Mountrail-Williams Electric Cooperative and Central Power Electric Cooperative as reflected in the attachments, Approved: Corporate Governance Committee October 27, 2015 Action Requested: Approve recommendation.

144 AMENDMENTS TO SPP MEMBERSHIP AGREEMENT FOR CENTRAL POWER ELECTRIC COOPERATIVE A1. Dispute Resolution Notwithstanding any provisions in the Agreement or the SPP Bylaws to the contrary, any disputes arising under the Agreement or SPP Bylaws and relating to determinations, decisions, conduct and actions made or taken by Central Power Electric Cooperative ("Central Power") pursuant to its participation in SPP shall be subject to binding resolution under Section 3.13 of the SPP Bylaws only to the extent agreed upon by Central Power s Board of Directors, and subject to the terms and conditions set by Central Power s Board of Directors. A2. Withdrawal Rights Central Power may terminate this Agreement and withdraw as a member of SPP with less than the advance notice required by Section of the Agreement in the event that (1) Western Area Power Administration Upper Great Plains Region ( Western UGP ) or Basin Electric Power Cooperative ( Basin Electric ) withdraws from SPP in accordance with its withdrawal rights; (2) FERC finds that SPP has not adhered to all of the Western UGP Amendments, all of the Basin Electric Amendments or all of the Central Power Amendments; or (3) SPP files and FERC approves one or more changes to the Central Power Amendments without Central Power s consent, and such changes have a material adverse effect on Central Power. In such event, Central Power and SPP shall meet and confer to facilitate the withdrawal as soon as practicable or as necessary to ensure compliance with state or Federal law. In the event of a withdrawal by Western UGP or Basin Electric, Central Power s withdrawal will become effective on the same date as that of Western UGP or Basin Electric. If Central Power exercises its withdrawal rights under this provision, the financial obligations will be calculated under 4.3 of this Agreement. A3. Obligation to Build Conditions Central Power s Board of Directors shall have discretionary authority to decide whether Central Power will construct new transmission facilities. Central Power s Board of Directors shall not replace any state regulatory authority with responsibility for siting activities under state law. IN WITNESS WHEREOF, Central Power and SPP have caused their duly authorized representatives to execute, on their respective behalves, these Amendments to Central Power's Membership Agreement with SPP, which Amendments are fully applicable and incorporated into said Membership Agreement and together shall constitute one and the same instrument binding upon Central Power and SPP. [SIGNATURES APPEAR ON FOLLOWING PAGE]

145 AMENDMENTS TO SPP MEMBERSHIP AGREEMENT FOR MOUNTRAIL WILLIAMS ELECTRIC COOPERATIVE A1. Dispute Resolution Notwithstanding any provisions in the Agreement or the SPP Bylaws to the contrary, any disputes arising under the Agreement or SPP Bylaws and relating to determinations, decisions, conduct and actions made or taken by Mountrail Williams Electric Cooperative ("Mountrail Williams") pursuant to its participation in SPP shall be subject to binding resolution under Section 3.13 of the SPP Bylaws only to the extent agreed upon by Mountrail Williams s Board of Directors, and subject to the terms and conditions set by Mountrail Williams s Board of Directors. A2. Withdrawal Rights Mountrail Williams may terminate this Agreement and withdraw as a member of SPP with less than the advance notice required by Section of the Agreement in the event that (1) Western Area Power Administration Upper Great Plains Region ( Western UGP ) or Basin Electric Power Cooperative ( Basin Electric ) withdraws from SPP in accordance with its withdrawal rights; (2) FERC finds that SPP has not adhered to all of the Western UGP Amendments, all of the Basin Electric Amendments or all of the Mountrail Williams Amendments; or (3) SPP files and FERC approves one or more changes to the Mountrail Williams Amendments without Mountrail Williams s consent, and such changes have a material adverse effect on Mountrail Williams. In such event, Mountrail Williams and SPP shall meet and confer to facilitate the withdrawal as soon as practicable or as necessary to ensure compliance with state or Federal law. In the event of a withdrawal by Western UGP or Basin Electric, Mountrail Williams s withdrawal will become effective on the same date as that of Western UGP or Basin Electric. If Mountrail Williams exercises its withdrawal rights under this provision, the financial obligations will be calculated under 4.3 of this Agreement. A3. Obligation to Build Conditions Mountrail Williams s Board of Directors shall have discretionary authority to decide whether Mountrail Williams will construct new transmission facilities. Mountrail Williams s Board of Directors shall not replace any state regulatory authority with responsibility for siting activities under state law. IN WITNESS WHEREOF, Mountrail Williams and SPP have caused their duly authorized representatives to execute, on their respective behalves, these Amendments to Mountrail Williams's Membership Agreement with SPP, which Amendments are fully applicable and incorporated into said Membership Agreement and together shall constitute one and the same instrument binding upon Mountrail Williams and SPP. [SIGNATURES APPEAR ON FOLLOWING PAGE]

146 Comments on Proposed Federal Plan December 4, 2015

147 Southwest Power Pool, Inc. Name of Current Section (Optional) Revision History Date or Version Number Author Change Description Comments 11/24/2015 Sam Ellis Initial draft 12/4/2015 Sam Ellis Feedback from CPPTF Report Name 1

148 Southwest Power Pool, Inc. Name of Current Section (Optional) One of the goals of the Clean Power Plan Task Force of the Strategic Planning Committee ( CPPTF ) is to perform a qualitative assessment of the EPA s proposed federal implementation plan ( FIP ) for consideration in any comments SPP may file on the proposed FIP. These issues were identified based on discussions with staff, the CPPTF, and other stakeholders, and they focus on revisions to the FIP that would mitigate CPP impact on electric system reliability in cases where the FIP is implemented in a state(s). The EPA should have a consolidated review process for proposed State and Federal Plans SPP proposes that the FIP accommodate and encourage coordinated review of compliance plans (state and federal) to mitigate the impact the CPP may have on regional planning and operation of the electric grid. The regional system operators for the relevant regions in the country should perform these analyses, because they are in the best position to understand the impacts on grid planning and operations. Many regions of the country (organized market and vertically integrated) operate the electric grid on a regional basis. In those regions, the CPP compliance plans for states will impact grid management by changing the capacity portfolio available to system operators that plan and operate the grid. Individual state compliance with the CPP without consideration of the collective impact of all relevant state compliance plans will likely result in greater impact to the system operator functions (transmission planning, operations and markets). This, in turn, will impact electric system reliability and economic benefits to the states in the regions. Conversely, concurrent review of proposed state compliance plans (SIPs and/or FIPs) will facilitate CPP compliance in a manner that mitigates the impact to regional grid operations and planning, which then mitigates the impact to the electric system reliability and economic benefits that inure to the states and their customers. With respect to SPP in particular, in the SPP region states rely on a mix of generation resources from within and outside of their state to provide electricity. In order to fully assess the reliability impacts that the actions of one state may have on another, a consolidated review of all plans should be performed before any of the plans have been submitted for final EPA approval. As noted above, this review should be conducted by SPP, the RTO for the region that performs the relevant planning and operational functions for the grid in the SPP region. The EPA should establish timelines for issuance and review of FIPs that are conducive to supporting a consolidated review that include both FIPs and state plans. An overall review of both state and federal plans in context would allow transmission planning authorities to present more optimal solutions to address any identified reliability concerns. Report Name 2

149 Southwest Power Pool, Inc. Name of Current Section (Optional) The EPA should consult planning authorities and reliability coordinators in developing federal plans The EPA should work with impacted system operators in developing a federal plan for a specific state prior to submitting the plan for comments. This coordination should align with the requirement in the CPP that states consider electric system reliability in the development of their SIPs. This review of the FIP should also, to the maximum extent possible, be coordinated with other state plans to mitigate the collective impact to regional grid management (discussed in more detail in above section). Consideration of FIP impact on a coordinated basis will mitigate the potential negative impacts from disconnects between plans. For example, EPA may need to consider plans from other states in the surrounding region before determining whether a mass-based or rate-based approach is appropriate for a given state. Also, if EPA provides for any reliability set-asides in a federal plan, system operator analysis will facilitate effective and efficient scoping of such set asides by facilitating the development of a thorough record and basis for the allocation of such set-asides based on the analysis of the impacted system operators. Furthermore, mitigating reliability concerns (must-run resources, voltage stability, load pockets, etc.) may be addressed with a combination of flexible time-based actions (e.g., borrowing from future periods) in the federal plan and planning actions developed by the planning authority. Identifying and mitigating reliability issues are the responsibility of the relevant system operators and planners, and in the development/application of any FIP, EPA should coordinate with those entities to develop a FIP that mitigate potential and actual impacts to electric system reliability. Both federal and state plans should require a reliability safety valve As contemplated, the reliability safety valve ( RSV ) is to be used for an unforeseeable... extraordinary, unanticipated, potentially catastrophic event. Although the proposed rules for federal plans are expected to contain market-based flexibility, the RSV should be available in a federal plan for extreme, unforeseen events that require immediate action. The market-based flexibility that is proposed in a federal plan may not be effective to deal with these events if surrounding state plans are not compatible with the federal plan imposed on a state in the same region. Even if the plans are compatible/coordinates issues may arise that require the use of an RSV to mitigate the impact to grid reliability. SPP recognizes that the approach in the CPP and the FIP rule provide flexibility that can mitigate the potential impact to grid reliability. However, even if the most beneficial, coordinated regional compliance approaches are implemented, situations can arise where a unit is needed for grid reliability and the flexibility under approved plans is not adequate to allow that unit to operate without resulting in a violation of CPP compliance. This is because the grid is extremely complex and sensitive to the particularities of each respective region. For example, the loss of a line or generator may result in the need to operate one or more generators to address local issues. In Report Name 3

150 Southwest Power Pool, Inc. Name of Current Section (Optional) unanticipated cases like this there may not be adequate time for market mechanisms available in CPP compliance plans to enable those units to run without violating the rules. In these circumstances a RSV would be needed to coordinate grid reliability with CPP compliance. SPP believes the RSV approach in the CPP is most likely suitable for inclusion in the FIP. SPP looks forward to working with EPA to ensure an appropriate RSV is included in the FIP to provide the insurance needed to mitigate unanticipated events that cannot be addressed via more structural forward looking reliability reviews. Since RSVs are intended for the catastrophic and unforeseen circumstances, there should be a provision to deploy the RSV whenever such action is warranted by a justifiable reliability situation, regardless of whether an RSV had been utilized previously. Regional precedent should be considered in formulating a federal plan The EPA should defer consideration of a blanket mass-based or rate-based approach for FIPs until it is apparent whether there is a predominant regional preference for a particular approach. Furthermore, if a state has expressed particular approach in a plan that was rejected by the EPA, the EPA should give consideration of that state s preferences in formulating a FIP for that state. Given that different areas of the country rely on different fuel sources and have varying capacity for installation of renewable energy (such as wind or solar), there may be strong indications that a rate-based plan might be more appropriate than a mass-based plan, or vice versa, if the surrounding states have already indicated a predominate approach in their plans. This issue should be addressed in the coordinated reviews during FIP development that were discussed earlier in this document. Resource owners should continue to retain allowances for retired resources under the proposed mass-based plan Under the proposed mass-based plan, allowances associated with retired resources are reallocated to provide incentives for additional renewable energy. This approach could have a detrimental impact to market efficiency, particularly for states that are served by multiple system operators. As resources retire, it is possible allowances, and their associated economic benefit, would shift to markets associated with different system operators. This could result in a significant cost shift between utilities in states operating within multiple regions as well as between the regions themselves. To mitigate this problem, resource owners to retain the allowances for retired resources under the federal plan. Report Name 4

151 SPP Clean Power Plan Talking Points SPP studies indicate a regional approach to CPP compliance is more cost effective than a state-by-state approach and less disruptive of the reliability and economic benefits provided by SPP s Integrated Marketplace. A regional compliance approach does not have to depend upon a single compliance plan for a geographic region, but could be accomplished with compatible state compliance plans that rely on market-based solutions. States are encouraged to develop plans, even if litigating, rather than waiting for EPA s Federal Plan to be imposed on them. SPP is responsible for planning and operating the electric transmission system across its 14-state region and is best equipped to assess reliability impacts of state compliance plans to the SPP region. SPP can best assess reliability impacts to its region by performing a consolidated review of the compliance plans for the states operating in SPP. SPP stands ready to assist any way that it can to ensure a reliable, cost effective approach to compliance.

152 2015 Board of Directors Evaluation Results November 16, 2015 SPP Communications Department

153 Southwest Power Pool, Inc. Executive Summary The SPP Communications Department launched the 2015 Board of Directors Evaluation on October 21, 2015, distributing survey invitations to the 28 members of the Board of Directors and Members Committee. Eighteen individuals submitted responses seven members of the Board of Directors and eleven members of the Members Committee representing a response rate of 64%. This is down from 2014 s response rate of 77%. The average score went up in 2015 for every metric assessed in the survey with two exceptions: one that stayed the same and one that fell. A comparison of the last two years data is presented in the chart below. Question Change The board has a full and common understanding of the roles and responsibilities of a board. Board members understand the organization's mission and services. The organization structure is clear (board, officers, committees, executive, and staff). The board has clear goals and actions resulting from relevant and realistic strategic planning. The board attends to policy-related decisions that effectively guide operational activities of staff. The board receives regular reports on finances/budgets, performance, and other important matters. The board effectively represents the organization to the stakeholder community. Board meetings facilitate focus and progress on important organizational matters. The board regularly monitors and evaluates progress toward strategic goals and objectives. The board regularly evaluates and provides development plans for the chief executive officer. Each member of the board is involved and interested in the board's work. The board considers the diverse positions of the membership in a non-discriminatory manner Detailed data and responses to open-ended comments are included in the following report Board of Directors Evaluation Results 1

154 Southwest Power Pool, Inc. Section I: Survey Results 2015 Board of Directors Evaluation Results 2

155 2015 SPP Board of Directors Evaluation I am a: Response percent Response total Member 61.11% 11 Board Member 38.89% 7 Statistics based on 18 respondents; Average Score By Respondent Group The board has a full and common understanding of the roles and responsibilities of a board. Board members understand the organization's mission and services. The organization structure is clear (board, officers, committees, executive, and staff). The board has clear goals and actions resulting from relevant and realistic strategic planning. The board attends to policy-related decisions that effectively guide operational activities of staff. The board receives regular reports on finances/budgets, performance, and other important matters. The board effectively represents the organization to the stakeholder community. Board meetings facilitate focus and progress on important organizational matters. The board regularly monitors and evaluates progress toward strategic goals and objectives. The board regularly evaluates and provides development plans for the chief executive officer. Each member of the board is involved and interested in the board's work. The board considers the diverse positions of the membership in a nondiscriminatory manner. I am a: Member I am a: Board Member Mean : Mean :

156 The board has a full and common understanding of the roles and responsibilities of a board. Strongly Disagree Disagree Neutral Agree Strongly Agree Score=1 Score=2 Score=3 Score=4 Score=5 Response total Average score 0% (0) 0% (0) 5.88% (1) 47.06% (8) 47.06% (8) Average rating 4.41 Statistics based on 17 respondents; Board members understand the organization's mission and services. Strongly Disagree Disagree Neutral Agree Strongly Agree Score=1 Score=2 Score=3 Score=4 Score=5 Response total Average score 0% (0) 0% (0) 0% (0) 35.29% (6) 64.71% (11) Average rating 4.65 Statistics based on 17 respondents; The organization structure is clear (board, officers, committees, executive, and staff). Strongly Disagree Disagree Neutral Agree Strongly Agree Score=1 Score=2 Score=3 Score=4 Score=5 Response total Average score 0% (0) 0% (0) 6.25% (1) 62.5% (10) 31.25% (5) Average rating 4.25 Statistics based on 16 respondents; The board has clear goals and actions resulting from relevant and realistic strategic planning. Strongly Disagree Disagree Neutral Agree Strongly Agree Score=1 Score=2 Score=3 Score=4 Score=5 Response total Average score 0% (0) 0% (0) 31.25% (5) 56.25% (9) 12.5% (2) Average rating 3.81 Statistics based on 16 respondents; The board attends to policy-related decisions that effectively guide operational activities of staff. Strongly Disagree Disagree Neutral Agree Strongly Agree Score=1 Score=2 Score=3 Score=4 Score=5 Response total Average score 0% (0) 0% (0) 6.25% (1) 75% (12) 18.75% (3) Average rating 4.13 Statistics based on 16 respondents; The board receives regular reports on finances/budgets, performance, and other important matters. Strongly Disagree Disagree Neutral Agree Strongly Agree Score=1 Score=2 Score=3 Score=4 Score=5 Response total Average score 0% (0) 0% (0) 0% (0) 29.41% (5) 70.59% (12) Average rating Statistics based on 17 respondents;

157 The board effectively represents the organization to the stakeholder community. Strongly Disagree Disagree Neutral Agree Strongly Agree Score=1 Score=2 Score=3 Score=4 Score=5 Response total Average score 0% (0) 0% (0) 5.88% (1) 41.18% (7) 52.94% (9) Average rating 4.47 Statistics based on 17 respondents; Board meetings facilitate focus and progress on important organizational matters. Strongly Disagree Disagree Neutral Agree Strongly Agree Score=1 Score=2 Score=3 Score=4 Score=5 Response total Average score 0% (0) 0% (0) 11.77% (2) 52.94% (9) 35.29% (6) Average rating 4.24 Statistics based on 17 respondents; The board regularly monitors and evaluates progress toward strategic goals and objectives. Strongly Disagree Disagree Neutral Agree Strongly Agree Score=1 Score=2 Score=3 Score=4 Score=5 Response total Average score 0% (0) 0% (0) 17.65% (3) 47.06% (8) 35.29% (6) Average rating 4.18 Statistics based on 17 respondents; The board regularly evaluates and provides development plans for the chief executive officer. Strongly Disagree Disagree Neutral Agree Strongly Agree Score=1 Score=2 Score=3 Score=4 Score=5 Response total Average score 0% (0) 0% (0) 12.5% (2) 37.5% (6) 50% (8) Average rating 4.38 Statistics based on 16 respondents; Each member of the board is involved and interested in the board's work. Strongly Disagree Disagree Neutral Agree Strongly Agree Score=1 Score=2 Score=3 Score=4 Score=5 Response total Average score 0% (0) 5.88% (1) 0% (0) 58.82% (10) 35.29% (6) Average rating 4.24 Statistics based on 17 respondents; The board considers the diverse positions of the membership in a non-discriminatory manner. Strongly Disagree Disagree Neutral Agree Strongly Agree Score=1 Score=2 Score=3 Score=4 Score=5 Response total Average score 0% (0) 0% (0) 5.88% (1) 41.18% (7) 52.94% (9) Average rating Statistics based on 17 respondents;

158 Southwest Power Pool, Inc. Comments Section 2: Comments Please list three to five points on which the Board of Directors should focus attention in Please be as specific as possible in identifying these points. 1. Transition from Transmission build and new market, to optimizing the system. Efficiencies and cost control. 2. Focus on the extent to which the Board can delegate greater responsibility to staff. My feeling is that the Board has deviated from its role as policy and strategic advisor and is concerning itself too much with the day to day operations of SPP. Focus on ways that the board can foster greater cooperation with neighboring RTOs. Coordinating operations across a broader footprint will lead to greater efficiency and lower costs to member systems. We need to quit seeing other RTOs as an enemy and find ways to work together for the benefit of all RTO members. 3. Cyber Security Footprint expansion Succession 4. Robust and realistic planning futures (not short-sighted). Complete and implement Value of Transmission work. 5. We need to control capital spending. We need to use Board members to better our outreach to members and to political entities. The Board needs to build liaisons with the Boards of other regional entities. 6. CPP - Reduce the reserve margin allow for non-firm transmission for planning reserves Develop a communications program for the value of SPP Seams issues and potential loss of load The Board should re-evaluate the current transmission expansion plan to determine if it is cost effective given changing economic and regulatory changes. 2. The Board should determine that there is a organization-wide succession plan in place for all critical positions. 3. Evaluate the current strategic plan for SPP now that the IS integration is complete. 8. Improvement in evaluation/transparency of key voting items Increased training for the group receiving member questions on the operation's side of the organization Focus on relationship with regulatory agency 9. Keep the line on costs. Keep focused on improving productivity. Resolve the Z2 credits soon. Keep focused on growing the footprint. To the west preferably With the Addition of Board Members this year, Mentoring and Developing the New Board Members both technically and culturally - Within multi-entity zones particularly, independent & criteria based review and approval of zonal transmission additions Clean Power Plan Impacts on market design & the SPP region 2. FERC Order 1000 Transmission Activities 3. Improvements in IM market design 4. SPP Organizational Efficiency & Effectiveness Board of Directors Evaluation Results 6

159 Southwest Power Pool, Inc. Comments 12. 1)Fixing RCAR inequity in deficit zones 2)Fixing RCAR inequity in deficit zones 3)Fixing RCAR inequity in deficit zones 4)Fixing RCAR inequity in deficit zones 13. Integration of new members of board. Strategic planning within each board committee. Improved understanding and implementation of necessary and appropriate compliance measures. Ensure adequate response to each member's needs in implementation of EPA CPP Board should establish a set of key objectives for itself and the organization and should monitor progress on these items more regularly. This should be derived from the strategic planning process but should have defined, actionable milestones to measure progress during the upcoming year. 2. The Board should obtain further development on the role of proper governance- there is still too much of a tendency for the Board to cross over into the role of management. 3. The Board should conduct a more complete succession planning process for the leadership of the organization greater bod involvement in strategic planning process ; consider formalized independent bod member input of strategic issues to the SPC comm and to retreat. 2.focus on succession planning 3.review of performance metrics ; their appropriateness and use 4.improvement and enhancement of internal independent bod interaction,discussion, deliberation 2015 Board of Directors Evaluation Results 7

160 SPP Organizational Group Self-Evaluation/Assessment (August 2014 July 2015) GROUP NAME: Balancing Authority Operating Committee (BAOC) (established Dec. 2014) CHARTER/SCOPE UPDATE: Attached Charter/Scope has been reviewed: Y MEMBER ROSTER/ATTENDANCE: Member Company Sector # Present # Absent Bill Nolte Sunflower Electric Power Corporation Cooperative 4 Bryan Taggart Westar Energy, Inc. Investor Owned 2 2 (1 Proxy) Chris Bridges Kansas City Power & Light Company, Investor Owned 4 GMO Darryl Boggess Western Farmers Electric Coop. Cooperative 4 David Pham Empire District Electric Company Investor Owned 3 1 (1 Proxy) Gary Plummer City of Independence, Missouri Municipal 3 1 Gregory McAuley, Vice Chair Oklahoma Gas and Electric Co. Investor Owned 3 1 (1 Proxy) Jeff Wells Grand River Dam Authority State Agency 4 Jessica Tucker Kansas City Power & Light Company Investor Owned 2 2 (1 Proxy) John Stephens City Utilities of Springfield Municipal 1 3 Kyle McMenamin Xcel Energy Investor Owned 4 Mark Trumble Omaha Public Power District State Agency 4 Paul Johnson, Chair American Electric Power Investor Owned 3 1 Ron Gunderson Nebraska Public Power District State Agency 4 Steve Haun Lincoln Electric System Municipal 4 Terry Petzoldt Kansas City Board of Public Utilities Municipal 2 2 (2 Proxies) *Only on Committee for part of the assessment period. Please list the number of members represented in the following areas: Transmission/Owners Transmission/Users Directors 10 6 Investor Owned Utility Sectors Cooperative Municipal State Federal Independent Power Producer/ Marketer Alt Power/ Public Interest Large Retail Small Retail

161 AVERAGE OVERALL ATTENDANCE (INCLUDING NON-GROUP MEMBERS): 23 MEETINGS HELD TO DATE: Live: 0 Teleconference: 4 AVERAGE LENGTH OF MEETINGS: 2:00 NUMBER OF VOTES TAKEN: 3 *MEETING COST(S): $ * Meeting costs include hotel expenses (room rental, A/V, food and beverage), estimate of teleconference expenses, and Director fees for attendance. MAJOR ACCOMPLISHMENTS/ISSUES ADDRESSED BY THE GROUP: 1. EOP Update methodology 2. Revision to EOP; published Sept 1, NERC-requested Generator Response Survey MAJOR PENDING ISSUES BEFORE THE GROUP: 1. Member participation in Load Shed Drills (new) 2. Any potential changes to the SPP Attachment AN

162 GROUP NAME: SPP Organizational Group Self-Evaluation/Assessment (August 2014 July 2015) Board of Directors CHARTER/SCOPE UPDATE: Attached Charter/Scope has been reviewed: N/A MEMBER ROSTER/ATTENDANCE: Member Company Sector # Present # Absent Eckelberger, Jim Chairman N/A 7 0 Skilton, Harry Vice Chairman N/A 7 0 Altenbaumer, Larry Director N/A 7 0 Bernard, Phyllis Director N/A 7 0 Brix, Julian Director N/A 7 0 Brown, Nick Director N/A 7 0 Martin, Josh Director N/A 7 0 *Ashley, Kristy Exelon Generation Company Independent Power Producer (TU) 4 1 *Bittle, Ricky Arkansas Electric Cooperative Corp Cooperative (TU) 2 0 Crissup, Phil Oklahoma Gas & Electric Investor-Owned (TO) 6 1 (1 Proxy) Deggendorf, Mike Kansas City Power & Light Investor-Owned (TO) 6 1 (1 Proxy) *Doghman, Mo Omaha Public Power District State Agency (TO) 0 2 (2 Proxies) *Hansen, Jon Omaha Public Power District State Agency (TO) 3 2 (2 Proxies) *Harris, Robert Western Area Power Administration Federal Agency (TU) 4 0 Harrison, Kelly Westar Energy, Inc. Investor-Owned (TO) 6 1 (1 Proxy) *Highley, Duane Arkansas Electric Cooperative Corp Cooperative (TU) 2 3 *Hudson, David Xcel Energy Investor-Owned (TU) 3 Janssen, Rob Dogwood Independent Power Producer (TU) Kent, Tom Nebraska Public Power District State Agencies (TO) 5 (3 Proxies) 1 (1 Proxy) (2 Proxies) Knottek, Jeff City Utilities Springfield, MO Municipals (TU) 7 0 *Kruse, Bruce Calpine Independent Power Producer (TU) 1 *Lowry, Stuart Sunflower Electric Power Corporation Cooperative (TO) 4 0 Osburn, Dave Oklahoma Municipal Power Authority Municipals (TU) 5 1 (1 Proxy) 2 (2 Proxies) *Risan, Mike Basin Electric Power Cooperative Cooperative (TU) 4 0 Roulet, Gary Western Farmers Electric Cooperative Cooperative (TU) 1 5 (3 Proxy) *Schmidt, Kristine ITC Great Plains Independent Transmission Co (TU) 2 0 Smith, Kevin Tenaska Independent Power Producer (TU) 5 2 Solomon, Stuart Public Service Company of Oklahoma Investor-Owned (TO) 7 0 *Walters, Kelly Empire District Electric Company Investor-Owned (TO) 4 0 Williams, Noman Sunflower Electric Power Corporation Cooperative (TO) 1 0 Wise, Mike Golden Spread Electric Cooperative Cooperative (TU) 6 1

163 Suskie, Paul Staff Secretary 7 0 *Only on Committee for part of the assessment period. List the number of members represented in the following areas: Transmission/Owners Transmission/Users Director(s) Sectors Investor Owned Utility Cooperative Municipal State Federal Independent Power Producer/ Marketer Alt Power/ Public Interest Large Retail Small Retail AVERAGE OVERALL ATTENDANCE (INCLUDING NON-GROUP MEMBERS): 94 MEETINGS HELD TO DATE: Live: 6 Teleconference: 1 AVERAGE LENGTH OF MEETINGS: 5:00 NUMBER OF VOTES TAKEN: 45 *MEETING COST(S): $203, * Meeting costs include hotel expenses (room rental, A/V, food and beverage), estimate of teleconference expenses, and Director fees for attendance. MAJOR ACCOMPLISHMENTS/ISSUES ADDRESSED BY THE GROUP: 1. Order Tariff Revisions and Bylaws Modifications (Membership Agreement Modifications) 3. Notification to Construct changes 4. Seams Issues 5. Clean Power Plan MAJOR PENDING ISSUES BEFORE THE GROUP: 1. Order Seams Issues 3. Clean Power Plan 4. Tariff Revisions and Bylaws Modifications (Membership Agreement Modifications)

164 SPP Organizational Group Self-Evaluation/Assessment (August 2014 July 2015) GROUP NAME: Business Practices Working Group CHARTER/SCOPE UPDATE: Attached Charter/Scope has been reviewed: Y MEMBER ROSTER/ATTENDANCE: Member Company Sector # Present # Absent Wilkerson, Grant Westar Energy Investor-Owned 10 Utility McCord, Rick Empire District Electric Investor Owned Utility 10 *Adamczyk, David Kansas City Power & Light Investor Owned Utility 6 Hotovy, James Nebraska Public Power District State Agencies 10 Lemaire, Anthony Tenaska Power Services IPP/Marketer 9 1 *Marshall, Charles ITC Great Plains IPP/Marketer 8 1 Hesterman, Tom Sunflower Electric Power Corp. Coop. 10 Jones, Rob Grand River Dam Authority State Agencies 9 1 Ross, Richard American Electric Power Investor Owned Utility 10 Taylor, Joe Xcel Energy Investor Owned Utility 10 *Portra, Kass Western - UGP Federal 2 *Only on Committee for part of the assessment period. Please list the number of members represented in the following areas: Transmission/Owners Transmission/Users Directors 6 5 Investor Owned Utility Sectors Cooperative Municipal State Federal Independent Power Producer/ Marketer Alt Power/ Public Interest Large Retail Small Retail AVERAGE OVERALL ATTENDANCE (INCLUDING NON-GROUP MEMBERS): 28 MEETINGS HELD TO DATE: Live: 4 Teleconference: 6 AVERAGE LENGTH OF MEETINGS: 3:30 NUMBER OF VOTES TAKEN: 18 *MEETING COST(S): $ * Meeting costs include hotel expenses (room rental, A/V, food and beverage), estimate of teleconference expenses, and Director fees for attendance.

165 MAJOR ACCOMPLISHMENTS/ISSUES ADDRESSED BY THE GROUP: 1. FERC Order 1000 Business Practices 2. Multiple Business Practice clean-up, in light of the SPP IM 3. Aggregate Study Process revision MAJOR PENDING ISSUES BEFORE THE GROUP: 1. FERC Order 1000 Business Practices 2. Continued Business practice Clean-up, re: Redispatch 3. Business Practice Revision re: Integrated Systems.

166 GROUP NAME: Change Working Group (CWG) SPP Organizational Group Self-Evaluation/Assessment (August 2014 July 2015) CHARTER/SCOPE UPDATE: Attached Charter/Scope has been reviewed: Yes MEMBER ROSTER/ATTENDANCE: Member Company Sector # Present # Absent Alexander, Eric Grand River Dam Authority State Agency 11 1 Anderson, Lee Lincoln Electric System Municipal 12 0 *Bowles, Stuart Arkansas Electric Cooperative N/A 1 2 Corporation *Callies, Byron Western Area Power Admin Federal Agency 0 5 Carter, Kevin Duke Energy Americas Marketer 1 11 *Cochran, Adam Tenaska Power Service IPP 5 1 (1 Proxy) *Dixon, Carrie Xcel Energy Investor-Owned 0 0 *Fife, James Physical Systems Integration Marketer 0 1 Gates, Terry American Electric Power Investor-Owned 9 3 (1 Proxy) Geil, Shawn Kansas Electric Power Coop Cooperative 10 2 Hall, Jodi KCP&L Greater MO Investor-Owned 12 0 *Hatfield, Jeremy The Energy Authority N/A 5 0 Howell, Mandi Western Farmers Elect Coop Cooperative 9 3 (3 Proxies) Jacoby, Jim (Chairman) American Electric Power Investor-Owned 7 5 (4 Proxies) Jenson, Shane Omaha Public Power District State Agency 11 1 (1 Proxy) *King, Bethany Empire District Electric Co Investor-Owned 8 3 (2 Proxies) *Kruse, Brett Calpine Energy Service IPP 0 0 Lee, Kevin Oklahoma Gas & Elect Co Investor-Owned 12 0 *Ludwig, Dirk Nebraska Public Power District State Agency 1 0 Lyons, Chris Exelon Generation Co Investor-Owned 3 9 *Medford, Jim NextEra Energy Resources IPP 0 1 *Mentzel, Katie Oklahoma Municipal Power Municipal 5 1 (1 Proxy) Metzker, Amber Xcel Energy Investor-Owned 6 6 (5 Proxies) *Parker, Bradley Empire District Elect Co Investor-Owned 1 0 Perry, Jennifer Westar Energy Investor-Owned 12 0 Purtee, Jerin Board of Public Utilities, KS Municipal 3 9 Rome, Aaron Midwest Energy Cooperative 4 8 *Rosner, Roberto NextEra Energy Resources IPP 0 1 Seck, John Kansas Municipal Energy Municipal 11 1 Agency Shumate, Walter Shell Energy North Americas Marketer 12 0 *Stillwell, Robert City of Independence, MO Municipal 4 3

167 (1 Proxy) *Trenary, Michelle Tenaska Power Services Co IPP 6 0 (Vice Chair) *True, Roy Aces Power N/A 10 0 Tynes, Keith East Texas Electric Coop Cooperative 0 12 *Wankhade, Sanjay Dogwood Energy IPP 1 0 *Williams, Aundrea NextEra Energy Resources IPP 0 11 Wilson, Joe Dan Golden Spread Electric Coop Cooperative 11 1 *Winburn, Chris City of Independence, MO Municipal 1 0 *Wolford, Tyler The Energy Authority N/A 5 2 (2 Proxies) *Wood, Gordon NextEra Energy Resources IPP 0 1 Worf, Mark Sunflower Electric Power Corp Cooperative 7 5 (1 Proxy) *Holbert, Annette (SS) SPP Staff N/A 5 0 *Cathey, Erin (SS) SPP Staff N/A 6 1 *Only on Committee for part of the assessment period. Please list the number of members represented in the following areas: Transmission/Owners Transmission/Users Directors Investor Owned Utility Cooperative Municipal State Federal Sectors Independent Power Producer/ Marketer Alt Power/ Public Interest Large Retail Small Retail AVERAGE OVERALL ATTENDANCE (INCLUDING NON-GROUP MEMBERS): 26 MEETINGS HELD TO DATE: Live: 4 Teleconference: 8 AVERAGE LENGTH OF MEETINGS: 2:75 NUMBER OF VOTES TAKEN: 14 *MEETING COST(S): $14, * Meeting costs include hotel expenses (room rental, A/V, food and beverage), estimate of teleconference expenses, and Director fees for attendance.

168 MAJOR ACCOMPLISHMENTS/ISSUES ADDRESSED BY THE GROUP: 1. Project Pinnacle the group worked together to implement the Project Pinnacle program as well as the included projects on time and under budget. Projects included were Regulation Compensation, Long-term TCR, Market-to-Market, and the Environment Build-Out. Successful delivery was achieved following defined CWG, SPP and stakeholder processes. 2. Functional Releases the group continued to work together to implement multiple releases for Marketplace functional areas including Markets, Settlements, Transmission Congestion Rights, Market Monitoring Data Depository, and Public Data. As for Project Pinnacle, defined CWG, SPP and stakeholder processes were followed, with improvements as applicable based on SPP and stakeholder-identified areas for improvement. 3. Integrated Systems and Z2 Credit Stacking the group has monitored progress on both the Integrated Systems Integration and Z2 Credit Stacking projects, to ensure a clear understanding of both projects and to assist with risk avoidance and implementation success. 4. Change Notification Process Improvements To aid in clearer and more streamlined communication of system changes and maintenance activities with identified impact to stakeholders, the CWG worked together to fine-tune change types and also to reduce the frequency of ed change notifications (per request in the SPP Stakeholder Survey). To do this, change types were standardized and associated notification timeframes were updated based on today s system environment, and a new online change calendar was developed to provide a centralized location detailing all memberimpacting/member-facing change activity. The calendar is available on spp.org. (CWG Change Calendar) 5. The CWG continues to provide a collaborative environment for participants and SPP to implement member-impacting/member-facing projects and to discuss impacts, concerns and risks. 6. The group has maintained a high level of engagement which continues to allow for efficient meetings and productive discussions resulting in effective working group processes and successful project implementations. MAJOR PENDING ISSUES BEFORE THE GROUP: 1. Integrated Systems and Z2 Credit Stacking the group will continue to monitor progress on both the Integrated Systems Integration and Z2 Credit Stacking projects, to ensure a clear understanding of both projects and to assist with risk avoidance and implementation success. 2. Gas Day and Enhanced Combined Cycle (ECC) the group will work together, following CWG processes, to coordinate SPP and stakeholder changes in support of the Gas Day and ECC projects. 3. Outage Scheduling Criteria changes affecting outage scheduling changes are currently going through the stakeholder process. Once approved, the group will work together, following CWG processes, to coordinate SPP and stakeholder changes in support of the criteria changes. 4. Functional Releases the group will continue to work together, following CWG processes, to deliver releases for Marketplace functional areas including Markets, Settlements, Transmission Congestion Rights, Market Monitoring Data Depository, and Public Data. 5. Strategic Plan Assignment the MOPC has assigned the Optimize Data Streams Strategic Plan initiative to the CWG. To address this assignment, staff will develop a whitepaper covering data interfaces provided by SPP and the CWG will review, discuss, and possibly recommend and/or prioritize improvements identified as a result of the analysis and discussion. 6. CWG Process Improvements the group will continue to work together to refine CWG processes to ensure continued improvements in SPP and stakeholder collaboration as well as continued successful project delivery.

