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MARCUNTYING THE GORDIAN KNOT

The Wind Coalition

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THE WIND COALITION

+ Member Directory+ AES Wind Generation | Blattner Energy, Inc.

BP Alternative Energy North America | Clean Line Energy Partners, LLC | Clipper Windpower | CPV Renewable Energy Co.Duke Energy | Edison Mission Energy | enXco | E.ON | Electric Power Engineers, Inc | Eurus Energy Gamesa Energy | GE Energy | Horizon Wind EnergyIberdrola Renewables | Infinity Wind | Invenergy | John Deere | LuminantMartifer Renewables | Mesa Power | Mortenson Construction | Novus WindpowerPattern | RES Americas | Shell Wind Energy | Siemens | Stahl, Bernal & Davies, LLP | Stewart National Title ServicesTerra-Gen | Third Planet | TradeWind Energy, LLC | Trinity Structural Towers, Inc.Vestas-Americas, Inc. | Wanzek Construction | Wind Capital Group

+ Non-Profit Members:+ AWEA | Environmental Defense Fund | Public Citizen | TREIA

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EVERYBODY’S TALKING ABOUT IT

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EVERYBODY’S TALKING ABOUT IT

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EVERYONE’S TALKING ABOUT IT

+ SPP– FERC Tariff Filed

+ MISO– FERC Tariff to be filed in July

+ PJM– FERC revisiting after 7th Circuit Decision

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YOU PAY! NO YOU PAY. NO YOU!!!

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THE ARGUMENTS CAN BE SERIOUS TO THOSE INVOLVED

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THE SPP STORY

+ SPECIAL Authority Given to the Regional State Committee

+ FERC approved the SPP request to become an RTO with States in SPP generally supportive

+ A Primary driver of state support was that the RSC would have decisional authority over what was filed on cost allocation by the SPP Board

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WHAT KIND OF UPGRADE?

+ Cost Allocation divided into several categories– Generation Interconnection– Reliability– Economic– Policy

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SPP

+ Reliability upgrades and those necessary to deliver energy from new or changed designated generation resources to load– Subsequent to RTO formation and RSC

action One third regional Two thirds assigned to zones on a MW

mile basis

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BUT IT COULD SAVE US MONEY!

+ Economic Upgrades–Initially participant funded–Balanced Portfolio

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GOOD NEWS/BAD NEWS

+ Despite all of the incremental improvements it did not appear that substantial progress was being made in constructing significant needed improvements to the grid in SPP

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“WE ARE NEVER GOING TO GET THERE”

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SPP

+ Migration to Highway-Byway filing– Need to build a more robust grid– Cannot get there with reliability alone– Results of the Balanced Portfolio were not

encouraging Complexity Good projects left behind

÷ Transfer mechanism was insufficient to solve benefit/cost issues (in part because the method of measuring benefits did not capture many of the regional benefits of the upgrades)

÷ The over all benefits of projects in the areas near seams were only partially counted

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SPP BOARD

+ Stepping out of the weeds+ SPPT how do we plan and build the

needed transmission infrastructure in SPP?

–New approach to planning and cost allocation

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SYNERGISTIC PLANNING PROJECT TEAM GOALS

+ Integrate west and east portions of SPP grid– Renewable resources primarily in west while the

majority of load is in the east+ Support Aggregate Study process for

transmission service+ Provide relief to Generation Interconnection

(GI) queue+ Relieve known congestion

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HORSE AND CARRIAGE PLANNING AND COSTS

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SPPT

+ Proactive Planning+ Fair balance between zonal and regional cost

sharing on new transmission+ Consider cost effective solutions to reliability

and policy driven issues+ Make transmission a facilitator in crafting

solutions+ Do not evaluate transmission cost allocation

benefits one line at a time

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PLANNING

+ Traditionally Reactive– Plan for current or short term needs

Reliability driven Zonal not regional Limited to facilitation of delivery of known generation

to load Fails to identify the efficiencies for the region over time Does not facilitate efficient generation siting -

particularly for location constrained resources.

– The big picture was often ignored

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REACTIVE REGIONAL PLANNING

+ Traditional Process– Reactive in nature– Reliability– Moving vertically integrated generation to the company’s load– Congestion relief (sometimes)

+ Generation (the most expensive solution) drives the use of transmission

+ Generation revenue protection and market power are major factors influencing the decision to build transmission

+ Policy does not factor in to measuring the need for transmission+ Economic upgrades are done if at all by some but not all of the

beneficiaries

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DESIGN AN INFRASTRUCTURE FOR CURRENT AND FUTURE NEEDS.

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BETTER PLANNING AND DESIGN

+ Proactive– Uses transmission to solve for the future needs on

a more equal footing with other resources– Plans around regional and local current and

anticipated future needs – Designed around the needs of more than one

likely future– Designs are cost effective solutions to anticipated

needs of the region

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POLICY NEEDS

+ Policy driven upgrades are needed for load– State RESs anticipated national RESs.

+ Traditional analysis and modeling has not been getting cost effective transmission solutions for policy driven upgrades built in a cost effective way

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SPP VISION

+ SPP approach– Transmission should be a part of the solutions

examined to address anticipated future needs– The distinctions between reliability and economic

upgrades is artificial and can act as an obstacle to needed improvements

– How do you build a system that addresses policy needs unless you model for them? Policy upgrades do not fit into traditional economic or reliability analyses.

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“I PROMISE, ITS CALCULATED BY THE BITE”

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BENEFICIARIES SHOULD PAY

+ Trying to predict how much any particular entity benefits from particular upgrades is like……

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WE CAN KEEP THIS UP! BUT WHY?

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WHY WE CAN STOP THE OLD HABIT AND FINALLY MOVE FORWARD

+ System is designed for the SPP load.+ Higher voltage lines primarily will be used as a

backbone for the SPP system.+ The planning and design justify the way costs

are shared.

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HIGHWAY/BYWAY COST ALLOCATION

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VoltagePaid for by

RegionPaid for by Local

Zone

300 kV and above 100% 0%

above 100 kV and below 300 kV 33% 67%

100 kV and below 0% 100%

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WHAT THE NEW COST ALLOCATION IS NOT

+ Generation Interconnection– Connection requirements– Generator pays for upgrades– Eligible for revenue credits– Cost allocation for regional upgrades

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PROJECTS ARE READY TO ROLL

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MAYBE WE ARE LOOKING AT THIS WRONG.

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MAYBE WE ARE MAKING THIS TOO DIFFICULT

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THANK YOUSTEVE GAW

Wind Coalition