The Midwest ISO from a Transmission Owner Perspective

Transmission Service Evolution FERC 888 & Open Access Tariff (1997) FERC 888 & Open Access Tariff (1997) Equal Access Use of Transmission System Equal Access Use of Transmission System Regulated New Transmission Service Business Regulated New Transmission Service Business FERC RTO Order (2000) FERC RTO Order (2000) All Transmission Providers Must Be in a RTO All Transmission Providers Must Be in a RTO

Before RTOs

ERCOT ISO Grid Florida PJM PJM West New York ISO RTO New England Grid West WestConnect California ISO SPP After RTOs

What is the Transmission System? Transmission System – Key Aspects Runs cross country The highest voltage– defined as 100,000 V (100 kV) and above (Ameren uses 138 kV, 161 kV, 230 kV and 345 kV) Often steel or concrete towers holding the conductors Interconnected and Networked: more than one path for energy to flow from point A to point B

Transmission System Operation Safe, Reliable and Economic Operation of the Ameren System Transmission Line Flow Control Transmission Line Flow Control Limit Transmission Access Across System Limit Transmission Access Across System TLR – Transmission Line Loading Relief Procedures TLR – Transmission Line Loading Relief Procedures Raise or Lower Generation Output (Redispatch) Raise or Lower Generation Output (Redispatch) Reconfigure Transmission System Reconfigure Transmission System Generation Impact on Transmission Reliability Generation Impact on Transmission Reliability Balance generation and load Balance generation and load Maintain System Frequency Maintain System Frequency Maintain Voltages with Reactive Power Support (MVAR) Maintain Voltages with Reactive Power Support (MVAR)

Transmission Functions Safe, Reliable and Economic Operation of the Ameren System Transmission System Operations (Ameren) Transmission System Operations (Ameren) Operation of Transmission System Operation of Transmission System Transmission Line Outage Coordination (Internal) Transmission Line Outage Coordination (Internal) Compliance to NERC Policies Compliance to NERC Policies Transmission Service (MISO) Transmission Service (MISO) Sale of Transmission Access Through Ameren System Sale of Transmission Access Through Ameren System Transmission Line Outage Coordination (System-Wide) Transmission Line Outage Coordination (System-Wide) Administration of Interconnection Contracts Administration of Interconnection Contracts Compliance to NERC Policies and FERC Transmission Tariffs Compliance to NERC Policies and FERC Transmission Tariffs

Transmission Outage Coordination Coordination of : Coordination of : Construction Projects Construction Projects Failure Repairs Failure Repairs Routine Maintenance Routine Maintenance Transmission System Operated on a Single Contingency Basis Transmission System Operated on a Single Contingency Basis Single worst contingency would not cause any transmission system element to exceed its emergency rating Single worst contingency would not cause any transmission system element to exceed its emergency rating Transmission Maintenance Outages generally only granted in Spring & Fall Transmission Maintenance Outages generally only granted in Spring & Fall

MISO Day 1 Responsibilities Open Access Transmission Service Responsibilities Open Access Transmission Service Responsibilities OASIS Administration OASIS Administration Calculate ATC (Available Transmission Capacity) Calculate ATC (Available Transmission Capacity) Oversight of Transmission Grid Operations Oversight of Transmission Grid Operations Review/Approve Proposed Transmission Facility Outages Review/Approve Proposed Transmission Facility Outages Review (only) of Proposed Generation Outages Review (only) of Proposed Generation Outages Reliability Coordinator Functions Reliability Coordinator Functions TLR (Transmission Loading Relief) TLR (Transmission Loading Relief) Emergency Operations Coordination Emergency Operations Coordination Long Term Transmission Planning Coordination Long Term Transmission Planning Coordination

MISO ordered by FERC to develop a wholesale energy market in the Midwest The market allows stakeholders the opportunity to benefit directly from open and transparent market- based, day-ahead and real-time energy prices Prices are determined by Locational Marginal Pricing (LMP) Congestion hedged via Financial Transmission Rights, FTRs (allocated or purchased) MISO Day 2 Market

Day 2 Cost and Benefits Balancing cost control/cost effectiveness and rate recovery in states In Missouri, currently undergoing Cost/Benefit Analysis Regional Reliability Broad regional view TLR vs. Redispatch Outage Coordination Emergency Actions

MISO Day 3: Ancillary Services Market Balancing Authority Balancing Authority MISO becomes the Balancing Authority for many NERC functions MISO becomes the Balancing Authority for many NERC functions Ameren remains a Local Balancing Authority for remaining NERC functions Ameren remains a Local Balancing Authority for remaining NERC functions BA Agreement to be amended BA Agreement to be amended Ancillary Services Market Ancillary Services Market Regulation and Frequency Control Regulation and Frequency Control Contingency Reserve – Spinning Contingency Reserve – Spinning Contingency Reserve – Non-Spinning Contingency Reserve – Non-Spinning Co optimized with Energy Market Co optimized with Energy Market Currently, implementation expected early 2008 Currently, implementation expected early 2008

Alphabet Soup And Transmission Expansion

The ABCs of Transmission Expansion n MTEP n RECB I n RECB II n In The Future PTTP: Post-Transition Transmission Pricing

MTEP 06 n Midwest Transmission Expansion Plan 2006 Lists $3.6 Billion in Transmission projects by 2001 Attachment A projects will move forward Attachment B projects still under study

RECB I n Regional Expansion Criteria and Benefits (3/15/07) For Baseline Reliability Projects (BRP) Only Projects of 345kV and above funded at 20% Postage Stamp and 80% Sub-regional Generation Interconnections Network Upgrades at 100% Participant Funding (50% borne by generator; 50% repaid through revenue credits and funded 20% postage stamp, 80% Sub-regional) Projects planned prior to filing are excluded from regional cost allocation

RECB II n Regionally Beneficial (Economic) Transmission Projects For Regional Beneficial Projects (RBPs), Greater than $5M Postage Stamp within the sub-regions that show (net- positive) benefits Benefits calculated 10 years out Funded at 20% postage stamp, 80% Sub-regional (West/Central/East) No projects ear-marked to date

Things to Think About n Projects benefits are very long term n Planning is impacted by national and local policy debates, often difficult to reach consensus n Generation capacity additions are largely unknown n Do we need the additional transmission capacity? n Are the right people paying?

Questions?