Tariff Change Recommendations to the Commercial Practices Committee From the Regional Tariff Working Group April 9, 2001

RTWG Roster Company Representative AEP-WestMr. Dennis BethelMember (TO) Arkansas Electric CooP. Corp.Mr. Ricky Bittle Chair (TC) Coral Power TradingMr. Rick Rucker Member (TC) Dynegy Marketing and TradeMs. Kim Casey Member (TC) Empire District Elect. Co.Mr. Rick McCord Member (TO) ENRON Power Marketing, Inc.Mr. Ron McNamara Member (TC) East Texas Electric CooperativeMr. Wayne Miller Member (TC) Jonesboro City Water and LightMr. Rick HenleyMember (TC) Kansas City Power & LightMr. Ron Kite Member (TO) KPL, Western Resources, IncMr. Dennis Reed Vice-Chair (TO) Missouri Public Svc. Comm.Mr. Mike Proctor Member OG+E Electric ServicesMr. John Gunesch Jr.Member (TO) Oklahoma Municipal Power Mr. Gene Anderson Member (TC) Southwest Power PoolMr. Pat Bourne Secretary Southwestern Power Admin.Mr. James Sherwood Member (TO) Southwestern Public Service Co.Mr. David Grover Member (TO) Tenaska Power Services Co.Mr. Mark Foreman Member (TC) Western Farmers ElectricMr. Gary Roulet Member (TO)

Two Sets of Changes  Tariff Changes to Accommodate Retail Access –Preparation for Retail Access in Texas  Pilot phase begins June 1, 2001  Permanent program begins January 1, 2002 –Applicable to retail access elsewhere  Tariff Changes to Improve Clarity

Retail Access Changes  Modifications to the Base Tariff –To establish retail provider eligibility –To reflect billing and payment impacts  Estimated and adjusted billings  One year period and 2% threshold for billing adjustments other than meter error –To revise service application and contractual requirements for Network Service  SPP may waive certain information requirements  Minimum term reduced to one month for the Texas Pilot

Retail Access Changes  Modifications to The Network Service Agreement –To tie availability of service to status as an Eligible Customer –To allow the statement of a term of service consistent with the Tariff changes for the Texas Pilot Program –To recognize the use of energy-only metering and demand profiles

Retail Access Changes  Modifications to The Network Operating Agreement –To enable SPP to waive certain information and metering requirements –To revise metering requirements to accommodate use of energy-only metering and customer class demand profiles when necessary

Clarification Changes  Revise Sections 2.2 and 22 – Reservation Priority and Right of First Refusal  Revise Creditworthiness Standards to Apply Specifically to Entities Applying for Service  Revise Extensions for Commencement of Service to require 120 day Notice  Revise Attachment J - Recovery of Costs Associated With New Facilities  Revise Attachment L – Treatment of Revenues

Sections 2.2 and 22 Reservation Priority Issues  Background –Reservation priority issues discussed extensively at the RTWG –These revisions clarify the rights and obligations of both incumbent and new customers

Sections 2.2 Reservation Priority Issues Change time frame to respond to a competing request –New Customer with a competing must make a contractual commitment via a contingent service agreement –Current user with reservation priority must respond within 60 days of notification of a contingent service agreement –Studies are paid for by requesting party

Section 22 Reservation Priority Issues Clarify that requesting a change in path for an existing firm transmission reservation with remaining term of less than 1 year has reservation priority on the original reservation

Sections 2.2 and 22 Reservation Priority Issues  Recommendation –Approve the proposed revisions to Sec.2.2 and Sec. 22

Section 11 Creditworthiness  Change –Modified to clarify when the credit requirements contained in the tariff apply  Background –An entity applying for service may not (yet) be an Eligible Customer –Anyone seeking service must be willing to demonstrate their creditworthiness –The proposed change applies to an “entity seeking service” as well as a Customer.

Section 17.7 Commencement of Service Extension  Change –Modified to require that a customer must request an extension of the start of service at least 120 days prior to the start of service.  Background –An extension for commencement of service less than 120 days may leave capacity unused  Proposed notice gives other market participants time to react to availability of the capacity  Transmission Owner revenue opportunity increased

Attach. J - Recovery of Costs Associated With New Facilities  Change –Modified to clarify cost recovery issues  Background –Transfer language to Attachment L –Eliminate roll-in of facilities paid for previously

Attach. L - Treatment of Revenues  Change –Modified to clarify revenue allocation  Background –Include language moved from Attachment J –Clarify how revenue is allocated to Transmission Owners when Network Upgrades are involved

Ongoing Consideration of Major Issues  Investigate changing Network Service pricing from a load ratio share basis to a stated rate  Develop Pro Forma Generation Interconnection Agreement  Deposit policy reevaluation  Improving the standards for putting transmission facilities in the rate base  Ultimate rate design for SPP Tariff –Zone vs Postage Stamp vs ???