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Schedule 11Schedule 11 INPUTS and IMPACTS

April 25, 2012

Steve [email protected]∙ 501.688.1683

Transmission Settlements

SCHEDULE 11 INPUTS AND IMPACTSTransmission Settlements

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OUTLINE

1. RRR FILING

OUTLINE

2. BASE PLAN REVENUE REQUIREMENT ALLOCATION SPREADSHEETSPREADSHEET

3. IMPACTS TO CHARGES AND REVENUES

4 ATRR 10 YEAR FORECAST4. ATRR 10 YEAR FORECAST

5. CHARGES AND REVENUES BY UPGRADE ID

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Summary of Revenue Requirements and Rates

RRR FILINGy q

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RRR FILINGRRR FILING

• Snapshot of Currently Effective Revenue RequirementsSnapshot of Currently Effective Revenue Requirements and Rates:

– Created to streamline the Rate/ATRR filing process for– Created to streamline the Rate/ATRR filing process for annual formula rate updates

Broken down by Zone– Broken down by Zone

– Separated by Schedule 1, 7, 8 and 11

– Used as inputs into the Settlement e‐Terra System (ETS)

– Began in December, 2011

– Published on www.spp.org – under Governing Documents Header

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RRR FILING TABSRRR FILING TABS

UPGRADE COST/ALLOCATIONS FOR SCHEDULE 11

LAST 12 MO CP DATA

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TAB FORMATS FROM RRR FILETAB FORMATS FROM RRR FILE

E l WR S h 11 PTP R t T b E l Mid t PTP R t Att T T b

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Example: WR Sch 11 PTP Rate Tab Example: Midwest PTP Rate Att T Tab

RRR FILE LINKRRR FILE LINK

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Summary of Upgrades

BASE PLAN REVENUE REQUIREMENT ALLOCATION SPREADSHEET

Summary of Upgrades

ALLOCATION SPREADSHEET

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BASE PLAN REVENUE REQUIREMENTBASE PLAN REVENUE REQUIREMENT ALLOCATION SPREADSHEET• Breakdown of Base Plan Upgrade Allocations to Zones:

– Summarized by T.O. AREAS (Zones)

– Broken down by REGION‐WIDE and ZONAL ATRR figures

– Main input for PTP Rates and NITS ATRRs used in– Main input for PTP Rates and NITS ATRRs used in Schedule 11 calculations

$s per Zone are based on MW Mi allocations of the– $s per Zone are based on MW‐Mi allocations of the Upgrade or Highway / Byway allocations

Published in the RRR filing– Published in the RRR filing

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/HIGHWAY / BYWAY HIGHLIGHTS• Notification To Construct issued after 6/19/2010/ /• Three tiers of Cost Allocation based on Voltage of Upgrade

Highway/Byway

Voltage Paid for by Region Paid for by Local Zone

Highway/Byway

300 kV and above 100% 0%

above 100 kV and below 300 kV 33% 67%

100 kV and below 0% 100%

191212

Base Plan Revenue Requirement Allocation Spreadsheetq p

*This sheet shows total $’s allocated to each ZONE, by Upgrade ID, sorted by T.O. PROJECTS BY AREA

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*These numbers affect both the Schedule 11 Regional and Zonal calculations, and can be a great indicator of future invoices.

Preparing for Change

IMPACTS TO CHARGES AND Preparing for Change

REVENUES

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IMPACTS TO SCHEDULE 11 CHARGES &IMPACTS TO SCHEDULE 11 CHARGES & REVENUES• How the Inputs from Regulatory Impact Your Invoices:

– Impacts to Point – To – Point Charges and Revenues

– Impacts to Network (NITS) Charges and Revenues

– Sample Calculations and Rules– Sample Calculations and Rules

– What to Watch For with Regard to the Regulatory Inputs

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Condensed Version of SpreadsheetCondensed Version of Spreadsheet

*This will be used in examples going forward

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TOTALS OF IMPORTANCETOTALS OF IMPORTANCE

TOTALS by T.O. AREA (Zones): U dUsed as numerator in Pro‐Rata Share l l icalculations

for Revenue Allocation

*ZONAL TOTALS: Used as denominator in Pro‐Rata Share for Zonal Revenue

REGIONWIDE TOTAL: Used as denominator in Pro‐Rata Share for

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Allocation, and as numerator for PTP Schedule 11 Zonal Rates

Regional Revenue Allocation, and as numerator for PTP Schedule 11 Regional Rates

ATTACHMENT H TIE‐INATTACHMENT H TIE‐INThe totals of Columns 4 + 5 in Attachment H will correspond to the total Schedule 11 Zonal ATRR for charges in the same Zone.

