ATSS Backlog Clearing Process (BCP) Customer Workshop October 4, 2013

Purpose Provide overview and details of the Backlog Clearing Process (BCP), including timelines and requirements Capture questions to include in posted documents 2

Overview Overview of the Backlog Clearing Process (BCP) ATSS Completion Agreement (ACA) Study Procedure Third-party Impact Process Make-Whole Payment (MWP) Open Season Extension One-Time Cost-Causer Exemption 3

Definitions Current Process –The currently-effective aggregate study process Backlog Clearing Process (BCP) –The process to be implemented upon FERC acceptance of SPP’s filing in ER –Requested effective date of October 12, 2013 New Process –A new aggregate study process – still in development in SPP’s working groups – for future implementation with a date to be determined –No tariff changes have yet been approved or filed 4

Aggregate Study is an iterative process that continues until no customers withdraw. Open Season (4 months) Open Season (4 months) Facilities Study (60 days) Facilities Study (60 days) Letter of Intent Response Period (15 days) Restudy Needed ? Write Service Agreement YES NO Current Aggregate Study Process

Are New Completion Requirements Met? ACA Completion Requirements 1.Maximum directly-assigned upgrade cost 2.Maximum 3 rd party upgrade cost 3.Latest acceptable deferred start date 4.Accept interim redispatch 5.Maximum Letter of Credit ACA Completion Requirements 1.Maximum directly-assigned upgrade cost 2.Maximum 3 rd party upgrade cost 3.Latest acceptable deferred start date 4.Accept interim redispatch 5.Maximum Letter of Credit Overview of the Backlog Clearing Process Post AFS-4 and Tender ATSS Completion Agreement (ACA) Facilities Study Accept all requests and Tender Service Agreements NO YES Collect Make-Whole Payments from Customer, if required Customer Executes ACA Customer Does Not Execute ACA Request Withdrawn Customer Confirms Service (and Executes Service Agreement) Customer Does Not Confirm Service Start NO YES Customer with 3 rd party impacts may move to next study Customer with 3 rd Party impacts postpones action Customer with 3 rd Party impacts postpones action Customers with requests that did not meet parameters may withdraw or must execute ACA amendment to remain Did any customers withdraw? Stop Customer Action SPP Staff Action

AGGREGATE STUDY COMPLETION AGREEMENT (ACA) 7

ATSS Completion Agreement (ACA) and Process ACA tendered only for studies that are first in queue and after AFS-4 ACA covers the request through the completion of the study Customer commits either to accept service offered within the ACA parameters or to pay a make-whole payment Baseline values are the values from the pre-ACA study iteration and customers can enter greater “acceptable” values 8

ACA Contents 9 Additional components of ACA: Agreement with Table 1 for OASIS requests Appendix 1 – Study parameters Appendix 2 – Mutually exclusive requests Additional components of ACA: Agreement with Table 1 for OASIS requests Appendix 1 – Study parameters Appendix 2 – Mutually exclusive requests

ACA – Table 1 ACA Table 1 will list all OASIS requests covered by agreement: Any related GI study number should be included in the ‘GI Study Number’ column 10

ACA – Appendix 1 11

ACA – Appendix 1 12

ACA – Appendix 1 13 Customer selects study option at top of Appendix 1. Remain: Items 1-5 must be completed. Sign and date at bottom.

ACA – Appendix 1 14 Customer selects Expedited Service, Accepts ATC or Withdraws, then skip items 1-5 and sign and date at bottom.

ACA – Appendix 1 – cont. (1) Directly Assigned Upgrade Costs (DAUC) –Customer can specify a maximum amount, but no less than its DAUC from the iteration prior to signing the ACA –If no maximum amount is provided in (1)(b), the value from the most recently posted study will be utilized 15

ACA – Appendix 1 – cont. (2) 3rd Party Upgrade Costs –Customer can specify a maximum amount, but no less than its costs from the iteration prior to signing the ACA –Customer can elect to either remain in the current study or move to the next highest priority study in queue if the 3rd party cost is non-zero or listed as indeterminate –If no maximum amount is provided in (2)(b), the value from the most recently posted study will be utilized –If no selection is made for (2)(c), the request will remain in study 16

ACA – Appendix 1 – cont. (3) Deferred Start Date without redispatch –Customer can specify the latest acceptable start date –If date in (3)(b) is left blank, the Start Date from Most Recently Posted Study will be the default date 17

ACA – Appendix 1 – cont. (4) Interim Redispatch, if it can provide an earlier Start Date –Customer can specify if Interim Redispatch is acceptable –If no selection is made, then ‘No’ will be the default 18

ACA – Appendix 1 – cont. (5) Letter of Credit (if required) –Customer can specify a maximum amount –If no maximum amount is provided in (5)(b), the value from the most recently posted study will be utilized 19

ACA – Appendix 2 Mutually-exclusive requests –Post AFS-4, customer must select only one (1) request to remain in study. –Customer will withdraw any remaining requests 20