169 SPP Organizational Group Self-Evaluation/Assessment (August 2014 July 2015) GROUP NAME: Corporate Governance Committee CHARTER/SCOPE UPDATE: Attached Charter/Scope has been reviewed: N MEMBER ROSTER/ATTENDANCE: Member Company Sector # Present # Absent *Jason Atwood Northeast Texas Electric Cooperative Cooperative (TU) 3 0 Nick Brown (Chair) Director SPP 5 0 *Ricky Bittle Arkansas Electric Cooperative Cooperative (TU) 2 0 Denise Buffington Kansas City Power & Light Company Investor-Owned (TO) 5 0 Jim Eckelberger Director N/A 5 Jason Fortik Lincoln Electric System Municipal (TU) 5 0 *Robert Harris Western Area Power Administration - UGPR Federal Agency (TU) 3 0 Rob Janssen Dogwood Independent Power Producer (TU) 5 0 John McClure Nebraska Public Power District State Agency (TO) 5 0 Paul Suskie Staff Secretary SPP 5 0 *Only on Committee for part of the assessment period. List the number of members represented in the following areas: Transmission/Owners Transmission/Users Director(s) Sectors Investor Owned Utility Cooperative Municipal State Federal Independent Power Producer/ Marketer Alt Power/ Public Interest Large Retail Small Retail AVERAGE OVERALL ATTENDANCE (INCLUDING NON-GROUP MEMBERS): 24 MEETINGS HELD TO DATE: Live: 3 Teleconference: 2 AVERAGE LENGTH OF MEETINGS: 2.13 NUMBER OF VOTES TAKEN: 26 *MEETING COST(S): $20, * Meeting costs include hotel expenses (room rental, A/V, food and beverage), estimate of teleconference expenses, and Director fees for attendance.

170 MAJOR ACCOMPLISHMENTS/ISSUES ADDRESSED BY THE GROUP: 1. Increased the Members Committee by adding an IOU seat, two Cooperative seats, the State and Federal sectors were separated, adding a Federal Seat and an Independent Transmission Company seat was added. 2. Alternative Power Sector Membership was more clearly defined as being members that are engaged in distributive generation and demand response technology using renewable energy consistent with current and future FERC guidance. 3. The committee approved a revision to the Bylaws for Board expansion by two additional seats. 4. The Members Committee increased in size by 5. Corn Belt Power Cooperative, East River Electric Power Cooperative, Inc., and Northwest Iowa Power Cooperative all joined SPP. MAJOR PENDING ISSUES BEFORE THE GROUP: 1. The addition of two additional Board Members is in process. 2. Trans-Elect Membership issues.

171 SPP Organizational Group Self-Evaluation/Assessment (August July 2015) GROUP NAME: Credit Practices Working Group CHARTER/SCOPE UPDATE: Attached Charter/Scope has been reviewed: Y MEMBER ROSTER/ATTENDANCE: Member Company Sector # Present # Absent Brooker, Malcom Oklahoma Municipal Power Authority Municipal (TU) 7 1 *Goforth, James Xcel Energy Investor Owned (TO) 5 2 Hall, Ronnie Kansas City Power & Light Investor Owned (TO) 3 3 Holler, Mark (Chair) Tenaska Power Services *Johnson, Steve Basin Electric Power Cooperative Independent Power Producers (TU) 8 0 Cooperative (TU) 2 1 *Krebs, Paul Kansas City Power & Light Investor Owned (TO) 5 0 Strange, Cassandra Oklahoma Gas & Electric Co. Investor Owned (TO) 8 0 Thompson, Bill American Electric Power Investor Owned (TU) 5 2 Wendlandt, Terri Westar Energy, Inc Investor Owned (TO) 5 Wilson, Gina ITC Holdings Independent Transmission Company (TU) 2 (1 Proxy) 6 2 McCraw, Phil Southwest Power Pool Staff Secretary 8 0 *Only on Committee for part of the assessment period. List the number of members represented in the following areas: Transmission/Owners Transmission/Users Director(s) Sectors Investor Owned Utility Cooperative Municipal State Federal Independent Power Producer/ Marketer Alt Power/ Public Interest Large Retail Small Retail

172 AVERAGE OVERALL ATTENDANCE (INCLUDING NON-GROUP MEMBERS): 21 MEETINGS HELD TO DATE: Live: 1 Teleconference: 7 AVERAGE LENGTH OF MEETINGS: 1:56 NUMBER OF VOTES TAKEN: 9 *MEETING COST(S): $2, * Meeting costs include hotel expenses (room rental, A/V, food and beverage), estimate of teleconference expenses, and Director fees for attendance. MAJOR ACCOMPLISHMENTS/ISSUES ADDRESSED BY THE GROUP: 1. Changed Credit Policy to accept financial statements prepared according to International Financial Reporting Standards to meet requirements of section Accepted methodology of accounting for credit exposure of Long Term TCRs. 3. Improved usability of credit metrics. MAJOR PENDING ISSUES BEFORE THE GROUP: 1. Netting of positively-valued TCR portfolios with bids, offers, and ARR self-converts for the same period in the annual and monthly auctions. 2. Determining if using historical data is appropriate for determining reference prices. 3. Determining if selling a positively valued TCR should increase credit requirements.

173 SPP Organizational Group Self-Evaluation/Assessment (August 2014 July 2015) GROUP NAME: Critical Infrastructure Protection Working Group (CIPWG) CHARTER/SCOPE UPDATE: Charter/Scope has been reviewed: Y MEMBER ROSTER/ATTENDANCE: Member Company Sector # Present # Absent Allen, Ronald American Electric 1 3 Investor-Owned Power *Ashford, Dewayne Oklahoma Gas & 1 (1 Proxy) Investor-Owned Electric Beatty, Dwight Kelson Energy Alt Power 0 4 Breckenridge, John Kansas City Power 3 1 Investor-Owned & Light Buyce, Mike City Utilities of 4 0 Municipal Springfield Clark, Phil Grand River Dam 4 0 State Agency Authority Eddleman, Tony Nebraska Public 4 0 State Agency Power District Ervin, Eric Westar Energy Investor Owned 4 0 Fitzpatrick, Mike Omaha Public 3 1 State Agency Power District Franson, Paul Oklahoma Gas & 1 3 Investor-Owned Electric Co Long, Kalem Empire District 3 1 Investor-Owned Electric Co *Lotz, Mike City of 1 3 Municipal Independence, MO McClanahan, Robert Arkansas Electric 3 1 Cooperative Coop Corp Moore, Daniel Western Farmers 2 2 Investor-Owned Electric Coop *Murray, Mike City of 1/1 0/1 Municipal Independence, MO *Rinehart, Darrell City Utilities of 0 4 Municipal Springfield Sprague, Paul Kansas City Board 1 3 Municipal of Public Utilities Veillon, Michael Cleco Power Investor Owned 2 2 (1Proxy) Wasinger, Chad Sunflower Electric 4 0 Cooperative Power Corp Bingham, Lesley Staff Secretary N/A 4 0 *Only on Committee for part of the assessment period.

174 Please list the number of members represented in the following areas: Trans/Owners Trans/Users Directors 9 6 Sectors Investor Owned Utility Cooperative Municipal State Federal Independent Power Producer/ Marketer Alt Power/ Public Interest Large Retail Small Retail AVERAGE OVERALL ATTENDANCE (INCLUDING NON-GROUP MEMBERS): 35 MEETINGS HELD TO DATE: Live: 4 Teleconference: 0 AVERAGE LENGTH OF MEETINGS: 7:00 NUMBER OF VOTES TAKEN: 13 *MEETING COST(S): $0, Members cover costs * Meeting costs include hotel expenses (room rental, A/V, food and beverage), estimate of teleconference expenses, and Director fees for attendance. MAJOR ACCOMPLISHMENTS/ISSUES ADDRESSED BY THE GROUP: 1. Keep Members updated on CIP V5 Transition issues. 2. Discuss security-related challenges and solutions. 3. Discuss Member audit experiences MAJOR PENDING ISSUES BEFORE THE GROUP: 1. CIP Version 5 and the Risk-based audits from NERC and the Regions

175 SPP Organizational Group Self-Evaluation/Assessment (August 2014 July 2015) GROUP NAME: Event Analysis Working Group CHARTER/SCOPE UPDATE: Attached Charter/Scope has been reviewed: Y MEMBER ROSTER/ATTENDANCE: Member Company Sector # Present # Absent *Bud Averill Grand River Dam Authority State Agency-TO 3 *Eric Ervin Westar Energy, Inc. Investor-Owned-TO 1 1 Jim Useldinger Kansas City Power & Light Investor-Owned-T/O 3 Mitchell Williams Western Farmers Electric Cooperative Cooperatives-T/O 1 1 *Mo Awad Westar Energy, Inc. Investor-Owned-TO 3 *Noman Williams Sunflower Electric Power Cooperatives-T/O 0 *Rick Gurley American Electric Power Investor Owned-T/U 0 *Robert McClanahan Arkansas Electric Cooperative Corporation Cooperatives-T/U 0 Ron Losh Southwest Power Pool *Only on Committee for part of the assessment period. Please list the number of members represented in the following areas: Transmission/Owners Transmission/Users Directors 5 0 Investor Owned Utility Cooperative Municipal State Federal Sectors Independent Power Producer/ Marketer Alt Power/ Public Interest Large Retail Small Retail AVERAGE OVERALL ATTENDANCE (INCLUDING NON-GROUP MEMBERS): 5 MEETINGS HELD TO DATE: Live: 0 Teleconference: 3 AVERAGE LENGTH OF MEETINGS: 1:00 NUMBER OF VOTES TAKEN: 1 *MEETING COST(S): $70.00 * Meeting costs include hotel expenses (room rental, A/V, food and beverage), estimate of teleconference expenses, and Director fees for attendance. MAJOR ACCOMPLISHMENTS/ISSUES ADDRESSED BY THE GROUP: 1. Approve Charter in Feb meeting 2. Approve adding the Chair from the RCWG June meeting 3. Review the MISO Non-event that effected SPP seams issues from March 2015 MAJOR PENDING ISSUES BEFORE THE GROUP: 1. None

176 SPP Organizational Group Self-Evaluation/Assessment (August 2014 July 2015) GROUP NAME: Finance Committee CHARTER/SCOPE UPDATE: Attached Charter/Scope has been reviewed: Y MEMBER ROSTER/ATTENDANCE: Member Company Sector # Present # Absent Skilton, Harry (Chair) Director N/A 7 0 Altenbaumer, Larry Director N/A 7 0 Bennett, Sandra American Electric Power Investor-owned (TO) 6 1 Harrison, Kelly Westar Energy, Inc. Investor-owned (TO) 6 *Kapustka, Laura Wells, Coleen Wise, Mike Lincoln Electric, Inc. Kansas Electric Power Cooperative Golden Spread Electric 1 (1 Proxy) Municipal (TU) 5 0 Cooperative (TU) 1 1 Cooperative (TU) 6 1 Dunn, Tom Staff Secretary 7 0 *Only on Committee for part of the assessment period. List the number of members represented in the following areas: Transmission/Owners Transmission/Users Director(s) Sectors Investor Owned Utility Cooperative Municipal State Federal Independent Power Producer/ Marketer Alt Power/ Public Interest Large Retail Small Retail AVERAGE OVERALL ATTENDANCE (INCLUDING NON-GROUP MEMBERS): 15 MEETINGS HELD TO DATE: Live: 5 Teleconference: 2 AVERAGE LENGTH OF MEETINGS: 4:25 NUMBER OF VOTES TAKEN: 12 *MEETING COST(S): $35, * Meeting costs include hotel expenses (room rental, A/V, food and beverage), estimate of teleconference expenses, and Director fees for attendance.

177 MAJOR ACCOMPLISHMENTS/ISSUES ADDRESSED BY THE GROUP: 1. Clarified financial requirements within the competitive bidding process for new transmission development 2. Implemented changes to SPP s annual budgeting process to included development and documentation of an annual operating plan, periodic detailed review of financial performance, and semi-annual detailed review of process improvement program results 3. Documented 3 principles related to setting SPP s administrative fee in the future: Maintain generational equity Reduce volatility Maintain A rating from credit rating agencies and comply with financial covenants in existing credit agreements MAJOR PENDING ISSUES BEFORE THE GROUP: 1. Balancing value creation with cost control 2. Administrative fee rate strategy 3. Capital expenditure funding policy

178

179 SPP Organizational Group Self-Evaluation/Assessment (August 2014 July 2015) GROUP NAME: Generation Working Group CHARTER/SCOPE UPDATE: Attached Charter/Scope has been reviewed: Y MEMBER ROSTER/ATTENDANCE: Member Company Sector # Present # Absent Amber Metzker Xcel Energy IOU 10 2 Andrew Arkansas Electric Coop COOP 1 11 Lachowsky * Corp. Bryan Taggart WESTAR Energy IOU 11 1 Jim Fehr Nebraska Public Power STATE 12 0 District Mike Grimes * EDP Renewables North IPP/Marketer 7 5 America LLC Mike Sheriff Oklahoma Gas & IOU 12 0 Electric Services Mitch Williams Western Farmers COOP 11 1 Electric Coop Houston, Stuart Empire District Electric IOU 11 1 Company Terry Gates American Electric Power IOU 9 3 (3 Proxy) Scott Jordan SPP Staff Secretary 6 Derek Hawkins SPP Staff Secretary 6 *Only on Committee for part of the assessment period. Please list the number of members represented in the following areas: Transmission/Owners Transmission/Users Directors 6 3 Sectors Investor Owned Utility Cooperative Municipal State Federal Independent Power Producer/ Marketer Alt Power/ Public Interest Large Retail Small Retail

180 AVERAGE OVERALL ATTENDANCE (INCLUDING NON-GROUP MEMBERS): 27 MEETINGS HELD TO DATE: Live 1 Teleconference: 11 AVERAGE LENGTH OF MEETINGS: 2:24 NUMBER OF VOTES TAKEN 24 *MEETING COST(S): $1, * Meeting costs include hotel expenses (room rental, A/V, food and beverage), estimate of teleconference expenses, and Director fees for attendance. MAJOR ACCOMPLISHMENTS/ISSUES ADDRESSED BY THE GROUP: 1. CRR58_CRR014 addressing MOD GWG Report focusing on wind performance related to the approval of the CRR012 s wind accreditation methodology 3. The GWG is staying apprised of the discussions and issues raised through the Capacity Margin Task Force (CMTF) 4. MAJOR PENDING ISSUES BEFORE THE GROUP: 1. Pending recommendations of the CMTF and which group ultimately owns Criteria Continued development on the analysis of generator performance within SPP 3. SPP Criteria language cleanup with the Criteria to Protocols initiative

181 SPP Organizational Group Self-Evaluation/Assessment (August 2014 July 2015) GROUP NAME: Human Resources Committee CHARTER/SCOPE UPDATE: Attached Charter/Scope has been reviewed: Y MEMBER ROSTER/ATTENDANCE: Member Company Sector # Present # Absent Brix, Julian (Chair) Director N/A 5 0 Martin, Josh Director N/A 5 0 *Burke, Kevin Highley, Duane *Kent, Tom Walters, Kelly *Williams, Noman ITC Holdings Arkansas Electric Cooperative Corporation Nebraska Public Power District Empire District Electric Company Sunflower Electric Power Corporation Independent Transmission Co. (TU) 3 2 Cooperative (TU) 3 2 State Agency (TO) 2 0 Investor-owned (TO) 5 0 Cooperative (TO) 3 0 See, Malinda Southwest Power Pool Staff Secretary 5 0 *Only on Committee for part of the assessment period. List the number of members represented in the following areas: Transmission/Owners Transmission/Users Director(s) Sectors Investor Owned Utility Cooperative Municipal State Federal Independent Power Producer/ Marketer Alt Power/ Public Interest Large Retail Small Retail AVERAGE OVERALL ATTENDANCE (INCLUDING NON-GROUP MEMBERS): 8 MEETINGS HELD TO DATE: Live: 3 Teleconference: 2 AVERAGE LENGTH OF MEETINGS: 4:30 NUMBER OF VOTES TAKEN: 10 *MEETING COST(S): $24, * Meeting costs include hotel expenses (room rental, A/V, food and beverage), estimate of teleconference expenses, and Director fees for attendance.

182 MAJOR ACCOMPLISHMENTS/ISSUES ADDRESSED BY THE GROUP: 1. Selected a new 401(k) Plan Investment Advisor. This advisor serves as an ERISA 3(38) investment manager. This selection was made via a Request for Proposal (RFP) process that included in-person interviews with the top applicants. The selection resulted in a cost savings to plan participants. 2. Approved a Scope Statement for the Southwest Power Pool Administrative Committee. This committee was appointed by the Board of Directors to perform fiduciary functions of the Plan Administrator other than the authority or discretion to manage or control assets of the Southwest Power Pool, Inc., 401(k) Savings Plan and Trust and Southwest Power Pool, Inc. Retirement Plan and to perform non-fiduciary functions. In addition, the Administrative Committee performs fiduciary and non-fiduciary functions for the following SPP non-erisa plans: 457(b), 457(f), Post-Retirement Healthcare Plan and Employee Medical Plan. 3. Approved an update to the Southwest Power Pool Performance Compensation Plan operational metrics to include an analysis of market performance. 4. Approved an amendment to the Southwest Power Pool employee Post-Retirement Healthcare benefit that provides savings to both SPP and retirees while maintaining medical coverage for retirees. MAJOR PENDING ISSUES BEFORE THE GROUP: 1. Review and analysis of Southwest Power Pool officer and staff compensation and benefits. 2. Review and analysis of Southwest Power Pool Performance Compensation Plan metrics.

183 GROUP NAME: Market Working Group SPP Organizational Group Self-Evaluation/Assessment (August 2014 July 2015) CHARTER/SCOPE UPDATE: Attached Charter/Scope has been reviewed: Y MEMBER ROSTER/ATTENDANCE: Member Company Sector # Present # Absent Richard Ross (Chair) AEP Investor Owned Utility 18 2 (2 Proxies) Jim Flucke (V-Chair) KCPL Investor Owned Utility 19 1 (1 Proxy) Aaron Rome KMEA Municipal 16 4 (2 Proxies) Amber Metzker Xcel Investor Owned Utility 19 1 (1 Proxy) Ann Scott TNSK Independent Power Producer/Marketer (7 proxies) Brad Johnston* AECC Cooperative 3/3 Chris Lyons Exelon Independent Power 13 7 Producer/Marketer Cliff Franklin WR Investor Owned Utility 19 1 (1 Proxy) Kevin Galke* CUS Municipal 8/8 Lee Anderson LES Municipal 19 1 (1 Proxy) Matt Moore GSEC Cooperative 18 2 Mike Mushrush* OMPA Municipal 2/3 1 Neal Daney Midwest Cooperative 19 1 Rick McCord EDE Investor Owned Utility 18 2 (1 Proxy) Rick Yanovich OPPD State 18 2 (1 Proxy) Ron Thompson NPPD State 20 Shawn McBroom OGE Investor Owned Utility 19 1 Valerie Weigel* Basin Cooperative 6/8 2 (1 Proxy) Gene Anderson* OMPA Municipal 15/17 2 (2 Proxies) Bruce Walkup* AECC Cooperative 12/17 5 (4 Proxies) Marguerite Wagner* Boston Independent Power Producer/Marketer 7/12 5 (3 Proxies) Matt Johnson* CUS Municipal 11/12 1 (1 Proxy) *Only on Committee for part of the assessment period.

184 Please list the number of members represented in the following areas: Transmission/Owners Transmission/Users Directors 9 9 Investor Owned Utility Sectors Independent Cooperative Municipal State Federal Power Producer/ Marketer Alt Power/ Public Interest Large Retail Small Retail AVERAGE OVERALL ATTENDANCE (INCLUDING NON-GROUP MEMBERS): 85 MEETINGS HELD TO DATE: Live: 12 Teleconference: 8 AVERAGE LENGTH OF MEETINGS: 16:00 NUMBER OF VOTES TAKEN: 109 *MEETING COST(S): $21, * Meeting costs include hotel expenses (room rental, A/V, food and beverage), estimate of teleconference expenses, and Director fees for attendance. MAJOR ACCOMPLISHMENTS/ISSUES ADDRESSED BY THE GROUP: 1. Over-Collected Losses Design Change (RR26_MPRR212) 2. Transitional ARR Allocation Process (RR34_MPRR221) 3. Short-Term RUC (RR99) 4. Annual Allocation Percent Change (RR91) MAJOR PENDING ISSUES BEFORE THE GROUP: 1. TCR Enhancements 2. Day-Ahead Must Offer design recommendation to MOPC 3. Quick Start Resource Enhancements 4. Ramp Product Market Design 5. MMU Market Design Recommendations

185 SPP Organizational Group Self-Evaluation/Assessment (August 2014 July 2015) GROUP NAME: Markets and Operations Policy Committee CHARTER/SCOPE UPDATE: Attached Charter/Scope has been reviewed: N MEMBER ROSTER/ATTENDANCE: Member Company Sector # Aaron Pupa* Adam Graff* Al Tamimi* Midwest Gen, LLC Heartland Consumers Power District Sunflower Electric Power Corporation Independent Power Producer-T/U Present # Absent 2/2 0 State Agency-T/U 2/2 0 Cooperative-T/O 2/4 2 Alan Derichsweiler* Western Farmers Electric Cooperative-T/O 2/4 2 (2 proxies) Andrew Ferris* Board of Public Utilities-KC, KS Municipal-T/U 2/3 1 Andrew Rosenlieb Entergy Asset Management Independent Power 5 0/5 Producers-T/U (4 proxies) Aundrea Williams* NextEra Energy Resources, LLC Independent Power 2 3/5 Producers-T/U (1 proxy) Bary Warren The Empire District Investor Owned- 1 4/5 T/O (1 proxy) Bill Bojoquez Hunt Transmission Service, LLC Independent Trans. 2 3/5 Co-T/U (2 proxies) Bill Dowling Midwest Energy Cooperative-T/O 3/5 2 (1 proxy) Bill Grant Xcel Energy-Southwestern PSC Investor Owned- 1 4/5 T/O (1 proxy) Bob Adam* Board of Public Utilities, Kansas 1 Municipal-T/U 2/3 City, Kansas (1 proxy) Bob Burner* Duke-American Transmission Co Independent Trans. Co-T/U Bob Reilley* Shell Energy Marketer-T/U 0/2 Brett Kruse Brian Gedrich* Brian Weber* Bruce Walkup* Calpine Energy Services NextEra Energy Resources, LLC Prairie Wind Transmission, LLC Arkansas Electric Cooperative Corporation Independent Power Producers-T/U Independent Power Producers-T/U Independent Trans. Co-T/U 1/1 0 1/5 4/5 2 (2 proxies) 4 (3 proxies) 1 (1 proxy) 0/4 4 Cooperative-T/U 2/2 0 Burton Crawford Kansas City Power & Light Investor Owned- T/O 4/5 1 Carroll Riddick* Western Farmers Electric Cooperative-T/O 1/1 0 Cheryl Bredenbeck* Xcel Energy Southwest Investor Owned- Transmission Company, LLC T/U 1/1 0 Chris Jones* Duke-American Transmission Co Independent Trans. Co-T/U 3/4 1

186 Chris Lyons Exelon Generation Co. Investor Owned- 2 3/5 T/U (2 proxies) Courtney Mehan Kansas City Power & Light Investor Owned- 1 4/5 T/O (1 proxy) Daniel Kuehn Cielo Wind Services Cooperative-T/U 4/5 1 David Lazos El Paso Energy Marketing Co. Marketer-T/U 0/5 5 Dave Raatz* Basin Electric Power Coop Cooperative-T/U 1/2 1 (1 proxy) Denise Buffington Kansas City Power & Light Co Investor Owned- 1 4/5 T/O (1 proxy) Dennis Florom Lincoln Electric System Municipal-T/U 5/5 0 Doug Collins* Omaha Public Power District State Agency-T/O 3/3 0 Edd Hargett East Texas Electric Coop Cooperative-T/U 0/5 5 (5 proxies) Eddy Reece Rayburn County Electric Coop 4 Cooperative-T/U 1/5 (4 proxies) Eric Hixson* The Central Nebraska Public Power & Irrigation District State Agency-T/U 4/4 0 Errol Ortego Louisiana Energy & Power Authority State Agency-T/U 0/5 5 Frank Ledoux Lafayette Utilities System Municipal-T/U 0/5 5 Gary Hurse Lea County Electric Coop. Cooperative-T/U 0/5 5 (4 proxies) Gregory Coco Cleco Power Investor Owned- T/U 0/5 5 Gregory Pakela DTE Energy Trading Inc. Marketer-T/U 0/5 5 Harshi Panchal XO Energy SW, LP Marketer-T/U 0/5 5 Jake Langthorn OG+E Electric Services Investor Owned- 1 4/5 T/O (1proxy) Jason Atwood Northeast Texas Electric Co-op Cooperative-T/U 5/5 0 Jeff Brown* Shell Energy Marketer-T/U 0/3 2 (2 proxies) Jeff Knottek City Utilities, Springfield, MO Municipal-T/U 5/5 0 Jeff Stebbins Tri-County Electric Coop Cooperative-T/U 2/5 3 (2 proxies) Jennifer Vosburg NRG Power Marketing Marketer-T/U 0/5 5 Jerry Ohmes* Board of Public Utilities-KC, KS Municipal-T/U 1/1 0 Jim Edwards* East River Electric Power Coop Cooperative-T/U 1/1 0 Jimmy Wever Public Service Commission of Municipal-T/U 0/5 5 John Grotzinger Yazoo City, MS MO Joint Municipal Elec. Utility Comm. State Agency-T/U 3/5 2 (2 proxies) John Olsen Westar Energy-KGE Investor Owned- T/O 5/5 0 Kara Sidman Flat Ridge 2 Wind Energy Independent Power Producer- T/U 4/5 1 Keith Sugg* Arkansas Electric Coop. Corp Cooperative-T/U 2/3 1 Ken Meringolo CPV Renewables Independent Power Producers-T/U 0/5 5 Kevin Carter* Duke Energy Americas Marketer-T/U 0/4 4

187 Kristine Schmidt* ITC Great Plains Independent Trans. Co-T/U 4/4 0 Larry Holloway Kansas Power Pool Municipal-T/U 4/5 1 Les Evans Kansas Electric Power Cooperative-T/U 5/5 0 Lloyd Linke* Western Area Power Federal Agency- Administration T/U 2/2 0 Lucy Johnston Luminant Energy Co. Marketer-T/U 0/5 5 Marguerite Wagner* ITC Great Plains Independent Trans. Co-T/U 1/1 0 Mark McCulla Entergy Investor Owned- T/U 0/5 5 Mark McGrail Enel Green Power North America Independent Power Producer-T/U 0/5 5 Mark Shults* Northeast Nebraska Public Power District State Agency-T/U 0/4 4 Michael Shook City of Coffeyville Municipal-T/U 0/5 5 Mike Grimes EDP Renewables Independent Power Producers-T/U 3/5 Mike Mushrush Oklahoma Municipal Power Authority 2 (1 proxy) Municipal-T/U 5/5 0 Noman Williams South Central MCN, LLC Independent Transmission Co-T/U 5/5 0 Paul Johnson American Electric Power Investor Owned- 1 4/5 T/U (1 proxy) Paul Lampe* City of Independence, MO Municipal-T/U 0/2 2 (1 proxy) Paul Mahlberg* City of Independence, MO Municipal-T/U 2/3 1 (1 proxy) Paul Malone Nebraska Public Power District State Agency-T/O 5/5 0 Paul McCoy Independent Trans-Elect Development Transmission Company, LLC Company-T/U 0/5 5 Richard Ross American Electric Power Investor Owned- 1 4/5 T/U (1 proxy) Robert Janssen Dogwood Energy Independent Power Producers -T/U 4/5 1 Robert Priest Clarksdale Public Utilities Municipal-T/U 0/5 5 Robert Walker Cargill Power Markets Marketer-T/U 0/5 5 Steve Drew* OGE Transmission, LLC Investor Owned- T/U 0/1 1 Terri Gallup* American Electric Power Investor Owned- 1 4/5 T/U (1 proxy) Tom Hestermann Sunflower Electric Power Corp. Cooperative-T/O 5/5 0 Tom Stuchlik* Westar Energy Investor Owned- 1 4/5 T/O (1 proxy) Tim Brown Grand River Dam Authority State Agency-T/O 2/5 3 (3 proxies) Todd Fridley Transource Energy, LLC Independent Trans 1 4/5 Co-T/U (1 proxy) Tom Burke Golden Spread Electric Coop. Cooperative-T/U 5/5 0

188 Tom Saitta Kansas Municipal Energy Agency Municipal-T/U 4/5 1 Troy Via* Omaha Public Power District State Agency-T/O 2/2 0 Wayne Galli Plains & Eastern Clean Line,LLC Independent Trans 4 1/5 Co-T/U (1 proxy) Julian Brix-Liaison Member n/a n/a 5/5 0 Carl Monroe-Staff Secretary Southwest Power Pool 5 0 *Only on Committee for part of the assessment period. Please list the number of members represented in the following areas: Transmission/Owners Transmission/Users Directors Investor Owned Utility Sectors Cooperative Municipal State Federal Independent Power Producer/ Marketer Alt Power/ Public Interest Large Retail Small Retail AVERAGE OVERALL ATTENDANCE (INCLUDING NON-GROUP MEMBERS): 131 MEETINGS HELD TO DATE: Live: 4 Teleconference: 1 AVERAGE LENGTH OF MEETINGS: 12:10 NUMBER OF VOTES TAKEN: 76 *MEETING COST(S): $85, * Meeting costs include hotel expenses (room rental, A/V, food and beverage), estimate of teleconference expenses, and Director fees for attendance.

189 MAJOR ACCOMPLISHMENTS/ISSUES ADDRESSED BY THE GROUP: 1. Approved 2 SPP Criteria, 18 Tariff, 54 Market Protocols, 14 Business Practices, and 16 Charter Changes. 2. Approved Scopes for 2015 ITP10 Changes, 2016 ITP10, 2017 ITP10 Futures and endorsed 2016 ITPNT Scope. 3. Endorsed 2015 ITP10 and 2015 ITPNT Reports and Plans. 4. Approved Revisions Request Process. 5. Approved Minimum Design Standards. 6. Approved various changes to NTCs. MAJOR PENDING ISSUES BEFORE THE GROUP: 1. Enhanced Combine Cycle 2. Implementation of the Strategic Plan 3. Stakeholder Prioritization 4. Revision of Transmission Planning Process 5. Gas/Electric Coordination 6. Working Group Coordination

190 GROUP NAME: CHARTER/SCOPE UPDATE: SPP Organizational Group Self-Evaluation/Assessment (August 2014 July 2015) Model Development Working Group No MEMBER ROSTER/ATTENDANCE: Member Company Sector # Present # Absent Brian Wilson Kansas City Power & Light Company Investor-Owned 7 1 (1 Proxy) Derek Brown Westar Energy Kansas Gas and Investor-Owned 8 0 Electric Dustin Betz Nebraska Public Power District State Agencies 6 2 (1 Proxy) Holli Krizek * Western Area Power Administration Federal Agencies 1 1 Jason Shook GDS Associates (E. TX Elect. Coop, NE TX Elect. Coop, Tex-LA Coop of TX) (1 Proxy) Cooperatives 7 1 Joe Fultz * Grand River Dam Authority State Agencies 6 2 (2 Proxy) John Boshears City Utilities of Springfield, MO Municipals 7 1 Liam Stringham * Sunflower Electric Power Corporation Cooperatives 5 0 Mike Clifton * Oklahoma Gas & Electric Investor - Owned 3 0 Nate Morris Empire District Electric Company Investor-Owned 7 1 Nathan McNeil * Midwest Energy, Inc. Cooperatives 4 0 Reene Miranda Xcel Energy, Inc. Investor-Owned 8 0 Scott Rainbolt American Electric Power Investor-Owned 6 2 Scott Schichtl Arkansas Electric Cooperative Co Cooperatives 4 4 Anthony Cook SPP Staff Secretary 8 0 *Only on Committee for part of the assessment period.

191 Please list the number of members represented in the following areas: Transmission/Owners Transmission/Users 8 6 Investor Owned Utility Cooperative Municipal State Federal Sectors Independent Power Producer/ Marketer Alt Power/ Public Interest Large Retail Small Retail AVERAGE OVERALL ATTENDANCE (INCLUDING NON-GROUP MEMBERS): 31 MEETINGS HELD TO DATE: Live 2 Teleconference: 6 AVERAGE LENGTH OF MEETINGS: 3:17 NUMBER OF VOTES TAKEN 30 *MEETING COST(S): $5, * Meeting costs include hotel expenses (room rental, A/V, food and beverage), estimate of teleconference expenses, and Director fees for attendance. MAJOR ACCOMPLISHMENTS/ISSUES ADDRESSED BY THE GROUP: 1. MDWG Procedure Manual MOD-032-R1 Compliant Series Powerflow, Short Circuit, and Dynamic Models MAJOR PENDING ISSUES BEFORE THE GROUP: 1. Final MDWG Procedure Manual Updates 2. Model Building Improvements

192 SPP Organizational Group Self-Evaluation/Assessment (August 2014 July 2015) GROUP NAME: Operating Reliability Working Group CHARTER/SCOPE UPDATE: Attached Charter/Scope has been reviewed: Y MEMBER ROSTER/ATTENDANCE: Member Company Sector # Present # Absent Jim Useldinger Kansas City Power & Light TO 16 0 Allan George Sunflower Electric Power TO 16 0 Corporation Paul Lampe City of Independence TU 13 3 (1 Proxy) John Stephens City Utilities of Springfield TU 14 2 (2 Proxies) Walter Gosnell OPPD TO 13 3 Gregory McAuley OGE TU 10 6 (5 Proxies) *Mike Wech SPA TO 6 1 Ron Gunderson NPPD TO 16 0 Kyle McMenamin Xcel TU 13 3 (2 Proxies) Darrel Yohnk ITC TU 12 4 (2 Proxies) Steve Haun LES TU 14 2 (2 Proxies) *David Pham EDE TO 3 1 Allen Klassen Westar TO 12 4 Dennis Sauriol AEP TU 12 4 (4 Proxies) *Only on Committee for part of the assessment period. Please list the number of members represented in the following areas: Transmission/Owners Transmission/Users Directors 7 7 Investor Owned Utility Cooperative Municipal State Federal Sectors Independent Power Producer/ Marketer Alt Power/ Public Interest Large Retail Small Retail

193 AVERAGE OVERALL ATTENDANCE (INCLUDING NON-GROUP MEMBERS): 26 MEETINGS HELD TO DATE: Live: 3 Teleconference: 10 AVERAGE LENGTH OF MEETINGS: 15:30 NUMBER OF VOTES TAKEN: 49 *MEETING COST(S): $7, * Meeting costs include hotel expenses (room rental, A/V, food and beverage), estimate of teleconference expenses, and Director fees for attendance. MAJOR ACCOMPLISHMENTS/ISSUES ADDRESSED BY THE GROUP: 1. Revised the SPP Reliability Plan to include (Integrated System Changes) 2. Reviewed x number of RRs for approval a. Approved RR 81 Control Status Notification as an enhancement to reliability b. Approved RR99 Short Term RUC with quick start carve out 3. Revised the ORWG charter to address the newly created RCWG, as well as further define scope of ORWG with the Integrated Marketplace 4. Added oversight of the Balancing Authority Operating Committee 5. Gave significant input into the Gas Electric Coordination Taskforce 6. Reviewed efforts related to EPA plans MAJOR PENDING ISSUES BEFORE THE GROUP: 1. Improving Transmission and Generation outage submission lead times 2. Analyzing and recommending policy changes to allow more access for wind and other fuel types 3. Conversion of SPP Criteria to Operating and Planning protocols 4. Establishing criteria for Resource retirement notification 5. Various Revision Requests to allow for more data sent in the Operating Horizon to increase accuracy for forward studies

194 SPP Organizational Group Self-Evaluation/Assessment (August 2014 July 2015) GROUP NAME: Operations Training Working Group CHARTER/SCOPE UPDATE: Attached Charter/Scope has been reviewed: YES MEMBER ROSTER/ATTENDANCE: Member Company Sector # Present # Absent *Jay Chase Grand River Dam Authority State Agency 10 Chris Dodds Westar Energy Investor-Owned 12 (1 Proxy) Denney Fales Kansas City Power & Light Investor-Owned 13 Michael Gaunder Oklahoma Gas & Electric Investor-Owned 11 2 (2 Proxies) Robert Hirchak CLECO Investor-Owned 12 (1 Proxy) Mike Hood Arkansas Electric Coop Cooperative 10 3 Sheldon Hunter Sunflower Electric Power Cooperative 11 2 (2 Proxies) *Danny Johnson Xcel Energy Investor-Owned 1 0 Russell Moore City Utilities Springfield Municipal 12 (1 Proxy) Edgar Rivera Lafayette Utilities System Municipal 7 6 (4 Proxies) Steve Tegtmeier Lincoln Electric System Municipal 12 1 Stanley Winbush American Electric Power Investor-Owned 10 3 (2 Proxies) Margaret Adams SPP Staff Secretary 13 0 *Only on Committee for part of the assessment period. Please list the number of members represented in the following areas: Transmission/Owners Transmission/Users Directors 5 6 Sectors Investor Owned Utility Cooperative Municipal State Federal Independent Power Producer/ Marketer Alt Power/ Public Interest Large Retail Small Retail AVERAGE OVERALL ATTENDANCE (INCLUDING NON-GROUP MEMBERS): 27 MEETINGS HELD TO DATE: Live: 5 Teleconference: 8 AVERAGE LENGTH OF MEETINGS: 1:29 NUMBER OF VOTES TAKEN: 36 *MEETING COST(S): $1, * Meeting costs include hotel expenses (room rental, A/V, food and beverage), estimate of teleconference expenses, and Director fees for attendance.