•This total will determine that Zone’s Schedule 11 Zonal Rates for PTP

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ATTACHMENT H TIE‐INATTACHMENT H TIE‐INThe total displayed in Line 5 of Table 2 in Attachment H will correspond to the totalAttachment H will correspond to the total Schedule 11 Region‐Wide ATRR for charges in the footprint.

•This total will determine the RegionalThis total will determine the Regional Schedule 11 Rates for PTP

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How Do These #s Affect Your Bottom Line?How Do These #s Affect Your Bottom Line?

• Point – To – Point ServicePoint To Point ServiceSchedule 11 Zonal Charge

Schedule 11 Regional ChargeSchedule 11 Regional Charge

Schedule 11 Zonal Revenue Allocation

Schedule 11 Regional Revenue AllocationSchedule 11 Regional Revenue Allocation

• Network Service (NITS)Schedule 11 Zonal Charge

Schedule 11 Regional Charge

Schedule 11 Zonal Revenue Allocation

Schedule 11 Regional Revenue Allocation

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Breakdown for ExamplesBreakdown for Examples

For our examples, we’ll concentrate on upgrades in TO AREA #3, and ATRR p , pg ,$s designated to their corresponding ZONE 3.

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Point – To – Point Charges

• Schedule 11 Zonal Charges : The Sch11 Zonal Rates are

Point – To – Point Charges

Schedule 11 Zonal Charges : The Sch11 Zonal Rates are derived from the total ATRR per ZONE.

• Schedule 11 Regional Charges: The Sch 11 Regional• Schedule 11 Regional Charges: The Sch 11 Regional Rates are determined from the combined Regional ATRRs of all T.O. PROJECT AREAS.ATRRs of all T.O. PROJECT AREAS.

**KEEP IN MIND : Each additional $ to these ZONAL TOTALS will drive upto these ZONAL TOTALS will drive up rates for that ZONE.

**KEEP IN MIND : Each additional $ to this REGIONAL TOTAL will drive REGIONAL rates up.

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TOTALp

Point – To – Point Revenue AllocationPoint – To – Point Revenue Allocation•Schedule 11 Zonal Revenue

This revenue allocation splits the charge amount to each T.O. with ATRR amounts in the total Zonal ATRR amount, via Pro‐Rata Share.

= T.O. TOTAL / ZONAL TOTAL

NOTE A $1000 Z l Ch

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NOTE: Assumes a $1000 Zonal Charge

Point – To – Point Revenue AllocationPoint – To – Point Revenue Allocation•Schedule 11 Regional Revenue

This revenue allocation splits the charge amount to each T.O. with Region wide ATRR amounts via Pro‐Rata Share of the TOTAL

** ASSUMES A $1000 REGIONAL CHARGE

Region‐wide ATRR amount.

ASSUMES A $1000 REGIONAL CHARGE

TO REGIONWIDE TOTALS PRS %

REVENUE TO T.O.

T.O. #1 $ 2,143,190.00 0.261628177 $ 261.63

T O #2 $ 3 349 000 00 0 408826452 $ 408 83T.O. #2 $ 3,349,000.00 0.408826452 $ 408.83

T.O. #3 $ 2,699,550.00 0.329545371 $ 329.54

TOTAL= T.O. TOTAL /

** f REGIONAL TOTAL **KEEP IN MIND: If a T.O. Area has increased Regional ATRR $, they can expect i d if

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increased revenue if everything else stays the same.

Network Charges• Schedule 11 Zonal Charges : Monthly charges to the TC are

calculated by multiplying the Load‐Ratio‐Share of TSR Prior Y ZCP h l P i Y CP f h i ZONE b

g

Year ZCP to the total Prior Year CP for the entire ZONE by 1/12th the total ZONAL Schedule 11 ATRR for that ZONE.