BCP STUDY PROCEDURE 21

Are New Completion Requirements Met? ACA Completion Requirements 1.Maximum directly-assigned upgrade cost 2.Maximum 3 rd party upgrade cost 3.Latest acceptable deferred start date 4.Accept interim redispatch 5.Maximum Letter of Credit ACA Completion Requirements 1.Maximum directly-assigned upgrade cost 2.Maximum 3 rd party upgrade cost 3.Latest acceptable deferred start date 4.Accept interim redispatch 5.Maximum Letter of Credit BCP Study Procedure Facilities Study Accept all requests and Tender Service Agreements NO YES NO YES 3 rd Party Process Customers with requests that did not meet parameters may withdraw or must execute ACA amendment to remain Did any customers withdraw? BCP Facilities Study begins once initial ACAs are returned Parameters evaluated from ACA Appendix 1 and 2 Requests that don’t meet one of the parameters may be Withdrawn ACA Amended Requests that meet all parameters will remain in study Restudy, if needed If no requests are withdrawn, begin finalizing study “Next Steps” s Accept all requests Tender Service Agreements 3 rd Party Process Customer Action SPP Staff Action

3 RD PARTY IMPACTS 23

3 rd party impacts The customer with 3 rd party impacts has three options prior to executing the ACA and entering into BCP –Option 1: Withdraw the request –Option 2: Move to next study –Option 3: Continue in study subject to make-whole payment 24

Are New Completion Requirements Met? ACA Completion Requirements 1.Maximum directly-assigned upgrade cost 2.Maximum 3 rd party upgrade cost 3.Latest acceptable deferred start date 4.Accept interim redispatch 5.Maximum Letter of Credit ACA Completion Requirements 1.Maximum directly-assigned upgrade cost 2.Maximum 3 rd party upgrade cost 3.Latest acceptable deferred start date 4.Accept interim redispatch 5.Maximum Letter of Credit Request Withdrawn 3 rd Party Impacts – cont. Post AFS-4 and Tender ATSS Completion Agreement (ACA) Facilities Study Accept all requests and Tender Service Agreements NO YES Collect Make-Whole Payments from Customer, if required Customer Executes ACA Customer Does Not Execute ACA Customer Confirms Service (and Executes Service Agreement) Customer Does Not Confirm Service Start NO YES Customer with 3 rd party impacts may move to next study Customer with 3 rd Party impacts postpones action Customer with 3 rd Party impacts postpones action Customers with requests that did not meet parameters may withdraw or must execute ACA amendment to remain Did any customers withdraw? Issue NTCs, if required Project Tracking Stop Customer Action SPP Staff Action Customers with unresolved 3 rd party impacts may choose to move to the next aggregate study prior to execution of the ACA

Are New Completion Requirements Met? ACA Completion Requirements 1.Maximum directly-assigned upgrade cost 2.Maximum 3 rd party upgrade cost 3.Latest acceptable deferred start date 4.Accept interim redispatch 5.Maximum Letter of Credit ACA Completion Requirements 1.Maximum directly-assigned upgrade cost 2.Maximum 3 rd party upgrade cost 3.Latest acceptable deferred start date 4.Accept interim redispatch 5.Maximum Letter of Credit Request Withdrawn 3 rd Party Impacts – cont. Post AFS-4 and Tender ATSS Completion Agreement (ACA) Facilities Study Accept all requests and Tender Service Agreements NO YES Collect Make-Whole Payments from Customer, if required Customer Executes ACA Customer Does Not Execute ACA Customer Confirms Service (and Executes Service Agreement) Customer Does Not Confirm Service Start NO YES Customer with 3 rd party impacts may move to next study Customer with 3 rd Party impacts postpones action Customer with 3 rd Party impacts postpones action Customers with requests that did not meet parameters may withdraw or must execute ACA amendment to remain Did any customers withdraw? Issue NTCs, if required Project Tracking Stop Customer Action SPP Staff Action Customers with un- resolved 3 rd party impacts after study completion may postpone the decision to confirm service

27 3 rd Party Impacts – Postponing Service Agreement is not reached with 3rd party or time expires Agreement is not reached with 3rd party or time expires Request is Accepted and Service Agreement is Tendered Make Whole Payment (MWP) is collected from Customer 3rd Party clears Request Customer Confirms Service (and Executes Service Agreement) Request is Declined and Sponsored Upgrade Agreement is Tendered Customer with 3 rd Party impacts postpones action Timer Starts (1 year or Service Start Date) Timer Starts (1 year or Service Start Date) Applicable 3rd Party Evaluation Process Applicable 3rd Party Evaluation Process Customer Action SPP Staff Action 3rd Party Action

