Transmission Expansion

REVOLUTION: Oklahoma Wind Energy Conference Oklahoma City, OKy,December 3, 2008

O iOverviewSPP Backgro nd• SPP Background1. Unprecedented interest to build EHV transmission and

develop wind resources• SPP Transmission Expansion PlanSPP Transmission Expansion Plan• Oklahoma Electric Power Transmission Task Force• Balanced Portfolio almost complete• 2008 EHV Overlay Study being finalized• 2008 EHV Overlay Study being finalized• Joint Coordinated System Plan being finalized • Federal leadership to address need for standard

interconnection protocols and siting challenges, as wellinterconnection protocols and siting challenges, as well as Seam Agreements with fair / simple cost allocations are critical success factors

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3 I t ti / 8 NERC R i3 Interconnections / 8 NERC Regions

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SPP Transmission Expansion Plan

F h b h i li bilit t• Focus has been comprehensive reliability assessment and documentation of other commitments for approved generator interconnections, long term firm service agreements and other economic / sponsoredservice agreements and other economic / sponsored upgrades for transmission expansion which have been reviewed and approved by SPP.

• Most recent plan 2008-2017 STEP included $2.2 B of transmission projects over 10 year horizon with almost $800M of transmission projects requiring financial$800M of transmission projects requiring financial commitments in 2008-2011 and $465M of major economic upgrades primarily in KS (costed at 345 kV).

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Transmission ExpansionTransmission ExpansionMinimum Transmission

SPP Today

Cos

t

Congestion Management CostTransmission ExpansionNeed for More

Transmission

Reliability

Infinite Bus

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Amount of Transmission

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Economic Planning

Reliability and Economics are InseparableReliability and Economics are Inseparable

Economic Upgrades – sponsored under existing t iff b t li ibl f dit b d itariff but eligible for credits based on new service sold

Balanced Portfolio • Postage stamp cost allocations for a portfolio of

Economic Upgrades which benefit SPP as a whole, and for which each zone realizes benefits in excess of theirfor which each zone realizes benefits in excess of their costs

• FERC Approved 10/16 in Docket ER08-1419• Balanced Portfolio in final stages of development

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Balanced Portfolio in final stages of development

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EHV Overlay Studies

• SPP hired Quanta Technologies to perform long range• SPP hired Quanta Technologies to perform long range visionary expansion plan.

• Original study updated in early 2008 due to GI queue requests. $8B 2 250 il 765 d 500 kV l ith i ifi t• $8B, 2,250 mile 765 and 500 kV plan with significant expansion into and within Entergy, MISO and PJM systems.

• 765 kV, not 345 kV, expansion was recommended when pwind development exceeds 4,600 MW in SPP.

• Foundation for 2008 EHV Overlay Study in process at SPP to identify optimal expansion and economic benefitsto identify optimal expansion and economic benefits

• Incorporated into JCSP study with MISO, TVA, PJM, ISO-NE, NYISO, MAPP, and others.

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OEPTTF Study

Okl h El t i P T i i T k• Oklahoma Electric Power Transmission Task Force (OEPTTF) created by OK legislature

• Identify need for SPP study to identify transmission expansion needs for OK and beyond

• Scope and assumptions approved lateScope and assumptions approved late December, 2007

• Final Report posted March 31, 2008

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15,000 MW

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EHV Commitments

• Competition to build transmission is refreshing• Competition to build transmission is refreshing.

• Westar and OG&E are building major 345 kV projects in KS and OK, respectively., p y

• ITC Great Plains and ITC Panhandle, along with Prairie Wind Transmission LLC and Tallgrass Transmission LLC are proposing to build major 765 and 345 kVLLC are proposing to build major 765 and 345 kV transmission to support an SPP EHV Overlay. AEP, Westar and OG&E have expressed interest too.

• Transmission Ownership Construction Task Force has addressed process and rules for deciding who has the right to build transmission in SPP.

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2007 - 2008 JCSP Overview

E l t 1/1/08 RPS d t i 26 t t /DC• Evaluate 1/1/08 RPS mandates in 26 states/DC as reference scenario, as well as a 20% National RPS scenario as part of 2008-2009 NREL/DOE E t Wi d I t ti &NREL/DOE Eastern Wind Integration & Transmission Study (EWITS)

• Studies will be used to demonstrate the value of bulk power transmission to harvest best wind resources in central plains for futurewind resources in central plains for future scenarios.

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• Check out www.jcspstudy.org

JCSP Progress to Date

MISO JOA ith PJM SPP d TVA i• MISO JOAs with PJM, SPP and TVA require periodic joint planning studies

• Initiated with kick off meeting Nov 1, 2007 inInitiated with kick off meeting Nov 1, 2007 in Pittsburgh by MISO, PJM, SPP and TVA

• Active participants include ISO-NE, MAPP and NYISO

• Interested parties continues to grow • 10 regional workshops/meetings to date• 10 regional workshops/meetings to date• FERC Order 890 emphasizes importance of

inter-regional planning and cost allocations

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g p g

Reference Scenario Current OverlayReference Scenario – Current Overlay

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20% Wind Scenario – Current Overlay20% Wind Scenario – Current Overlay

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SPP Implications• JCSP plans are complimentary to EHV Overlay p p y y

designs for SPP.• Reference scenario shows need for 765 kV

f L C KS MO d IL t AEP ifrom LaCygne, KS across MO and IL to AEP in Western IN, plus double circuit 500 kV from Ft Smith, AR across Entergy and TVA to SoCo.