**KEEP IN MIND : Each additional $ to this ZONAL ATRR TOTAL will drive this charge up

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TOTAL will drive this charge up.

Network Charges• Schedule 11 Regional Charges: Monthly charges to the TC

are calculated by multiplying the Load‐Ratio‐Share of the

g

are calculated by multiplying the Load Ratio Share of the TSR Prior Year ZCP to the total REGION‐WIDE Prior Year ZCP by 1/12th the total REGION‐WIDE Schedule 11 ATRR.

**KEEP IN MIND : Each additional $ to this REGIONAL TOTAL will drive this charge

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TOTAL will drive this charge up.

Network Revenue AllocationNetwork Revenue Allocation•Schedule 11 Zonal Revenue

This revenue allocation splits the charge amount to each T.O. with ATRR amounts in the total Zonal ATRR amount, via Pro‐Rata Share.

= T.O. TOTAL / ZONAL TOTAL

NOTE Assumes a $1000 Zonal Charge

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NOTE: Assumes a $1000 Zonal Charge

Network Revenue AllocationNetwork Revenue Allocation•Schedule 11 Regional Revenue

This revenue allocation splits the charge amount to each T.O. with Region wide ATRR amounts via Pro‐Rata Share of the TOTAL Region‐wide ATRR amount.

** ASSUMES A $1000 REGIONAL CHARGE

TO REGIONWIDE TOTALS PRS %

REVENUE TO T.O.

T.O. #1 $ 2,143,190.00 0.261628177 $ 261.63

T O #2 $ 3 349 000 00 0 408826452 $ 408 83T.O. #2 $ 3,349,000.00 0.408826452 $ 408.83

T.O. #3 $ 2,699,550.00 0.329545371 $ 329.54

TOTAL

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= T.O. TOTAL / REGIONAL TOTAL

Applying This KnowledgeApplying This KnowledgeTransmission Customers

For both PTP and NITS, if a TC has a TSR with Load in T.O. AREA / ZONE 3, that TC’s TSR charges would beAREA / ZONE 3, that TC s TSR charges would be affected as follows:

• Schedule 11 Regional Charge: Increases with every $• Schedule 11 Regional Charge: Increases with every $ added to the total REGION‐WIDE SCH 11 ATRR / PTP RATE – regardless of which T.O. AREA the $’s areRATE regardless of which T.O. AREA the $ s are added.

• Schedule 11 Zonal Charge: Increases with every $• Schedule 11 Zonal Charge: Increases with every $ added to ZONE 3’s NITS SCH 11 ATRR / PTP RATE figure.

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Applying This KnowledgeApplying This KnowledgeTransmission Owners

For both PTP and NITS, TSR revenue is allocated via Pro‐Rata Share of that T.O./ZONE portion to the total ATRRRata Share of that T.O./ZONE portion to the total ATRR figure:

• Schedule 11 Regional Revenue: Increases if T O Area’s• Schedule 11 Regional Revenue: Increases if T.O. Area s REGION‐WIDE ATRR increases proportionately, in comparison to other T.O. Areas.comparison to other T.O. Areas.

• Schedule 11 Zonal Revenue: Increases with additional ATRR $’s added to TO AREA’S Zonal component ofATRR $ s added to T.O. AREA S Zonal component of total ATRR.

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Key Results to RememberKey Results to Remember

• When REGION‐WIDE ATRR $s increase, Schedule 11When REGION WIDE ATRR $s increase, Schedule 11 Regional Charges increase for both PTP and NITS.

• When a TO ’s ZONAL ATRR figure increases Schedule• When a T.O. s ZONAL ATRR figure increases, Schedule 11 Zonal Charges will increase if you have a load in that Zone.that Zone.