195 MAJOR ACCOMPLISHMENTS/ISSUES ADDRESSED BY THE GROUP: 1. SPP increased duration of its net conferences, increased the amount of system restoration drill offerings, and added an intermediate Train-the-Trainer workshop event to the 2015 calendar. The existing and additional offerings were well attended and well received. 2. SPP s Integrated Marketplace elearning self-study library has been restructured and reorganized to enhance the learning for SPP Market Participants. The live net conferences have been well attended and well received. Many of the live courses have been transitioned to elearning self-study format. SPP is hosting its first highly anticipated Marketplace Symposium in October The OTWG has worked together to share information relevant to the upcoming expectations of PER Members have been involved in sharing NERC webinar information, vendor workshop data, and each of their entities strategy and approach for compliance with the new standard requirements. MAJOR PENDING ISSUES BEFORE THE GROUP: 1. We are preparing for the 2016 training year. SPP will be increasing its course offerings to at least six offerings per course, including System Operations Conferences, in order to cover each of the six week shift rotations. We will also add more self-study elearning offerings with continuing education credits. 2. SPP has scheduled two of its drills in coordination with neighboring RC Areas MISO and TVA. SPP will also help the OTWG collaborate efforts with the ORWG and other SPP Staff in order to develop Partial Restoration Drills with Upon receiving Board of Directors approval of the pending OTWG Charter Revisions, the OTWG will be accepting nominations for up to four new Members. We look forward to enhancing and enlarging our existing membership.

196 SPP Organizational Group Self-Evaluation/Assessment (August 2014 July 2015) GROUP NAME: Oversight Committee CHARTER/SCOPE UPDATE: Attached Charter/Scope has been reviewed: MEMBER ROSTER/ATTENDANCE: Member Company # Present # Absent Martin, Josh (Chair) Director 6 0 Bernard, Phyllis Director 6 0 Altenbaumer, Larry Director 6 0 *Michael Desselle Staff Secretary 2 0 *Paul Suskie Staff Secretary 3 0 *Stacy Duckett Staff Secretary 1 0 *Only on Committee for part of the assessment period. AVERAGE OVERALL ATTENDANCE (INCLUDING NON-GROUP MEMBERS): 12 MEETINGS HELD TO DATE: Live: 4 Teleconference: 2 AVERAGE LENGTH OF MEETINGS: 4:00 NUMBER OF VOTES TAKEN: 5 *MEETING COST(S): $39, * Meeting costs include hotel expenses (room rental, A/V, food and beverage), estimate of teleconference expenses, and Director fees for attendance. MAJOR ACCOMPLISHMENTS/ISSUES ADDRESSED BY THE GROUP: 1. Approval of first Order 1000 IEP pool and associated contracts 2. Oversight and recommendations for MMU 3. Assisted engagement of new Compliance and Security Director MAJOR PENDING ISSUES BEFORE THE GROUP: 1. Continued oversight of MMU structure issues and implications 2. Education and continued oversight of cybersecurity matters 3. Deliberations/Recommendations on FERC audit 4. Oversight/Deliberations/Recommendations on separate independent review of the MMU

197 SPP Organizational Group Self-Evaluation/Assessment (August 2014 July 2015) GROUP NAME: Project Cost Working Group CHARTER/SCOPE UPDATE: Attached Charter/Scope has been reviewed: Y MEMBER ROSTER/ATTENDANCE: Member Company Sector # Present # Absent Allen Ackland Kansas City Power & Light Investor Owned 11 2 Company *Art Wiese Nebraska Public Power District State Agency 3 0 Brenda Jessup Westar Energy, Inc. Investor Owned 13 Brian Studenka ITC Holdings Independent Transmission Company 11 2 (1 Proxy) *David Kimball Nebraska Public Power District State Agency 5 3 (1 Proxy) Jeff Stebbins Southwestern Public Service Investor Owned 9 4 Company Larry Holloway Kansas Power Pool Municipal 13 Leland Jacobson Omaha Public Power District State Agency 11 2 (1 Proxy) Lloyd Kolb Golden Spread Electric Cooperative 8 5 Cooperative, Inc. *Matthew Gomes Nextera Independent Power 3 0 Producers Peter Day Oklahoma Gas & Electric Investor Owned 12 1 Company Terri Gallup American Electric Power Investor Owned 11 2 (2Proxies) Thomas Maldonado Southwestern Public Service Company Investor Owned 10 3 (3Proxies) Tom Hesterman Sunflower Electric Power Corporation Cooperative 9 4 (4 Proxies) Tom Littleton Oklahoma Municipal Power Municipal 12 1 Authority John Krajewski Nebraska Power Review Board Liaison 10 3 Cary Frizzell Southwest Power Pool Staff 13 0 *Only on Committee for part of the assessment period.

198 Please list the number of members represented in the following areas: Transmission/Owners Transmission/Users Directors 9 4 Investor Owned Utility Sectors Cooperative Municipal State Federal Independent Power Producer/ Marketer Alt Power/ Public Interest Large Retail Small Retail AVERAGE OVERALL ATTENDANCE (INCLUDING NON-GROUP MEMBERS): 28 MEETINGS HELD TO DATE: Live: 7 Teleconference: 6 AVERAGE LENGTH OF MEETINGS: 4:11 NUMBER OF VOTES TAKEN: 25 *MEETING COST(S): $4, * Meeting costs include hotel expenses (room rental, A/V, food and beverage), estimate of teleconference expenses, and Director fees for attendance. MAJOR ACCOMPLISHMENTS/ISSUES ADDRESSED BY THE GROUP: 1. Developed addition to Business Practice 7060 that introduced a close-out process for projects issued Notifications to Construct. The new process added additional rigor and accountability in SPP s project tracking program. 2. Reviewed and approved Minimum Design Standards for Competitive Upgrades developed by the Minimum Design Standards Task Force. 3. Reviewed one project under the purview of the group that incurred an out-of-bandwidth cost variance. MAJOR PENDING ISSUES BEFORE THE GROUP: 1. Address action item from the SPP Board of Directors to improve the cost estimation process for Competitive Upgrades. 2. Develop addition revisions to Business Practice 7060 needed to further address issues associated with new processes implemented to comply with FERC Order Review any out-of-bandwidth projects according to Business Practice 7060 or as directed by the Markets and Operations Policy Committee or SPP Board of Directors.

199 SPP Organizational Group Self-Evaluation/Assessment (August 2014 July 2015) GROUP NAME: Regional Compliance Working Group (RCWG) CHARTER/SCOPE UPDATE: Attached Charter/Scope has been reviewed: YES MEMBER ROSTER/ATTENDANCE: Member Company Sector # Present Allen, John City Utilities of Springfield Municipal 7 0 DeLoach, Michael American Electric Power Investor-Owned 5 Eddleman, Tony Nebraska Public Power Dist State Agency 5 # Absent 2 (1Proxy) 2 (1 Proxy) Flandermeyer, Jennifer Kansas City Power & Light Co Investor-Owned 7 0 Froehling, Greg Rayburn County Elec Coop Cooperative 5 2 Guidry, Louis Cleco Power LLC Investor-Owned 7 0 Jones, Bo Westar Energy Investor-Owned 6 *Kauffman, Bryan Xcel Energy Investor-Owned 4 Lang, Chris Golden Spread Elec Coop Cooperative 3 McClanahan, Robert Arkansas Elec Coop Corp Cooperative 4 1 (1 Proxy) 3 (1 Proxy) 4 (2Proxies) 3 (1 Proxy) Meyer, Fred Empire Dist Elec Co Investor-Owned 7 0 Murray, Mike City of Independence, MO Municipal 6 1 Peterchuck, Doug Omaha Public Power Dist State Agency 5 Rhea, John Oklahoma Gas & Elec Co Investor-Owned 5 2 (1 Proxy) 2 (2Proxies) Ruskamp, Eric Lincoln Electric System Municipal 5 2 Stafford, Mike Grand River Dam Authority State Agency 5 2 (2Proxies) Van Brimer, Kim (SS) SPP(Staff) 7 0 *Only on Committee for part of the assessment period.

200 Please list the number of members represented in the following areas: Transmission/Owners Transmission/Users Directors 8 7 Investor Owned Utility Sectors Independent Power Cooperative Municipal State Federal Producer/ Marketer Alt Power/ Public Interest Large Retail Small Retail AVERAGE OVERALL ATTENDANCE (INCLUDING NON-GROUP MEMBERS): 13 MEETINGS HELD TO DATE: Live: 4 Teleconference: 3 AVERAGE LENGTH OF MEETINGS: 4.6 Hours NUMBER OF VOTES TAKEN: 14 *MEETING COST(S): $7, * Meeting costs include hotel expenses (room rental, A/V, food and beverage), estimate of teleconference expenses, and Director Fees for attendance. MAJOR ACCOMPLISHMENTS/ISSUES ADDRESSED BY THE GROUP: 1. Successful Implementation of 3 Subcommittees and 5 Task Forces 2. SPP Strategic Planning Committee Focus on Grid Resiliency, Misoperations and Event Analysis 3. Approval of CIP-002 Methodology 4. Approval of the MDWG Procedure Manual 5. Approval of the CRR Approval of the CIP-014 Template and Scope of Services MAJOR PENDING ISSUES BEFORE THE GROUP: 1. CIP Version 5 Standards Release April NERC Internal Control Evaluations (ICE) 3. Standards Coordination (Development, Revisions and Future Enforceable) 4. Increasing the number of voting members to the RCWG

201 SPP Organizational Group Self-Evaluation/Assessment (August 1, 2014 August 1, 2015) GROUP NAME: SPP Regional Entity Trustees CHARTER/SCOPE UPDATE: Attached Charter/Scope has been reviewed: N/A MEMBER ROSTER/ATTENDANCE PUBLIC : Member Company Sector # Present # Absent John Meyer RE Trustee, Chairman N/A 6 - Gerry Burrows RE Trustee N/A 6 - Dave Christiano RE Trustee N/A 6 - Emily Pennel RE Trustee Secretary N/A 5 1 Please list the number of members represented in the following areas: Trans/Owners Trans/Users Directors N/A N/A N/A Sectors IOU Coop Muni State/Fed IPP/Marketer Alt Power/Public Interest Lg Retail Sm Retail N/A N/A N/A N/A N/A N/A N/A N/A AVERAGE OVERALL ATTENDANCE (INCLUDING NON-GROUP MEMBERS): 38 MEETINGS HELD TO DATE: Face-to-face: 4 Teleconference: 2 AVERAGE LENGTH OF MEETINGS: 4.6 HOURS NUMBER OF VOTES TAKEN: 13 *MEETING COST(S): $74,730 * Meeting costs include hotel expenses (room rental, A/V, food and beverage) and Trustee fees for attendance at quarterly and special meetings. MAJOR ACCOMPLISHMENTS/ISSUES ADDRESSED BY THE GROUP: 1. Overall 2014 staff performance goals and metrics achievement was 121.8% 2. Processed Bulk Electric System Definition exceptions and registration changes 3. Implemented Risk Based Compliance Monitoring and Enforcement Program (CMEP) processes including Inherent Risk Assessments, Internal Control Evaluations, and Self- Logging of Minimal Risk Issues 4. Reviewed/accepted three regional reliability assessments 5. Continued outreach program of webinars, workshops, newsletters, and videos, including targeted outreach on CIP V5 at stakeholder companies 6. Maintained favorable stakeholder satisfaction score on the SPP RE annual survey, up from the previous reporting year 7. Maintained <12 month enforcement caseload

202 8. Operated RE within approved budget limits MAJOR PENDING ISSUES BEFORE THE GROUP: 1. Continue working with Registered Entities on CIP version 3 to version 5 transition 2. Continue working with NERC and other Regional Entities to streamline and standardize CMEP processes through tools and initiatives such as the Risk-Based CMEP, auditor training/certification, added on-site audit efficiencies, and risk-based audit scope 3. Monitor Registered Entities remediation of Facility Ratings discrepancies (FAC Alert) 4. Continue focusing on and monitoring relay misoperations and the Event Analysis program 5. Continue targeting outreach to improve Registered Entity compliance programs to reduce violations and achieve greater BES reliability 6. Consider the emerging issue of the diverging SPP RE and RTO footprints

203 SPP Organizational Group Self-Evaluation/Assessment (August 2014 July 2015) GROUP NAME: Regional Tariff Working Group CHARTER/SCOPE UPDATE: Attached Charter/Scope has been reviewed: Y MEMBER ROSTER/ATTENDANCE: Member Company Sector # Present # Absent Bary Warren Empire District Electric Investor Owned-T/O 13 6 (1 proxy) Bernie Liu Xcel Energy Investor Owned-T/O 19 0 Brian Coker* Western Farmers Electric Cooperative Cooperative-T/O 7 5 David Kays Oklahoma Gas & Electric Investor Owned-T/O 19 0 Dennis Reed Westar Energy Investor Owned-T/O 17 2 (1 proxy) Drew Robinson Kansas City Power & Light Co. Investor Owned-T/O 19 0 Heather Starnes* Missouri Joint Municipal EUC State Agency-T/O 2 0 Jim Bixby* ITC Holdings Independent 3 9 Transmission Co-T/U (1 proxy) John Stephens* City Utilities of Springfield Municipal-T/U 3 0 John Varnell Tenaska Power Services Independent Power Producers-T/U 16 3 Keith Tynes ETEC/NTEC/Tex-La Cooperatives-T/U 19 0 Lloyd Kolb Golden Spread Electric Coop Cooperative-T/U 14 5 Luke Haner Omaha Public Power District State Agency-T/O 17 2 (1 proxy) Michael Billinger Midwest Energy, Inc. Cooperative-T/O 18 1 Mitch Williams* Western Farmers Electric Coop Cooperative-T/O 2 5 Neil Rowland Kansas Municipal Energy Agency Municipal-T/U 13 6 Rich Andrysik* Lincoln Electric System Municipal-T/U 10 0 Rob Janssen Dogwood Energy, LLC Independent Power Producers-T/U 13 6 Robert Pennybaker American Electric Power Investor Owned-T/U 18 1 Robert Pick Nebraska Public Power District State Agency-T/O 19 0 Robert Shields Arkansas Electric Coop Cooperative-T/U 14 5 Steve Sanders* Western Area Power Administration Federal Agency-T/U 3 0 Tom Hestermann Sunflower Electric Cooperative-T/O 18 Tom Littleton Walt Cecil Brenda Fricano Oklahoma Municipal Power Authority Missouri Public Service Comm.- Liaison Member Southwest Power Pool-Staff Secretary *Only on Committee for part of the assessment period. 1 (1 proxy) Municipal-T/U 17 2 n/a 13 6 n/a 19 0

204 Please list the number of members represented in the following areas: Transmission/Owners Transmission/Users Directors Investor Owned Utility Sectors Cooperative Municipal State Federal Independen t Power Producer/ Marketer Alt Power/ Public Interest Large Retail Small Retail AVERAGE OVERALL ATTENDANCE (INCLUDING NON-GROUP MEMBERS): 55 MEETINGS HELD TO DATE: Live: 12 Teleconference: 7 AVERAGE LENGTH OF MEETINGS: 6:35 NUMBER OF VOTES TAKEN: 92 *MEETING COST(S): $12, * Meeting costs include hotel expenses (room rental, A/V, food and beverage), estimate of teleconference expenses, and Director Fees for attendance. MAJOR ACCOMPLISHMENTS/ISSUES ADDRESSED BY THE GROUP: 1. Aggregate Study Revisions 2. Order 1000 Transmission Owner Selection Process 3. Mitigated Offer VOM Calculation MAJOR PENDING ISSUES BEFORE THE GROUP: 1. Developing a process and Tariff language for the Z2 Payment Plan 2. Monitoring the Z2 Crediting Project 3. Developing Tariff language for the Capacity Margin White Paper

205 GROUP NAME: Seams Steering Committee SPP Organizational Group Self-Evaluation/Assessment (August 2014 July 2015) CHARTER/SCOPE UPDATE: Attached Charter/Scope has been reviewed: Y MEMBER ROSTER/ATTENDANCE: Member Company Sector # Present # Absent Paul Malone Nebraska Public Power District State Agency 10 2 (2 Proxies) Bary Warren Empire District Electric Investor-Owned 12 Roy Boyer Xcel Energy Investor-Owned 12 Chris Lyons* Exelon Independent Power 11 Producer Jeff Knottek City Utilities of Springfield Municipal 10 2 (2 Proxies) Jake Langthorn Oklahoma Gas & Electric Investor-Owned 10 2 Oliver Burke Entergy Investor-Owned 12 Richard Ross American Electric Power Investor-Owned 10 2 (2 Proxies) Keith Tynes East Texas Electric Coop. Cooperative 12 *Only on Committee for part of the assessment period. Please list the number of members represented in the following areas: Transmission/Owners Transmission/Users Directors 5 4 Sectors Investor Owned Utility Cooperative Municipal State Federal Independent Power Producer/ Marketer Alt Power/ Public Interest Large Retail Small Retail AVERAGE OVERALL ATTENDANCE (INCLUDING NON-GROUP MEMBERS): 40 MEETINGS HELD TO DATE: Live: 6 Teleconference: 6 AVERAGE LENGTH OF IN-MEETINGS: 8:45 NUMBER OF VOTES TAKEN: 14 *MEETING COST(S): $4, * Meeting costs include hotel expenses (room rental, A/V, food and beverage), estimate of teleconference expenses, and Director fees for attendance.

206 MAJOR ACCOMPLISHMENTS/ISSUES ADDRESSED BY THE GROUP: 1. Addressed interregional Order 1000 compliance requirements with MISO and SERTP 2. Oversaw the completion of the SPP-MISO Coordinated System Plan Study 3. Reviewed and monitored implementation of Market-to-Market MAJOR PENDING ISSUES BEFORE THE GROUP: 1. Continued Market-to-Market operations 2. Equity in the Firm Flow Entitlement Process

207 SPP Organizational Group Self-Evaluation/Assessment (August 2014 July 2015) GROUP NAME: Strategic Planning Committee CHARTER/SCOPE UPDATE: Attached Charter/Scope has been reviewed: Y - N MEMBER ROSTER/ATTENDANCE: Member Company Sector # Present # Absent *Bittle, Ricky Arkansas Electric Cooperative (TU) 4 0 Cooperative Bernard, Phyllis Director *Deggendorf, Michael Kansas City Power & Light Investor Owned (TO) Company Eckelberger, Jim Director Evans, Les Kansas Electric Power Cooperative (TU) 9 9 Cooperative *Florom, Dennis Lincoln Electric System Municipal (TU) 5 0 Grant, Bill Xcel Energy Investor Owned (TO) 7 2 (2 Proxies) *Hanson, Jon Omaha Public Power District State Agency (TO) 2 1 (1 Proxy) Janssen, Rob Dogwood Independent Power 9 9 Producer (TU) Langthorn, Jake Oklahoma Gas and Electric Company Investor Owned (TO) 7 2 (2 Proxies) McCellon-Allen, Venita American Electric Power Investor Owned (TO) 8 1 (1 Proxy) Skilton, Harry Director Wise, Michael (Chair) Golden Spread Electric Cooperative (TU) 9 0 Cooperative Desselle, Michael SPP Staff Secretary 9 0 *Only on Committee for part of the assessment period. List the number of members represented in the following areas: Transmission/Owners Transmission/Users Directors Investor Owned Utility Cooperative Municipal State Federal Sectors Independent Power Producer/ Marketer Alt Power/ Public Interest Large Retail Small Retail

208 AVERAGE OVERALL ATTENDANCE (INCLUDING NON-GROUP MEMBERS): 38 MEETINGS HELD TO DATE: Live: 5 Teleconference: 4 AVERAGE LENGTH OF MEETINGS: 5:26 NUMBER OF VOTES TAKEN: 19 *MEETING COST(S): $65, * Meeting costs include hotel expenses (room rental, A/V, food and beverage), estimate of teleconference expenses, and Director fees for attendance. MAJOR ACCOMPLISHMENTS/ISSUES ADDRESSED BY THE GROUP: 1. Oversight of the Proposed Clean Power Plan Analyses and Policy pronouncements 2. Finalized New Member Addition processes 3. Finalized Order 1000 Policies and transitioned Task Force to the MOPC CTPTF 4. Provided to ESWG guidance on ITP10 Futures MAJOR PENDING ISSUES BEFORE THE GROUP: 1. Continued oversight of Clean Power Plan strategic and policy implications 2. Coordinated oversight of the Transmission Planning Process Improvement Efforts 3. Coordinated oversight of Capacity Margin Changes 4. Continued oversight of New Member additions

209 SPP Organizational Group Self-Evaluation/Assessment (August 2014 July 2015) GROUP NAME: System Protection and Control Working Group CHARTER/SCOPE UPDATE: Attached Charter/Scope has been reviewed: Yes, the charter was reviewed and revised in late 2014 (see attached) MEMBER ROSTER/ATTENDANCE: Member Company Sector # Present # Absent Bob Soper * WAPA Federal 1 Brent Carr Arkansas Electric Coop Cooperatives 3 1 Corporation Edwin Averill Grand River Dam Investor- Owned 4 0 Authority Forrest Brock Western Farmers Cooperatives 4 0 Heidt Melson Xcel Energy Investor-Owned 4 0 Ken Zellefrow City Utilities of Municipals 3 1 Springfield, MO Louis Guidry Cleco Power LLC Investor-Owned 4 0 Mathew Sunflower Electric Cooperatives 4 0 Thykkuttathil Power Corp. Rick Gurley American Electric Investor-Owned 4 0 Power Shawn Jacobs Oklahoma Gas & Investor-Owned IOU 4 0 Electric Stephen Wadas Nebraska Public Power State Agencies 4 0 District Tom Miller ITC Holdings Investor- Owned 4 0 IOU Doug Bowman SPP Staff Secretary 4 0 *Only on Committee for part of the assessment period. Please list the number of members represented in the following areas: Trans/Owners Trans/Users 6 6 Investor Owned Utility Sectors Cooperative Municipal State Federal Independent Power Producer/ Marketer Alt Power/ Public Interest Large Retail Small Retail

210 AVERAGE OVERALL ATTENDANCE (INCLUDING NON-GROUP MEMBERS): 26 MEETINGS HELD TO DATE: Live: 4 Teleconference: 0 AVERAGE LENGTH OF MEETINGS: 9:15 NUMBER OF VOTES TAKEN: 16 *MEETING COST(S): $8, * Meeting costs include hotel expenses (room rental, A/V, food and beverage), estimate of teleconference expenses, and Director fees for attendance. MAJOR ACCOMPLISHMENTS/ISSUES ADDRESSED BY THE GROUP: 1. Assisted SPP Planning Coordinator staff in completing the UFLS Plan document to be used for implementing the requirements of the NERC PRC-006 UFLS standard. Worked as required to assist SPP PC in UFLS Plan revisions. Also reviewed the technical requirements and the results of the 2014 UFLS Study. 2. Tracked ongoing activities of the NERC System Protection & Control Subcommittee (SPC). 3. Reviewed and acted on two (2) requests to add or remove Special Protection Schemes from various entities. 4. Provided input to SPP on the Criteria Revisions project and recommended removal of certain sections of the criteria that are covered by NERC standards. 5. Reviewed various NERC standards in varying stages of development. 6. As part of the Strategic Plan Reliability Excellence effort, the SPCWG was directed to improve reliability by continuing to focus on protection system mis-operations. Additional mis-operations data was provided by the SPP RE. Due to an increase in the number of incorrect settings/logic/design errors related mis-operations within the SPP footprint, the incorrect settings/logic/design errors data was reduced to sub-causes and assembled for analysis. 7. Calculated benchmark comparisons of actual short circuit faults in the field with planning model short circuit results. Worked on resolving conflicting issues related to the models. Worked with the Model Development Working Group (MDWG) to ensure that the models, at the SPP level, contain all the data necessary to perform accurate short circuit fault studies. 8. Provided guidance to Minimum Design Standard Task Force on Protection and Control language in the Minimum Design Standard for Competitive Upgrades. 9. Revised the SPCWG Charter. Approved by MOPC. 10. Added two (2) new members to the working group for a current total of twelve (12). MAJOR PENDING ISSUES BEFORE THE GROUP: None

211 GROUP NAME: Transmission Working Group SPP Organizational Group Self-Evaluation/Assessment (August 2014 July 2015) CHARTER/SCOPE UPDATE: Attached Charter/Scope has been reviewed: Y MEMBER ROSTER/ATTENDANCE: Member Company Sector # Present # Absent Alan Myers ITC Great Plains, LLC Independent Transmission 12 5 (5 Proxies) Companies Dan Lenihan Omaha Public Power District State Agency 16 1 (1 Proxy) *Gayle Nansel Western Area Power Administration Federal Agency 4 3 (2 Proxies) Harold Wyble Kansas City Power & Light Company Investor-Owned 15 2 (2 Proxies) Jason Shook GDS Associates Cooperative 14 3 (1 Proxy) *Jeff Stebbins Tri-County Electric Cooperative, Inc. Cooperative 8 6 Jim McAvoy Oklahoma Municipal Power Authority Municipal 12 5 Joe Fultz Grand River Dam Authority State Agency 13 4 John Boshears City Utilities of Springfield Municipal 16 1 (1 Proxy) John Fulton Xcel Energy Investor Owned 17 John Payne Kansas Electric Power Cooperative, Cooperative 15 2 Inc. Matthew McGee AEP Investor Owned 14 3 (3 Proxies) Michael Mueller Arkansas Electric Cooperative Cooperative 15 2 Corporation Mohammad Awad Westar Energy, Inc. Investor Owned 16 1 (1 Proxy) Nate Morris Empire District Electric Company Investor Owned 8 9 (2 Proxies) Noman Williams South Central MCN, LLC Independent Transmission 9 8 (1 Proxy) Companies Randy Lindstrom Nebraska Public Power District State Agency 15 2 Scott Benson Lincoln Electric System Municipal 14 3 (2 Proxies) Tim Smith Western Farmers Electric Cooperative Cooperative 14 3 (3 Proxies) Travis Hyde Oklahoma Gas and Electric Company Investor Owned 12 5 (2 Proxies) *Nathan McNeil Midwest Energy, Inc. Cooperative 7 2 David Sargent Southwestern Power Administration Liaison 2 15 Kyle Watson Entergy Services, Inc. Liaison 4 13 Tony Gott Associated Electric Cooperative, Inc. Liaison 9 8 Kirk Hall Southwest Power Pool Staff 17

212 *Only on Committee for part of the assessment period. Please list the number of members represented in the following areas: Transmission/Owners Transmission/Users Directors 9 11 Investor Owned Utility Sectors Cooperative Municipal State Federal Independent Power Producer/ Marketer Alt Power/ Public Interest Large Retail Small Retail AVERAGE OVERALL ATTENDANCE (INCLUDING NON-GROUP MEMBERS): 66 MEETINGS HELD TO DATE: Live: 4 Teleconference: 13 AVERAGE LENGTH OF MEETINGS: 4:19 NUMBER OF VOTES TAKEN: 64 *MEETING COST(S): $26, * Meeting costs include hotel expenses (room rental, A/V, food and beverage), estimate of teleconference expenses, and Director fees for attendance. MAJOR ACCOMPLISHMENTS/ISSUES ADDRESSED BY THE GROUP: 1. Altering ITPNT cycle from a January start date to a May start date to allow more time to complete the study. 2. TPL Task Force assessed issues around new NERC TPL Standard 3. Reviewed and Reliability Limits Trigger by looking at trending data from previous ITPNT Assessments MAJOR PENDING ISSUES BEFORE THE GROUP: 1. Assessing the reliability impacts of EPA Rule 111d on the SPP transmission system in the 2017 ITP10 2. Transmission Planning Improvement Task Force 3. Implementing changes for TPL for the 2015 TPL Assessment

213 2015 Organizational Group Survey Analysis Overview Respondents were asked to select a score from 1-5 with 1 being a strong disagreement to the statement and 5 being a strong agreement with statement. The table below shows overall response rates and overall effectiveness scores by Organizational Group in alphabetical order. Response rates were up this year: 14 groups had higher response rates in 2015 than in 2014, and the overall response rate rose to 70% in 2015 from 63% the year prior. The Human Resources and Oversight Committees had the highest overall effectiveness (4.8). The lowest effectiveness score was the Systems Protection and Control Working Group (3.5). The Generation Working Group saw the biggest increase in overall effectiveness ratings, increasing from 3.0 in 2014 to 3.8 in The Cost Allocation Working Group saws the biggest decrease in overall effectiveness ratings, decreasing from 5.0 in 2014 to 3.9 in Overall average effectiveness is 4.2, slightly lower than in 2014 and just above average for the seven years on record. Every score across all groups and questions was 3.4 or higher. Group Response rate Overall effectiveness *2009 Balancing Authority Operating Committee 36% N/A N/A N/A N/A N/A N/A 4.2 N/A N/A N/A N/A N/A N/A Business Practices Working Group 73% 55% 71% 60% 64% 82% N/A Change Working Group 50% 52% 63% 61% 44% 65% 38% Corporate Governance Committee 80% 88% 100% 88% 88% 75% 43% Cost Allocation Working Group 88% 25% 67% 67% 50% 33% 27% Credit Practices Working Group 67% 78% 75% 80% 67% N/A N/A n/a n/a Critical Infrastructure Protection Working Group 47% 65% 53% 71% 75% 69% 27% Economic Studies Working Group 73% 56% 63% 81% 67% 71% 38% Event Analysis Working Group 67% N/A N/A N/A N/A N/A N/A 3.8 N/A N/A N/A N/A N/A N/A Finance Committee 86% 57% 86% 86% 86% 86% 30% Generation Working Group 50% 56% 50% 60% 22% 50% 38% Human Resources Committee 100% 86% 86% 71% 100% 86% 40% Market Working Group 68% 47% 74% 41% 63% 81% 38% Markets and Operations Policy Committee 39% 30% 37% 46% 48% 47% 33% Model Development Working Group 69% 92% 100% 77% 100% 92% 48% Project Cost Working Group 86% 59% 65% 63% N/A N/A N/A N/A N/A N/A Operating Reliabilty Working Group 67% 80% 67% 94% 87% 77% 38% Operations Training Working Group 83% 58% 70% 92% 83% 92% 45% Oversight Committee 100% 75% 100% 100% 100% 100% 100% Project Cost Working Group 86% 65% 65% 63% N/A N/A N/A N/A N/A N/A Regional Compliance Working Group 75% 65% N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A Regional Tariff Working Group 61% 77% 67% 52% 71% 67% 43% Strategic Planning Committee 83% 67% 83% 92% 100% 92% 43% Systems Protection and Control Working Group 62% 58% 62% 69% 77% 77% 38% Transmission Working Group 54% 67% 54% 82% 79% 67% 41% Average 70% 63% 71% 72% 74% 74% 42% * Note: Overall effectiveness was measured in a different way in 2009 Summary 1

214 Balancing Authority Operating Committee 2015 Number of members 33 Number of responses 12 Response rate 36% Overall effectiveness score 4.17 Lowest score Highest score Question The agenda reflects the actions to be taken during the meeting. 4.3 Meeting materials are provided in a timely manner. 4.1 The information provided prior to the meeting is utilized during the meeting. 4.3 The information presented in meetings is clear. 4.3 Meeting minutes are an accurate reflection of the meeting. 4.2 Additional comments: Average 2015 As typical with most meeting minutes, they traditionally tend to be high level and can always provide more detail for additional value. Not saying anything is wrong with the current minutes accurately reflecting the meeting. I personally just tend to be more detailed. Just a general suggestion for added value. Membership represents the diversity of the SPP organization. 4.5 Membership has the necessary expertise and/or skills to accomplish its goals. 4.6 Members come prepared to meetings. 4.2 Members are committed to participate and accomplish the group's goals. 4.4 Members are supportive and respectful of the individual needs and differences of group members. 4.5 Additional comments: SPP Staff & its Membership are always a great pleasure to work with. Keep up the great efforts in meeting the needs of your members. Thoroughly enjoy working with SPP Staff and Membership Peers. Members are engaged during the meeting. 4.2 Decisions are identified and action is recommended. 4.3 Facilitation is sufficient to guide discussion. 4.4 Dissenting voices are heard. 4.3 I depart with a feeling that we have accomplished something. 4.3 Additional comments: If issues are left open-ended, there is typically a timely follow-up to address at the next meeting or conference call, along with member exploder participation. No issues on accomplishment. The chair seeks input, and organizational group members are able to influence key decisions and plans. 4.3 The chair is supportive and respectful of the individual needs and differences of group members. 4.4 The chair keeps the group on task to achieve appropriate outcomes. 4.2 The chair ensures follow-through on questions and commitments. 4.3 Additional comments: - Please provide three or more recommendations for improvement of this particular group and/or SPP's overall organizational group structure. This committee has only been in effect since December Participation is quite good. The only recommendation I would have is to meet face-to-face more than once a year as it helps build better working relationships once a face is put with a name. Keep doing what you are doing to meet your members' needs. Always feel that SPP Staff act very professional and hear the concerns of its Members, 1. always keep to time frame given. 2. continue to keep us on task. 3. overall, keep doing what you are doing. well done. BAOC 2

215 Business Practices Working Group Number of members Number of responses Response rate 73% 55% 71% 60% 64% 82% Overall effectiveness score Lowest score Highest score Question Average score The agenda reflects the actions to be taken during the meeting Meeting materials are provided in a timely manner The information provided prior to the meeting is utilized during the meeting The information presented in meetings is clear n/a n/a Meeting minutes are an accurate reflection of the meeting Additional comments: Item #3: Meeting materials not always supplied in time for postin by material author. Ken Quimby does a great job of keeping us all on track with meeting organizing/notes, etc. Membership represents the diversity of the SPP organization Membership has the necessary expertise and/or skills to accomplish its goals Members come prepared to meetings Members are committed to participate and accomplish the group's goals Members are supportive and respectful of the individual needs and differences of group members Additional comments: - Members are engaged during the meeting Decisions are identified and action is recommended Facilitation is sufficient to guide discussion Dissenting voices are heard I depart with a feeling that we have accomplished something Additional comments: - The chair seeks input, and organizational group members are able to influence key decisions and plans The chair is supportive and respectful of the individual needs and differences of group members The chair keeps the group on task to achieve appropriate outcomes The chair ensures follow-through on questions and commitments Additional comments: Grant Wilkerson does a great job! Please provide three or more recommendations for improvement of this particular group and/or SPP's overall organizational group structure. 1. If a meeting is planned in person, keep it that way because of lost airline fees if it is changed to a web-ex. 2. Have fewer face to face meetings and more web-ex, in general. I think Carl should shave his mustashe. Other comments Defined operational/implementation practices of Tariff/protocols and associated transparency are important. Group does a good job. Thank you. BPWG 3

216 Cost Allocation Working Group Number of members Number of responses Response rate 88% 25% 67% 67% 50% 33% Overall effectiveness score Lowest score Highest score Question Average score The agenda reflects the actions to be taken during the meeting Meeting materials are provided in a timely manner The information provided prior to the meeting is utilized during the meeting The information presented in meetings is clear n/a n/a Meeting minutes are an accurate reflection of the meeting Additional comments: - Membership represents the diversity of the SPP organization Membership has the necessary expertise and/or skills to accomplish its goals Members come prepared to meetings Members are committed to participate and accomplish the group's goals Members are supportive and respectful of the individual needs and differences of group members Additional comments: - Members are engaged during the meeting Decisions are identified and action is recommended Facilitation is sufficient to guide discussion Dissenting voices are heard I depart with a feeling that we have accomplished something Additional comments: - The chair seeks input, and organizational group members are able to influence key decisions and plans The chair is supportive and respectful of the individual needs and differences of group members The chair keeps the group on task to achieve appropriate outcomes The chair ensures follow-through on questions and commitments Additional comments: - Please provide three or more recommendations for improvement of this particular group and/or SPP's overall organizational group structure. May want to consider moving away from the rotating chairmanship (making person who is the Chair correspond to RSC Chair) to provide for more stability in that position and help ensure that person has sufficient history (not a reflection on current or any particular past Chair). Although input from utilities is good, at times it seems some folks use this venue to lobby for positions that they should pursue in venues where they have a vote, such as MOPC, MWG, RARTF or Members Committee. This has improved from past years but there are times when this becomes an issue. Have all presentations (SPP, CAWG members and Member utility) available 1 week before CAWG meetings. No exceptions. Provide organizational structure chart including names and phone #'s for quick reference. Other comments The CAWG is made up of a great group of individuals who are committed to achieving the goals of the group, specifically tasks assigned by the RSC. CAWG 4

