TOP and BA Responsibilities SPP Wind Workshop May 30, 2013

Context  Sunflower and Mid-Kansas will give overview of their activities as example of how TOs and BAs operate in SPP  Other TOs and BAs encouraged to speak up with their own examples. 1

Sunflower and Mid-Kansas Who We Are  Sunflower is an electric G&T in western Kansas owned by six member cooperatives  Mid-Kansas is owned by five of the Sunflower member cooperatives, plus one additional member that is a wholly-owned subsidiary of the sixth Sunflower member  Mid-Kansas holds physical and contractual assets, but has no employees – agreement with Sunflower to operate and maintain all assets  Sunflower has assumed all compliance responsibility for Mid- Kansas and the member cooperatives  Sunflower and Mid-Kansas operate in a combined balancing area (SECI) 2

Sunflower and Mid-Kansas Service Territory 3

Sunflower and Mid-Kansas Transmission Facilities 4 Sunflower (miles) Mid-Kansas (miles) Total (miles) 115-kV Line1, , kV Line kV Line kV Line2220 Total Transmission1,2311,0122,243 Sunflower (number) Mid-Kansas (number) Total (number) Substations274976

Sunflower and Mid-Kansas Statistics  SECI peak load – 1,156 MW (June 27, 2012)  Sunflower and Mid-Kansas owned generation – 980 MW  Sunflower and Mid-Kansas wind contracts – 280 MW (nameplate)  Wind installed in SECI footprint – approximately 1,445 MW (nameplate) o Over 900 MW of new wind added in last year within the SECI BA 5

SECI Balancing Area 6

Sunflower Registered Functions – Typical for SPP TOs  Balancing Authority  Transmission Owner  Transmission Operator  Generator Owner  Generator Operator  Distribution Provider  Load Serving Entity  Resource Planner  Purchasing Selling Entity 7

Balancing Authority Responsibilities How Sunflower Meets  Balance resources with load to control frequency o Monitor and control Area Control Error (ACE) o Ensure adequate Regulation Reserves (up and down) are maintained o Meet NERC Control Performance Standards (CPS1 and CPS2) o Sunflower balances 445 MW (nameplate) of wind in the SECI BA 280 MW from contracts 165 MW from balancing agreements Other wind in SECI BA is pseudo-tied out Typically carry 10 MW of up regulation and 10 MW of down regulation  Respond to disturbances to restore frequency o Meet NERC Disturbance Control Standard requirements o Ensure adequate Contingency Reserves (spinning and supplemental) are maintained o Sunflower compliance met through participation in the SPP Reserve Sharing Group 8

Balancing Authority Responsibilities  Respond to capacity and energy emergencies o Maintain adequate capacity at all times to cover load and reserve requirements o Develop and implement plans to address capacity and energy shortfalls o Sunflower monitors capacity position each hour to ensure firm capacity position is maintained above load plus operating reserves minus wind generation  Plan to meet voltage and/or reactive power limits, including the deliverability/capability for any single contingency  Upon implementation of SPP Integrated Marketplace, BA responsibilities will shift to SPP 9

Transmission Owner Responsibilities  Develop and implement facility connection requirements  Develop and implement vegetation management program  Develop and implement facility rating methodology o Operating time frame Sunflower Facility Ratings: Operate indefinitely below Normal Rating Operate for up to four hours between Normal and Emergency Rating Operate for no more than 30 minutes above Emergency Rating 10

Transmission Owner Responsibilities  Implement an Underfrequency Load Shedding System (UFLS) per SPP RTO requirements  Set relays per SPP and RTO requirements  Develop and implement maintenance and testing program for Protection Systems, UFLS, Undervoltage Load Shedding Systems, and Special Protection Systems  Identify misoperations associated with Protection Systems and Special Protection Systems and develop corrective action plans 11

Transmission Operator Responsibilities  Establish and communicate System Operating Limits  Monitor and control voltage levels and real and reactive power flows  Operate within all identified operating limits (IROLs and SOLs)  Operate to prevent the likelihood that a disturbance, action, or inaction will result in an IROL or SOL violation  Operate the transmission system to ensure instability, uncontrolled separation, or cascading outages will not occur as the result of the most severe single contingency  Take actions as required to alleviate operating emergencies including curtailing transmission service or energy schedules, operating equipment, and shedding load  Coordinate outage requests with other TOPs 12

Shared BA and TOP Responsibilities  Coordinate current-day, next-day, and seasonal operations with neighboring BAs, TOPs, and the RC  Plan to meet forecasted load, system configuration, generation dispatch, interchange scheduling, and demand patterns  Plan to meet unscheduled changes in system configuration and dispatch (at a minimum N-1 contingency planning)  Conduct current-day, next-day, and seasonal studies to determine SOLs and update studies as required to reflect current system conditions  Plan to operate below all SOLs and IROLs (N-1 Contingency planning)  Comply with reliability directives issued by the RC 13