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Looking Ahead

ATRR 10 YEAR FORECASTLooking Ahead

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ATRR 10 YEAR FORECASTATRR 10 YEAR FORECAST

• Indicator of Future Costs and Allocations:

– Study of Expected Upgrades and Impacts to Each Zone

– Accounts for Upgrade Depreciation

– Based on Current Load‐Ratio‐Shares of the Footprint– Based on Current Load‐Ratio‐Shares of the Footprint

– Uses inputs provided by Transmission Owners

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ATRR 10 YEAR FORECAST LINKATRR 10 YEAR FORECAST LINK

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ATRR Forecast Purpose and General NotesATRR Forecast Purpose and General Notes

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ATRR SourcesATRR Sources

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Upgrade Summary with ITP Near TermUpgrade Summary with ITP Near Term

*As of Jan 14, 2012, these amounts are subject to change (Board

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Action, NTC additions, withdrawals, Est. Updates, etc.)

Upgrade SummaryUpgrade Summary

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*As of Jan 14, 2012, these amounts are subject to change (Board Action, NTC additions, withdrawals, Est. Updates, etc.)

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*As of Jan 14, 2012, these amounts are subject to change (Board Action, NTC additions, withdrawals, Est. Updates, etc.)

Applying This KnowledgeApplying This KnowledgeTransmission Customers

For both PTP and NITS, if a TC has a TSR with Load in T.O. AREA / ZONE 3, that TC’s charges would be affected asAREA / ZONE 3, that TC s charges would be affected as follows:

• Schedule 11 Regional Charge: Increases with every $• Schedule 11 Regional Charge: Increases with every $ added to the total REGION‐WIDE SCH 11 ATRR / PTP RATE – regardless of which T.O. AREA the $’s areRATE regardless of which T.O. AREA the $ s are added.

• Schedule 11 Zonal Charge: Increase with every $• Schedule 11 Zonal Charge: Increase with every $ added to ZONE 3’s NITS SCH 11 ATRR / PTP RATE figure.

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Applying This KnowledgeApplying This KnowledgeTransmission Owners

For both PTP and NITS, TSR revenue is allocated via Pro‐Rata Share of that T.O./ZONE portion to the total ATRRRata Share of that T.O./ZONE portion to the total ATRR figure:

• Schedule 11 Regional Revenue: Increases if T O Area’s• Schedule 11 Regional Revenue: Increases if T.O. Area s REGION‐WIDE ATRR increases proportionately, in comparison to other T.O. Areas.comparison to other T.O. Areas.

• Schedule 11 Zonal Revenue: Increases with additional ATRR $’s added to TO AREA’S Zonal component ofATRR $ s added to T.O. AREA S Zonal component of total ATRR.

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Collecting the Data

CHARGES AND REVENUES BY Collecting the Data

UPGRADE ID

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CHARGES AND REVENUES BY UPGRADE IDCHARGES AND REVENUES BY UPGRADE ID

• New Tool to Track Monies Associated with Upgrades:

– Charges and Revenues Summarized by Upgrade ID

– Shown in Excel Format, Mirroring Monthly TC/TO Summaries

– Data Collected for CURRENT MONTH’S Settlement Runs Onlyy

– Does Not Account for Net Charges/Revenues from Other Periods

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RECAPRECAP

• The RRR File, including Base Plan Funding AllocationThe RRR File, including Base Plan Funding Allocation information, are key indicators of upcoming changes to Schedule 11 dollars.

• Use these inputs to be aware of Zonal Rates and Revenue Requirements that affect your invoice.Revenue Requirements that affect your invoice.

• These are posted on www.spp.org

• Prepare yourself for upcoming changes by knowing which Zones your load is in, and be mindful of forecast h hchanges to those Zones.

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CONTACTSCONTACTS• RRR FILING:

– Nicole Wagner, Regulatory Supervisor – 501‐688‐1642

– Alfred Busbee, Regulatory Analyst III – 501‐688‐3309, g y y

• 10 YEAR ATRR FORECAST:

D J L d R l t E i 501 688 1717– Dan Jones, Lead Regulatory Engineer – 501‐688‐1717

• TRANSMISSION SETTLEMENTS:

– Ryan Gay, Transmission Supervisor – 501‐614‐3327

– Steve Davis, Transmission Lead – 501‐688‐1683Steve Davis, Transmission Lead 501 688 1683

– Dickie Hooton, Settlement Analyst III – 501‐614‐3262

– Denise Martin, Settlement Analyst – 501‐688‐824547