217 Corporate Governance Committee Number of members Number of responses Response rate 80% 88% 100% 88% 88% 75% Overall effectiveness score Lowest score Highest score Question Average score The agenda reflects the actions to be taken during the meeting Meeting materials are provided in a timely manner The information provided prior to the meeting is utilized during the meeting The information presented in meetings is clear n/a n/a Meeting minutes are an accurate reflection of the meeting Additional comments: This group is very functional. Everyone contributes and the chair insures all ideas are heard & considered. Membership represents the diversity of the SPP organization Membership has the necessary expertise and/or skills to accomplish its goals Members come prepared to meetings Members are committed to participate and accomplish the group's goals Members are supportive and respectful of the individual needs and differences of group members Additional comments: I appreciate the professionalism of both the SPP staff members and the CGC members that participate in the meetings. Members are engaged during meetings Decisions are identified and action is recommended Facilitation is sufficient to guide discussion Dissenting voices are heard I depart with a feeling that we have accomplished something Additional comments: - The chair seeks input, and organizational group members are able to influence key decisions and plans The chair is supportive and respectful of the individual needs and differences of group members The chair keeps the group on task The chair ensures follow-through on questions and commitments Additional comments: - Please provide three or more recommendations for improvement of this particular group and/or SPP's overall organizational group structure. 1.) Offer a brief "What do the Bylaws say" presentation regarding a select section related to the CGC's responsibilities. 2.) Create a handbook to deliver to new CGC members to help them understand and be more productive in their role. 3.) Continue to schedule when members nominate others from their company, they should make a disclosure statement. Need to stay on task and shorten meetings. A periodic newsletter summarizing the status of major issues before various stakeholder/governance groups would help paint the big picture for those who only see part of the action. Please share any additional comments about the organizational group's effectiveness: I find value in participating in this group. It provides insight into the decision making process SPP staff members utilize as well as offering Members an opportunity to provide a meaningful contribution to SPP. CGC 5

218 Critical Infrastructure Protection Working Group Number of members Number of responses Response rate 47% 65% 53% 71% 75% 69% Overall effectiveness score Lowest score Highest score Question Average score The agenda reflects the actions to be taken during the meeting Meeting materials are provided in a timely manner The information provided prior to the meeting is utilized during the meeting The information presented in meetings is clear n/a n/a Meeting minutes are an accurate reflection of the meeting Additional comments: The value in being a member of CIPWG is the collaboration to provide useful information for meeting compliance requirements and to help mature the process for security as an asset beyond an audit checkbox. Membership represents the diversity of the SPP organization Membership has the necessary expertise and/or skills to accomplish its goals Members come prepared to meetings Members are committed to participate and accomplish the group's goals Members are supportive and respectful of the individual needs and differences of group members Additional comments: The benefit in being a member is the collaboration to provide information for getting the architecture operating as an investment to grow security. Members are engaged during the meeting Decisions are identified and action is recommended Facilitation is sufficient to guide discussion Dissenting voices are heard I depart with a feeling that we have accomplished something Additional comments: The purpose of the CIPWG is not necessarily to decide solutions for each Member. Decisions are identified as needed, as are accomplishments. Collaboration and participation is encouraged; the outcome is items requiring action. The chair seeks input, and organizational group members are able to influence key decisions and plans The chair is supportive and respectful of the individual needs and differences of group members The chair keeps the group on task to achieve appropriate outcomes The chair ensures follow-through on questions and commitments Additional comments: Leadership is toward the next-generation detection of cyber threats. Please provide three or more recommendations for improvement of this particular group and/or SPP's overall organizational group structure. Need more sharing of lessons-learned, technology demos, and audit prep and outcome discussions. Provide examples of how utilities are meeting compliance with specific presentations from utilities. Please provide three or more recommendations for improvement of this particular group and/or SPP's overall organizational group structure Great group. With the new versions of CIP standards becoming effective in April 2016, this group is providing extremely high value! CIPWG 6

219 Credit Practices Working Group Number of members N/a Number of responses N/a Response rate 67% 78% 75% 80% 67% N/a Overall effectiveness score N/a Lowest score N/a Highest score N/a Question Average score The agenda reflects the actions to be taken during the meeting N/a Meeting materials are provided in a timely manner N/a The information provided prior to the meeting is utilized during the meeting N/a The information presented in meetings is clear n/a n/a Meeting minutes are an accurate reflection of the meeting N/a Additional comments: should put out request for agenda items before meetings are cancelled due to 'no items on the agenda'. Membership represents the diversity of the SPP organization N/a Membership has the necessary expertise and/or skills to accomplish its goals N/a Members come prepared to meetings N/a Members are committed to participate and accomplish the group's goals N/a Members are supportive and respectful of the individual needs and differences of group members N/a Additional comments: - Members are engaged during the meeting N/a Decisions are identified and action is recommended N/a Facilitation is sufficient to guide discussion N/a Dissenting voices are heard N/a I depart with a feeling that we have accomplished something N/a Additional comments: - The chair seeks input, and organizational group members are able to influence key decisions and plans N/a The chair is supportive and respectful of the individual needs and differences of group members N/a The chair keeps the group on task to achieve appropriate outcomes N/a The chair ensures follow-through on questions and commitments N/a Additional comments: - Please provide three or more recommendations for improvement of this particular group and/or SPP's overall organizational group structure. I have no recommendations. 1. Scheduled CPWG meetings do not conflict with other Working Group's scheduled meeting times. 2. Greater participation from CPWG in FC meetings. 3. Maybe offer SME training on credit topics to the general group. (This training would take place after the call with those that want to particiapte. (MISO does something similar for their members and it is benficial for seasoned members as well as those just coming into the industry. This training is offered in addition to online training.) Additional comments: - CPWG 7

220 Change Working Group Number of members Number of responses Response rate 50% 52% 63% 61% 44% 65% Overall effectiveness score Lowest score Highest score Question Average score The agenda reflects the actions to be taken during the meeting Meeting materials are provided in a timely manner The information provided prior to the meeting is utilized during the meeting The information presented in meetings is clear n/a n/a Meeting minutes are an accurate reflection of the meeting Additional comments: The meeting minutes get the main points, but it wouldn't be a bad thing if more detail was included. Membership represents the diversity of the SPP organization Membership has the necessary expertise and/or skills to accomplish its goals Members come prepared to meetings Members are committed to participate and accomplish the group's goals Members are supportive and respectful of the individual needs and differences of group members Additional comments: The CWG is primarily IT focused. I would like to see other (operations, project management) participate as well. Members are engaged during the meeting Decisions are identified and action is recommended Facilitation is sufficient to guide discussion Dissenting voices are heard I depart with a feeling that we have accomplished something Additional comments: Since the implementation of the IM, the CWG activities have slowed down and we don't see a lot of interaction on our calls. With several bigger projects starting up, that may change. The chair seeks input, and organizational group members are able to influence key decisions and plans The chair is supportive and respectful of the individual needs and differences of group members The chair keeps the group on task to achieve appropriate outcomes The chair ensures follow-through on questions and commitments Additional comments: - Please provide three or more recommendations for improvement of this particular group and/or SPP's overall organizational group structure. To facilitate a face to face meeting that is well attended, a 2 day agenda is needed, even if both days are half days. Those of us not in the MWG can't justify a trip for a 4 hour meeting. This working group has become market focused. I do not have the market expertise for a lot of this discussion. Face-to-face meetings seem to be more valuable for discussion purposes, but we haven't had a full enough agenda to justify a face-to-face meeting. In person meetings every other month. Keep face to face consistent. Try not to change the meetings schedule up too much after its already been set. Keep doing the great job you already are doing!! Record the meetings and allow members access to the recording. Semi-annual in person meetings. Seek more input from software vendors. Continue to meet as appropriate, either by WebEx or Face to Face Please provide three or more recommendations for improvement of this particular group and/or SPP's overall organizational group structure This group stays informed and tracks project progress and Market Participant involvement. To date the CWG has been very effective. CWG 8

221 Event Analysis Working Group 2015 Number of members 6 Number of responses 4 Response rate 67% Overall effectiveness score 3.75 Lowest score Highest score Question 2015 The agenda reflects the actions to be taken during the meeting. 4.0 Meeting materials are provided in a timely manner. 3.8 The information provided prior to the meeting is utilized during the meeting. 4.0 The information presented in meetings is clear. 4.0 Meeting minutes are an accurate reflection of the meeting. 3.5 Additional comments: We rarely meet which is a good thing for this group! Membership represents the diversity of the SPP organization. 4.0 Membership has the necessary expertise and/or skills to accomplish its goals. 4.3 Members come prepared to meetings. 3.8 Members are committed to participate and accomplish the group's goals. 3.5 Members are supportive and respectful of the individual needs and differences of group members. 4.0 Additional comments: - Members are engaged during the meeting. 3.8 Decisions are identified and action is recommended. 3.8 Facilitation is sufficient to guide discussion. 3.8 Dissenting voices are heard. 4.0 I depart with a feeling that we have accomplished something. 3.8 Additional comments: - The chair seeks input, and organizational group members are able to influence key decisions and plans. 3.8 The chair is supportive and respectful of the individual needs and differences of group members. 4.0 The chair keeps the group on task to achieve appropriate outcomes. 4.0 The chair ensures follow-through on questions and commitments. 4.0 Additional comments: - Please provide three or more recommendations for improvement of this particular group and/or SPP's overall organizational group structure. Please provide three or more recommendations for improvement of this particular group and/or SPP's overall organizational group structure This group is special because we only meet when there is an event over a certain threshold. So, it is a good thing we don't meet this often. I don't understand why RCWG has an Events Analysis Task Force while this group exists. I would like to understand what the RCWG role is in that task force as opposed to this working group. It seems like they have a task force for everything. EAWG 9

222 Economic Studies Working Group Number of members Number of responses Response rate 73% 56% 63% 81% 67% 71% Overall effectiveness score Lowest score Highest score Question Average score The agenda reflects the actions to be taken during the meeting Meeting materials are provided in a timely manner The information provided prior to the meeting is utilized during the meeting The information presented in meetings is clear n/a n/a Meeting minutes are an accurate reflection of the meeting Additional comments: Due to the volume of work being completed by the group, not all materials are provided in a timely manner but items requiring approval are always posted in with the requisite advance. It seems that we pretty consistently have more items on our agendas than we can cover during the allotted meeting time, necessitating a follow up conference call. Scheduling some meetings over two days has helped with this issue. Meeting materials are generally being provided in a timely manner, with approval items provided about a week before the meeting. Membership represents the diversity of the SPP organization Membership has the necessary expertise and/or skills to accomplish its goals Members come prepared to meetings Members are committed to participate and accomplish the group's goals Members are supportive and respectful of the individual needs and differences of group members Additional comments: We have members on in the group that don't speak up or participate. I'm not sure if it's an ability or desire issue. this group engages in active discussion of the relevant issues but does a good job of respecting varying opinions and of expressing dissent respectfully Members are engaged during the meeting Decisions are identified and action is recommended Facilitation is sufficient to guide discussion Dissenting voices are heard I depart with a feeling that we have accomplished something Additional comments: I depart feeling we've accomplished something a majority of the time...but not always. The chair seeks input, and organizational group members are able to influence key decisions and plans The chair is supportive and respectful of the individual needs and differences of group members The chair keeps the group on task to achieve appropriate outcomes The chair ensures follow-through on questions and commitments Additional comments: The chair does an excellent job making sure opinions are heard in this diverse group. The chair also represents the group well in the broader stakeholder realm. Alan continues to do a great job as our chairperson. Please provide three or more recommendations for improvement of this particular group and/or SPP's overall organizational group structure. The group, including SPP Staff, need to begin to standardize many of the recurring decision items that are discussed in detail for each study. This could help streamline discussion and reduce the need for additional meeting time. SPP could provide background material in appendices of presentations to facilitate discussions. To facilitate faster turn around of member feedback, (time permitting) SPP could send material to members of the ESWG in advance of the meeting to enable SPP to respond to member feedback either before the meeting or during the meetings. 1. Continue to strive for getting meeting materials out in a timely manner. 2. Getting meeting minutes out in a timely manner while the meeting is still somewhat fresh in our memory. 1. the meeting notes should be issued within one week of the meeting. They are typically issued very late sometimes as long as 2 months 2. Please provide three or more recommendations for improvement of this particular group and/or SPP's overall organizational group structure ESWG 10

223 Finance Committee Number of members Number of responses Response rate 86% 57% 86% 86% 86% 86% Overall effectiveness score Lowest score Highest score Question Average score The agenda reflects the actions to be taken during the meeting Meeting materials are provided in a timely manner The information provided prior to the meeting is utilized during the meeting The information presented in meetings is clear n/a n/a Meeting minutes are an accurate reflection of the meeting Additional comments: - Membership represents the diversity of the SPP organization Membership has the necessary expertise and/or skills to accomplish its goals Members come prepared to meetings Members are committed to participate and accomplish the group's goals Members are supportive and respectful of the individual needs and differences of group members Additional comments: - Members are engaged during the meeting Decisions are identified and action is recommended Facilitation is sufficient to guide discussion Dissenting voices are heard I depart with a feeling that we have accomplished something Additional comments: - The chair seeks input, and organizational group members are able to influence key decisions and plans The chair is supportive and respectful of the individual needs and differences of group members The chair keeps the group on task to achieve appropriate outcomes The chair ensures follow-through on questions and commitments Additional comments: - Please provide three or more recommendations for improvement of this particular group and/or SPP's overall organizational group structure. Continue meeting at locations that allow for easy access. Continue engagement with other Committees to ensure cross coordination regarding priorities. better follow up on the action plans listed No suggestions other than keep up the progress on keeping meetings on schedule. We always have good dialogue. No recommendations at this time Please provide three or more recommendations for improvement of this particular group and/or SPP's overall organizational group structure Good participation by all attendees. FC 11

224 Generation Working Group Number of members Number of responses Response rate 50% 56% 50% 60% 22% 50% Overall effectiveness score Lowest score Highest score Question Average score The agenda reflects the actions to be taken during the meeting Meeting materials are provided in a timely manner The information provided prior to the meeting is utilized during the meeting The information presented in meetings is clear n/a n/a Meeting minutes are an accurate reflection of the meeting Additional comments: - Membership represents the diversity of the SPP organization Membership has the necessary expertise and/or skills to accomplish its goals Members come prepared to meetings Members are committed to participate and accomplish the group's goals Members are supportive and respectful of the individual needs and differences of group members Additional comments: - Members are engaged during the meeting Decisions are identified and action is recommended Facilitation is sufficient to guide discussion Dissenting voices are heard I depart with a feeling that we have accomplished something Additional comments: - The chair seeks input, and organizational group members are able to influence key decisions and plans The chair is supportive and respectful of the individual needs and differences of group members The chair keeps the group on task to achieve appropriate outcomes The chair ensures follow-through on questions and commitments Additional comments: - Please provide three or more recommendations for improvement of this particular group and/or SPP's overall organizational group structure. I would like to see materials sent out earlier than the day before the meeting. I would like to see the draft minutes sent out on the next day after the meeting. 1. I feel like this group doesn't have quite the workload compared to other groups so it may be possible to increase their responsibilities. 2. Overall, I think the GWG could benefit with more direction from outside the group related to being more valueable to SPP and its organizational groups. The tendancy of the group is to go too far off into the weeds during discussion of items. My suggestion is for the group chair and SPP staff to make more of an effort to keep the group on track during the meetings. Please provide three or more recommendations for improvement of this particular group and/or SPP's overall organizational group structure I feel like the group has the potential to be more effective if given more direction. GWG 12

225 Human Resources Committee Number of members Number of responses Response rate 100% 86% 86% 71% 100% 86% Overall effectiveness score Lowest score Highest score Question Average score The agenda reflects the actions to be taken during the meeting Meeting materials are provided in a timely manner The information provided prior to the meeting is utilized during the meeting The information presented in meetings is clear n/a n/a Meeting minutes are an accurate reflection of the meeting Additional comments: - Membership represents the diversity of the SPP organization Membership has the necessary expertise and/or skills to accomplish its goals Members come prepared to meetings Members are committed to participate and accomplish the group's goals Members are supportive and respectful of the individual needs and differences of group members Additional comments: - Members are engaged during the meeting Decisions are identified and action is recommended Facilitation is sufficient to guide discussion Dissenting voices are heard I depart with a feeling that we have accomplished something Additional comments: I grade us down Q18 because, while I feel that we have accomplished something, I do not believe that some of our accomplishments are worthy of the time and attention of the committee. For example, some items should be delegated to the CEO, such as the pay of his subordinates. Other items, such as the review of the 401(k) savings plan, could be covered more quickly. The chair seeks input, and organizational group members are able to influence key decisions and plans The chair is supportive and respectful of the individual needs and differences of group members The chair keeps the group on task to achieve appropriate outcomes The chair ensures follow-through on questions and commitments Additional comments: - HRC 13

226 Please provide three or more recommendations for improvement of this particular group and/or SPP's overall organizational group structure. Overall structure is complex which does not always allow transparency in decision making for all stakeholders. not always provide a clear summary of processes taken and justification for recommendation Voting items included in the board material do We need a strategic plan for HR that is consistent with SPP's Strategist Plan. We should explicitly align all of our tactical decisions with this strategic plan. We should be provided with exit interview comments of employees at all levels who leave SPP. 1. If materials have been mailed in advance and reviewed by the committee, we don't need a 1 or 2 hour presentation of the same materials. For example, in the last meeting, the review of the 401(k) program could have been completed in just a few minutes if we had focused on questions that the committee members had on the previously shared material. I can read. In my opinion it is a waste of the committee's time to review the printed powerpoint in such detail. Similarly the compensation report, which had been provided in advance, was well written and clearly documented. We could have focused on questions for Deb and completed the review task if far less time. In our organization the agenda for October 12 would have been accomplished mostly by staff prior to the meeting, and the decision items could have been completed in less than half the time, very likely in 1/4 the time. 2. I'd like to see staff empowered to bring a recommendation to the committee for discussion and decision. I feel that the HR committee has inserted itself far too deeply into items that should be delegated to staff. I trust the SPP staff to do most things properly and I think they have demonstrated proper stewardship of the member's money to earn that trust. Let's start the discussion with their recommendation, let them make their case, and ask for a decision. 3. We have discussed the CEO salary far too long, and still will not be taking action until January. It really doesn't take that long to reach a decision on a salary recommendation. We discussed it two meetings ago, we discussed it again at the most recent meeting, and we will discuss it again when we forward a recommendation in January. I believe that this could all be accomplished at one meeting - the idea is not that complicated. I don't spend that much time on my own subordinates' compensation and my board does not spend that much time with me - they can and do make a decision in one meeting - in fact the actual discussion of my salary takes them less than 15 minutes. 4. If the Board chair wishes to engage with the committee in discussion, he should be very cautious about making statements of what the Board may or may not support. Such statements may influence the committee to avoid the discussion of a new direction or new methodology. The committee is supposed to develop its own recommendations of what it believes is right, not what the Board may already believe is right. The committee, through dissent with the Board, may rightly influence the Board to shift its thinking in a way that would benefit the membership. If the Chairman interjects his opinion too strongly into the committee discussion it will have the effect of quashing dissension, which is not healthy for the organization. We should be encouraging free thinking outside our current organizational box and encouraging dissenting opinions that may involve taking a different direction in the future than we have in the past. Some of our past practices may have to change to allow the organization to grow, and the committee needs the ability to have an open discussion of potential new directions. I'm not saying the the chair should not attend the meetings; he should attend any meeting he wishes. I am also not saying that he should not engage in discussion. His opinion is important and his view of past practice is valued. What I am saying is that the chair needs to be more cautious about expressing his strong opinions prior to the committee's discussion and decision on a matter. Does he want to hear from the committee or not? If not, we should dissolve the HR committee and return our actions back to the SPP Board for decision. 5. My overall feeling is that the Board and committees of SPP have not shown enough trust and delegation of responsibility to the very capable staff and leadership of SPP. This has probably developed over a number of years, but it is my observation that the level of detail covered by the HR committee is not healthy for the organization. It has resulted in a weaker management team that is reluctant to take action or make clear recommendations until they hear from the Board or committee. We want to develop strong leaders within SPP, so we need to show them a little trust, allow them to make an occasional mistake, and support their growth and development. We all have full-time jobs elsewhere. SPP staff can and should be allowed to run the day-to-day aspects of the organization. The Board and committees should review things at a high level and provide strategic direction, not get involved in items that are better handled by staff. Examples: Merit pool funding and Compensation plan metrics - Committee should provide staff with strategic direction - e.g. target the 50%ile or we should increase the incentive for x, then staff can develop their recommendation subject to approval. That's my 2. Please provide three or more recommendations for improvement of this particular group and/or SPP's overall organizational group structure HRC 14

227 Market Working Group Number of members Number of responses Response rate 68% 47% 74% 41% 63% 81% Overall effectiveness score Lowest score Highest score Question Average score The agenda reflects the actions to be taken during the meeting Meeting materials are provided in a timely manner The information provided prior to the meeting is utilized during the meeting The information presented in meetings is clear n/a n/a Meeting minutes are an accurate reflection of the meeting Additional comments: The technical &/or complicated nature of some of the subjects whether the materials are "clear" is a subjective and personal matter... at times limited by the capacity of the recipients to understand. Membership represents the diversity of the SPP organization Membership has the necessary expertise and/or skills to accomplish its goals Members come prepared to meetings Members are committed to participate and accomplish the group's goals Members are supportive and respectful of the individual needs and differences of group members Additional comments: Although to some outsiders discussions may seem combative at times; I believe it reflects the comfort everyone has with the members of the group. Candor. Brutal Candor at times is generally appreciated & facilitates communication; understanding; and progress towards achieving the groups goals. Members are engaged during the meeting Decisions are identified and action is recommended Facilitation is sufficient to guide discussion Dissenting voices are heard I depart with a feeling that we have accomplished something Additional comments: Some meetings are better than others. I feel like the work the group accomplishes would compare favorably against any other group in the region or any other comparable group in another RTO. The chair seeks input, and organizational group members are able to influence key decisions and plans The chair is supportive and respectful of the individual needs and differences of group members The chair keeps the group on task to achieve appropriate outcomes The chair ensures follow-through on questions and commitments Additional comments: Although the chair has strong opinions at times regularly seeks feedback from the group on how he should have handled difficult situations better/differently. Please provide three or more recommendations for improvement of this particular group and/or SPP's overall organizational group structure. The Market Design Staff efforts to implement the revision request process have been outstanding. The meeting needs to be moved to a central SPP location such as Kansas City. I am sure you can get a conference room donated like Dallas. I believe that we should write down working group guidelines for staff secretaries to ensure consistency for all working groups (example: drafting agendas, action items and minutes). This would be an improvement for SPP's overall organizational group structure. Please provide three or more recommendations for improvement of this particular group and/or SPP's overall organizational group structure MWG 15

228 Market and Operations Committee Number of members Number of responses Response rate 39% 30% 37% 46% 48% 47% Overall effectiveness score Lowest score Highest score Question Average score The agenda reflects the actions to be taken during the meeting Meeting materials are provided in a timely manner The information provided prior to the meeting is utilized during the meeting The information presented in meetings is clear n/a n/a Meeting minutes are an accurate reflection of the meeting Additional comments: It is frustrating that so many grops seems to wait until the last minute to actually do work. While the RTWG and MWG regularly have matters to deal with for teh full 3 months up to the meeting; other groups seem to defer action until the meeting just prior to MOPC. There has been a really good effort to make sure materials are issued before the meetings. I would like to see Staff all presentations that are not part of the packet before presentation, even if it is 2 minutes before. Most attendees have access and this would be helpful. This is isn't a major problem, just don't understand why it cant be done. Membership represents the diversity of the SPP organization Membership has the necessary expertise and/or skills to accomplish its goals Members come prepared to meetings Members are committed to participate and accomplish the group's goals Members are supportive and respectful of the individual needs and differences of group members Additional comments: Many of the attenees appear to be still doing little more than taking notes; casting ballots the way they were told before they arrived; and ill equipped to respond to any dynamic discussion during the meeting. Q11 - is a difficult one for what is intended by accomplishing the "group's goals". Is this to imply that any item brought to the MOPC must be approved to accomplish the "group's goals?" What is the metric? SPP market participants will continue to have more diverse goals and objectives. As the IM continues to evolve, additional membership categories will be needed. Members are engaged during the meeting Decisions are identified and action is recommended Facilitation is sufficient to guide discussion Dissenting voices are heard I depart with a feeling that we have accomplished something Additional comments: Due to comments on the earlier question; I sometimes feel if we go off script in any way the majority of the room is most comforable just kicking the can down the road... uncomfortable making a decision with out permission from their home office. To improve engagement, have all electronic communication devices disabled during the meeting. Breaks could be minutes to accommodate work that cannot wait. The chair seeks input, and organizational group members are able to influence key decisions and plans The chair is supportive and respectful of the individual needs and differences of group members The chair keeps the group on task to achieve appropriate outcomes The chair ensures follow-through on questions and commitments Additional comments: I am a new member of the MOPC therefore I am not able to give an accurate survey at this time. Chair runs an efficient meeting. MOPC 16

229 Please provide three or more recommendations for improvement of this particular group and/or SPP's overall organizational group structure. I think Carl should shave his mustashe. 1) A move to two week prior postings of meeting materials for MOPC and the Board. In earlier days (80s & 90s) the load of material review was modest. In today's environment with full markets, regional planning, tariff management, and emerging industry and commercial issues, the material is very broad and comprehensive to work through. Member companies utilities only have 3-4 business days for a full review of presentations and materials AND to hold an internal review/position meetings prior to the actual meeting. Since these are held quarterly, it should not be detrimental to the work schedule. 1. MOPC - higher level presentations at the MOPC, less discussion of the details. 2. Staff - don't look for vagueness of protocols or other items for cover on items you prefer not to address 3. Better quality presentations. Many times the presentation made at the MOPC is very weak and morphs considerably by the time it makes it to the RSC/Board. Provide a little better description of the purpose of each work group and task force. For new members it is sometimes hard to figure out what they all cover. I have not been on the MOPC long enough to make any recommendations. New rule - voting items material out one week in advance or vote is delayed until next meeting or conducted by . Informational topics material posted 3 business days before meeting. This allows staff to focus on voting items. While I appreciate moving the meeting location around for the members, I think all MOPC meetings should be in Little Rock so more SPP staff can be available to the members for discussion and presentation purposes. Though the Chair does a good job, maybe a little tighter rein on discussion. Please provide three or more recommendations for improvement of this particular group and/or SPP's overall organizational group structure - MOPC 17

230 Model Development Working Group Number of members Number of responses Response rate 69% 92% 100% 77% 100% 92% Overall effectiveness score Lowest score Highest score Question Average score The agenda reflects the actions to be taken during the meeting Meeting materials are provided in a timely manner The information provided prior to the meeting is utilized during the meeting The information presented in meetings is clear n/a n/a Meeting minutes are an accurate reflection of the meeting Additional comments: There have been times where meeting minutes are not captured as a reflection of the disscussion that took place. Membership represents the diversity of the SPP organization Membership has the necessary expertise and/or skills to accomplish its goals Members come prepared to meetings Members are committed to participate and accomplish the group's goals Members are supportive and respectful of the individual needs and differences of group members Additional comments: - Members are engaged during the meeting Decisions are identified and action is recommended Facilitation is sufficient to guide discussion Dissenting voices are heard I depart with a feeling that we have accomplished something Additional comments: Discussions are led and facilitated by a vocal minority. Members need to participate in discussions more. The chair seeks input, and organizational group members are able to influence key decisions and plans The chair is supportive and respectful of the individual needs and differences of group members The chair keeps the group on task to achieve appropriate outcomes The chair ensures follow-through on questions and commitments Additional comments: Our chair keeps things moving in a productive manner so we get through as much of the agenda as possible. He also regularly seeks input from some of the more reserved members and focuses concerns and objectives into Action Items for members and SPP Staff appropriately. Please provide three or more recommendations for improvement of this particular group and/or SPP's overall organizational group structure. 1. This group needs more support from SPP Staff on NERC Reliability Standards that influence steady-state, dynamic, and short-circuit models and studies. SPP Staff needs to get out in front of these standards so that members are not scrambling to meet compliance at the last minute. In the recent past, it is the members who have had to bring up X, Y, and Z reliability standard and pose the question, "what the heck are we going to do about it, it's effective in 6 months". We as a region need to shift our compliance from reactive to proactive. 2. See Item 1! 3. See Item 1!!! 4. Special Study "cases" and "models" need to be reviewed and approved (voted on) by this group. These are models that are used in one-off studies that are performed as needed. We (MDWG) are the ones supplying data and assumptions, so it should be us approving there use. Members need to be more engaged in conversation without having to be individually called upon by the chair. MDWG needs to find a way to produce Final Base Models with all issued NTCs, even if it means having to produce two sets of models during the year. One set which are Final Base Models and one that are Final Base Models with all NTCs. Please provide three or more recommendations for improvement of this particular group and/or SPP's overall organizational group structure Our members and SPP secretary + modeling staff care a lot about building models the right way. To continue to be effective, the recommendations I provided need to take place. We need more support from SPP Compliance on new Reliability Standards that affect modeling and studies. MDWG 18

231 Operating Reliability Working Group Number of members Number of responses Response rate 67% 80% 67% 94% 87% 77% Overall effectiveness score Lowest score Highest score Question Average score The agenda reflects the actions to be taken during the meeting Meeting materials are provided in a timely manner The information provided prior to the meeting is utilized during the meeting The information presented in meetings is clear n/a n/a Meeting minutes are an accurate reflection of the meeting Additional comments: There tend to be a number of last minute action items added to agendas. Not all materials are posted with the first notice that comes out, which makes it more difficult to review prior to the meeting. Membership represents the diversity of the SPP organization Membership has the necessary expertise and/or skills to accomplish its goals Members come prepared to meetings Members are committed to participate and accomplish the group's goals Members are supportive and respectful of the individual needs and differences of group members Additional comments: Group has solid focus on defined responsibilities. Members are engaged during the meeting Decisions are identified and action is recommended Facilitation is sufficient to guide discussion Dissenting voices are heard I depart with a feeling that we have accomplished something Additional comments: - The chair seeks input, and organizational group members are able to influence key decisions and plans The chair is supportive and respectful of the individual needs and differences of group members The chair keeps the group on task to achieve appropriate outcomes The chair ensures follow-through on questions and commitments Additional comments: - Please provide three or more recommendations for improvement of this particular group and/or SPP's overall organizational group structure. Sometimes not all material provided ahead of time MPRR's sometimes takes up allot of time. Need to find a way to speed those up or deal with them in another forum Extension of meetings to accomplish goals. More ownership and drive of goals from membership. Order the group meetings so the flow of RR's is easier to meet. There are times when something gets delayed due to the need to return to an additional user group before the RR can be approved. Please provide three or more recommendations for improvement of this particular group and/or SPP's overall organizational group structure ORWG 19

232 Operating Training Working Group Number of members Number of responses Response rate 83% 58% 70% 92% 83% 92% Overall effectiveness score Lowest score Highest score Question Average score The agenda reflects the actions to be taken during the meeting Meeting materials are provided in a timely manner The information provided prior to the meeting is utilized during the meeting The information presented in meetings is clear n/a n/a Meeting minutes are an accurate reflection of the meeting Additional comments: There are times when the minutes are different than wording discussed in the meeting Whoever works on documenting the meeting minutes and agendas does an excellent job of capturing all the information. the pre-meeting information works great. The only additional improvement that could be made in regard to meeting preparation is to include planned time for each item on the agenda. This could help prevent items that should take minutes from "dragging" to minutes. This has only happened once or twice this year, but it is still a concern when considering the effectiveness of meeting preparation and execution. Membership represents the diversity of the SPP organization Membership has the necessary expertise and/or skills to accomplish its goals Members come prepared to meetings Members are committed to participate and accomplish the group's goals Members are supportive and respectful of the individual needs and differences of group members Additional comments: I believe all the different views are heard and all decisions are made using a diverse and broad range of different views to come to best decisions to move forward on each topic. 10. I do believe that our group does a good job with getting value out of our meetings, but there are times it seems we could come better prepared to meetings, both the voting members of the group and the SPP staff that participates in our meetings and member training. 11. I do think there is a commitment from the members to accomplish meeting goals. However, I do believe that as we go forward we are going to need a stronger commitment to completing the mission / action items that come out of the meeting. Members are engaged during the meeting Decisions are identified and action is recommended Facilitation is sufficient to guide discussion Dissenting voices are heard I depart with a feeling that we have accomplished something Additional comments: I think everyone voices their concerns and praises to the topics and each has a chance and are encouraged to participate in the discussions and after all has been discussed I believe the best action is taken to address any issues. 16. Keep in mind I am commenting on our Chair/Secretary team that ran the meetings in 2015 and have not had an opportunity to see how our new secretary will do going forward. The chair seeks input, and organizational group members are able to influence key decisions and plans The chair is supportive and respectful of the individual needs and differences of group members The chair keeps the group on task to achieve appropriate outcomes The chair ensures follow-through on questions and commitments Additional comments: I think the OTWG chair seeks input from all the members so we can come to the best decision possible. The chair supports and understands the different views that each member voices and doesn't try to influence others to take any certain stance on issues, he just makes sure all the issues, concerns and questions are answered so all the members are educated on all the issues before the OTWG board. The chair represents the members and the group as a whole very well. 22. As I mentioned in an earlier item regarding adding times to the agenda. Another way to keep items from dragging on is for the chair to stop a particular topic if it goes long. I do recognize that this is a double edged sword in that by doing so, someone might say the chair is not being respectful to members' needs and differences. 23. I think our current chair and outgoing secretary did a good job in making sure action items are captured and followed up on in a timely manner. OTWG 20

233 Please provide three or more recommendations for improvement of this particular group and/or SPP's overall organizational group structure. I don't have any suggestions for improvement for the OTWG. I believe this groups experience and knowledge of the subject matters puts our members in a better position to learn and understand the important reliability related issues that need training and do their best to address any gaps for improvement. Increase members Increase training staff Increase DTS support increase members from IS/WAPA add more SOC training increase scenario training/ situational awareness 1 - include estimated times per topic on the agenda. 2 - Modify charter to include minimum training (design, develop, deliver, evaluate) requirements for voting members to ensure as we go forward we are getting the balanced / experienced value we need from our working group. 3 - In regards to SOC evaluation, I am encouraged by the idea of having facilitators/presenters filling out the surveys during the conferences like the participants do. However, I think we could modify this to be a single level 2 or 3 evaluation that members maintain/update during the conference and bring to the face to face meeting at the end of the conference so that we have immediate and detailed feedback that we can discuss and make immediate changes as necessary. Please provide three or more recommendations for improvement of this particular group and/or SPP's overall organizational group structure I believe this groups experience and knowledge of the subject matters facing the operators and the ability to put together a training plan to address any concerns is outstanding. This group has the best training opportunities anywhere. My company depends heavily on SPP training and therefore, on an effective OTWG. I would not wait until this 'end of the year' survey to voice any significant concerns with our group, so while I have offered a few suggestions/recommendations, I am satisfied with the effectiveness of our group and the resultant training that comes from it. Each of the members are truly passionate about the training needs of their stakeholders. Even when there are disagreements about how to accomplish goals as a group, it's refreshing that each member has this common goal. OTWG 21

234 Oversight Committee Number of members Number of responses Response rate 100% 75% 100% 100% 100% 100% Overall effectiveness score Lowest score Highest score Question Average score The agenda reflects the actions to be taken during the meeting Meeting materials are provided in a timely manner The information provided prior to the meeting is utilized during the meeting The information presented in meetings is clear n/a n/a Meeting minutes are an accurate reflection of the meeting Additional comments: - Membership represents the diversity of the SPP organization Membership has the necessary expertise and/or skills to accomplish its goals Members come prepared to meetings Members are committed to participate and accomplish the group's goals , Members are supportive and respectful of the individual needs and differences of group members Additional comments: - Members are engaged during the meeting Decisions are identified and action is recommended Facilitation is sufficient to guide discussion Dissenting voices are heard I depart with a feeling that we have accomplished something Additional comments: The work of the OC is becoming increasingly more complicated! The chair seeks input, and organizational group members are able to influence key decisions and plans The chair is supportive and respectful of the individual needs and differences of group members The chair keeps the group on task to achieve appropriate outcomes The chair ensures follow-through on questions and commitments Additional comments: - Please provide three or more recommendations for improvement of this particular group and/or SPP's overall organizational group structure. The Committee Charter needs to be re-visited to make sure it reflects all of the committee's responsibilities. It should be explicit that "Compliance" also includes protection from cyber and physical terroism. W need to re-visit and possibly re-ffirm our MMU model. We need to be more effective in the presentations of reports from key staff functions, such as the internal market monitor. Presentations should be designed for executive leadership, more concise with focus on key issues and considerations. Please provide three or more recommendations for improvement of this particular group and/or SPP's overall organizational group structure OC 22