Shared BA and TOP Responsibilities  Sunflower completes current-day, next-day and seasonal BES Studies and on an as-needed basis due to real time system changes, to identify N-0 and N-1 thermal overloads and voltage violations within the Sunflower/Mid-Kansas footprint  Results of studies are used to identify the need for mitigation plans to address any identified issues  Sunflower utilizes the SPP real time contingency analysis as an additional tool to monitor and evaluate N-1 overloads on Sunflower and Mid-Kansas facilities based on a pool-wide assessment of current operating conditions 14

Example Study and Mitigation Plan 15

NERC Alert and Impact in SPP 16

Facility Rating NERC Alert APPLICABLE TO ALL SPP TOs  On October 7, 2010 NERC issued a facility ratings alert to transmission facility owners to evaluate actual field conditions vs. original design conditions in the determination of Facility Ratings  Alert included a requirement for each entity to assess whether actual field conditions conform to design tolerances specification in the conformance with entity’s Facility Rating Methodology  Facility assessments were to be prioritized over a three-year period with assessment of the highest priority facilities to be completed by the end of 2011, medium priority facilities by the end of 2012, and low priority facilities by the end of

Facility Ratings NERC Alert  Assessments should identify situations where actual conductor clearances are not within design tolerances and do not meet code clearances  Such findings should be coordinated with the RC and an interim mitigation plan should be developed to address the findings and identify actions required to maintain reliability o Such actions could include de-rating of the impacted facility until the problem is fixed o Consideration should be given to optimizing the overall robustness and reliability of the bulk power system during the remediation period o Remediation that takes more than one year after identification requires approval from the Regional Entity 18

System Constraints in SPP “Perfect Storm” 19  Discrepancies found during NERC Alert inspections result in de- rates to Facility Ratings and constrain the system more than normal  Outages required to remediate NERC Alert findings change system topology which may further constrain the system  Multiple Transmission Owners completing NERC Alert inspections and remediation activities simultaneously add further potential for system constraints  Outages to support previously planned construction work associated with projects identified through the SPP planning process and generation interconnection and transmission service, as well as Member and third party delivery point requests add additional constraints  Large amount of wind generation added over past year adds to loading on already constrained transmission facilities (pseudo-ties help with balancing, but not physics)

 Following slides show how SECI deals with congestion  What can we do as BAs? As TOs? As a region? 20 “Perfect Storm” – Now What?

Congestion Management Process from Sunflower’s Perspective  Risk for congestion is highest when wind output is high during low load periods  When congestion occurs, Congestion Management Events (CMEs) are utilized by SPP to redispatch online dispatchable resources through the market system o Market Locational Imbalance Prices (LIPs) have experienced significant volatility as wind has been added to the system o Most of Sunflower’s gas resources are typically dispatched to minimum load, so redispatch that involves reducing output from these resources is often not possible or effective o Sunflower’s Holcomb 1 coal-fired unit, which has historically experienced very little dispatch movement as a base load resource, has experienced significant cycling over the past several months as a result of CMEs and LIP volatility  SPP’s remaining tool – out of market curtailments 21

Holcomb 1 Dispatch 22

Other Elements of Perfect Storm  Generator interconnection and transmission service study processes may not identify all system loading issues o In interconnection studies, upgrades not assigned to Customers for all wind on at 100% nameplate o Studies start with “system intact” before running ‘n-1’. (no maintenance outages accounted for) o NERC alerts may not be accounted for o Should studies be changed? 23

Other Elements of Perfect Storm  No load / Light load o High voltage o Lack of voltage control when wind generation is not producing o No reactive control/capability o May require opening of interconnection to control network voltage  Effects of generator outages due to EPA rules  FERC Separation of Functions Rules o Constrain communication/collaboration among TOs and generators o Using SPP to coordinate is key 24

NEXT STEPS 25

How Do We Minimize Wind Curtailments?  Investigate ways to speed up process for reducing wind output to protect reliability o Change from proactive N-1 mitigation to reactive? Can this be done short of implementing Special Protection Systems?  Reconsider process for reviewing and approving transmission facility outages o Should pre-contingent curtailment of wind continue to be an acceptable mitigation for violations identified when studying planned outage impacts?  Find a better way to coordinate required NERC Alert work from a SPP region-wide perspective to minimize wind impacts while continuing to protect reliability o Would require more input from SPP (FERC Separation of Functions Rules) 26

How Do We Minimize Wind Curtailments?  Investigate ways to factor in economic impact of wind curtailment o On generation owners – loss of PTC o On Project off-takers - potential make whole payments o How and can this be incorporated into CME process?  Moving projects from NDVER to DVER o Are projects capable? o What are the potential costs? o Are there control system changes required? o What is the required time frame to convert?  How will this change with Integrated Market?  What else? 27