FERC Order 1000 Transmission Planning and Cost Allocation Key Points of Seminole Electric Cooperative, Inc.’s Proposal FRCC Regional Stakeholder Meeting May 2, 2012

Sponsor’s Proposal Sponsors’ proposal does not meet Order 1000 requirements. Sponsors’ proposal maintains the current planning process and only new project proposals which avoid existing planned transmission projects with higher costs in the rolled-up plans would potentially be eligible for cost allocation. FRCC would only react to proposals that meet the very limiting defined criteria, most of which are not consistent with Order

Summary of Seminole’s Proposal The goal is to develop a more “optimal” transmission plan, taking into consideration not only avoided transmission costs, but other benefits such as reduced production costs and congestion relief. The FRCC regional transmission planning process should include an independent analysis to determine what makes sense from a reliability, cost-effective and cost efficiency standpoint for the entire region, taking into account the local plans of each TP. ◦ Seminole proposes that FRCC staff take on this independent role. 3

Summary of Seminole’s Proposal (continued) A regional tariff provides the most efficient platform for meeting Order 1000 requirements ◦ Provides a basis for cost allocation and enables entrance of non-incumbents. 4

Key Aspects of Regional Tariff License plate rates for existing transmission facilities Region-wide rates for new facilities built pursuant to the regional planning process. Elimination of “pancaked” transmission rates Eliminate the need for network transmission customers to designate network resources by balancing area 5