235 Project Cost Working Group Number of members Number of responses Response rate 86% 59% 65% 63% Overall effectiveness score Lowest score Highest score Question Average score The agenda reflects the actions to be taken during the meeting Meeting materials are provided in a timely manner The information provided prior to the meeting is utilized during the meeting The information presented in meetings is clear Meeting minutes are an accurate reflection of the meeting Additional comments: - Membership represents the diversity of the SPP organization Membership has the necessary expertise and/or skills to accomplish its goals Members come prepared to meetings Members are committed to participate and accomplish the group's goals Members are supportive and respectful of the individual needs and differences of group members Additional comments: Comment to question 12: I have always felt that this group is very open to everyone's opinion and remains respectful and professional no matter what opinion is stated. Members are engaged during the meeting Decisions are identified and action is recommended Facilitation is sufficient to guide discussion Dissenting voices are heard I depart with a feeling that we have accomplished something Additional comments: Comment to question 17: This goes back to my previous comment. The group is always very respectful and professional no matter what opinion is stated. The chair seeks input, and organizational group members are able to influence key decisions and plans The chair is supportive and respectful of the individual needs and differences of group members The chair keeps the group on task to achieve appropriate outcomes The chair ensures follow-through on questions and commitments Additional comments: Answers based on previous chairperson. We now have a new chair but I don't expect a drop off. Please provide three or more recommendations for improvement of this particular group and/or SPP's overall organizational group structure. Sometimes seems like all we do if write and re-write business practices. I realize that when there are not projects on the "outside of bandwidth" side of their estimate that is a good thing. I think going to quarterly face-to-face meetings has been a good change. 1. Establish "term limits" for leadership. Not a lifetime appointment. 2. Provide PDH/PDU credits for professional certifications for participation. 3. Continue current Group support efforts by SPP staff. Excellent supporting team! The multiple reviews necessary by various groups tends to lengthen the time it takes to get something approved and in practice. Please provide three or more recommendations for improvement of this particular group and/or SPP's overall organizational group structure Good cross section of membership, including State regulatory participants. PCWG 23

236 Regional Compliance Working Group Number of members Number of responses Response rate 75% 65% Overall effectiveness score Lowest score Highest score Question Average Average The agenda reflects the actions to be taken during the meeting Meeting materials are provided in a timely manner The information provided prior to the meeting is utilized during the meeting The information presented in meetings is clear Meeting minutes are an accurate reflection of the meeting Additional comments: The SPP RTO staff secretary does an excellent job supporting this working group. Perhaps the new SPP security/cip director should get some training on how the member entities function to support SPP rto The RCWG has provided significant value to my utility throughout The meeting agendas are always packed full of perti Membership represents the diversity of the SPP organization Membership has the necessary expertise and/or skills to accomplish its goals Members come prepared to meetings Members are committed to participate and accomplish the group's goals Members are supportive and respectful of the individual needs and differences of group members Additional comments: - Members are engaged during the meeting Decisions are identified and action is recommended Facilitation is sufficient to guide discussion Dissenting voices are heard I depart with a feeling that we have accomplished something Additional comments: RCWG has come a long way. Still room to grow. The group is dependent on SPP RTO for clarification/decesions and those are usually action items for after the meeting I am personally disappointed with the tone from the last meeting where dissenting voices and concerns were discouraged The chair seeks input, and organizational group members are able to influence key decisions and plans The chair is supportive and respectful of the individual needs and differences of group members The chair keeps the group on task to achieve appropriate outcomes The chair ensures follow-through on questions and commitments Additional comments: The Chair is very strong organizationally and makes sure the meetings progress to achieve outcomes. The Chair comes to RCWG 24

237 Please provide three or more recommendations for improvement of this particular group and/or SPP's overall organizational group structure. 1. Discuss NERC compliance violation trends over the region. 2. Work to find commonality among violations. 3. Assist SPP RTO compliance staff to perform outreach activities to address findings 4. Work with region (NOT JUST SPP MEMBERS) to help the transition/ revisions of SPP Criteria to SPP Protocols so as not to duplicate NERC activities. 5. Assist SPP RTO with issues during the transition to a mature consolidated BA with all the tools they need to effectively meet NERC obligations and reliable operations. 6. Help the Market side of the SPP RTO staff realize NERC blurs the line between "Operations" and "Market" 1. Reduce the number of task forces and subcommittees and try to accomplish those items during the regular meetings. 2. Look at having meetings on Tuesdays or another weekday so as not have to have to travel on Sundays. 3. Take contentious issues offline as needed, then regroup and resume the meeting. RCWG members have the experience and knowledge to recognize impediments to compliance with the NERC Standards and reliability of their entities, and propose solutions. They do this by incorporating all areas of SPP in the solution, including the RE and most significantly, the RTO. A good relationship with RTO leadership is a critical part of making progress beneficial to both SPP and the entity. Without RTO collaboration the RCWG and/or entities cannot effectively remedy stumbling blocks in reaching and maintaining compliance with the NERC Standards. While the goal of the current RTO Director of Security and Compliance to make SPP a model for compliance is laudable, SPP entities will still need to be able to look to the RTO for assistance in their compliance programs. SPP RTO seems not to be dedicated to supporting this working group. The group is discussing questions and concerns that not only affect the member companies but also can have a major impact on the SPP RTO. The SPP RTO can not just brush aside the concerns of this working group. The SPP RTO should reevaluate how they support this working group because this group is asking the hard questions but the RTO doesn't seem to want to listen or acknowledge its' responsibility. Please ensure discussions include all applicable Regional Entities and not just the SPP RE. The multiple subcommittees and task forces are creating an additional burden on time commitments. Please be aware of the additional burden and work to minimize additional work. Please provide three or more recommendations for improvement of this particular group and/or SPP's overall organizational group structure The group's effectiveness would be enhanced by a better understanding and acceptance on the part of SPP and its staff of how SPP's operating procedures impact the Members' ability to stay compliant. Ambiguity in SPP operating procedures and criteria put the Members at risk. Also, there appear to be "sacred cows" in various places within SPP. From time to time, when the RCWG asks questions about procedure, criteria, etc., SPP appears to be more interested in shutting down the discussion than answering the questions from RCWG. Said another way, some within SPP seem to be more interested in maintaining the status quo than opening up and trying to understand the Members' concerns. SPP RTO Compliance Staff involvement and support is critical to RCWG effectiveness. A collaborative and constructive relationship between the SPP RTO Compliance Group and Member Compliance groups is crucial to our success. The group is gaining more items and issues to deal with as the days move forward. As these responsibilities increase, it is important to sort through what can be accomplished and what has the highest priority. The RCWG has an exceptional track record in bringing systemic problems to a satisfactory conclusion. We are effective, but there is so much still to accomplish. For every item we complete another 3 items get added to our plate. SPP SME staff needs to continue to increase their involvement in their compliance related areas. We as members cannot write, coordinate and audit documents to meet SPP's RC and PC requirements as we have our own TOP requirements to focus on. For the memebers, the working group is very effective. Concerns relating to reliability and compliance are brought up and discussed in candid fashion. On the other hand for the SPP RTO, the group is ineffective. The SPP RTO seems to want to sweep the working group concerns under the rug and if they ignore them for long enough they will go away. The new Director of Compliance & Security doesn't seem willing to work with the members even though the members are providing any assistance that the new Director may require. Great group with many, very experienced professionals. Kim has been a strong support and has spent great efforts in support of getting the group structured and set up where both the Chair and Secretary were new to the SPP process as well as the expected outcomes. She has done a great job. Michael has been a welcome addition for strategic collaboration for the group given that there have been many leadership changes affecting the success and dynamics of the group. It is my hope for the group moving forward that productive collaborative ground is identified to ensure success for all involved. Thanks to all that contribute time and effort for the working group as well as from staff in way of support. RCWG 25

238 Regional Tariff Working Group Number of members Number of responses Response rate 61% 77% 67% 52% 71% 67% Overall effectiveness score Lowest score Highest score Question Average score The agenda reflects the actions to be taken during the meeting Meeting materials are provided in a timely manner The information provided prior to the meeting is utilized during the meeting The information presented in meetings is clear n/a n/a Meeting minutes are an accurate reflection of the meeting Additional comments: The RTWG Secretary does an excellent job of posting meeting material in a timely manner. However, due to the failure of other working groups & staff of honoring the "7 days prior rule" the RTWG is placed in a position of hurrying through Revision Requests requiring Tariff changes without due consideration. It is this members opinion that no action should be taken on any Revision Request that is not posted in the meeting material 7 days prior to the meeting. I would like to see material sent out sooner. Additional Meeting Material s typically do not have enough time for review. I think there is still a problem with materials not being posted and provided on time, but often it seems to come from staff and not stakeholders Membership represents the diversity of the SPP organization Membership has the necessary expertise and/or skills to accomplish its goals Members come prepared to meetings Members are committed to participate and accomplish the group's goals Members are supportive and respectful of the individual needs and differences of group members Additional comments: Non-TO/Non-TC really need to be represented in this group. This group needs to have people that do just TCR's on it. Members are engaged during the meeting Decisions are identified and action is recommended Facilitation is sufficient to guide discussion Dissenting voices are heard I depart with a feeling that we have accomplished something Additional comments: - The chair seeks input, and organizational group members are able to influence key decisions and plans The chair is supportive and respectful of the individual needs and differences of group members The chair keeps the group on task to achieve appropriate outcomes The chair ensures follow-through on questions and commitments Additional comments: - Please provide three or more recommendations for improvement of this particular group and/or SPP's overall organizational group structure. Deny action at the respective meeting on any Revision Request NOT submitted 7 days prior to such meeting without exception. Poor planning by another working group does not create an emergency for the RTWG and vice versa. 1. The issue of working groups presenting all approval items the month before MOPC/Board. This causes additional meetings to be scheduled in order to meet the deadline to post MOPC background materials. 2. It would be helpful when a member opposes or abstains to send the reason(s) why he/she voted to the staff secretary to record in the minutes. 3. Rotate staff secretaries, chairs and vice chairs. Perhaps set a maximum of three (3) years to serve in these positions. More timely material distribution If feasible, it would be good to get at least a general outline of each month's meeting agenda earlier than we currently do. I know this has been an issue for years, but need to reinforce cut-off deadlines for posting of materials. Folks are trying to expedite too many RRs or other decisions. Puts stakeholders in difficult position and is causing a lot of concern, especially when the issue comes from staff but there are other RRs that have been approved by SPP but filed with FERC timely. Staff works really hard and does a good job, but need to have reinforcement from Chairs to set deadlines and stand by them so members can adequately prepare for meetings and provide necessary and appropriate feedback. Please provide three or more recommendations for improvement of this particular group and/or SPP's overall organizational group structure The effectiveness of the RTWG is exemplified by its ability to produce a high quality product quickly despite the extremely poor planning of numerous other working groups and sometimes Staff The members work well with each other and other working groups. They voice their thoughts and opinions in a professional manner. RTWG 26

239 Strategic Planning Committee Number of members Number of responses Response rate 83% 67% 83% 92% 100% 92% Overall effectiveness score Lowest score Highest score Question Average score The agenda reflects the actions to be taken during the meeting Meeting materials are provided in a timely manner The information provided prior to the meeting is utilized during the meeting The information presented in meetings is clear n/a n/a Meeting minutes are an accurate reflection of the meeting Additional comments: well organized and well run meetings Membership represents the diversity of the SPP organization Membership has the necessary expertise and/or skills to accomplish its goals Members come prepared to meetings Members are committed to participate and accomplish the group's goals Members are supportive and respectful of the individual needs and differences of group members Additional comments: - Members are engaged during the meeting Decisions are identified and action is recommended Facilitation is sufficient to guide discussion Dissenting voices are heard I depart with a feeling that we have accomplished something Additional comments: - The chair seeks input, and organizational group members are able to influence key decisions and plans The chair is supportive and respectful of the individual needs and differences of group members The chair keeps the group on task to achieve appropriate outcomes The chair ensures follow-through on questions and commitments Additional comments: - Please provide three or more recommendations for improvement of this particular group and/or SPP's overall organizational group structure. improve the effectiveness of the annual planning retreat better definition of operational and industry trends and goals that need to be addressed with strategic initiatives/programs in depth evaluation of performance on strategic initiatives build on the steps being taken to improve the alignment of strategic initiatives and financial budget Need to move public information from a wish to an achievement. Need to figure out how to marshall the states to respond to the CPP. Please provide three or more recommendations for improvement of this particular group and/or SPP's overall organizational group structure group is very adept at initiating task forces to address difficult issues SPC 27

240 System Protection and Control Working Group Number of members Number of responses Response rate 62% 58% 62% 69% 77% 77% Overall effectivness score Lowest score Highest score Question Average score The agenda reflects the actions to be taken during the meeting Meeting materials are provided in a timely manner The information provided prior to the meeting is utilized during the meeting The information presented in meetings is clear n/a n/a Meeting minutes are an accurate reflection of the meeting Additional comments: Some of the meeting materials is very technical and every effort needs to be made to make sure the members receive this information well in advance of the meetings. Membership represents the diversity of the SPP organization Membership has the necessary expertise and/or skills to accomplish its goals Members come prepared to meetings Members are committed to participate and accomplish the group's goals Members are supportive and respectful of the individual needs and differences of group members Additional comments: The membership is very supportive of each others concerns. Members are engaged during the meeting Decisions are identified and action is recommended Facilitation is sufficient to guide discussion Dissenting voices are heard I depart with a feeling that we have accomplished something Additional comments: - The chair seeks input, and organizational group members are able to influence key decisions and plans The chair is supportive and respectful of the individual needs and differences of group members The chair keeps the group on task to achieve appropriate outcomes The chair ensures follow-through on questions and commitments Additional comments: - Please provide three or more recommendations for improvement of this particular group and/or SPP's overall organizational group structure. Having meeting materials further in advance would help me be more prepared. Two weeks prior to the meeting date is recommended. Continue to post meeting minutes shortly after the meeting is completed. Continue to schedule meeting 1 year out, this helps with everyone being able to attend. Continue to rotate meeting locations. We'll see how well that works this year. I believe this group is very effective and provides a value to the SPP member companies. Please provide three or more recommendations for improvement of this particular group and/or SPP's overall organizational group structure Continuing to keep up on standards and the changes that seem to be continuous. SPCWG 28

241 Transmission Working Group Number of members Number of responses Response rate 54% 67% 54% 82% 79% 67% Overall effectiveness score Lowest score Highest score Question Average score The agenda reflects the actions to be taken during the meeting Meeting materials are provided in a timely manner The information provided prior to the meeting is utilized during the meeting The information presented in meetings is clear n/a n/a Meeting minutes are an accurate reflection of the meeting Additional comments: There has been significant improvement in properly identifying items as action items on the agenda, but more attention is needed, as some still slip through. Also, sometimes items are marked as action items, but neither the agenda nor the background materials materials make clear what action is requested. 1. We have room for improvement on the materials posting date. Sometimes if they are posted at 11 pm, that takes some of the time for members to review. 2. We sometimes have to vote on items that aren't clearly marked on the agenda as approval item. We need to make sure they are clearly marked. Hopefully, the expedited voting protocols can address some of these issues. Membership represents the diversity of the SPP organization Membership has the necessary expertise and/or skills to accomplish its goals Members come prepared to meetings Members are committed to participate and accomplish the group's goals Members are supportive and respectful of the individual needs and differences of group members Additional comments: Most members do not voice their opinions until it comes down to voting. While members come prepared to the meeting, complex issues that is being presented for the first time may need more than one meeting to take an action on. I appreciate it if staff gives enough time for those specific issues. Members are committed to group's goals, but the world is changing (FERC O1000 and IM), and we need to make sure we are making the appropriate changes to match the real world. Members are engaged during the meeting Decisions are identified and action is recommended Facilitation is sufficient to guide discussion Dissenting voices are heard I depart with a feeling that we have accomplished something Additional comments: Only certain members speak up on most issues. I wish we have more vocal members on the group...randy needs to speak up more often. The chair seeks input, and organizational group members are able to influence key decisions and plans The chair is supportive and respectful of the individual needs and differences of group members The chair keeps the group on task to achieve appropriate outcomes The chair ensures follow-through on questions and commitments Additional comments: Our Chair is doing a fine job of keeping group on task while promoting discussion, and is respectful and informed. Mo does a good job leading the group Please provide three or more recommendations for improvement of this particular group and/or SPP's overall organizational group structure. We definately need more microphones and perhaps better ones. Arrange tables so that it is easy to get around in the room. Sometimes there is lots of wasted space in the middle with congestion points between the tables and wall. TWG needs to make policy type recommendations to MOPC and not leave the decision to MOPC reps. actions in other working groups. It would be helpful to keep TWG informed of Please provide three or more recommendations for improvement of this particular group and/or SPP's overall organizational group structure TWG 29

242 2015 RE Stakeholder Satisfaction Survey Results December 8, 2015 Ron Ciesiel SPP RE General Manager

243 About the respondents Sent to Primary Compliance Contacts 58 respondents 12 opted out 65% response rate Up from 62% in 2014 Frequency of interaction 2

244 How well program meets expectations All averages in meets expectations range between 3.2 and 3.6 3

245 Customer Service/Responsiveness All averages between good and excellent, from 4.1 to 4.6 4

246 Overall Satisfaction Year-By-Year Overall score of 4.1 is just above good Same as 2014 score 5

247 Interaction with other Regional Entities 6

248 Qualitative Analysis 6 Dissatisfied comments related to: Enforcement staff changes Slow adoption of Risk Based processes 11 Satisfied comments regarding staff s: Proactive outreach efforts Responsiveness, professionalism, and expertise 6 suggestions for exceeding expectations: Improve staff availability while traveling Get procedures in place before implementing programs Further reduce audit burdens 7

249 Next Steps SPP RE management and staff will discuss survey results Management and staff will develop action plan to address concerns 8

250 2015 SPP RE Stakeholder Satisfaction Survey Report

251 Southwest Power Pool Regional Entity Executive Summary Table of Contents Executive Summary...3 Demographics...5 Interaction with other Regional Entities...6 Operations and Planning Compliance Monitoring...7 Critical Infrastructure Protection (CIP) Compliance Monitoring...9 Enforcement...11 Event Analysis/Lessons Learned and Reliability Assessments...13 Outreach...14 Electronic Tools...16 Registration and Certification...17 Overall Performance Qualitative - Dissatisfaction...19 Qualitative - Satisfaction...20 Qualitative - Improvement SPP RE Stakeholder Satisfaction Survey Report 2

252 Southwest Power Pool Regional Entity Quantitative Results Executive Summary SPP RE strives to continuously improve its performance of its NERC-delegated functions. Each year SPP RE asks its Registered Entities to provide anonymous input on the organization s programs and customer service to stakeholders. SPP RE issued the 2015 Stakeholder Satisfaction Survey on September 15, 2015 to the 88 Primary Compliance Contacts who are registered in SPP RE s compliance database (webcdms). The survey had a 65% response rate (58 respondents), up from 62% in Of the 58 respondents, 12 opted out of the survey. Respondents were asked to assess seven SPP RE programs on their importance, how well they meet expectations, and customer service/responsiveness. Stakeholders were also asked to assess SPP RE s performance in relation to other Regional Entities, to rate overall performance, and to provide qualitative comments. Of the 21 respondents who interact with other Regional Entities, none rated SPP much worse, 5% rated SPP RE somewhat worse, 19% rated SPP RE about the same, 43% rated SPP RE somewhat better, and 33% rated SPP RE much better. When asked how well SPP RE s programs and services meet expectations, respondents rated all with average scores in the meets expectations range between 3.2 and 3.6. How well program meets expectations Outreach Ops & Planning Monitoring Registration & Certification Enforcement Events & Assessments CIP Monitoring E-tools Fails to Almost Meets Exceeds Greatly Meet Meets Exceeds Denotes the 2014 rating. Registration & Certification is a new category SPP RE Stakeholder Satisfaction Survey Report 3

253 Southwest Power Pool Regional Entity Quantitative Results When asked to rate employees customer service ability or programs responsiveness to needs, respondents rated all with average scores between good and excellent, from 4.1 to 4.6. Customer Service/Responsiveness Ops & Planning Monitoring Outreach Events & Assessments Enforcement CIP Monitoring Registration & Certification Poor Below Average Good Excellent Average The 2015 overall satisfaction rating of 4.1 is the same as last year s rating. SPP RE Overall n=46 x= n=58 x= n=56 x= n=60 x= n=47 x=3.8 1-Poor 2-Below Average 3-Average 4-Good 5-Excellent 1 Stacked bar charts throughout this report indicate the number of respondents in each category, not the percentage. N represents the number of people who responded to that question, while X denotes the average response SPP RE Stakeholder Satisfaction Survey Report 4

254 Southwest Power Pool Regional Entity Quantitative Results Demographics I choose not to take this survey because: Comments: I just joined with SPP last month and have not had any interaction yet Other 25% I do not work with SPP RE enough to provide input 75% KMEA is doing most of the City of Gardner Work I don't think the surveys do any good. All our entities are now in a Coordinated Oversight program with TRE as the LRE, so I rarely work with SPP now. Number reporting (n) =12 How often do you interact with SPP RE? Rarely 10% Weekly 16% A few times per year 44% Monthly 30% n= SPP RE Stakeholder Satisfaction Survey Report 5

255 Southwest Power Pool Regional Entity Quantitative Results Interaction with other Regional Entities Do you interact with other Regional Entities? No 56% Yes 44% n=48 If "yes", how does SPP RE compare with the Regional Entities with which you interact most often? Much worse 0% Somewhat worse 5% Much better 33% About the same 19% Somewhat better 43% n= SPP RE Stakeholder Satisfaction Survey Report 6

256 Southwest Power Pool Regional Entity Quantitative Results Operations and Planning Compliance Monitoring How well does our Operations & Planning (693) program meet your expectations? Self-Certifications n=45 x=3.6 Self-Reports Audits n=24 x=3.7 n=30 x=3.7 IRA/ICE Reviews 1-Fails to Meet 4 2- Almost Meets Meets 4-Exceeds 5- Greatly Exceeds 5 1 n=16 x=2.9 Average=3.6 Please rate the Operations & Planning (693) staff's customer service ability (responsiveness, professionalism, problem solving, and communication skills): Customer Service n=48 x=4.6 1-Poor 2-Below Average 3-Average 4-Good 5-Excellent Please share your suggestions for improving our Operations and Planning (693) Compliance Monitoring program: I recently received a Risk Assessment Questionnaire as the initial notification phase for an Operations and Planning Audit in For the most part the Questionnaire was reasonably clear, however there were some items that were unclear with respect to what was being requested and a follow-up did not provide complete understanding. I made a judgment call to complete the last few items. The Questionnaire was similar in nature to a previous Audit period (3 years ago) but had some differences that quite honestly did not seem to have had sufficient review before sending it out. There were no serious issues, but the few items that needed clarification were not critical and yet delayed completion of the response by 3 days. Join other regions in implementing RAI in a timely, organized manner. Mike Hughes has been a nice addition to the team!ira/ice reviews have been talked about but it is not really clear how SPP-RE will process/handle and communicate results with the entity. It is not clear what the thresholds of an IRA/ICE review are in terms of compliance oversight, in other words what would a successful IRA/ICE look like if there is such a desire? 2015 SPP RE Stakeholder Satisfaction Survey Report 7

257 Southwest Power Pool Regional Entity Quantitative Results Our main concern is technical with CDMS - manually entering the RAPA misops each quarter is a laborious process. It would be great if there was an import feature. If possible could you increase your online training? I have new employees with little or no utility experience and additional opportunities for training would help. 693 Audit team is responsive and professional. We would appreciate better communication in regards to changes in data submittal forms (e.g., PRC-004 Misoperations). Guidance given at workshops, if the RE plans to speak to the new standards coming into effect, should constitute more than reading the new standards to the registered entities. Also, when an entity requests an ICE not associated with an audit the RE should not discourage the entity from trying to participate in the programs suggesting there is no benefit outside of an audit the entity values the RE opinion. The smaller entities have specific requirements that although similar, are actually different from larger entities. This is due in part to the economy of scale, and additional differences are derived from the nature of how they work. Would like a webex with guidance on IRA/ICE information 2015 SPP RE Stakeholder Satisfaction Survey Report 8

258 Southwest Power Pool Regional Entity Quantitative Results Critical Infrastructure Protection (CIP) Compliance Monitoring How well does our CIP program meet your expectations? Self-Certifications n=34 x=3.4 Self-Reports n=18 x=3.4 Audits n=23 x=3.2 IRA/ICE Reviews 1-Fails to Meet 4 2- Almost Meets Meets 4-Exceeds 5- Greatly Exceeds 4 n=12 x=2.7 Average=3.2 Please rate the CIP staff's customer service ability (responsiveness, professionalism, problem solving, and communication skills): Customer Service n=40 x=4.2 1-Poor 2-Below Average 3-Average 4-Good 5-Excellent Please share your suggestions for improving our CIP program: The CIP Team is so busy that it is difficult to make contact by phone or . Responses are often delayed by several days. There needs to be a more timely response time to Entity questions. Maybe a designated "on call" person could field the Entity questions and forward to other CIP Team Members as needed. Join other regions in implementing RAI in a timely, organized manner. Steven Keller has been very responsive. IRA/ICE reviews have been talked about but it is not really clear how SPP-RE will process/handle and communicate results with the entity.it is not clear what the thresholds of an IRA/ICE review are in terms of compliance oversight, in other words what would a successful IRA/ICE look like if there is such a desire? our utility service is so small we don't really need to be in this program at all! If we had a comparison (within another region or footprint) we may state "below average." CIP Compliance Monitoring staff is somewhat inconsistent with professionalism and communication SPP RE Stakeholder Satisfaction Survey Report 9

259 Southwest Power Pool Regional Entity Quantitative Results Similar to O&P, our biggest issue is a technical one with CDMS. Although you can import assets into a TFE initially, subsequent updates require manual entry/removal and that can take a large amount of time (e.g. two full days of work) due to all the manual searching and typing necessary. It would be great if there was a mass update feature. Kevin Perry can be a challenge. Outreach efforts have been great. This will help with V5 transition. These outreach efforts should continue going forward I believe the team has shown great improvements in working with registered entities and trying to help each entity improve as well as understand requirements. Please continue this direction for collaboration where possible and improvements for all. Would like a webex with guidance on IRA/ICE information 2015 SPP RE Stakeholder Satisfaction Survey Report 10

260 Southwest Power Pool Regional Entity Quantitative Results Enforcement How well does our Enforcement program meet your expectations? FFT/Compliance Exception Processing n=22 x=3.5 Violation (NOP) processing n=23 x=3.5 Mitigation Plan processing n=24 x=3.6 Average=3.5 1-Fails to Meet 2- Almost Meets 3 - Meets 4-Exceeds 5- Greatly Exceeds Please rate the Enforcement staff's customer service ability (responsiveness, professionalism, problem solving, and communication skills): Customer Service n=34 x=4.2 1-Poor 2-Below Average 3-Average 4-Good 5-Excellent Please share your suggestions for improving our Enforcement program: The Enforcement Team is readily available by phone or . We are just moving into the Mitigation Plan phase and Violation Processing so I do not have any substantial comments regarding those areas. The enforcement group, in particular Bob Reynolds, has been a tremendous help to our Registered Entities. We are registered in many NERC Regions, however, anytime I have a question I always feel comfortable discussing any possible issues or questions with the SPP RE team, especially Bob. The mitigation process is not well organized in terms of clarity of violations and timeliness in processing mitigation activities. Processing violations still is a slow process. Needs better response time for ongoing self report & settlements One person (SPP STAFF) in the last years audit Needs to get in the real world we don't have any cyber assets yet he wanted to nail us to the wall. He (Hint) was insulting that we needed an electrical engineer to train us. We are electrical engineers Duh! With more education than that auditor! None SPP RE Stakeholder Satisfaction Survey Report 11

261 Southwest Power Pool Regional Entity Timely turnaround, good questions, good coordination with other regions. Greatly appreciated. Enforcement has been very helpful the past year. Quantitative Results Determine internal procedures and how items should be handled for consistency so registered entities are clear on expectations and can support those expectations. We are interested in successful outcomes for all but need to understand to support SPP RE Stakeholder Satisfaction Survey Report 12

262 Southwest Power Pool Regional Entity Quantitative Results Event Analysis/Lessons Learned and Reliability Assessments How well do our Event Analysis/Lessons Learned and Reliability Assessment programs meet your expectations? Reliability Assessments n=19 x=3.2 Event Analysis/Lessons Learned n=21 x=3.3 Average=3.3 1-Fails to Meet 2- Almost Meets 3 - Meets 4-Exceeds 5- Greatly Exceeds Please rate our Event Analysis/Lessons Learned and Reliability Assessment staff's customer service ability (responsiveness, professionalism, problem solving, and communication skills): Reliability Assessments Responsiveness n=23 x=4.3 Event Analysis/Lessons1-Poor 2-Below Average 3-Average 4-Good 5-Excellent Learned 1-Fails 2- Almost 3 - Meets 4-Exceeds 5- Greatly Please share your suggestions to Meet for Meets improving our Event Analysis/Lessons Learned Exceeds and Reliability Assessment programs: Other than viewing WebEx presentations or Workshop presentations, BPU does not have any experience to draw from regarding this topic. None. Alan is always very responsive SPP RE Stakeholder Satisfaction Survey Report 13

263 Southwest Power Pool Regional Entity Quantitative Results Outreach How well does our Outreach program meet your expectations? Videos n=38 x=3.5 Webinars n=43 x=3.6 Workshops n=43 x=3.7 Newsletters n=45 x=3.7 Average=3.6 1-Fails to Meet 2- Almost Meets 3 - Meets 4-Exceeds 5- Greatly Exceeds Please rate our Outreach program's responsiveness to your needs: Responsiveness n=43 x=4.3 1-Poor 2-Below Average 3-Average 4-Good 5-Excellent Please share your suggestions for improving our Outreach program: 1 Outreach is the "shining star" of the SPPRE Compliance effort. The training videos provide a wealth of education regarding NERC Compliance activities. Newsletters are timely and full of helpful information. The Workshops provide informative presentations and the opportunity for valuable face-to-face discussions. BPU has also found the Outreach events to be very beneficial. Greatly improved from the past Don't Need it way to many s how does one unsubscribe??? Outreach does a good job providing "mock audit" services. A lot more could be done, but what is done is effective. None. we are very pleased, it is great to get a straight answer when looking for interpretation. Other regions are not nearly as helpful or concise. Emily does a great job with the Workshops. I believe SPP RE has the best outreach of all of the RE's. The videos are extremely helpful and Emily does a great job coordinating and structuring the workshops and newsletters SPP RE Stakeholder Satisfaction Survey Report 14

264 Southwest Power Pool Regional Entity Quantitative Results This one would be ranked higher due to the CIP team efforts for outreach as I believe the team has done an outstanding job in trying to communicate proactively and the team has clearly educated themselves in relationship to the documentation available on the new CIP standard. As mentioned earlier, the 693 team should spend some time focusing on the outreach efforts and providing useful guidance SPP RE Stakeholder Satisfaction Survey Report 15

265 Southwest Power Pool Regional Entity Quantitative Results Electronic Tools How well do our electronic tools meet your expectations? webcdms n=46 x=3.2 EFT Server n=38 x=3.1 RE webpages of SPP.org n=47 x=3.4 Average=3.2 1-Fails to Meet 2- Almost Meets 3 - Meets 4-Exceeds 5- Greatly Exceeds Please share your suggestions for improving our electronic tools: webcdms is a bit "clunky" at times. As a new user (1 year +), I have had to fumble my way through the system without any user guide or internal (BPU) guidance. Entities should be able to look at (Read Only) docs uploaded to EFT Server. OATI CDMS does not support the latest versions of Internet Explorer. This is a problem which needs to be resolved by SPP RE. If OATI doesn't update than SPP RE should look at another vendor. to many changes Sometimes there are "technical issues" trying to upload to the EFT server. The EFT server has difficulty accepting larger files sizes that were specifically requested by the RE/auditors. It appears the auditors for 693 have an easier time opening and viewing certain files that the CIP auditors had a difficult time with. See comments above on RAPA and TFEs. We are a participant in MRRE would like to see some progress on portal and reporting criteria. Seems to be all talk up to this point. SPP RE web pages are difficult to navigate. The EFT Server only permits single document upload, which creates a cumbersome and time consuming process SPP RE Stakeholder Satisfaction Survey Report 16

266 Southwest Power Pool Regional Entity Quantitative Results Registration and Certification How well did SPP RE's processes meet your expectations?? BES Definition n=24 x=3.5 Certification n=17 x=3.5 Registration n=20 x=3.4 Average=3.5 1-Fails to Meet 2- Almost Meets 3 - Meets 4-Exceeds 5- Greatly Exceeds Please rate the Registration & Certification staff's customer service ability (responsiveness, timeliness, technical expertise): Responsiveness n=29 x=4.1 1-Poor 2-Below Average 3-Average 4-Good 5-Excellent 2015 SPP RE Stakeholder Satisfaction Survey Report 17

267 Southwest Power Pool Regional Entity Quantitative Results Overall Performance n=46 x= n=58 x= n=56 x= n=60 x= n=47 x=3.8 1-Poor 2-Below Average 3-Average 4-Good 5-Excellent The 2015 overall satisfaction rating of 4.1 was the same as in SPP RE Stakeholder Satisfaction Survey Report 18

268 Southwest Power Pool Regional Entity Qualitative Results Qualitative - Dissatisfaction Please share other comments regarding your dissatisfaction with SPP RE There have not been a lot of changes in staffing in the past year, however the recent changes in staffing in the Enforcement group has not clearly identified who is leading the effort (at least to our understanding). A clearer definition of the Enforcement group and responsibilities would help us improve our efforts in meeting compliance/enforcement goals. Enforcement is understaffed resulting in lengthy mitigation. None See previous surveys. Nothing has changed. Seems to be some turnover in the enforcement side, this makes things difficult when you are working an open violation and it gets passed on from one worker to the next. Lost Tyler and Tasha within 1 year. Before that Clay and Monty. PV and self report response time needs to be improved because of the backlog. Staffing seems to change a lot with this group. Enforcement needs more independence from the audit team. None None. Overall the RE has done a good job. However, transition and adoption of the Risk Based Compliance Approach has been painfully slow. Resources have not been allocated sufficiently to this important effort. Behind the other Regions in implementation and adoption. Self Logging needs to be more widely offered SPP RE Stakeholder Satisfaction Survey Report 19

269 Southwest Power Pool, Inc. Qualitative Results Qualitative - Satisfaction Please share other comments regarding your satisfaction with SPP RE: Well done Audit. Reasonable expectations. My first experience leading BPU into a CIP Audit was to say the least "educational". I found the CIP Audit Team to be very genuine and helpful and did not find them to be confrontational. All RE employees seem to be genuinely concerned with entity issues, and with doing their best with each situation. None Recently completed a spot-check audit for GOP. Audit team was courteous and professional, willing to answer any questions and address any concerns we had. Mike Hughes and Steven Keller have been prompt and accurate to work with. In all areas of interaction with SPPRE, the staff does a great job of communicating what they're looking for while also being flexible to our situation. I just know that when I need to deal with the SPP RE, things will be done professionally. My staff attends RE training sessions, which are very good. Technical questions are addressed in a thorough and timely manner. Outreach and willingness to discuss issues openly has been great. I am hopeful that some of this continues even after V5 effective date. Greg Sorenson and Kevin Perry are our primary contacts at SPP. We have been very impressed with their customer service. They respond to short requests quickly and thoroughly. We know we are getting industry expertise when we discuss or meet with them. For example, Kevin met with us to discuss CIP v5 and gave us the answers we needed to further develop our program on short notice. Likewise, Greg was able to make arrangements to meet with us and gave us answers that we were able to use to further develop our program. Staff has always been more than willing to assist in any area registered entities are seeking guidance for SPP RE Stakeholder Satisfaction Survey Report 20

270 Southwest Power Pool, Inc. Qualitative Results Qualitative - Improvement What specific things could we do to EXCEED expectations? The biggest concern I have is getting in touch with the Audit team (primarily CIP) on a timely basis. Between audits, training, conferences and other travel, their availability can be very limited. Usually the questions I have are not lengthy but also are usually of a timesensitive nature. Think through each new "program" possible problems and have procedures in place prior to issuing to entities. none Adequate Enforcement staffing level and expertise to allow for independence and reasonable turn around time. Perhaps provide a bit more information around the status of new standards and provide a synopsis of industry comments. I realize this is above and beyond but it would be a great service to stakeholders. IC evaluations on specific Standards as requested by the Entity. Eliminate periodic reporting requirements as appropriate. Reduce Audit 'burden' as much as possible. I think this is underway with the off site reviews. I think the effort put forth for all areas of interaction with registered entities is stellar. Good people! 2015 SPP RE Stakeholder Satisfaction Survey Report 21

271 2015 Stakeholder Satisfaction Survey Results November 16, 2015 SPP Communications Department

272 Southwest Power Pool, Inc. Executive Summary The SPP Communications Department launched the 2015 Stakeholder Satisfaction Survey on October 15, Staff distributed 2,752 survey invitations to organizational group members, market participants, and other individuals who had interacted with SPP during the previous twelve months, either through meetings, training, customer relations interactions, or other exchanges. The survey s response rate rose from twelve percent in 2014 to fifteen percent in 2015, with the overall number of responses more than doubling from 181 to 410. The average score went up in 2015 for every service and metric assessed in the survey, with just one exception which stayed the same. Comparison charts for the last two years data follow: Question: Overall how well does SPP s provision of the following services meet your expectations? Service Change Reliability Coordination Scheduling Tariff Administration Generation Interconnection/Aggregate Studies Transmission Expansion Planning Settlements/Invoicing Meeting Planning/Organization Compliance Support (RTO)/ RTO Member Compliance Assistance Training Integrated Marketplace Question: Based on your experience, please rate SPP staff's performance against your expectations in the following areas: Service Change SPP staff members are responsive to my needs. SPP staff members provide accurate information upon request. SPP staff members resolve problems to my satisfaction. Overall, I am satisfied with SPP's service Stakeholder Satisfaction Survey Results 1

