Updated 1/28/2011

Legislative Drivers, Regulatory Practices and Market SolutionsMarch 8, 2011Jay Casparyjcaspary@spp.org · 501.614.3220

SPP Milestones

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1968 Became NERC Regional Council1980 Implemented telecommunications network1991 Implemented operating reserve sharing1994 Incorporated as non-profit1997 Implemented reliability coordination1998 Implemented tariff administration2001 Implemented regional scheduling2004 Became FERC-approved Regional Transmission Organization

2006 Implemented contract services

2007 Launched EIS market, became NERC Regional Entity

2009 Integrated Nebraska utilities2010 FERC approved Highway/Byway cost allocation methodology and

Integrated Transmission Planning Process

The SPP Difference

• Relationship - Based

• Member - Driven

• Independence Through Diversity

• Evolutionary vs. Revolutionary

• Reliability and Economics Inseparable

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Operating Region 2010

• 370,000 square miles service territory

• 859 generating plants• 6,101 substations• 48,930 miles transmission:

⁻ 69 kV – 12,722 miles

⁻ 115 kV – 10,143 miles

⁻ 138 kV – 10,009 miles

⁻ 161 kV – 5,097 miles

⁻ 230 kV – 3,787 miles

⁻ 345 kV – 7,079 miles

⁻ 500 kV – 93 miles5

Operating Region 2010

• 53,012 MW peak demand

• 223,080 GWh energy consumption

• 1,500 MW wholesale demand response

• 419 MW retail demand response

• 66,175 megawatts generating capacity:

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Generating Resources

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Regulatory Environment

• Incorporated in Arkansas as 501(c)(6) non-profit corporation• FERC - Federal Energy Regulatory Commission– Regulated public utility– Regional Transmission Organization

• NERC - North American Electric Reliability Corporation– Founding member– Regional Entity

3 Electric Interconnections / 8 NERC Regions

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Independent System Operator (ISO) /Regional Transmission Organization (RTO) Map

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Interregional Coordination

• ISO-RTO Council

• Interregional planning efforts, including Eastern Interconnection Planning Collaborative

• North American Energy Standards Board

• National Association of Regulatory Utility Commissioners

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• Facilitation• Reliability Coordination• Tariff Administration• Market Operation

• Standards Setting• Compliance Enforcement• Transmission Planning

Our Major Services

Regional IndependentCost-effectiveFocus on reliability

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SPP Strategically

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Transmission is Enabler • Transmission capacity defines and creates markets.

Its absence limits choices and has very long term consequences

• EHV/UHV transmission capability is often undervalued in grid planning and operations

• Bulk power transmission facilities have tremendous economies of scope and scale, which can lower reliability margins and drastically improve dynamic performance and system operations

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Legislative Drivers, Regulatory Practices• Mandated Standards and Climate Legislation/

Protocols should drive bulk power planning decisions

• Be aware of unintended consequences of well intentioned edicts and mandates which may not be feasible or very costly in terms of compliance

• Governance regarding responsibility and authority for cost allocations is critical success factor with Regional State Committee in SPP

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Market Solutions• Collaboration and coordination are key

• Evolutionary approaches work not only for broader planning, but also market developments– Joint Coordinated System Plan in ‘08, Eastern Wind

Integration and Transmission Study in ‘09 and Eastern Interconnection Planning Collaborative in process

– Transmission Service in ‘97, Energy Imbalance Service Market in ‘07, Integrated Marketplace in ‘14

• Transmission infrastructure needs to be robust to support efficient markets

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