1. T.O. Highway/Byway Recommendations
Dennis Reed, Westar
Jake Langthorn, OG&E
May 21, 2009
11/10/2018

2. Disclaimer Prepared for the May 27, 2009 CAWG meeting
Not vetted with full TO group
Does not necessarily represent the views of all TOs
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3. Current OATT Has 3 buckets of cost recovery
Regional
Zonal
Direct Assigned
All Methods of Cost recovery use these 3 buckets
Base Plan Funding can use all three.
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4. Existing Cost Recovery
Facilities built prior to 2006 : 100% Zonal
Transmission upgrades built on or after Jan 1, 2006
Reliability Upgrades: BPF-33% Regional, 67% Zonal
Zonal Reliability Upgrades: 100% Zonal
Upgrades for Service Requests:
Default to direct assigned, but can qualify for BPF
Special allocation for upgrades related to wind generators
Upgrades for Generation Interconnection: Direct Assigned to Generator
Economic Upgrades: Direct assigned to Sponsor unless part of a Balanced Portfolio, then 100% Regional
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5. Highway/Byway Structure
Highway: Regional Cost Recovery
345kV and above
Byway: Zonal Cost Recovery
100 kV and below
Outstanding question: What to do with the facilities between 100 kV and 345 kV?
There are multiple ties between various B.A.s and Pricing Zones inside SPP at 115 kV, 138 kV and 230 kV.
Do we allocate the facilities by function?
only put tie facilities into the highway
Bright line at some other level?
Some other methodology?
11/10/2018

6. Allocating Costs For New Upgrades
Existing Facilities
All facilities as of a set point in time
Cost allocations for those facilities will remain the same
New Facilities
Modify BPF to HWBW:
Eliminate the 1/3, 2/3 split and allocate upgrade cost either to Highway or Byway depending on criteria
Maintain Safe Harbor limits
Direct assign costs in excess of Safe Harbor
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7. Allocation of Cost of New Upgrades
ITP Upgrades
NERC Reliability: HWBW
Service Upgrades: Direct Assigned unless for DR, then HWBW with Safe Harbor [see next slide]
Economic: HWBW
Question: Do we keep the Balanced Portfolio or does this type of upgrade go away?
Zonal Reliability: Byway
Generation Interconnection
Interconnection Facilities: Direct Assigned
Other network upgrades? Can be addressed in ITP process
Requested Upgrades: Sponsored or Direct Assigned unless incorporated with the ITP upgrades
11/10/2018

8. Service Upgrades PTP Requests NITS Requests
Costs direct assigned to customer
If Request is for a new Designated Resource serving load in the SPP: HWBW
NITS Requests
Upgrades in host zone: HWBW
Upgrades in other zones:
If Highway – Goes to Highway
If Zonal, gets Direct assigned to NITS customer (“and” pricing)
Related to a new DR (w/safe harbor): HWBW
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9. Other Related Issues Through and Out Rates PtP revenue allocation
Go to System Average Rate?
PtP revenue allocation
Maintain allocation of revenues to TOs or try and split the revenue between customers and TOs
Existing Facilities
Do we maintain the current cost allocation forever?
Or, do we transition to HWBW rates?
Transition period to new Cost Allocation
Going to HWBW
FERC position regarding existing facilities?? May have an opinion.
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10. Why this approach? Simplifies the accounting for both TOs and SPP
May Minimize Regulatory Concern
Minimizes Changes to the Tariff
Leaves in place most of the compromises made over the past 10 years on certain issues
Quicker to implement and probably get through FERC
Minimizes Rate impacts to customers
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11. Schedule
MAKE THE OCT 27 DATE!!!
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