273 Southwest Power Pool, Inc. The following report is organized in three sections: 1. A report of raw response data from the survey tool; 2. Charts showing the average scores for each survey question, separated by respondent group (Member, Customer, Regulatory, Other); and 3. A full, unedited report of responses to open-ended survey questions Stakeholder Satisfaction Survey Results 2

274 Southwest Power Pool, Inc. Section I: Survey Results 2015 Stakeholder Satisfaction Survey Results 3

275 SPP Stakeholder Satisfaction Survey Results What type of relationship does your organization have with SPP? Response percent Response total Member 79.61% 324 Customer 7.37% 30 Regulatory 4.91% 20 # Responses 2 agent 17 Consultant representing utility 41 Neighboring entity 68 Independent Director 71 market participant 88 SPP Director 90 Vendor 106 Stakeholder representative 141 Consultant to Member of SPP 154 interconnected Utility 162 Vendor 164 NEIGHBOR 196 Consultant to Members 201 Ratepayer Other 203 Board of Directors 210 MP 213 Particpants 215 Associate Member (Non-Transmission Owner in SPP) 242 Former member, continue to participate in training 273 Consultant 275 landowner traversed by the SWEPCO 345 kv line to Kings River 277 Neighboring BA 278 Market Participant 290 Non-SPP member participating in SPP 312 Market Participant 326 Posible applicant 328 Consultant 338 IPP 361 Contractor 373 Agent of Customer 377 Vendor, Consultant 401 Consultant 407 Financial Counterparty 8.11% 33 Statistics based on 407 respondents; 4

276 What is your 5role within your organization? Response percent Response total Operations 24.76% 101 Engineering 13.24% 54 Technical / IT 3.43% 14 Policy / Regulatory / Legal 10.05% 41 Executive (Director or Officer) Accounting / Finance / Settlements 12.99% % 46 Compliance 12.5% 51 Training 2.94% 12 Other 8.82% 36 Statistics based on 408 respondents; 5

277 If your role is 6"other", please specify: Response total # Responses 6 Power Supply Planning 17 Consultant supporting utility procurement and project development. 24 communications and community relations 29 Communications 30 Project Management 32 System Planning Engineer. I assist in model building and run powerflow, short-circuit, and transient stability studies. 63 Electric Production Superintendent 71 Congestion portfolio manager (trader) 90 Data analyst 91 Risk Management 95 Mid-Term trader and orgination 98 Strategic Planning 106 Representative of stakeholder group 109 In a small organization I wear many hats. I am involved in planning, operations, regulatory and compliance activities. 137 Planning Analyst 145 Commissioner 157 Monitor SPP 181 Outage Coordinator. 182 All of the above. 201 Gather information about and oversee SPP planning for transmission expansion. 203 Board of Directors 224 Compensation 238 Settlemnets 256 Planning, some IT related to market participation, reporting on settlements, market activity, hedging, fuel variance, etc. 274 Energy Trader My role is to care for my family and friends. When my neighbors called me about 2 routes over my water well, septic and driveway, a few feet from my front door, not shown on the SWEPCO route map, I called Mathews' office requesting notification. My letter, addressed to LANDOWNER arrived within five days of the 30-day deadline, April My life changed. I am now a power generator, with a 5.5 kw rooftop solar system and plans for Powerwall batteries and a Chevy Volt. Last week, at the Wild Wilderness Gentry Safari condemnation re-trial, the Jury awarded 100 percent of what the Safari asked for - they deserved $2 million in compensation, but the Judge once again got in the way. SWEPCO will appeal just because they can and get 12 percent of whatever they spent on the fictitious 14 mile 345 kv SPP requested based on false demand forecast. SPP benefits from a larger footprint and new transmission lines, more revenue to give SPP executives "generous" compensation packages and Thursday morning office massages for everyone else. 276 Trader 288 I am on the project cost working group and wasn't sure this fit under the other categories. 301 Energy Manager - Ops and Finance 318 Consultant 320 Consultant/Representative 338 Interested observer. 345 Market policy and trading 352 Rates 359 Director of Wholesale Electric Operations 361 Support in most of the categories listed 368 Load Serving Entity 370 Trader 372 Manage the trading group 398 Project manager 404 Supt. of Operations / NERC Compliance Coordinator 406 Marketing 409 Operations Training Manager and NERC Compliance Specialist. Statistics based on 43 respondents; 6

278 How often do 7you interact with the following SPP services? Never Rarely A few times per year Monthly Weekly Daily Response total Reliability Coordination 43.09% (159) 26.02% (96) 15.45% (57) 5.42% (20) 5.69% (21) 4.34% (16) 369 Scheduling 56.13% (206) 20.71% (76) 9.54% (35) 4.36% (16) 2.45% (9) 6.81% (25) 367 Tariff Administration 51.78% (189) 20% (73) 18.36% (67) 4.93% (18) 4.11% (15) 0.82% (3) 365 Generation Interconnection/Aggregate Studies 49.45% (179) 22.1% (80) 17.68% (64) 8.29% (30) 2.21% (8) 0.28% (1) 362 Transmission Expansion Planning 50.83% (184) 19.06% (69) 16.58% (60) 9.67% (35) 3.32% (12) 0.55% (2) 362 Settlements/Invoicing 47.53% (173) 17.58% (64) 11.26% (41) 9.34% (34) 5.5% (20) 8.79% (32) 364 Meeting Planning/Organization 37.47% (136) 18.18% (66) 21.49% (78) 17.91% (65) 4.13% (15) 0.83% (3) 363 RTO Member Compliance Assistance 45.73% (166) 25.34% (92) 19.01% (69) 8.82% (32) 0.55% (2) 0.55% (2) 363 Training 18.98% (71) 26.47% (99) 39.31% (147) 12.3% (46) 2.67% (10) 0.27% (1) 374 Integrated Marketplace 30.44% (112) 15.76% (58) 14.95% (55) 10.05% (37) 7.34% (27) 21.47% (79) 368 How often do you interact with the following SPP services? Average score Reliability Coordination 2.18 Scheduling 1.97 Tariff Administration 1.92 Generation Interconnection/Aggregate Studies 1.93 Transmission Expansion Planning 1.97 Settlements/Invoicing 2.34 Meeting Planning/Organization 2.36 RTO Member Compliance Assistance

279 Training Integrated Marketplace 3.13 Statistics based on 385 respondents; 8

280 Please mark 9the SPP staff and/or service with which you have the most interaction: Response percent Response total Reliability Coordination 10.54% 39 Scheduling 3.24% 12 Tariff Administration 6.22% 23 Generation Interconnection/Aggregate Studies Transmission Expansion Planning 2.97% % 46 Settlements/Invoicing 9.73% 36 Meeting Planning/Organization RTO Member Compliance Assistance 7.3% % 43 Training 8.38% 31 Integrated Marketplace 27.57% 102 Statistics based on 370 respondents; 9

281 Overall, how 10 important are the following SPP services to you? If your organization does not use a service, please skip that service. 1-Not Important Score=1 2-Moderately Important Score=2 3- Important Score=3 4-Very Important Score=4 5- Critical Score=5 Response total Average score Reliability Coordination 6.77% (18) 7.14% (19) 20.3% (54) 24.44% (65) 41.35% (110) Scheduling 11.91% (30) 9.52% (24) 27.78% (70) 28.97% (73) 21.83% (55) Tariff Administration 11.58% (30) 10.81% (28) 28.96% (75) 30.89% (80) 17.76% (46) Generation Interconnection/Aggregate Studies 8.56% (22) 14.4% (37) 31.91% (82) 28.02% (72) 17.12% (44) Transmission Expansion Planning 8.43% (22) 12.64% (33) 25.67% (67) 33.33% (87) 19.92% (52) Settlements/Invoicing 11.4% (31) 6.99% (19) 19.49% (53) 30.88% (84) 31.25% (85) Meeting Planning/Organization 10.36% (26) 18.73% (47) 43.03% (108) 20.32% (51) 7.57% (19) RTO Member Compliance Assistance 8.49% (22) 14.67% (38) 32.43% (84) 32.05% (83) 12.36% (32) Training 2.37% (7) 14.87% (44) 37.5% (111) 35.81% (106) 9.46% (28) Integrated Marketplace 7.17% (20) 6.09% (17) 16.49% (46) 29.39% (82) 40.86% (114) Average rating 3.45 Overall, how important are the following SPP services to you? If your organization does not use a service, please skip that service. Average score Reliability Coordination 3.87 Scheduling 3.39 Tariff Administration 3.32 Generation Interconnection/Aggregate Studies 3.31 Transmission Expansion Planning

282 Settlements/Invoicing Meeting Planning/Organization 2.96 RTO Member Compliance Assistance 3.25 Training 3.35 Integrated Marketplace 3.91 Statistics based on 346 respondents; 11

283 Overall, how 12 well does SPP's provision of the following services meet your expectations? If your organization does not use a service, please skip that service. 1-Fails to Meet Score=1 2-Almost Meets Score=2 3-Meets Score=3 4- Exceeds Score=4 5-Greatly Exceeds Score=5 Response total Average score Reliability Coordination 0% (0) 3.18% (7) 62.73% (138) 29.09% (64) 5% (11) Scheduling 0% (0) 2.11% (4) 68.95% (131) 25.26% (48) 3.68% (7) Tariff Administration 4.06% (8) 5.58% (11) 67.51% (133) 19.8% (39) 3.05% (6) Generation Interconnection/Aggregate Studies 0.51% (1) 5.08% (10) 69.54% (137) 21.32% (42) 3.55% (7) Transmission Expansion Planning 3.38% (7) 7.73% (16) 65.22% (135) 21.74% (45) 1.93% (4) Settlements/Invoicing 1.91% (4) 6.22% (13) 62.2% (130) 24.4% (51) 5.26% (11) Meeting Planning/Organization 0% (0) 4.06% (8) 57.87% (114) 30.46% (60) 7.61% (15) RTO Member Compliance Assistance 1.93% (4) 4.83% (10) 61.84% (128) 26.57% (55) 4.83% (10) Training 0.4% (1) 6% (15) 56.4% (141) 28.8% (72) 8.4% (21) Integrated Marketplace 2.26% (5) 4.07% (9) 58.82% (130) 27.6% (61) 7.24% (16) Average rating 3.28 Overall, how well does SPP's provision of the following services meet your expectations? If your organization does not use a service, please skip that service. Average score Reliability Coordination 3.36 Scheduling 3.31 Tariff Administration 3.12 Generation Interconnection/Aggregate Studies 3.22 Transmission Expansion Planning

284 Settlements/Invoicing Meeting Planning/Organization 3.42 RTO Member Compliance Assistance 3.28 Training 3.39 Integrated Marketplace 3.34 Statistics based on 327 respondents; 13

285 Based on your 14experience, please rate SPP staff's performance against your expectations in the following areas: 1-Fails to Meet Score=1 2-Almost Meets Score=2 3-Meets Score=3 4- Exceeds Score=4 5-Greatly Exceeds Score=5 Response total Average score SPP staff members are responsive to my needs. 3.18% (11) 6.07% (21) 34.97% (121) 38.15% (132) 17.63% (61) SPP staff members provide accurate information upon request. 3.76% (13) 5.2% (18) 42.2% (146) 35.55% (123) 13.3% (46) SPP staff members resolve problems to my satisfaction. 4.97% (17) 8.48% (29) 42.98% (147) 32.16% (110) 11.4% (39) Overall, I am satisfied with SPP's service. 4.61% (16) 6.05% (21) 38.91% (135) 35.45% (123) 14.99% (52) Average rating 3.49 Based on your experience, please rate SPP staff's performance against your expectations in the following areas: Average score SPP staff members are responsive to my needs. SPP staff members provide accurate information upon request. SPP staff members resolve problems to my satisfaction Overall, I am satisfied with SPP's service. 3.5 Statistics based on 348 respondents; 14

286 Do you participate 15 in SPP committee, working group, or task force meetings? Response percent Response total Yes 58.92% 208 No 41.08% 145 Statistics based on 353 respondents; Please rate SPP's service and support of committee, working group, and task force meetings as they relate to your expectations. 1-Fails to Meet Score=1 2-Almost Meets Score=2 3-Meets Score=3 4- Exceeds Score=4 5-Greatly Exceeds Score=5 Response total Average score Meeting schedules and logistics are communicated in a timely and clear manner. 1.93% (4) 5.8% (12) 34.78% (72) 41.55% (86) 15.94% (33) Meeting facilities are planned appropriately and meet the needs of the group. 0% (0) 5.34% (11) 39.32% (81) 38.35% (79) 16.99% (35) Meeting materials are well-prepared and distributed in a timely manner. 0.97% (2) 11.11% (23) 41.55% (86) 33.33% (69) 13.04% (27) Average rating 3.59 Please rate SPP's service and support of committee, working group, and task force meetings as they relate to your expectations. Average score Meeting schedules and logistics are communicated in a timely and clear manner. Meeting facilities are planned appropriately and meet the needs of the group. Meeting materials are well-prepared and distributed in a timely manner Statistics based on 207 respondents; 15

287 Do you interact 16 with other Regional Transmission Organizations and/or transmission providers? Response percent Response total Yes 52.56% 185 No 47.44% 167 Statistics based on 352 respondents; Overall, how does SPP compare with the Regional Transmission Organization/transmission provider with which you interact most often? Response percent Response total Much worse 3.26% 6 Somewhat worse 9.24% 17 About the same 39.67% 73 Somewhat better 24.46% 45 Much better 23.37% 43 Mean 3.55 Statistics based on 184 respondents; 16

288 Southwest Power Pool, Inc. Section 2: Average Scores by Respondent Group 2015 Stakeholder Satisfaction Survey Results 17

289 Southwest Power Pool, Inc. Average Scores by Respondent Group How often do you interact with the following SPP services? Member Customer Regulatory Other 2015 Stakeholder Satisfaction Survey Results 18

290 Southwest Power Pool, Inc. Average Scores by Respondent Group Overall, how important are the following SPP services to you? Member Customer Regulatory Other 2015 Stakeholder Satisfaction Survey Results 19

291 Southwest Power Pool, Inc. Average Scores by Respondent Group Overall, how well does SPP's provision of the following services meet your expectations? Member Customer Regulatory Other 2015 Stakeholder Satisfaction Survey Results 20

292 Southwest Power Pool, Inc. Average Scores by Respondent Group Based on your experience, please rate SPP staff's performance against your expectations in the following areas: Member Customer Regulatory Other 2015 Stakeholder Satisfaction Survey Results 21

293 Southwest Power Pool, Inc. Average Scores by Respondent Group Please rate SPP's service and support of committee, working group, and task force meetings as they relate to your expectations Member Customer Regulatory Other 2015 Stakeholder Satisfaction Survey Results 22

294 Southwest Power Pool, Inc. Section 3: Comments 2015 Stakeholder Satisfaction Survey Results 23

295 Southwest Power Pool, Inc. Comments Please list any characteristics of SPP with which you are SATISFIED. 1. Modeling & Data Integrity, EMS Modeling, IT 2. responsive to questions 3. Friendly people. Just not responsive 4. SPP staff works extremely hard to provide stakeholders/working groups with information when requested. 5. Earlier this year I had numerous questions on the aggregate study process and capacity requirements. I was asking these questions on behalf of a small utility client. I found the staff to be knowledgeable, responsive, and very helpful. 6. Response to requests that support reliability 7. The entire RTO organization is superb. Always helpful and responsive, willing to listen and take member input. 8. Friendliness of staff, openness, willing to engage in dialog. 9. openness, willing to listen and consider suggestions. Great meeting communciatons and doc's Staff very friendly and responsive Compliance Workshops are very organized, and locations are convenient Training/Outreach is the best compared to the other Regions our entity reports to. 11. RMS is a great tool to questions answered and tracked. Training has been very good too. 12. Willingness to interact and resolve any problems and/or address any concerns. 13. Staff is good to work with. 14. Staff is friendly and responsive. 15. SPP's member driven approach provides us a lot of value SPP Staff provides support in a professional manner 18. Very prompt response to questions, very patient with new member questions (we are a new member). 19. I am very ssatisified with the responses fromt he RTO. They respond to questions very quickly. The information provided is complete and very helpful Stakeholder Satisfaction Survey Results 24

296 Southwest Power Pool, Inc. Comments 20. response time is often very quick and staff does a good job of finding appropriate subject matter experts to answer my questions 21. We have had IT issues related to market submissions. Several specific SPP staff members have gone far above & beyond to speak to us on the phone and via to troubleshoot the problems. Thanks in particular to Tanya Sorrells! 22. Timely repsponse to questions Resolving issues RMS response 23. Appreciate the fact that SPP is so member driven. 24. Outreach and meeting coordination is exceptional. Plan to get more involved in training opportunities but have not participated at this point. Webinars for commenting on Reliabilty Standards changes. Committee meetings and compliance calls. Facilities in Little Rock, Arkansas. Genuine interest of staff to assist, guide and provide other help with compliance issues. 25. The Culture and spirit of cooperation 26. Responsiveness is something SPP does well. 27. SPP has done an excellent job making market data available and easy to use to the public. As a vendor who serves numerous SPP participants, it is very important to us to be able to process and present market data in a timely and accurate format to participants. SPP makes this fairly easy for us. The advance notice and documentation prior to changes has also been excellent. Client support has also always been very responsive and helpful. SPP is among our favorite ISOs to deal with support-wise. 28. As I am new to my position, my experiences are limited. I will say Ron Losh has been very helpful in navigating any compliances questions I have had. 29. The Reliability Coordinators and Operations Planning groups are excellent to work with. They are very responsive and are willing to work with members to resolve issues that come up. The Standards Review group is also a positive within SPP and the team provides value to the membership. 30. Generally concerned about meeting stakeholder needs 31. Working group and its members seem to look after the overall health of the organization in a collaborative fashion instead of their own needs and wants. 32. Staff tries very hard to please members. The accessibility of the Board to stakeholders is a very good. 33. Being newly brought into the SPP family, it has been painless. The RC's and Study engineers have been friendly, helpful, responsive to questions/needs and overall fantastic to work with Stakeholder Satisfaction Survey Results 25

297 Southwest Power Pool, Inc. Comments 34. Customer service is excellent - Clint Savoy and Dena G. have never disappointed. Staff is always helpful and professional. As new members of SPP we have been treated very well. 35. attention to meeting customer's needs 36. Outreach efforts. 37. Outreach efforts. 38. The number of compliance forums. Usually quick turnarounds when a question is asked. 39. Promptness, and ability to talk to Shift Engineer if needed 40. The professionalism. The knowledge. 41. Great group of people; always a pleasure to work with them. Keep up the god work! 42. Testing has gone well and the meeting to review testing was efficient. 43. They have good customer service and are always trying to improve their relationship with its members. 44. Very satisfied with Dickie Hooton who always answers my questions quickly and correctly. 45. Availability, responsiveness and knowledge. 46. NTR 47. Staff is generally very friendly & helpful 48. Training staff is very responsive during Restorations drills. 49. SPP is clearly always striving to satisfy its members and get better through technology and its expertise while still trying to be cost effective. 50. people working for SPP are very nice and always found a way to answer my inquiries 51. They are competent in technical matters. 52. Operations training OTWG 53. Very helpful responsive staff 54. Newsletter and information sharing 55. Accounting is very good about contacting me if they have not received my payment by a certain time on due date Stakeholder Satisfaction Survey Results 26

298 Southwest Power Pool, Inc. Comments 56. Always friendly and helpful 57. We recently joined SPP so we've been working with a number of people and all of them have been great to work with. They all shared a sense of common cause and worked with a sense of urgency to complete tasks. SPP has a great group of people who are good to work with. Other RTO could learn a thing or two from SPP. 58. Extensive training offered. 59. Very easy to communicate and work with when issues arise. 60. Organizational Committee Structure Member Driven and they act accordingly 61. SPP staff is very receptive to feedback and works really hard to get things done 62. The focus on member driven decision making is important. SPP staff members seem to make sincere efforts to provide useful and timely information. 63. Notifications are timely and informative 64. Stakeholder process, Staff efforts to help, meetings well planned and conducted 65. TRAINING 66. SPP may not always act, but they do listen 67. None 68. none 69. Ease of access to personnel to resolve issues. Many questions answered through websites. 70. Whenever there is an issue, SPP is very quick to respond. 71. Communication, discussion, and scheduling of seams issues. 72. Stakeholder input is valued highly. 73. Currently in the process of settlement and management is not up front and forth coming with requirements. Very little has been done to assist us in necessary preparation for SPP requirements. 74. Appreciate the stakeholder process and ability for members to express their positions 75. Collegial atmosphere with spirited discussion 2015 Stakeholder Satisfaction Survey Results 27

299 Southwest Power Pool, Inc. Comments 76. SPP is good at attempts with outreach and training but unfortunately its governance structure makes all the meetings and voting unmanageable. It typically just requires companies to hire someone to follow all the meetings and thereby just add another layer to the red tape. 77. Market design and operations staff listen to stakeholders and strive for continuous improvement. 78. Responsive to requests on what is required of SPP BA/RC for compliance purposes. 79. Highly competent and dedicated staff. Very professional. 80. Truly collaborative and willing to lead when the time comes for a decision to be made. 81. SPP staff listens to stakeholders and works to meet or exceed their needs. 82. Reaching out to industry for NERC related requirements and providing recommendations from an RTO perspective. 83. Responsive to my requests for information. 84. Usually, the responses from SPP staff are prompt and helpful. 85. Responsive member support 86. SPP tends to respond to questions/needs in a timely manner. SPP's settlements seem to have improved this year. 87. Attentiveness to members Communication Desire for collaboration 88. Overall, the market seems to be fairly efficient and we do not see a lot of illogical prices or commitments. We do not see a lot of system issues on SPP's end and overall things just seem to work. 89. Timely responses In the early 1900's people wanted electric lights, poles and wires were needed, random lines were added, one at a time 2. Everyone became a ratepayer, and new transmission was needed to avoid frequent outages. Incentives and eminent domain was granted. 3. Wheeling electrons to high-profit markets changed the nature of utilities, no longer service providers but high profit out of control corporations, using fictitious names to hide abuses to landowners. Remote, bulk power generation and interstate transmission of coal power, with low-income states exporting power to far away centers with responsible environmental rules destroyed life on Earth and the benign climate that existed for millions of years. Planet Earth will go on and new life may develop in millions of years. The new civilization will never know we were once here. 4. Distributed Solar generation and lithium storage technologies can save homo-sapiens. The 2015 Stakeholder Satisfaction Survey Results 28

300 Southwest Power Pool, Inc. Comments cat is out of the bag. Responsible utilities will join the solar revolution integrating microgrids and maintain the existing grid, other utilities will hire more lobbyists to keep the old rules and try to save stranded assets. Keeping the lights on is a waste of energy. The last woman on Earth will have abundant oil and gas, transmission lines and power but will die from lack of clean air, clean water, and healthy food. Let's hope she remembers to turn the lights off - it would be a tragedy to keep the lights on a lifeless planet like Venus. What will it take before deniers face the music? AEP shareholders should demand moral leadership, they want to see profits every quarter, not just for a few years more. SPP needs to let go Lanny Nickell and his planning crew, and hire new engineers trained in Distributed Generation and Storage. The Rock Mountain Institute, Tesla, and many other 21st-century technology companies have the necessary talent. Eliminating wasted energy and using what we need to "have a cold beer and a hot shower" is the real challenge. It is said "The Stone Age did not end for lack of rocks" The issue tracking system is nice. 92. Response to questions and issues 93. I appreciate SPP's transparency and the helpfulness of staff. 94. Generally questions submitted through the RMS are answered in a timely and effective manor. Staff is generally accessible and knowledgeable when a question is asked and a response is needed. 95. Nice to see the next day market up and running. Progress in holding the line on costs. IS integration. 96. We brought an issue to SPP staff last year and at first they weren't responsive because they weren't understanding the complex problem. Once they understood the problem they were very responsive and critical to solving the issue. While SPP staff wasn't meeting our expectations during our initial dicussions, ultimatley we were extremely satisfied. 97. Overall stakeholder process 98. Modeling group - Gerald Williams, Joe Bumgarner Customer Relations - Clint Savoy, Don Martin IS Integration - Clint Savoy, Dena Geissman 99. I think SPP does a very good job in every area I really appreciate the effort of several folks at SPP. (Clint Savoy, Don Martin, Dena Geissman) 101. RTO NERC audit group 102. Meeting venues, meals and refreshments are appropriate to the level of meeting. SPP Staff in general is friendly and accommodating Am satisfied with what I am involved Stakeholder Satisfaction Survey Results 29

301 Southwest Power Pool, Inc. Comments 104. all 105. Openness Stakeholder driven Truthful resourceful 106. SPP staff does a great job of encouraging and facilitating collaboration among all stakeholders I believe the staff are excellent and are able to explain complex procedures/processes well. The response to questions during the integration process was also very timely and got us right to the people with answers if there was an answer. The SPP culture is in line with our company's culture and thus far has been a good fit Online training is improving. Seems like logging into Simulator for training is cumbersome but improving as well. Your organization is definitely improving in all areas. I cannot think of anything where your not improving The RC, RT, RUC, and CROW individuals that I line up with on my rotation are exceedingly helpful. They do a great job and help make mine easier Tim Miller and his group have been tremendously helpful to us in working with our State Estimator. They respond quickly to questions we have, offer advice, share programs they have written, and work hard to get us the data we request from other companies. I wish all RTOs were like SPP Staff...always friendly, approachable, and helpful 112. There is only one person in Tariff Administration who is not responsive. The rest exceed my expectations. SPP is open to stakeholder concerns. The meetings encourage stakeholder involvement The people are fantastic. We might not agree all the time, but our relationship is always kept professional and cordial. I've known them for a long time and they have always treated me well. Your employees really are your best resource Staff are responsive and positive--great to work with. Meeting facilities always great. Everyone seems pleased to work at/for SPP and it shows. TY 115. Professional staff - very talented - most are very helpful, friendly and eager SPP Portal 117. Market User Interface works well 118. Training...I find the NERC training SPP provides very valuable when it comes to operating and compliance issues Timely matter in responding to my s Stakeholder Satisfaction Survey Results 30

302 Southwest Power Pool, Inc. Comments 120. Training program availability and versatility: many offerings across a wide range of subject matters. Interaction with training staff: they are quickly responsive, knowledgeable and pleasant to work with Staff are friendly and helpful Staff is always willing to work with stakeholders on issues to provide assistance as requested and also to testify for transmission siting on the need of the projects SPP directs members to build Excellent Listening & Communication - staff attitude is excellent, appreciate members & member questions / interaction & always anxious to answer questions & help - stakeholder interaction & transparency excellent 124. SPP personnel are good to work with and they try to understand and resolve concerns 125. Training Staff strives to accommodate the many members Typically intereseted in understanding and resolving the issue/problem/concern when such things arise. cooperative effor to resolve matters in a reasonable manner 127. Their strategic initiatives and the quality of people that are employed RTO responsiveness Training Content 129. The staff is responsive and very helpful. Thank you! 130. The government affairs department exceeds my expectations. They are very effective on Capitol Hill. Overall, I am very satisfied with their work Timeliness and assistance in NERC issues The group I work with Carl, Kim, Lisa, Rachel, and Nancy either have an answer for me or research it. We have a great working relationship and work things out in order to balance SPP (WAUE) Stakeholder Satisfaction Survey Results 31

303 Southwest Power Pool, Inc. Comments Please list any characteristics of SPP with which you are DISSATISFIED. 1. more meetings should be held in Kansas City. 2. Getting and answer or information from Staff is like pulling teeth. 3. Being a new member of SPP, some tasks with joining were unclear and requested data submittals changed often. 4. The provision of market data is spotty compared to other markets. Things like actual zonal load, masked generator bids, transmission maps, etc. 5. settlements 6. Interaction with the RE tends to be confrontational, unprepared, and arbitrary - one time "bound by the letter of the Standards" and the next time "that's our professional judgement" 7. quality of work, unwillingness to make a decision that appear driven by fear of tariff/protocol violations. At times, appear to hide / use vagueness in these documents to find the path of least resistance / effort. 8. Need to increase use nationally standardized portfilo and project management definations and processes on transmission work overseeing. 9. Member support for new or evolving reliability standards. Compliance with standards should be initiated and led by SPP well in advance of a standards effective date. 10. Have had issues with receiving bills in the past. 11. SPP needs to be more attentive to a fair balance between buyers and sellers, more consistent with other RTO organizations. 12. Some of the planning processes are designed with the framework that the end user will be a large vertically integrated utility. Small utilities oftentimes don't fit into the process very well because they are not set up like a large vertical utility. 13. LMP prices are not justifying capital investments. This is going result in eventual capacity shortage which will evolve to the need for a capacity market, just like the other Day 2 Markets. 14. Hard to get firm answers from SPP on some topics. SPP does not understand how their operating practices impact Members' NERC compliance. Vagaries in operating practice put Members at significant risk of non-compliance. SPP needs to stop pretending that the RTO and the RE have the same objectives and can peacefully co-exist. It's time to cut the RE loose and make them a separate, standalone entity. SPP RTO's footprint is now MUCH bigger than SPP RE's and incorporates multiple REs. Time to stop showing preference to one Stakeholder Satisfaction Survey Results 32

304 Southwest Power Pool, Inc. Comments 15. Overall SPP does a fantastic job. 16. Better undsrstanding of working committes and duties of the different working groups 17. Often it will take me multiple messages through the RMS to get my point across. Sometimes staff will answer my question and then direct me to spp.org which is not really helpful since the reason I've sent a message through RMS is because I cannot find something. If staff is going to make reference to links/areas of the site, please have them include those links in their response. 18. The overall tone of SPP seems to have been focused on cleanup of issues related to the new market and CBA that no one wanted to address during the planning stages. Un fortunately a lot of effort is used re-inventing the wheel. Reach out to other RTOs... more than one to gain lessons learned and move forward. Examples are... SPP Emergency Operations Plan, SPP UFLS Plan, BA real time communications requirements with ALL entities in the footprint. 19. Sometimes difficult to reach the RE staff (very busy with audits, training and such). RTO Forums are not very valuable. Several RTO staff & Enforcement staff (none) were not at the last Workshop/Forum meeting in Dallas. Lost opportunity to address pending concerns faceto-face. 20. To date I do not have any negative experiences. 21. Roll our of the new SPP website was less than stellar. Issues that came up could have been mitigated had beta testing with some members been done to work our potential problems prior to the site going live with all the bugs. This was suggested but rejected by SPP communications staff. 22. When they fail to meet stakeholder needs 23. It would be nice if the day ahead commitments matched up better with the gas day and/or vice versa. 24. Hurdles to SPP membership (exit fees. Lack of membership sectors. Coordination of Work Group meetings. The lack of joint coordination of topics across multiple work groups. 25. As new members and transmission owners new to a regional tariff and to regional planning, we could use more orientation/training for these areas. Responses to requests could be a little faster but I also understand the staff is very busy. 26. level of detail to which Board and staff are involved in what should be day-to-day responsibilities of the SPP leadership and staff 27. We are still new, learning all the CROW software and outage request. So we have maybe just a few line segment names that need renaming or addition to the list of line segments. Thanks 2015 Stakeholder Satisfaction Survey Results 33

305 Southwest Power Pool, Inc. Comments 28. SPP staff are professional and responsive to any needs I have as they arise. 29. NTR 30. Meeting materials sometimes are not posted on time, or not posted but used during meeting presentations, which made it hard to bring back to own SMEs for discussions and feedback. 31. IS integration has been troublesome and disappointing specifically with respect to communication and support for needed activities. 32. Inability to schedule DA Interchange (Tags) for a month in advance. Concerned about the autonomy of Market Monitoring Unit. Can the MMU really be independent while functioning as SPP staff? 33. The one area I wish SPP could look into improving is considering a CIM application to better handle all the various models across planning and operations and studies because I do feel I spend a great deal of time submitting and resubmitting sometimes years-old updates, changes or corrections in multiple places not only during model build season but well after from months to years when studies are using models from a year or 2 past. I just really wish there was a one-stop shop for all modeling submissions. 34. the dispute portal is not the most user-friendly I've seen. 35. SPP isn't very forthcoming with information about commitments/market results in RMS tickets. These types of questions are rarely answered to a useful level of detail. Also, the market monitoring unit not being independent from the RTO doesn't seem ideal. If the MMU doesn't agree with SPP staff/management (e.g. RR69), they may be pressured to agree or accept a position they wouldn't otherwise accept. 36. I know that it is necessary but I do not care for the RMS procedure for reporting problems or issues 37. From time to time it seems a decision could not be reached on how to handle a problem. These decisions tend to cause a panic when deadlines begin to approach. In the future it may be better to provide a contingency plan in the case a decision won't be reached in a timely manner. Putting out fires isn't fun. At this time asking if an RMS ticket has been submitted can be like nails on a chalkboard. 38. Not providing auto-etf-debit for invoices like any other RTO. Erroneous historical data left on the FTP sites rather than retroactively fixed. MWP infrastructure is opaque and wasteful. 39. Perhaps an internal disconnect between the RC function and the BA function. 40. Customer Service Interface - Process on the operation's side often takes multiple iterations to resolve questions Transparency and education for regulatory agencies Transparency on regulatory filing prcess and member review 2015 Stakeholder Satisfaction Survey Results 34

306 Southwest Power Pool, Inc. Comments 41. It is sometimes evident that SPP members that represent a larger share of SPP's revenues receive more weight in SPP's decisions. The relationship between the SPP RTO and RE seems to grow more problematic as the RTO footprint expands. 42. It is difficult to travel as often as working group meetings are scheduled; particularly if you follow several working groups. It is important that if you call in, that the facility in which the meeting is held is capable of providing adequate audio so those on the phone can hear. This is a recurring issue that needs to be addressed to help garner more participation. 43. THE AMOUNT OF IN HOUSE TRAINING ON CAMPUS 44. Lack of action on obvious (in your face) issues 45. As a transmission planning organization, SPP appears unaware of easily foreseeable changing conditions indicating the lack of need for new capacity. In addition, in my experience, SPP has fabricated out of whole cloth justifications for unnecessary expansion plans. As a result, SPP has lost credibility as a regional transmission planning organization. 46. Need to reduce administrative costs. Tying operational congestion into the planning of transmission. 47. SPP lacks experienced personnel in some of its key positions. In general SPP does not clarify its processes before implementation leaving the customer base guessing how to comply. 48. Non-firm tx posting 49. Settlement process. 50. The RMS ticket process to answer questions about the integrated market place and tariff adminstration is not the right way to handle those questions. The RMS ticket is closed to early many times without answering all questions. In addition, it rarely provides the ability to ask followup questions. In addition there is a reluctance to provide enough information to the customer as responses are too vague. The training materials do not provide enough detail on how things are handled. Especially in the ARR/FTR allocation and auction process. In the rare circumstance you are able to speak with the subject matter expert, they know their particular area well but no one seems to know how it all fits into the bigger picture. No on seems to be monitoring the customer experience and thoroughly vetting how changes affect all their custmers. 51. Can be very difficult to get a clear answer on certain things. 52. Along with others, I definitely notice tension between SPP Staff and the SPP MMU. I am concerned the Market Monitoring Unit does not have an adequate level of independence and some degree of politics seems to be at play on key decisions. SPP may want to consider restructuring the organization to make the MMU separate and independent of SPP Stakeholder Satisfaction Survey Results 35

307 Southwest Power Pool, Inc. Comments 53. See prior response. While I appreciate the training attempts and member interaction, it is unmanageable. Also there needs to be more interaction in the working groups with higher level SPP staff to advise on tariff revisions, BPM changes etc. The members need direction on what can and cannot be done in the language on the front end rather than the back end. 54. The MMU has no grasp on what it takes to run a power plant (such as maintenance requirements) let alone a competitive marketplace. Additionally, there are way too many RUC's when LMP's don't support the unit. If a unit is needed for reliability (or any other reason), LMP's should support it. Combining the MMU's exclusion of cost recovery on necessary maintenance with the frequent RUC's results in generators losing money on a regular basis which is not a good long term solution to a healthy marketplace. 55. We have an AQ request that is over 2 years old and SPP and the Host TO cannot come to agreement on the solution in a timely manner. Six months would be understandable, two years is unacceptable. The LSE should not have to drive the process to get SPP and the Host TO to communicate and resolve their differences. 56. lack of ach for bill payment is a bit archaic 57. Allowing issues to float (sometimes for years) without resolution or a 'no decision' completion. 58. Some working groups do a better job of providing meeting materials in s timely manner. 59. SPP criteria and changes are difficult to search for generator compliance. 60. Filings of BOD approved Tariff changes take to long. 61. SPP Marketplace Portal 62. On a few occasions during the IS integration process, SPP staff responses were very slow to respond to questions. 63. ITP DPP Submittal Forms 64. When SPP does respond to questions, they often refer me to the tariff--a document that is thousands of pages long and in sometimes complicated legal language. I asked the question because I was confused about the tariff or protocols. 65. The inability to locate the correct person to ask given questions of, and once you find that person, he (or she) usually cannot give a firm answer or commitment for SPP. It appears SPP has many people who have the responsibility to get things done, but not the authority to make decisions that are binding to SPP management. 66. At times, it seems that SPP is more interested in advancing its interests as an organization and bringing dissenters into the fold rather than listening and addressing the concerns of the 2015 Stakeholder Satisfaction Survey Results 36