Are New Completion Requirements Met? ACA Completion Requirements 1.Maximum directly-assigned upgrade cost 2.Maximum 3 rd party upgrade cost 3.Latest acceptable deferred start date 4.Accept interim redispatch 5.Maximum Letter of Credit ACA Completion Requirements 1.Maximum directly-assigned upgrade cost 2.Maximum 3 rd party upgrade cost 3.Latest acceptable deferred start date 4.Accept interim redispatch 5.Maximum Letter of Credit Request Withdrawn 3 rd Party Impacts – cont. Post AFS-4 and Tender ATSS Completion Agreement (ACA) Facilities Study Accept all requests and Tender Service Agreements NO YES Collect Make-Whole Payments from Customer, if required Customer Executes ACA Customer Does Not Execute ACA Customer Confirms Service (and Executes Service Agreement) Customer Does Not Confirm Service Start NO YES Customer with 3 rd party impacts may move to next study Customer with 3 rd Party impacts postpones action Customer with 3 rd Party impacts postpones action Customers with requests that did not meet parameters may withdraw or must execute ACA amendment to remain Did any customers withdraw? Issue NTCs, if required Project Tracking Stop Customer Action SPP Staff Action Customers with 3 rd party impacts that move forward by signing the ACA may be subject to a make-whole payment if service is not confirmed.

MAKE-WHOLE PAYMENT (MWP) 29

Make-Whole Payment (MWP) Customers that sign an ACA without executing a Transmission Service Agreement (TSA) are obligated to pay for any shared upgrade costs in the form of a MWP Customers that pay a MWP will execute a Sponsored Upgrade agreement under Attachment J –Sponsored Upgrades are eligible to receive revenue credits under Attachment Z2 30

31 Re-Run Cost Allocation & Prepare Sponsored Upgrade Agreements Notify Customer of MWP and Tender Sponsored Upgrade Agreements Settlement of Make Whole Payment Incorporate into Creditable Upgrades Database Make-Whole Payment (MWP) Process

32 Maximum Potential MWP Example Excerpt from Table 3 of study report showing Service Upgrades allocated to a request The highlighted cells depict the potential MWP for each upgrade, based on the revenue requirements. The non-highlighted upgrades are non-shared upgrades and are not included in the MWP calculation. Upgrade #Upgrade NameDUNEOC Earliest Start Date Redispatch Available Allocated E & C Cost Total E & C Cost Total Revenue Requirements 1 GRAND ISLAND - SWEETWATER 345KV CKT 212/1/20136/1/2019 No $ 207,454 $ 96,288,750 $ 634,269 2 HYDRALIC JCT NORTH - MACARTHUR 69KV CKT 16/1/2018 $ 1,745,900 $ 5,150,283 3 HYDRALIC JCT NORTH - OAKLAWN 69KV CKT 16/1/2018 $ 1,098,100 $ 3,239,318 4 SMAN_W_ SOUTH MANHATTAN 115KV CKT 16/1/20156/1/2016 $ 78,476 $ 790,000 $ 285,837 5 ST JOHN - ST_JOHN 115KV CKT 1 MIDW12/1/20136/1/2016 No $ 19,438 $ 450,000 $ 55,670 6 ST JOHN - ST_JOHN 115KV CKT 1 MKEC12/1/20136/1/2016 No $ 24,298 $ 562,500 $ 117,718 Total: $ 3,173,666 $ 100,935,250 $ 9,483,093 Maximum Potential MWP: $1,098,494 Maximum Potential MWP: $1,098,494

Non-Shared Upgrades Non-shared upgrades will not be included in the Make-Whole Payment for requests that are not confirmed Exception: –Non-shared upgrades that are allocated to a request with a third-party impact that exercised the option to postpone action will be included in subsequent studies –If service is granted to subsequent requests that rely on the non-shared upgrade, the original request will be assigned a MWP if the request is not confirmed 33

OPEN SEASON EXTENSION 34

Open Season Extension Open season will remain open until either the immediately prior study becomes the highest priority study or SPP Staff determines the Open Season needs to close –SPP will give at least 10 days’ notice before the open season closes –The Open Season will be open for no less than 4 months 2014-AG1 will be the first open season to be extended 35

ONE-TIME COST-CAUSER EXEMPTION 36

One-Time Cost-Causer Exemption Customers will have an opportunity to withdraw any pending aggregate study request without incurring an obligation to pay for subsequent restudies –Customers have 45 days after FERC acceptance of the tariff language to exercise the option This is a one-time exemption 37

WRAP-UP 38

39 Implementation Timeline Filed Tariff Aug. 15, 2013 FERC order expected by Oct. 14, 2013 Letters of Intent due for 2011-AG3-AFS-10 on Oct. 12 If FERC issues an order by COB October 14, 2013 and accepts the October 12, 2013 effective date, then: –2011-AG3 will be subject to BCP if it did not complete with AFS-10 (ACA will be tendered) –If October 12 th is not the effective date, 2011-AG3 will continue under the Current Process if it did not complete with AFS-10

Posting of Documents on spp.org 40

41 ATSS Contact Information Steve Purdy, (501) Chris Jamieson, Lead (501) Eric Samson, Sr. James Bailey, David Duhart, Terry Fang, Charlton Hill, Aaron Stewart, John O’Dell, Sherri Maxey, General