• 20% Wind Scenario has 3 - 800 kV HVDC terminals in central and southern plains sourced from 765 kV EHV Overlay in SPP atsourced from 765 kV EHV Overlay in SPP at Lawton Eastside & Muskogee in OK, and LaCygne KS with another 800 kV HVDC

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terminal north of KC near Omaha, NE.

JCSP T i i R lt / C tJCSP Transmission Results / CostsCost per Mile Assumption

345 KV (2) - 345 kV 500 KV (2) - 500 kV 765 KV DC - 400 kV DC - 800 kV

2024$ 2,250,000 3,750,000 2,875,000 4,792,000 5,125,000 3,800,000 6,000,000

Estimated Line Mileage Summary (Miles)

345 KV (2) - 345 kV 500 KV (2) - 500 kV 765 KV DC - 400 kV DC - 800 kV Total

Reference 3,329 292 508 946 3,118 282 2,400 10,875

20% Wind 2,042 193 864 279 3,977 0 7,582 14,937

Estimated Cost Summary (Millions of 2024$)

345 KV(2) - 345

kV 500 KV(2) - 500

kV 765 KVDC - 400

kVDC - 800

kV Total

Reference 9,363 1,371 1,825 5,668 19,975 1,698 14,400 54,298

20% Wind 5,742 905 3,106 1,671 25,478 0 45,492 82,394

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Cost Perspectives20% Wind Future Cumulative

Costs through 2024Reference Future Cumulative

Costs through 2024 Costs through 2024

Transmission Capital2%

Costs through 2024

Transmission Capital

Generation Capital30%

2%

Generation Capital23%

p1%

Production68%

Production76%

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Benefit to Cost Ratios are Impressive

A i 15% l i h t• Assuming an 15% annual carrying charge rate and existing plans, the B/C for the reference and 20% Wind scenarios are roughly 1.4 and g y1.0, respectively.

• Economic models are showing annual adjusted production cost savings in either scenario in excess of $10B.$

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Estimated CO2 Implications by Estimated CO2 Implications by Scenario

2008 2024 C l ti CO O t t• 2008 – 2024 Cumulative CO2 Output

Reference Future (5% Wind): 34 98 B tonsReference Future (5% Wind): 34.98 B tons20% Wind Future: 32.11 B tons

• Increase of 15% Wind in Eastern Interconnection will reduce CO2 Output by 2.87 B t hi h ld ti i thB tons which some would monetize in the range of tens of billions of dollars

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T S l H i ht C i164’

To Scale Height Comparison

151’

164

92’

164’

262’

328’

500 kV-DC

116’

800 kV-DC

138’

765 kV-AC

133’

345 kV-AC

88’

500 kV-AC

103’

50m Wind Turbine

6

80m Wind Turbine

100m Wind Turbine

Mad

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Turbine Turbine Turbinee

by

JT

Produced by Midwest ISO

Next Steps

Fi l it ti ti i i 2024 i• Final iteration on optimizing 2024 expansion plans in process.

• Reliability assessments for 2018 reliability and 2024 economic models are in process.

• Expect economic and reliability analyses to be completed soon with results published by yearcompleted soon with results published by year end.

• Upcoming meetings: JCSP 12/10/08 at DFW Hyatt Regency and EWITS TransmissionHyatt Regency and EWITS Transmission Expansion 1/21/09 in Little Rock with registration links on www.spp.org calendar.

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2009 – 2012 JCSP Scope

S f JCSP f 2009 2012 i d• Scope for JCSP for 2009 - 2012 is under development with focus on structure and funding.g

• 2009 effort is expected to include a 10% National RPS future, as well as other futures to evaluate carbon constraints increased nuclearevaluate carbon constraints, increased nuclear expansion, etc.

• DOE seems to be expecting JCSP to take over p gcongestion studies for the Eastern Interconnection.

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July 1 2006 HE 0100 Wind Profile

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Aug 1 2006 HE 0100 Wind Profile

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Wi d I t ti / P t tiWind Integration / Penetration

C b t ti l i i t d• Concerns about operational issues associated with wind integration must be addressed => Wind Integration Task Force with kick off gmeeting 12/4 in Dallas

• SPP is working with AMEC on SPS Wind Penetration Study to identify and address operating reserve issues in near term with p gfocus on 2010 light load conditions

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SPP 2008 EHV Overlay Study

I ith lt t d i t k• In process with results expected in next week or so.

• Focus on economic benefits of major EHVFocus on economic benefits of major EHV transmission expansion in and around SPP to support wind development from 3 to 21 GW in next 20 yearsnext 20 years.

• Provide a foundation for EHV cost allocation and seams agreement discussions.g

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Questions?Questions?

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Jay Caspary Director, Engineering501.614.3220jcaspary@spp.org

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