308 Southwest Power Pool, Inc. Comments dissenter. Perhaps there is a difference in the understanding of what it means to collaborate and compromise First responses on RMS Tickets. The first response on most RMS tickets is a little weak as we generally receive a very vague response. Once we ask clarifying questions or ask for more detailed information, it seems that the RMS ticket gets sent to the correct person and then we receive really good answers. 2. Better communication when there are delays on product releases. SPP was supposed to publish a 7 Day SPP Wind forecast as part of the October 2015 update, but instead it was delayed. We never received any notification that this item had been delayed and instead had to put in a RMS ticket asking when it was going to be released. 68. Transmission expansion to increase grid reliability is an oxymoron. The grid is inherently unreliable, and you know this. Adding new lines increases cost, waste and complexity. Breaking up the grid into microgrids, power islands to avoid total blackouts is the smart design. The Tres Amigas, the dream of transmission engineers, like El Nino and La Nina, Las Tres Amigas are nightmares named by someone with a great sense of humour. Look it up! New lines are planned only to increase SPP footprints and revenues. Not-for-profit corporations love to share and spend customer revenue and expansion SPP has three major problems: The 3R's 1. SPP is no longer a Regional transmission organization 2. Reliability is the wrong metric, and it is used with no operational definition by trial lawyers at condemnation trials. It is undefined and explained with a false goal of "keeping the lights on today and in the future" Anyone trained in Applied Reliability Engineering and Risk Analysis would have more questions and laugh at what you do. 3. Resilience is the new metric, as long as you have an operational definition. Patricia, the latest Hurricane and other F6 or F7 monster hurricanes will take down your poles and wires in five minutes. I will watch it online unless my house is destroyed. Hire some climate experts, we see the results but climate science is not one of SPP core competencies. NASA has good people. The 14- mile 345 kv line from Flint Creek to Shipe Rd, trespassing what was for 50 years the home of endangered and exotic wildlife, is now Arkansas' second tourist attraction after Crystal Bridges Museum of American Art. People will come from all over the world and wonder why it was built, which way the electrons flow, and there will be rumors claiming it is not energized. Like the people who walk in the footsteps of our Neolithic ancestors at Stonehenge, tourists will walk the 14-miles wondering if there is current on the line, and will show up at night with fluorescent light tubes to see the EMF and ELF everyone talks about. Please use my feedback, you will be tempted to ignore it, but remember you asked my opinion. There are many other people in Arkansas that know a lot more about FERC, NERC, MISO, Clean Line, SWPA, DOE than I do, but few people know where are the offices and how many people work at Southwest Arkansas Utilities Corporation. 69. Outages are atrocious. If you are going to post transmission outages, they should be somewhat reliable. Market participants make decisions based on the information you provide. I realize this is ultimately the TOs at fault, but something needs to be done to improve the reliability of this data. SPP takes longer than any ISO to post DAM results. Would be nice to move this up in the day, even by an hour Stakeholder Satisfaction Survey Results 37

309 Southwest Power Pool, Inc. Comments 70. Webb-Ex has declined, New web site has made registering for meetings harder. 71. Settlements seems like a mess and poorly designed. 72. The exit fee. 73. in regards to the UMZ integration, too many items were left to the last minute which forced the participants to rush to complete. The participants raised many questions early on that SPP failed to address until late in the process and SPP made many assumptions that needed to be resolved on an expedited basis. SPP sent many data requests with only a few days allowed to respond, whereas SPP would take longer than expected to get data, agreements, etc. to the members. SPP failed to get MOD functional for the UMZ members to be able to participate in the model building process as expected which required the UMZ participants to do extra work converting files from one format to another in order to be able to participate. SPP was ineffective in communicating deadlines in a timely manor in general, and timelines/deadlines seemed to be continuously changing. SPP often missed promised deadlines which the members then needed to make up for. In general, SPP seems to send out requests for review/verification that needs to be completed in a very short time, but if any review is asked of SPP, it can take weeks or months. 74. Slow response to RMS tickets 75. Non resolution of Z2 credit issue is embarrassing and is unacceptable. 76. The RMS system is inadequate. I usually have to follow up multiple times to get a complete answer. 77. Slipping from the unwritten rule of meeting materials being provided a week in advance. needs to be reinforced again IS Transmission Settlements planning - Market transparency with RUC and online/offline capacity 79. NGCC modeling for dispatch. Training for settlements availability and comprehensivness. 80. I prefer the old way of being able to go directly to individual market experts instead of sumbitting an RMS ticket. 81. SPP Staff needs to be careful not to push THEIR agenda over that of the members. Capacity Margin Task Force is a good example of a problem looking for a solution. 82. somewhat lack or fear to be creative Tend to look at and follow the desire of the larger TO Need to be more responsive and look for ways to support the smaller stakeholders 83. SPP should consider providing web access to the MOPC, SPC, RSC, and Board meetings so that interested persons can participate via web conference Stakeholder Satisfaction Survey Results 38

310 Southwest Power Pool, Inc. Comments 84. I'm not dissatisfied with anything. Your Trainers are great The competitive upgrade process is not a level playing field for non-incumbents. 86. Price reporting. To view one day of historical prices in PJM or MISO I can download one file. For the same information from SPP I have to download and process 288 files. Since the market settles on hourly pricing it would make sense for SPP to report an hourly price. 87. New website is slower than old website. More transparency into business processes (behind the curtain--for example how various calcs around Z2 work) would be very helpful. 88. Rushed material/votes. SPP prioritizes their needs over membership's needs. 89. The new Compliance/Security Director 90. Transparecy in Tarriffs 91. The transmission invoices are not located on the main SPP website. The dates on the transmission invoice are in random order. No total is given on transmission invoice or daily settlement statements. Daily settlement statements are duplicated and are not separated (initial and final)making it wasteful when printing out statements. 92. TCR Underfunding TCR software Credit detail 93. It seems that SPP desires to build transmission just to build transmission. 94. Energy Market (Market User Interface) needs a lot of work. Its very slow and inefficient. There should be better ways to submit virtuals into the system. Example. I want 20MW across all $10 and it would fill that in with a button. PJM and MISO do a great job at this. 95. I've had difficulty finding current documentation--looking for and finding current protocols etc has not been intuitive. 96. Meeting materials are not always issued timely or are issued late prior to the meetings resulting in not enough time to review within the member company prior to the meetings. MOPC is one big area that has this issue. 97. Not allowing monthly tags Not an easy way to download historical LMP data in bulk 98. Some of the SPP documentation in regards to the Emergency Operation Plans did not always mesh when SPP became the BA. 99. RE Organization and stability 100. Location of SPP headquarters Stakeholder Satisfaction Survey Results 39

311 Southwest Power Pool, Inc. Comments Please share any remaining thoughts about your satisfaction with SPP. 1. I receive great customer service from SPP. Always a good experience 2. We just want our money from the Z2 project. 3. Overall very happy with SPP staff's commitment to the stakeholders requests, even if sometimes unreasonable. 4. Comparing notes with colleagues around the country, many of them have commented that they wish they worked with an RC/RTO like us. Keep up the good work! 5. I haven't had a whole lot of interaction. 6. SPP is keeping pace with a rapidly changing world...its a group and employees I look forward to interacting with. 7. I work with settlements and markets for 6 different ISOs. I used to think of PJM as the model, but since the launch of the SPP IM, I think SPP has better organization of processes. RMS is useful to coordinate and track responses, 5m settlements makes much better sense when you want to encourage resources to follow 5m dispatch instructions. I even appreciate that the protocols are organized in one document. It makes it much easier to research answers to our questions independently. 8. SPP employees are bright individuals with great desire to do the right thing. More focus needs to be on directing SPP back to Member driven and provide value for being a member company versus just a Market participant 9. Overall, I am satisfied with the response of SPP to our compliance needs. The attitude of the Auditors and Enforcement staff has softened and it is now easier to identify that they truly are available and eager to help. Both the RE and RTO outreach coordinators do an exceptional job in communication amd organization of outreach opportunities (meetings, webinars, conference calls). 10. SPP has done an excellent job twice now with getting new markets online on time and without issue (Initial Go-Live and WAUE). It has been a pleasure to get ready for both events with the excellent preparation and documentation SPP has done. Other ISOs have been a large challenge for us when they expand or come online, but SPP has gone smoothly both times, largely because of SPP's excellent efforts. Thank you! 11. Would like to see highly recommended list of seminars based on compliance. This would allow me to focus on the most critical needs to become better aware. 12. The organization seems to be especially committee heavy, thereby causing and effecting change slow and difficult. I suppose by design Stakeholder Satisfaction Survey Results 40

312 Southwest Power Pool, Inc. Comments 13. Great organization. Pat Bourne has been good to work with but how/when do you replace him? 14. People are pleasant to work with and were helpful in our meeting. 15. I am pleased that the Transmission settlements have stepped it up this year. I would still like to see some LMS training on the Transmission charge types and how to calculate a settlement statement. 16. SPP staff are a pleasure to work with. 17. SPP seems to keep its head above water in a very complex and demanding industry. Good work! 18. Keep up the good work! 19. I enjoy working with SPP, they make my job easier by helping out when we have a problem. 20. Figure out how to automatically debit from bank accounts for invoices!! Ridiculous to not provide this basic service. 21. SPP seems to be staffed with good people that care about doing quality work and earnestly try to help the Members whenever possible. 22. SPP could greatly improve its credibility by making a place at the table for ratepayer representation, giving voting power to ratepayers who want to participate in the transmission planning process. 23. Great corporate culture which permeates the entire organization. 24. SPP is getting better at using technology to reduce customer workloads. 25. Very good customer service 26. Good staff trying to meet needs and requests of members. 27. SPP needs to improve the way questions are handled so that participants can know better how it all works together. There is much more information available but without answers to how each piece is used the ease of access to information is drowned out by questions of how each piece is used in each process. 28. Great staff. Incredibly friendly and personable along with being super capable. Awesome corporate building. Future seems bright. 29. As a whole, I think that SPP staff is very responsive to stakeholders and strives for continual improvement Stakeholder Satisfaction Survey Results 41

313 Southwest Power Pool, Inc. Comments 30. An exceptional organization that is well-led and amazingly able to handle this complex, changing environment. 31. SPP has a good working relationship with their members. 32. Overall, I think SPP is one of the best RTOs in the country. 33. Hire more help. 34. You have been given a great deal of trust and power. Please use it wisely. Times have changed, we are at over 400 ppm CO2 - we have created a harsh new world Please be part of the solution before is too late, your children will appreciate it. According to National Geographic, 2014, Earth's wildlife species are rapidly dwindling, due largely to habitat destruction and man-made climate change, vanishing at a rate a thousand times higher than before humans existed. This tragic phenomenon is so common no one seems to care, but some people do. I do. Thank you for the opportunity to send my comments, please call me at 512 / anytime. Dr. Luis Contreras "We are all connected," said Pope Francis to the U.S. Congress, where he asked all to care for our common home. 35. We had issues with settlements and especially with the process of how OCL was handled. 36. SPP started out being very responsive to new members needs, but after the integration on 10/1, we have already seen a decline in responsiveness from SPP staff, even though there are numerous clean up items to resolve. 37. Kudos to Carl and others that helped bring in the IS. Great add to the organization and will bring benefits to our customers. Let's go get the next one. 38. Liked seeing in the finance committee report that SPP is flattening out its employee numbers which helps reduce 1A increases in future years. this is critical. 39. Overall very happy with membership in the RTO, however transparency & learning curve into actual operations and settlements for planning purposes has been challenging. 40. Meeting planning staff are awesome. Thanks a bunch to Tara and all the staff secretaries of every group. 41. Overall, very satisfied with SPP, given it is a stakeholder process. I wouldn't expect to get everything I wanted over the desires of all the diverse interests represented at the SPP. 42. Keep up the good work. 43. I am a real time generation operator for wind farms all staff that I have comunicated with has been a good experience. 44. Our organization just became a member of SPP within the last month as part of the UMZ so have just started interacting and working with SPP. Have just started participating in the 2015 Stakeholder Satisfaction Survey Results 42

314 Southwest Power Pool, Inc. Comments different committees. Have not used all of the services and still learning SPP. As a result, my responses are based on limited experience. 45. Good people who provide good customer/member service. 46. Like I said before, SPP is improving every time I interact with them on something. That is great Keep up the good work! You are a good role model. 48. Very positive over all. Staff works hard and is committed to working through issues. 49. Great job! Keep it up! Overtime, SPP will prove to be a leader energy markets. 50. Well run organization 51. SPP is a valuable training resource for information, materials, collaboration and CEHs. 52. Staff is very professional and responsive to member needs and more recently proactive in needs. Management is very responsive and professional to members. All are respective of the members and various needs that are not always the same among members. 53. Staff that I interact with are always willing to help out, in a very friendly, courteous manner. 54. Overall I think SPP does a very good job and are always willing to help. 55. This is an exceptional group of people that are willing to work hard with the customer to resolve any issues in the checkout process. I appreciate there willingness to help out with any circumstance Stakeholder Satisfaction Survey Results 43

315 SPP 2015 Emergency Management & Business Continuity (EMBC) Update SPP Board/Members Meeting December 8, 2015

316 Emergency Management & Business Continuity (EMBC) Emergency Management (EM) An effective approach for managing threatening incidents Assures employee safety as a priority Coordinates management of resources, personnel, communications and costs in emergency situation Reduces the business impact or shortens the timeframe of the impact of the event Business Continuity (BC) Plans to minimize interruption of mission-critical services, and to reestablish full functioning as swiftly as possible 2

317 Summary of 2015 Accomplishments Significantly improved SPP s EMBC Plans EMBC Plan awareness at all staff levels Readiness to manage disruptive incident s of any type in a coordinated and well communicated manner Employee safety plans and communications processes Resulting in reduced risk associated with Natural or Technological Hazards Potential terroristic incidents 3

318 2015 Accomplishments 1. 1Q 2015 Implemented a new EMBC Plan with greater emphasis on Emergency Management (ICS) and detailed All-hazards plans 2. 1Q/2Q 2015 Continued implementation of Homeland Security s Incident Command Structure (ICS) for SPP Identified SPP staff assignments for full ICS (primary & backup) Conducted ICS overview education, training and follow up drills for (6) ICS sections Conducted ICS Tabletop drill including After Actions Report 3. 4Q 2015 Reinforced usage of ICS to manage SPP s Grid Ex III response efforts 4

319 2015 Accomplishments Restructured Employee Safety Plans and awareness consistent with ICS Implementation Updated Safety Team leadership and safety plans o Enhanced employee emergency communications processes o Safety team training on EMBC plan and emergency procedures (50 staff) o Identified Emergency shelter areas on all floors and for all on the lower level Developed Emergency Management and Safety training for all SPP staff o o 97% of SPP staff attended live training Balance of staff to be assigned on-line training 5

320 Key Future Plans Continue to Enhance Emergency Management and Business Continuity Capabilities 1. Finalize the enhanced plan to recover SPP critical cyber assets in support of the Bulk Electric System (BES) in accordance to CIP-009 requirements in 1Q Continue to enhance SPP EM/BC capabilities Follow up on improvements identified in EMBC training classes and in Grid Ex III After Actions Report (AAR) Develop streamlined and more effective Business Continuity plans in 2016 Develop a three year exercise/drill/test plan to assure that all components of our EMBC plan get practiced and improved 3. Continued development of EMBC relationships within the Community, with SPP Member organizations, and other RTO/ISOs. 6

321 Corporate Metrics 3 rd Quarter 2015 October 19, 2015

322 Transmission & Market Indicators 1 TCR/ARR Summary 2 Congestion 3 Regional Control Performance 4 Prices 5 Revenue Neutrality Uplift Financial Metrics 6 SPP Admin Fee performance 7 Budget Performance Monitor 8 Financial Settlement Index 9 Financial Disputes Index 10 Employee Turnover Performance 11 SPP Regional Entity Compliance 12 IT System Performance 13 Studies 14 Strategic Plan Metrics Definitions Southwest Power Pool Corporate Metrics Table of Contents Supplement - Regulatory Activity Update & Outlook DISCLAIMER The data and analysis in this report are provided for informational purposes only and shall not be considered or relied upon as market advice or market settlement data. Southwest Power Pool (SPP) makes no representation or warranties of any kind, express or implied, with respect to the accuracy or adequacy of the information contained herein. SPP shall have no liability to recipients of this information or third parties for the consequences arising from errors or discrepancies in this information, or for any claim, loss or damage of any kind or nature whatsoever arising out of or in connection with (i) the deficiency or inadequacy of this information for any purpose, whether or not known or disclosed to the authors, (ii) any error or discrepancy in this information, (iii) the use of this information, or (iv) a loss of business or other consequential loss or damage whether or not resulting from any of the foregoing.

323 1a. TCR Funding Summary $60 120% $50 100% $40 80% Millions $30 $20 60% 40% Transmission & Market Indicators $10 $0 -$10 Jul 14 Aug 14 Sep 14 Oct 14 Nov 14 Dec 14 Jan 15 Feb 15 Mar 15 Apr 15 May 15 Jun 15 Jul 15 Aug 15 Sep 15 DA Revenue TCR Funding TCR Uplift Funding Percent Cumulative Funding Percent - Prior Year Cumulative Funding Percent - Current Year 20% 0% -20%

324 1b. ARR Funding Summary $70 140% $60 120% $50 100% Millions $40 $30 80% 60% Transmission & Market Indicators $20 $10 $0 Jul 14 Aug 14 Sep 14 Oct 14 Nov 14 Dec 14 Jan 15 Feb 15 Mar 15 Apr 15 May 15 Jun 15 Jul 15 Aug 15 Sep 15 TCR Revenue ARR Funding ARR Surplus Funding Percent Cumulative Funding Percent - Prior Year Cumulative Funding Percent - Current Year 40% 20% 0%

325 2a. Congestion - TLR / CME Time 4,000 3,000 Hours in TLR / CME 2,000 1,000 Transmission & Market Indicators 0 in hours Jul 14 Aug 14 Sep 14 Oct 14 Nov 14 Dec 14 Jan 15 Feb 15 Mar 15 Apr 15 May 15 Jun 15 Jul 15 Aug 15 Sep mo Level 3A Level 3B Level Level 5A Level 5B Total TLR Time CME Time (loading >90%) Level 5B Level 5A Level 4 Level 3B Level 3A CME Time (loading >90%) 2,565 3,703 3,710 2,672 3,589 3,141 3,172 2,216 1,798 1,826 1,979 2,291 2,779 3,134 3,475 2,276 2,351 2,705 2,673 Monthly Average in Hours Monthly Average Level 3 TLR (hrs) Monthly Average Level 4 TLR (hrs) Monthly Average Level 5 TLR (hrs) 3,000 2,000 CME Time (loading > 90%) (hrs) , mo mo mo mo

326 2b. Congestion - Congested Intervals (RTBM) 100% 80% 60% 40% 20% Transmission & Market Indicators Uncongested Intervals Intervals with Binding Only Intervals with a Breach Interval = 5 minutes 40% 0% Jul 14 Aug 14 Sep 14 Oct 14 Nov 14 Dec 14 Jan 15 Feb 15 Mar 15 Apr 15 May 15 Jun 15 Jul 15 Aug 15 Sep mo 17% 10% 14% 21% 7% 20% 24% 22% 30% 16% 27% 24% 12% 9% 3% 14.5% 14.6% 16.9% 17.9% 70% 77% 73% 64% 72% 66% 67% 68% 52% 65% 56% 65% 72% 75% 76% 79.2% 78.6% 69.1% 66.4% 12% 13% 14% 14% 20% 14% 9% 10% 17% 20% 17% 11% 16% 18% 17% 6.3% 6.8% 14.0% 15.4% Uncongested Intervals Uncongested Intervals Intervals with Binding Only Intervals with a Breach 100% Intervals with Binding Only 16% Intervals with a Breach Average 30% 20% 80% 60% 40% 12% 8% Figures prior to March 2014 are from the Energy Imbalance Service market. 10% 20% 4% 0% mo 0% mo 0% mo

327 2b. Congestion - Congested Intervals (DAMKT) 100% 80% 60% 40% 20% Transmission & Market Indicators 0% Uncongested Intervals Intervals with Binding Only Intervals with a Breach Interval = 1 hour Uncongested Intervals Intervals with Binding Only Intervals with a Breach Jul 14 Aug 14 Sep 14 Oct 14 Nov 14 Dec 14 Jan 15 Feb 15 Mar 15 Apr 15 May 15 Jun 15 Jul 15 Aug 15 Sep mo 0% 4% 0% 0% 3% 2% 6% 1% 2% 2% 0% 0% 0% 2.0% 1.7% 99% 95% 99% 99% 96% 97% 93% 99% 98% 97% 99% 99% 100% 97.3% 97.7% 1% 1% 1% 0% 1% 1% 1% 0% 0% 1% 1% 0% 0% 0.7% 0.6% Average 8% Uncongested Intervals 100% Intervals with Binding Only 8% Intervals with a Breach 6% 4% 80% 60% 40% 6% 4% 2% 20% 2% 0% mo 0% mo 0% mo

328 2c. Price Contour Map (October 2014-September 2015) Transmission & Market Indicators Day-Ahead Real-Time

329 2d. Congestion - Flowgates (October September 2015) $60 60% $50 50% Transmission & Market Indicators Shadow Price ($/MWh) $40 $30 $20 $10 $0 40% 30% 20% 10% 0% DA Average Shadow Price RT Average Shadow Price DA % Intervals Congested RT % Intervals Congested % Congested Flowgate Name Region Flowgate Location OSGCANBUSDEA Texas Panhandle Osage Switch-Canyon East (115) ftlo Bushland-Deaf Smith (230) WDWFPLTATNOW Western Oklahoma Woodward-FPL Switch (138) ftlo Tatonga-Northwest (345) TUBDOBBENGRI^ Entergy-East Texas Tubular-Dobbins (138) ftlo Dobbin-Grimes (138) SUNAMOTOLYOA Texas Panhandle Sundown-Amoco (230) ftlo Tolk-Yoakum (230) NEORIVNEOBLC SE Kansas Neosho-Riverton (161) ftlo Neosho-Blackberry (345) BRKXF2BRKXF1 SW Missouri Brookline Xfmr 2 (345/161) ftl Brookline Xfmr 1 (345/161) FAIOSBSTJHAW# KC - Omaha Corridor Fairport-Osborn (161) ftlo St. Joe-Hawthorn (345), Alabama-Nashua (161) NPLSTOGTLRED Western Nebraska North Platte-Stockville (115) ftlo Gentleman-Red Willow (345) ARCKAMARCNOR Oklahoma Arcadia-Jones KAMO (138) ftlo Arcadia-Northwest Station (345) SHAHAYKNOXFR Central Kansas South Hays-Hays (115) ftlo Knoll Xfmr (230/115) # AECI flowgate * SPP Market-to-Market flowgate ^ MISO Market-to-Market flowgate

330 2d. Congestion - Flowgates (October September 2015) Flowgate Name Region Flowgate Location Projects that may provide mitigation OSGCANBUSDEA Texas Panhandle Osage Switch - Canyon East (115) ftlo Bushland - Deaf Smith (230) Canyon East Sub Randall County Interchange 115 kv line (March 2018 Aggregate Studies) WDWFPLTATNOW Western Oklahoma Woodward - FPL Switch (138) ftlo Tatonga - Northwest (345) 1. Matthewson - Tatonga 345 kv Ckt 2 (March 2021 ITP10) 2. Elk City - Red Hills 138 kv Ckt 1 Reconductor (June 2015, ITPNT) TUBDOBBENGRI ^ Entergy - East Texas Tubular-Dobbins (138) ftlo Dobbin- Grimes (138) No projects identified at time of report publication. Transmission & Market Indicators SUNAMOTOLYOA NEORIVNEOBLC BRKXF2BRKXF1 FAIOSBSTJHAW # Texas Panhandle SE Kansas SW Missouri KC - Omaha Corridor Sundown - Amoco (230) ftlo Tolk - Yoakum (230) Neosho - Riverton (161) ftlo Neosho - Blackberry (345) Brookline Xfmr 2 (345/161) ftlo Brookline Xfmr 1 (345/161) Fairport - Osborn (161) ftlo St. Joe - Hawthorn (345), Alabama - Nashua (161) 1. Tuco Interchange Yoakum 345 kv Ckt 1 (June 2020 HPILS) 2. Amoco - Sundown 230 kv Terminal Upgrades (April ITP10) No projects identified at time of report publication. No projects identified at time of report publication. 1. Sibley Mullin Creek 345 kv (December 2016 High Priority) 2. Iatan Nashua 345kV (completed April Balanced Portfolio) NPLSTOGTLRED Western Nebraska North Platte-Stockville (115) ftlo Gentleman-Red Willow (345) 1. Gentleman Cherry Co. Holt 345 kv (June 2018 ITP10) 2. Thedford 345/115 kv transformer (June 2018 HPILS) ARCKAMARCNOR Oklahoma Arcadia-Jones KAMO (138) ftlo Arcadia-Northwest Station (345) No projects identified at time of report publication. SHAHAYKNOXFR Central Kansas South Hays - Hays (115) ftlo Knoll Xfmr (230/115) Hays Plant - South Hays 115 kv Ckt 1 (June ITPNT) # AECI flowgate * SPP Market-to-Market flowgate ^ MISO Market-to-Market flowgate

331 3a. Balancing Authority Report - CPS Performance CPS1 (statistical measure of 1 minute average ACE vs. Frequency) 200% 150% 100% Marketplace Indicators 50% Jul 14 Aug 14 Sep 14 Oct 14 Nov 14 Dec 14 Jan 15 Feb 15 Mar 15 Apr 15 May 15 Jun 15 Jul 15 Aug 15 Sep 15 >=100% <100% CPS2 (10 minute average of ACE performance) 100% 95% 90% 85% Jul 14 Aug 14 Sep 14 Oct 14 Nov 14 Dec 14 Jan 15 Feb 15 Mar 15 Apr 15 May 15 Jun 15 Jul 15 Aug 15 Sep 15 >95% 90%-95% <90% SPP BA is not subject to CPS, but is subject to BAAL. CPS is reported here for informational purposes only.

332 3b. Balancing Authority Report - BAAL Performance 10 8 Events Marketplace Indicators 0 Jul 14 Aug 14 Sep 14 Oct 14 Nov 14 Dec 14 Jan 15 Feb 15 Mar 15 Apr 15 May 15 Jun 15 Jul 15 Aug 15 Sep 15 >10 and <=20 min >20 and <=30 min >30 min Event Length Jul 14 Aug 14 Sep 14 Oct 14 Nov 14 Dec 14 Jan 15 Feb 15 Mar 15 Apr 15 May 15 Jun 15 Jul 15 Aug 15 Sep 15 >10 and <=20 min >20 and <=30 min >30 min

333 4a. Price and Volatility (Day-Ahead) - October September 2015 $ WFES $28 AECC AEPM CHAN EDEP OGE OMPA SPRM 0.8 GRDX Transmission & Market Indicators $26 $24 $22 BEPM FREM GMOC GSEC INDN KBPU MEUC KCPS KMEA KPP MIDW LESM MEAN NPPM OPPM SEPC SPSM TNSK WRGS $ LSE Volatility LSE Average SPP Average SPP Volatility

334 4b. Price and Volatility (Real-Time) - October September 2015 $ SPSM $28 AECC AEPM CHAN EDEP OGE OMPA SPRM WFES 1.6 Transmission & Market Indicators $24 $20 BEPM FREM GMOC GRDX GSEC INDN KBPU KCPS KMEA KPP LESM MEAN MEUC MIDW NPPM OPPM SEPC TNSK WRGS $ LSE Volatility LSE Average SPP Average SPP Volatility

335 4c. Electricity/Gas Cost Comparison $50 $10 Transmission & Market Indicators Electricity Price ($/MWh) $40 $30 $20 $10 $8 $6 $4 $2 Gas Cost (Panhandle Eastern Pipeline) $/MMBtu $0 Sep 13 Oct 13 Nov 13 Dec 13 Jan 14 Feb 14 Mar 14 Apr 14 May 14 Jun 14 Jul 14 Aug 14 Sep 14 Oct 14 Nov 14 Dec 14 Jan 15 Feb 15 Mar 15 Apr 15 May 15 Jun 15 Jul 15 Aug 15 Sep 15 $0 EIS LIP DA LMP RT LMP Gas (PEPL) Average in $ Jul 14 Aug 14 Sep 14 Oct 14 Nov 14 Dec 14 Jan 15 Feb 15 Mar 15 Apr 15 May 15 Jun 15 Jul 15 Aug 15 Sep 15 DA LMP ($/MWh) RT LMP ($/MWh) PEPL Gas Cost ($/MMBtu)

336 4d. Prices - annual $60 $12 $50 $10 Transmission & Market Indicators Electricity Price (LIP) $/MWh $40 $30 $20 $10 $8 $6 $4 $2 Gas Cost (Panhandle Eastern Pipeline) $/MMBtu $ $0 RTBM Price* ($/MWh) DAMKT Price ($/MWh) PEPL Gas Cost ($/MMBtu) in $ DAMKT Price ($/MWh) RTBM Price* ($/MWh) PEPL Gas Cost ($/MMBtu) Average * 2014 RTBM includes last two months of LIP for the EIS market, and RTBM LMP for the first ten months of the Integrated Marketplace. All prior years use EIS LIP.

337 5a. Revenue Neutrality Uplift $6,000 $4,000 in thousands $ $2,000 $0 Transmission & Market Indicators -$2,000 -$4,000 -$6,000 in thousands $ Jul 14 Aug 14 Sep 14 Oct 14 Nov 14 Dec 14 Jan 15 Feb 15 Mar 15 Apr 15 May 15 Jun 15 Jul 15 Aug 15 Sep mo Total Uplift ,050 2,805 2,245 2,009 3, ,790 4,231 1,984 2,575 3,409 2,913 1,824-7,463-7,553 11,906 24,953 Total in thousands $ $30,000 $20,000 $10,000 $0 Revenue Neutrality Uplift (RNU) ensures settlement payments/receipts for each settlement interval equal zero. Positive RNU - SPP receives insufficient revenue and collects from market participants. Negative RNU - SPP receives excess revenue, which must be credited back to market participants. -$10, mo

338 5a. Revenue Neutrality Uplift in thousands $ Jul 14 Aug 14 Sep 14 Oct 14 Nov 14 Dec 14 Jan 15 Feb 15 Mar 15 Apr 15 May 15 Jun 15 Jul 15 Aug 15 Sep 15 DA Revenue Inadequacy RT Revenue Inadequacy RT OOME MWP RT Regulation Deployment Adj RT JOA Adj ,337-1,873-1, RT Congestion Adj ,771 2,034 1,673 1,181 3, ,149 5,299 3,046 1,516 2,253 1,944 1,785 Transmission & Market Indicators SUBTOTAL ,958 2,207 1,982 1,376 3, ,120 3,439 1,432 1,898 2,344 2,363 1,537 Less RT Net Inadvertent Adj , TOTAL RNU ,050 2,803 2,245 2,009 3, ,772 4,256 1,984 2,573 3,410 2,918 1,824 * This table is based on the latest available settlements data and is subject to change due to resettlement.

339 Transmission & Market Indicators 5b. Make Whole Payments

340 8. Financial Settlement Index 12% % of Late Transmission Payments 12% % of Late Market Payments % of Total Payout 9% 6% 3% % of Total Payout 9% 6% 3% 0% 0% Financial Metrics in thousands Oct 14 Nov 14 Dec 14 Jan 15 Feb 15 Mar 15 Apr 15 May 15 Jun 15 Jul 15 Aug 15 Sep mo Late Transmission Payments $58 $778 $540 $33 $948 $1,613 $64 $0 $579 $54 $0 $1,289 $5,956 Total Transmission Payments $40,826 $37,780 $24,312 $35,089 $36,626 $35,488 $41,098 $39,967 $28,523 $40,179 $42,699 $32,757 $435,344 % Late Payments 0% 2% 2% 0% 3% 5% 0% 0% 2% 0% 0% 4% 1.4% in thousands Oct 14 Nov 14 Dec 14 Jan 15 Feb 15 Mar 15 Apr 15 May 15 Jun 15 Jul 15 Aug 15 Sep mo Late Market Payments $56 $44 $201 $186 $11 $197 $38 $88 $200 $8 $4 $563 $1,596 Total Market Payments $75,855 $45,666 $49,069 $65,577 $41,049 $106,625 $64,205 $51,558 $12,662 $72,598 $62,588 $53,268 $700,720 % Late Payments 0% 0% 0% 0% 0% 0% 0% 0% 2% 0% 0% 1% 0.2% $800 Transmission Short Pays $50 Market Short Pays $600 $40 in thousands $400 $200 in thousands $30 $20 $10 $0 $0 in thousands Oct 14 Nov 14 Dec 14 Jan 15 Feb 15 Mar 15 Apr 15 May 15 Jun 15 Jul 15 Aug 15 Sep mo Transmission Short $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $0 Pays Market Short Pays $22 $ - $ - $24 $ - $ - $ - $ - $ - $ - $ - $ - $46

341 6. SPP Admin Fee Performance $0.40 $0.39 $0.38 $0.36 $0.34 $0.32 $ per MWh $0.28 $0.24 $0.24 $0.23 $0.20 $0.20 $0.18 $0.19 Financial Metrics $0.16 $0.12 $ Approved Admin Fee Budgeted NRR / Budget Load Actual NRR / Actual Load Budgeted Net Revenue Required ($000s) $ 52,819 $ 61,462 $ 56,478 $ 68,358 $ 78,368 $ 89,560 $ 121,800 $ 132,600 $ 141,208 Budgeted Load (000's) 288, , , , , , , , ,500 Budgeted NRR / Budget Load $ $ $ $ $ $ $ $ $ Approved Admin Fee Actual Net Revenue Required ($000's) $47,998 $58,081 $59,837 $63,497 $80,841 $84,776 $123,336 $136,959 $142,143 Actual Load (000's) 301, , , , , , , , ,176 Actual NRR / Actual Load $ $ $ $ $ $ $ $ $ Actual Load Growth 5.12% -1.65% 10.82% 1.05% 2.96% 5.93% -1.15% -1.83% 6.04% Note: Budgeted 2015 figures cover the entire 2015 calendar year, while actual 2015 figures cover the period through the date of this report.

342 7. Budget Performance Monitor Operating Expense Variance $2,000 $0 Oct 14 Nov 14 Dec 14 Jan 15 Feb 15 Mar 15 Apr 15 May 15 Jun 15 Jul 15 Aug 15 Sep 15 -$2,000 in thousands $ -$4,000 -$6,000 Financial Metrics -$8,000 -$10,000 -$12,000 Monthly Variance Cumulative Variance in thousands $ Oct 14 Nov 14 Dec 14 Jan 15 Feb 15 Mar 15 Apr 15 May 15 Jun 15 Jul 15 Aug 15 Sep 15 Budgeted Operating Expense 17,051 16,311 16,309 16,526 16,359 16,795 17,206 16,846 16,981 16,646 16,615 16,622 Actual Operating Expense 15,593 15,024 15,317 15,171 15,800 16,560 17,086 15,874 15,403 16,050 15,841 16,045 Monthly Variance: Over Budget / (Under Budget) 12 month Cumulative Variance: Over Budget / (Under Budget) (1,458) (1,287) (992) (1,355) (559) (235) (120) (972) (1,578) (596) (774) (577) (1,458) (2,745) (3,737) (5,092) (5,651) (5,886) (6,006) (6,978) (8,556) (9,152) (9,926) (10,503)

343 9a. Financial Disputes Index - $ Integrated Marketplace $350 Settlement Dispute Statistics ($) $300 $250 $000's $200 $150 $100 $50 Financial Metrics $0 (Figures in $000's) Total Disputes Avg. Dispute Size Largest single dispute Jul 14 Aug 14 Sep 14 Oct 14 Nov 14 Dec 14 Jan 15 Feb 15 Mar 15 Apr 15 May 15 Jun 15 Jul 15 Aug 15 Sep mo Total Disputes $7.8 $167.3 $3.1 $326.1 $26.3 $16.1 $1.9 $6.6 $34.7 $0.9 $42.8 $7.5 $29.0 $0.1 $36.8 $100.0 $17.8 $44.1 Avg. Dispute Size Largest single dispute $1.9 $18.6 $0.4 $40.8 $5.3 $5.4 $0.1 $0.9 $8.7 $0.3 $8.6 $0.8 $1.8 $0.0 $3.3 $18.5 $2.7 $6.3 $7.1 $96.6 $1.2 $149.2 $16.2 $11.0 $1.0 $2.2 $32.6 $0.9 $25.8 $3.0 $14.5 $0.1 $27.8 $149.2 $32.6 $149.2 * Average $160 Monthly Average Amount in Dispute ($000's) $30 Average Dispute Size ($000's) Largest Single Dispute ($000's) $160 * Annual maximum $120 $20 $120 $80 $40 $10 $80 $40 $ mo $ mo $ mo

344 9b. Financial Disputes Index - Integrated Marketplace # New Disputes # Resettlements Financial Metrics 10-5 Avg Days Outstanding (Figures in $000's) Jul 14 Aug 14 Sep 14 Oct 14 Nov 14 Dec 14 Jan 15 Feb 15 Mar 15 Apr 15 May 15 Jun 15 Jul 15 Aug 15 Sep mo # New Disputes # Resettlements Avg Days Outstanding Monthly Average 80 Monthly Average of Active Disputes 80 Average Monthly Resettlements 80 Average Days Outstanding

345 10a. Employee Turnover - monthly Turnover Rate 3.0% 2.5% 2.0% 1.5% 1.0% 0.5% Employee Turnover (monthly) % Sep 13 Oct 13 Nov 13 Dec 13 Jan 14 Feb 14 Mar 14 Apr 14 May 14 Jun 14 Jul 14 Aug 14 Sep 14 Oct 14 Nov 14 Dec 14 Jan 15 Feb 15 Mar 15 Apr 15 May 15 Jun 15 Jul 15 Aug 15 Sep Involuntary TO Rate Voluntary TO Rate # of Employees Financial Metrics Jul 14 Aug 14 Sep 14 Oct 14 Nov 14 Dec 14 Jan 15 Feb 15 Mar 15 Apr 15 May 15 Jun 15 Jul 15 Aug 15 Sep 15 Voluntary TO Rate 0.2% 0.5% 0.4% 0.7% 0.0% 0.4% 0.2% 0.3% 0.9% 0.2% 0.7% 0.5% 0.2% 0.5% 0.2% Involuntary TO Rate 0.0% 0.4% 0.2% 0.0% 0.2% 0.0% 0.0% 0.2% 0.3% 0.2% 0.2% 0.0% 0.2% 0.2% 0.2% Total Turnover (# of employees) Permanent Employees % Rolling 12-month Turnover Rate Turnover Rate 8% 6% 4% 2% 0% Sep 13 Oct 13 Nov 13 Dec 13 Jan 14 Feb 14 Mar 14 Apr 14 May 14 Jun 14 Jul 14 Aug 14 Sep 14 Oct 14 Nov 14 Dec 14 Jan 15 Feb 15 Mar 15 Apr 15 May 15 Jun 15 Jul 15 Aug 15 Sep 15 Rolling 12-month Turnover Rate Jul 14 Aug 14 Sep 14 Oct 14 Nov 14 Dec 14 Jan 15 Feb 15 Mar 15 Apr 15 May 15 Jun 15 Jul 15 Aug 15 Sep % 6.1% 5.8% 5.8% 5.4% 5.4% 5.4% 6.0% 6.8% 6.7% 6.7% 6.5% 6.7% 6.5% 6.3%

346 10b. Employee Turnover - annual Annual Turnover Ratio and Employee Count 12% % 500 Turnover Rate (annualized) 8% 6% 4% Total Employees Financial Metrics 2% 0% Total Employees Turnover Ratio Total Turnover Total Employees Turnover Ratio 7.7% 2.2% 9.6% 6.4% 9.1% 6.9% 6.1% 4.7% 5.7% 7.1% 8.7% 3.1% 4.7% 3.9% 5.0% 5.8% 5.4% 6.8% Note 1: Total Turnover only includes voluntary and involuntary separations; retirements and interns are not used in the calculation. Note 2: Turnover Ratio is annualized for the current year.

347 11. SPP Regional Entity Compliance 300 Period End Open Caseload 300 Violations Performance New Processed Dismissed Starting Caseload New Violations Processed by SPP RE Dismissed by SPP RE Ending Caseload Cumulative Violations ,051 1,177 1,233

348 Performance 12. IT System Performance

349 13a. Studies - Aggregate - MW 25,000 20, AG AG1 15, AG AG3 10,000 MW 2013-AG AG2 5, AG1 - Completed 2013-AG AG AG1 Performance (5,000) (10,000) Completed Completed (15,000) 3Q 14 4Q 14 1Q 15 2Q 15 3Q 15 MW MW Completed 3Q 14 4Q 14 1Q 15 2Q 15 3Q 15 In Progress 3Q 14 4Q 14 1Q 15 2Q 15 3Q AG AG AG AG AG AG AG2 13, AG AG3 1, AG2 14,024 14, AG1 3, AG3 2,309 2,309 1,885 TOTAL 1,054-13,842 5, AG1 5,853 5,160 4, AG1 3,373 3,441 TOTAL 22,186 21,493 6,843 3,373 3,441

350 13b. Studies - Aggregate - Upgrade $ $400 $300 $ (in millions) $200 $100 Performance $ AG AG AG AG AG AG AG AG AG AG1 Completed Completed Completed Completed Completed -$100 3Q 14 4Q 14 1Q 15 2Q 15 3Q 15 Completed 3Q 14 4Q 14 1Q 15 2Q 15 3Q 15 In Progress 3Q 14 4Q 14 1Q 15 2Q 15 2Q AG2 $ (in millions) $ (in millions) 2012-AG AG3 $ AG AG1 $ AG AG2 $ AG AG3 $ 9.49 $ AG2 $ 0.40 $ AG1 $ $ AG3 $ 4.72 $ 0.46 $ 9.39 TOTAL $ $ - $ 0.14 $ $ AG1 $ $ $ AG1 $ $ TOTAL $ $ $ $ $ 16.62

351 13c. Studies - Generation Interconnection - MW 12,000 Generation Interconnection MW - In Progress 8,000 MW 4,000-3Q 14 4Q 14 1Q 15 2Q 15 3Q Studies 2011 Studies 2012 Studies 2013 Studies 2014 Studies 2015 Studies Performance MW In Progress 3Q 14 4Q 14 1Q 15 2Q 15 3Q 15 DISIS DISIS DISIS DISIS DISIS ,490 1,490 1,490 DISIS DISIS ,055 5,922 3,482 2,401 2,638 DISIS ,317 5,205 5,020 PISIS PISIS ,403 1,156 1,156 PISIS FCS FCS FCS FCS FCS FCS FCS Pending Withdrawal TOTAL 11,753 10,322 9,150 8,704 8,833

352 13d. Schedule of Commerical Operation Dates for Upcoming Generation Interconnection Agreements as of June 30, , ,600 3 MW Capacity 1, GW Capacity 2 Performance Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Commercial Operation Month Commercial Operation Year Charts above reflect Executed Generation Interconnection Agreements (GIA s) with upcoming Commercial Operation Date (COD) milestones by year and month. Data based on Queue Status of IA Fully Executed / On Schedule, MW Capacity IA Fully Executed / On Suspension 1,918.2 IA Fully Executed / On Schedule 8,632.9 Total Scheduled or Suspended Generation 10,551.1

353 Performance 14a. Strategic Plan as of September 30, 2015

354 Performance 14b. Strategic Plan as of September 30, 2015

355 Metrics Definitions Transmission and Market Indicators Two groups of metrics will be monitored to provide an overall health indication of the regional transmission system and market. Reliability Performance Indicators, which focus on the actual operations of the transmission system and whether or not it was operated within expected limits and standards. Market Performance Indicators, which focus on the performance of the market in terms of overall volume, prices and level of participation. Reliability Performance Indicators This sub-group of metrics is designed to measure the operations of the transmission system from a reliability perspective. How well-funded are Transmission Congestion Rights (TCR). (see TCR/ARR Summary) How much time was congested during the period. (see Congestion) Was the system operated in compliance with the relevant control performance standards? (see Regional Control Performance) TCR/ARR funding is derived as follows: 1. Day-ahead revenue is collected daily 2. TCR holders are paid daily based on awarded TCR MW and Day-ahead clearing prices a. Uplift is charged daily b. Surpluses are redistributed Monthly and Annually 1. TCR/ARR Summary 3. TCR revenue is collected daily based on TCR MW and TCR ACPs (consistent through month/season) 4. ARR holders are paid daily based on ARR MW and TCR ACPs (consistent through month/season) a. Uplift is charged daily b. Surpluses are redistributed Monthly and Annually 2a. TLR / CME Time TLR Events by level (in hours) Level 3 - curtailment of non-firm schedules and non-firm market flow Level 4 curtailment of all non-firm schedules and non-firm market flow (additional reconfiguration of transmission allowed) Level 5 - curtailment of all non-firm and some firm schedules and market flow CME (Congestion Management Events) where loading is greater than 90% (in hours) 2b. Congested Intervals Percent of intervals binding (flow = System Operating Limit [SOL]), breached (flow > SOL) and 2. Congestion congested (either binding or breached) during the month. Charts are included for both the Day-Ahead Market (DAMKT) and the Real-Time Balancing Market (RTBM). 2c. Price Contour Map Graphic representation of average monthly prices by load area in both the Day-Ahead Market and Real-Time Balancing Market since the start of the Integrated Marketplace. 2d. Congestion Flowgates Congestion by flowgate ranked by average hourly shadow price in the RTBM for the last 12 months. DA values are also included. Table is included to show top ten most congested flowgates and any potential projects which may provide mitigation to the congestion.

356 The SPP BA is not subject to CPS, but is subject to BAAL. CPS is reported here for informational purposes only. Measures the aggregate performance to the NERC CPS (Control Performance Standards) for SPP. This indicator is set based on the NERC real time control performance standards (known as BAL-001 Real Power Balancing Control Performance and BAL-002 Disturbance Control Performance). 3. Regional Control Performance CPS1 requires compliance for 100% of the periods measured within the month; and CPS2 requires compliance for 90% of the periods measured within the month. BAAL - each Balancing Authority shall operate such that its clock-minute average of reporting ACE does not exceed for more than 30 consecutive clock-minutes its clock-minute Balancing Authority ACE Limit (BAAL) Market Performance Indicators This sub-group of indicators provides a view of the effectiveness of the market in the context of answering the following questions: What was the average wholesale price paid in the region and what was its volatility? (see Price) How much Revenue Neutrality Uplift was generated during the month? (see Uplift) What was the level of available generation offered to the market and EIS related energy sales in the month? (see Market Liquidity) Shows the prices and volatility for both the DAMKT and RTBM for each market participant with load within the footprint. Also provides an SPP-wide average price for the period reported. Volatility (measured as the coefficient of variation, which is average divided by the standard deviation) is 4. Price shown for each market participant as well as SPP as a whole. A higher volatility indicates more variability in prices. SPP-wide monthly average LMP and the Gas Cost at the Panhandle Eastern Pipeline hub along with12-month rolling averages. 5. Uplift Tracks amount of RNU (Revenue Neutrality Uplift) charged or credited to market participants during the month, along with the category of uplift. RNU ensures settlement payments/receipts for each settlement interval equal zero. Positive RNU - SPP receives insufficent revenue and collects from market participants. Negative RNU - SPP receives excess revenue, which must be credited back to market participants. Tracks Make Whole Payments (MWP) for both the Day-Ahead Market and the RUC (Real-Time) with payments broken down by Fuel Type of the generation receiving the MWP.

357 Financial Metrics This group of metrics provides a view of the organization s overall financial situation in terms of both the operating costs and settlement functions carried out. 6. SPP Admin Fee Performance 7. Budget Performance Monitor 8. Financial Settlement Index 9. Financial Disputes Index Measures actual costs incurred by SPP on an annual basis and compares this to the approved Admin Fee and Budgeted Net Revenue Requirement (NRR). Measures the total actual operating expenses against the total budgeted operating expenses across the organization. Metric measures the timeliness of the financial settlements for both transmission billing and market billing and provides a proxy for the strength of the organization s cash flow. Measures the number and value of disputes made with regard to the financial settlements of the markets. The objective in this area is twofold: (1) minimize the time to clear disputes; and (2) minimize the total value of dollars in dispute. The dollar amount for total disputes, the average dispute size and the largest single dispute is tracked. The number of disputes active during the month, as well as the average days outstanding for those disputes is calculated. In addition, the number of resettlements during the month is tracked. Measures both involuntary and voluntary turnover rates, along with number of employees in the organization. Monthly turnover is charted on a rolling 12 month basis, while annual turnover ratio and number of employees is provided for historical purposes. 10. Employee Turnover A turnover rate is calculated each month by dividing the total turnover for the month by the total employee count at month-end. This monthly rate is then aggregated for the previous 12 months giving a 12-month turnover rate. In order to observe the trend, this 12-month turnover rate is calculated on a rolling basis for the last 25 months. An annual turnover rate and the number of employees at year-end are both tracked for historical purposes.

358 Performance Metrics The metrics in this group focus on NERC Compliance, IT System Availability, Engineering Studies and the Strategic Plan. 11. SPP RE Compliance Measures SPP Regional Entity compliance of all NERC standards. Metrics track the active caseload, as well as new possible violations and the disposition of reported violations. 12. IT System Availability Measures availability of SPP IT Systems. 13. Studies Tracks status of Aggregate Studies and Generation Interconnection Studies by MW and upgrade costs (Aggregate Studies only). 14. Strategic Plan Tracks status of Strategic Plan initiatives and assignments.

359 SPP Tariff/Governing Document Revisions Docket Number Short Description Summary ER Submission of Tariff Revisions to Comply with Order No Regional Planning and Cost Allocation Requirements and On August 3, 2015, FERC issued an order accepting SPP's compliance filing submitted on May 18, 2015 in Docket No. ER On July 2, 2015, LSP Transmission Holdings, LLC and LS Power Transmission, LLC filed their Non- Binding Statement of Issues to be Raised in Case No ER (U.S. Court of Appeals) (U.S. Court of Appeals) ER Submission of Revisions to its Membership Agreement to Comply with Order No Oklahoma Gas and Electric Company ("OG&E") v. Federal Energy Regulatory Commission ("FERC") Concerning Orders Issued in Docket Nos. ER and ER Regarding SPP's Order No Regional Compliance Filings LSP Transmission Holdings, LLC and LS Power Transmission, LLC v. Federal Energy Regulatory Commission ("FERC") Submission of Tariff Revisions to Comply with Order No Interregional Coordination and Cost Allocation Requirements On July 24, 2015, OG&E and Intervenors Supporting Petitioner filed a Joint Opening Brief in Case No On September 21, 2015, FERC filed its Brief in Case No On October 6, 2015, Intervenors Supporting Respondent filed their Brief in Case No On August 31, 2015, FERC issued an order accepting SPP's May 18, 2015 compliance filing related to the SPP-Southeastern Regional Transmission Planning Process ( SERTP ) region process, subject to a further compliance filing. SPP was directed to submit a compliance filing that lists either the particular type of transmission studies that will be conducted or that cross-references the specific provisions in SPP s Tariff that indicate the type of transmission studies SPP will conduct to evaluate interregional transmission facilities. In the order, FERC stated it will address any arguments regarding SPP's proposed interregional cost allocation as it applies to transmission facilities below 300 kv in Docket No. ER On September 30, 2015, SPP submitted its compliance filing related to the SPP-SERTP process in response to the order issued on August 31, An effective date of January 1, 2015 was requested.

360 SPP Tariff/Governing Document Revisions Docket Number Short Description Summary ER Submission of Tariff Revisions to Modify the Generator Interconnection Procedures On July 20, 2015, SPP submitted its compliance filing in response to the order issued on June 18, ER ER and ER Order No. 681 Compliance Filing to Implement Long-Term Congestion Rights ("LTCRs") Submission of Tariff Revisions to Facilitate the Integration of Western Area Power Administration - Upper Great Plains Region ("Western-UGP"), Basin Electric Power Cooperative ("Basin Electric"), and Heartland Consumers Power District ("Heartland") (collectively the "IS Parties"), which Jointly Own and Operate the Integrated System, into the SPP Regional Transmission Organization ("RTO") Submission of Bylaws and Membership Agreement ("Governing Documents") Revisions to Facilitate the Integration of Western Area Power Administration - Upper Great Plains Region ("Western- UGP"), Basin Electric Power Cooperative ("Basin Electric"), and Heartland Consumers Power District ("Heartland") (collectively the "IS Parties"), On July 16, 2015, FERC issued an order denying rehearing of the order issued on October 28, FERC conditionally accepted SPP's January 30, 2015 compliance filing, subject to a further compliance filing. SPP's compliance filing is due on October 30, On October 15, 2015, FERC issued an Order on Rehearing and Clarification. The Commission denied the requests for rehearing and granted in part and denied in part the requests for clarification of the order issued on November 10, 2014.

361 SPP Tariff/Governing Document Revisions Docket Number Short Description Summary which Jointly Own and Operate the Integrated System, into the SPP Regional Transmission Organization ("RTO") ER ER ER ER Submission of Tariff Revisions Regarding Multi-Day Reliability Commitment in Conservative Operations (Revising Attachment AE Sections and 4.5.3) Order No Interregional Compliance Filing with Regards to the Mid-Continent Area Power Pool ("MAPP") Planning Region and its Sole Public Utility, NorthWestern Corporation ("NorthWestern") Submission of Tariff Revisions to Clarify and Modify Transmission Owner Selection Process Provisions Revisions to Bylaws to Expand the Board of Directors On August 14, 2015, FERC issued an order conditionally accepting the tariff revisions to clarify whether and how Resources are committed in the Multi-Day Reliability Assessment after Conservative Operations have been implemented pursuant to the SPP Emergency Operation Plan, subject to a compliance filing. On September 11, 2015, SPP submitted its compliance filing pursuant to the order issued on August 14, 2015 in this proceeding. An effective date of May 15, 2015 was requested. On September 30, 2015, FERC issued an order rejecting as moot SPP s compliance filing specifying SPP's proposal to comply with the interregional planning and cost allocation requirements of Order No with regards to the MAPP planning region and its sole public utility, NorthWestern. On August 14, 2015, FERC issued an order accepting in part and rejecting in part SPP's tariff revisions, subject to a further compliance filing. On September 11, 2015, SPP submitted its compliance filing pursuant to the order issued on August 14, 2015 in this proceeding. An effective date of August 15, 2015 was requested. On August 10, 2015, FERC issued an order accepting the revisions to the SPP Bylaws to expand SPP's Board of Directors by up to three additional seats and to incorporate corresponding modifications to certain quorum and voting requirements. An effective date of August 15, 2015 was granted. ER Submission of Tariff Revisions to Modify Procedures for Establishing Trading Hubs and Resource Hubs This order constitutes final agency action. On July 24, 2015, SPP filed tariff revisions to set forth one set of procedures for establishing, modifying, and terminating Trading Hubs and another for Resource Hubs. An effective date of September 23, 2015 was requested. On September 22, 2015, FERC issued an Order Conditionally Accepting Tariff Revisions. SPP's compliance filing is due on October 22, 2015.

362 SPP Tariff/Governing Document Revisions Docket Number Short Description Summary ER Submission of Tariff Revisions Regarding Components of Mitigated Offers On July 24, 2015, SPP submitted tariff revisions to clarify the costs to be included in Mitigated Energy Curve Offers, Start-Up Offers, and No-Load Offers submitted by Market Participants pursuant to the SPP Market Power Mitigation Plan. SPP requested that the Commission accept the proposed revisions for filing, allow a specified portion of the revisions to become effective September 22, 2015, and allow the remainder of the revisions to become effective approximately five months later. Numerous parties filed comments and protests. ER ER ER Contract Services Agreement Between Southwest Power Pool, Inc. and Western Area Power Administration Submission of Tariff Revisions to Attachment AE to Support the Application of the Federal Service Exemption in the Integrated Marketplace Contract Services Agreement Between Southwest Power Pool, Inc. and Basin Electric Power Cooperative On September 22, 2015, FERC issued an Order Rejecting Tariff Revisions. On July 31, 2015, SPP filed tariff revisions to incorporate an agreement governing the tariff administration and other duties that SPP will perform on behalf of SPP Member Western Area Power Administration-Upper Great Plains Region, for its transmission facilities in the Western Interconnection that will transfer to the functional control of SPP on October 1, An effective date of October 1, 2015 was requested. On August 21, 2015, NorthWestern Corporation filed a Motion to Intervene, Comments and Request for Hearing and Settlement Judge Procedures. On September 30, 2015, FERC issued an order accepting SPP's tariff revisions to incorporate the agreement, suspending the agreement for a nominal period, to become effective October 1, 2015, subject to refund, and establishing hearing and settlement judge procedures. On July 31, 2015, SPP submitted tariff revisions to support the implementation, accounting, and settlement of the Federal Service Exemption when the Western Area Power Administration - Upper Great Plains Region, a Federal power marketing agency, joins SPP and begins taking Tariff services on October 1, On September 28, 2015, FERC issued an order accepting SPP's tariff revisions. An effective date of October 1, 2015 was granted. This order constitutes final agency action. On July 31, 2015, SPP filed tariff revisions to incorporate an agreement governing the tariff administration and other duties that SPP will perform on behalf of SPP Member Basin Electric Power Cooperative, for its transmission facilities in the Western Interconnection that Basin Electric will transfer to the functional control of SPP on October 1, On September 30, 2015, FERC issued an order accepting SPP's tariff revisions to incorporate the agreement. An effective date of October 1, 2015 was granted.

363 SPP Tariff/Governing Document Revisions Docket Number Short Description Summary This order constitutes final agency action. ER ER Gas-Electric Coordination Compliance Filing (Order No. 809) Submission of Tariff Revisions to Implement Approval and Cost Allocation for a Seams Transmission Project On August 4, 2015, SPP submitted its compliance filing in response to the order issued on March 20, 2014 in Docket No. EL SPP proposed tariff revisions in compliance with Order No. 809 to modify the timeframes for its Day-Ahead Market and Day-Ahead Reliability Unit Commitment process and demonstrated why further alignment of its Day-Ahead Market posting results with the natural gas pipeline Timely Nomination Cycle is not needed. An effective date of October 1, 2016 was requested. Several parties filed comments. FERC action is pending. On September 24, 2015, SPP filed tariff revisions to include terms and conditions to allow for the study, approval, and cost allocation of transmission facilities identified pursuant to coordinated transmission planning between SPP and external entities that are outside the scope of, or do not qualify for, Order No interregional coordination and cost allocation. An effective date of December 1, 2015 was requested.

364 Other Filings of Interest Docket Number Short Description Summary EL11-34 Midcontinent Independent System Operator, Inc. ("MISO ) Petition for Declaratory Order Seeking Commission Confirmation Regarding Section 5.2 of the Joint Operating Agreement ("JOA") between MISO and SPP (U.S. Court of Appeals) Southwest Power Pool, Inc. v. Federal Energy Regulatory Commission ( FERC ) On October 13, 2015, SPP, together with MISO, Associated Electric Cooperative, Inc., Southern Company Services, the Tennessee Valley Authority, Louisville Gas and Electric Company and Kentucky Utilities Company, PowerSouth Energy Cooperative, and NRG Energy, Inc., submitted an Offer of Settlement to resolve all issues between and among the Parties. On October 13, 2015, SPP and the other parties filed a Joint Motion for Interim Relief and Request for Expedited Action. The parties requested authorization to implement the compensation and transfer limit provisions of Articles II, III, and VII of the Settlement Agreement commencing on February 1, 2016, pending the Commission's consideration and acceptance of the Settlement Agreement. EL14-21 ER EL14-30 SPP Complaint for an Order Finding the Midcontinent Independent System Operator, Inc. ("MISO") is Violating the Joint Operating Agreement ("JOA") between SPP and MISO and the SPP Tariff and Requiring MISO to Compensate SPP for Use of SPP's Transmission System ( SPP Complaint ) Unexecuted Firm Point-To-Point Transmission Service Agreement between SPP as Transmission Provider and Midcontinent Independent System Operator, Inc. ("MISO") as Transmission Customer ( Service Agreement Filing ) Midcontinent Independent System Operator, Inc. ("MISO") Complaint Regarding

365 Other Filings of Interest Docket Number Short Description Summary Transmission Service Invoices from SPP ( MISO Complaint ) ER ER Joint Operating Agreement ("JOA") between SPP and the Midcontinent Independent System Operator, Inc. ("MISO") to Include Market-to-Market ("M2M") Terms and Conditions (SPP Rate Schedule FERC No. 9) Joint Operating Agreement ("JOA") between SPP and the Midcontinent Independent System Operator, Inc. ("MISO") to Comply with Interregional Requirements of Order No (SPP Rate Schedule FERC No. 9) On July 22, 2015, SPP filed is first informational report regarding Interface Bus Pricing and a Day-Ahead Firm Flow Entitlement exchange process. On August 19, 2015, FERC issued an order accepting SPP's revisions to the JOA between SPP and MISO to revise Attachment 2, Section in compliance with the order issued on January 22, An effective date of March 1, 2015 was granted. On August 18, 2015, SPP submitted proposed revisions to the JOA between MISO and SPP to comply with the requirements of the order issued on February 19, 2015, regarding Order No. 1000's interregional planning and cost allocation requirements applicable to SPP and MISO. An effective date of March 30, 2014 was requested.

366 State Cases Docket Number Short Description Summary No significant activity to report this quarter.

367 Date Event Location 8/14/15 Joined RLC members for meeting with EPA regarding the CPP Final Rule Washington, DC 9/10/15 9/28/15 9/29/15 Attended AR Legislative Joint Energy Committee meeting to discuss SPP s roles and responsibilities Hosted Government Affairs conference for SPP member companies' government affairs representatives. Conference speakers included Members of Congress, FERC Commissioners, and a representative from the EPA. Siloam Springs, AR Washington, DC

368 Regulatory Outlook FERC ER FERC ER FERC ER FERC ER FERC ER FERC ER FERC ER FERC ER FERC ER Settlement Conference begins at 10 AM Eastern Time (Order of Chief Judge Designating Settlement Judge and Scheduling Settlement Conference issued on October 6, 2015) Intervenor Answering Testimony and Exhibits are due (Order of Chief Judge Adopting Procedural Schedule issued on August 12, 2015) Compliance Filing due to revise language related to the procedures for establishing Trading Hubs and Resource Hubs (Order Conditionally Accepting Tariff Revisions issued on September 22, 2015) Settlement Conference begins at 10 AM Eastern Time (Order of Chief Judge Designating Settlement Judge and Scheduling Settlement Conference issued on October 6, 2015) Settlement Conference to begin at 10 AM Eastern Time (Order Scheduling Settlement Conference issued on September 28, 2015) Settlement Conference begins at 10 AM Eastern Time (Order of Chief Judge Designating Settlement Judge and Scheduling Settlement Conference issued on October 6, 2015) Settlement Conference begins at 10 AM Eastern Time (Order of Chief Judge Designating Settlement Judge and Scheduling Settlement Conference issued on October 9, 2015) Settlement Conference begins at 10 AM Eastern Time (Order of Chief Judge Designating Settlement Judge and Scheduling Settlement Conference issued on October 6, 2015) SPP's compliance filing is due related to compliance with Order No. 681 (Order Denying Rehearing and Accepting Compliance Filing, Subject to Further Compliance Filing issued on July 16, 2015; Notice of Extension of Time issued on August 10, 2015) 10/20/ /22/ /22/ /22/ /23/ /27/ /27/ /29/ /30/2015 FERC AD14-15 RTO/ISO Performance Metrics are due (Request for Information on Common Performance Metrics for RTOs and ISOs and Utilities Outside RTO and ISO Regions issued on August 17, 2015) 10/30/ /15/2015 3:10:16 PM Page: 1

369 Regulatory Outlook FERC ER FERC RM15-9 SPP to file its Annual Budget in FERC Docket Nos. ER04-48, ER , RT04-1 Effective date of Order No. 813, Final Rule approving a revised Reliability Standard, PRC (Protection System, Automatic Reclosing and Sudden Pressure Relaying Maintenance (Order No. 813 issued on September 17, 2015) 11/1/ /23/2015 FERC RM15-8 Comments due in response to Notice of Proposed Rulemaking proposing to approve Reliability Standard PRC (Relay Performance During Stable Power Swings) (Notice of Proposed Rulemaking issued on September 17, 2015) 11/23/2015 FERC RM15-4 FERC RM15-25 Effective date of Order No. 814, Final Rule approving Reliability Standard PRC (Disturbance Monitoring and Reporting Requirements) (Order No. 814 issued on September 17, 2015) Comments due in response to Notice of Proposed Rulemaking proposing to amend the Commission's regulations to require the North American Electric Reliability Corporation (NERC) to provide the Commission, and Commission staff, with access, on a non-public and ongoing basis, to certain databases compiled and maintained by NERC (Notice of Proposed Rulemaking issued on September 17, 2015) 11/24/ /30/2015 FERC RM15-24 Comments due in response to the Notice of Proposed Rulemaking proposing to revise the Commission's regulations to require that each regional transmission organization and independent system operator settle energy transactions in its real-time markets at the same time interval it dispatches energy and settle operating reserves transactions in its real-time markets at the same time interval it prices operating reserves (Notice of Proposed Rulemaking issued on September 17, 2015) 11/30/2015 FERC RM15-23 Comments due in response to the Notice of Proposed Rulemaking proposing to amend the Commission's regulations to require each regional transmission organization and independent system operator to electronically deliver to the Commission, on an ongoing basis, data required from its market participants that would (i) identify the market participants by means of a common alpha-numeric identifier; (ii) list their "Connected Entities," which includes entities that have certain ownership, employment, debt, or contractual relationships to the market participants, as specified in this NOPR; 11/30/ /15/2015 3:10:16 PM Page: 2

370 Regulatory Outlook and (iii) describe in brief the nature of the relationship of each Connected Entity (Notice of Proposed Rulemaking issued on September 17, 2015) FERC ER FERC ER FERC ER Settlement Conference to begin at 10 AM Eastern Time (Notice Scheduling Settlement Conference issued on September 9, 2015) Staff Direct and Answering Testimony and Exhibits are due (Order of Chief Judge Adopting Procedural Schedule issued on August 12, 2015) Settlement Conference to begin at 1:30 PM Eastern Time (Notice Scheduling Settlement Conference issued on October 5, 2015; Notice Rescheduling Settlement Conference issued on October 14, 2015) 12/2/ /10/ /10/2015 FERC Refund report is due (Letter Order issued on October 13, 2015) ER FERC Refund report is due (Letter Order issued on October 13, 2015) ER State of New Mexico Lea County Electric Cooperative Inc.'s Interim Period ends (participation in SPP RTO) (October 1, UT Uncontested Stipulation; December 16, 2010 Final Order Adopting Certification of Stipulation) 12/11/ /11/ /16/2015 FERC ER FERC ER Intervenor Cross-Answering Testimony and Exhibits are due (Order of Chief Judge Adopting Procedural Schedule issued on August 12, 2015) SPP's Informational Report due detailing SPP s and MISO s progress on resolving issues related to their implementation methodologies for Interface Bus Pricing, and analyzing whether the benefits of implementation of a day-ahead firm flow entitlement exchange process outweigh its costs, until such issues are resolved (Order Conditionally Accepting in Part and Rejecting in Part Revisions to Joint Operating Agreement issued on January 22, 2015) 1/12/2016 1/22/2016 FERC Authorization to issue $70 million in promissory notes expires (Order issued on January 29, 2014) ES /29/ /15/2015 3:10:16 PM Page: 3

371 Regulatory Outlook FERC ER FERC ER SPP and City of Independence Answering Testimony and Exhibits are due (Order of Chief Judge Adopting Procedural Schedule issued on August 12, 2015) Final Joint Statement of Issues, Joint Witness List, Index of Exhibits are due (Order of Chief Judge Adopting Procedural Schedule issued on August 12, 2015) 2/5/2016 2/9/2016 FERC Hearing to be held (Order of Chief Judge Adopting Procedural Schedule issued on August 12, 2015) ER FERC Initial Briefs due (Order of Chief Judge Adopting Procedural Schedule issued on August 12, 2015) ER /23/2016 3/29/ /15/2015 3:10:16 PM Page: 4

372 December 2015 Dashboard Metric RT-DA Price Deviation Monthly Average Gross Virtual Profitability per MWh TCR Funding Excess Capacity MWP Distribution per MWh HR Operational Metrics Markets Operational Indicators Previous 3 Month Indicators Metric Previous 3 Month Indicators Chart Oct-15 Sep-15 Aug-15 Chart Oct-15 Sep-15 Aug-15 Real-Time Obligation fulfilled by DA (DAMKT or DA-RUC, 1 7 DBDA-RUC) 2 Day-Ahead Mid-Term Load Forecast 8 3 Short-Term Load Forecast 9 4 On-Time Real-Time Posting 10 5 On-Time Day-Ahead Posting 10 6 RT-DA Price Deviation Metric Indicator Thresholds Indicator Threshold Values Metric Indicator Threshold Values Real-Time Obligation fulfilled by DA (DAMKT, DA-RUC, <= 25% <= 30% <= 35% > 45% >= 95% >= 90% >= 85% < 85% DBDA-RUC) (% Committed Capacity) Monthly Average Gross Virtual Profitability per MWh TCR Funding Excess Capacity (900 MW + X% of Peak Load) MWP Distribution per MWh HR Operational Metrics (Year to date),days Failed) <= $2.00 <= $2.50 <= $3.00 > $3.00 Day-Ahead Mid-Term Load Forecast (% error) <= 5% <= 10% <= 15% > 15% >= 90%, <= 100% ± 5% of green ± 10% of green ± 20% of green <= 1% <= 1.5% <= 2.5% > 2.5% <= 0.5% <= 1% <= 1.5% > 1.5% On-Time Real-Time Posting >= 99.5% >= 99% >= 98.5% < 98% <= $0.50 <= $0.75 <= $1.00 > $1.00 On-Time Day-Ahead Posting >= 99% >= 98.5 % >= 98% < 98% <= 14 <= 18 <= 25 > 25 Short-Term Load Forecast (% error) Expected Monitor Concern Problem Please note: Dashboard metric criteria are reviewed and revised each year. *The current year Dashboard metric criteria have been published at the end of the document **Each metric item is identified by an alphabetic symbol that links the metric to its corresponding chart and criteria entry

373 1 The Absolute Difference is the daily average of the absolute values of the hourly difference between Day-Ahead Market LMPs and Real-Time Market LMPs The Average Difference is the daily average of the hourly difference between Day-Ahead Market LMPs and Real-Time Market LMPs The Average LMP %Difference is the Absolute Difference divided by the average Day-Ahead LMP.

374 2 The Cleared Virtual Profitability is the daily average of the hourly DA LMP minus the hourly averaged RT LMP mulitiplied by the cleared virtual transactions from DA and all divided by the absolute value of the total cleared virtual transactions from DA. The Monthly Market Index is the monthly average of the cleared virtual profitability. Volume of Cleared MWh is the daily average of the total cleared virtual transactions in DA.

375 3 TCR Funding Final number shown in report Difference in DA congestion revenue (money collected) and TCR payment (money paid to TCR holders) 90% funded would equate to collecting 90$ in DA and paying out 100$ to TCR holders

376 4 Excess Capacity = Effective Max DispatchMW Cleared RegUp Cleared Spin Cleared Online Supplemental Excess Capacity is calculated as the MW capacity remaining (on dispatchable resources) that is not being dispatched for energy or reserved for online operating reserves (Reg Up, Spin, Online Supplemental). This Excess Capacity is calculated for each unit for every hour and that excess capacity is assigned to a Commitment Source that represents where the unit s commitment actually came from. Only excess capacity from the hour of the daily peak generation obligation (averaged by month) is considered. The final chart only includes those additional commitment changes made by SPP outside of DAMKT or MP-initiated decisions. Expected Monitor Concern Problem Excess Capacity (900 MW + X% of Peak Load) <= 0.5% <= 1% <= 1.5% > 1.5%

377 5 The all-in price cost of each MW is broken down into different components associated with different product or cost distribution. The DA MWP and RUC MWP make up the MWP distribution per MWh paid out as component of all-in cost for each MW of energy.

378 6 STLF This includes a count of days that the STLF Error has exceeded 1% as of October DAMKT - This portion of the graph includes a count of days that the DAMKT closed past the deadline as of October DARUC This portion of the graph includes a count of days that DARUC failed to ssolve within 4 hours of DAMKT Posting as of October SE/RTLODF - This portion of the graph shows a count of days that the SE solution failed to solve every 4 seconds as of October The metric indicator will be green if the failure counts falls between 0 & 7. The metric indicator will fall in the yellow category if the count falls between 8 & 14.

379 7 Commitments Commitments are determined and separated into 5 different cases SELF, MANUAL, ID_RUC, DA_RUC and DAMKT and are taken from the Current Operating Plan table. Depending on the process the commitment is made, they are categorized into groups. For the purpose of the Metrics on the dashboard, the DA_RUC, DAMKT and DBDA commitments are considered DA commitments fulfilling Real-Time obligation.

380 8

381 9

382 10 Short-Term Load Forecast This graph shows the percentage of time the STLF error (Actual Load vs STLF) was within 1% for each of the three previous months as well as from Go-Live to Date. Mid-Term Load Forecast This portion of the graph shows the percentage of time that the MTLF Error (Actual Load vs MTLF) was within 5% for each of the three previous months as well as from Go-Live to Date. Day Ahead Market This portion of the graph shows the percentage of time that the DAMKT closed on time for each of the three previous months as well as from Go-Live to Date. Intra Day RUC This portion of the graph shows the percentage of time that IDRUC studies succesfully ran every four hours for each of the three previous months as well as from Go-Live to Date. State Estimator This portion of the graph shows the percentage of time that there was a SE solution every four seconds for each of the three previous months as well as from Go-Live to Date. Real Time Balancing Market This portion of the graph shows the percentage of time that RTBM solved and approved successfully every five minutes for each of the three previous months as well as from Go-Live to Date.