1. Westar Formula Rate and your bill
10/22/2010

2. What we will be going over
Transferring the results from the Westar Formula Rate to the SPP tariff.
The SPP Tariff
Basic Cost Recovery
Cash flow through the SPP tariff
Base Plan Funding (BPF)
What goes into a Customer’s bill
Results from the 2010 projection
Customer bills
10/22/2010

3. Overview Westar ATRR TO 2 ATRR TO 2 ATRR TO 17 ATRR SPP Tariff
SPP bills its customers based upon these ATRRs and its FERC approved Tariff
Each Transmission Owner in the SPP reports its authorized Annual Transmission Revenue Requirement (ATRR)
10/22/2010

4. Westar Formula Rate
Annual Transmission Revenue Requirement Based on a fully projected 2010 Rate Year
Projection based on 13 month average rate base for 2010
Beginning balance: 2008 Form 1 adjusted for projected 2009
Ending Balance: Beginning balance plus 2010 projections
Add in any “True-up” balance (plus interest) from 2008
True-up based on actual 2008 cost vs Projected 2008 ATRR for the period from June 1 to December 31
Most Projections based on internal formulas
Projected O&M is based upon the change in Net Plant
Other factors held at 2008 levels
New Capital based on 2010 Construction Budget
Based on Projects required by SPP
10/22/2010

5. SPP is broken up into 17 different Pricing Zones
The SPP Tariff - Rates
SPP is broken up into 17 different Pricing Zones
The Transmission Rates for each Zone are calculated by SPP
Annual Transmission Revenue Requirements (ATRR) from each Transmission Owner are used
Cost of Transmission Service for each Zone are based on the sum of all the ATRR allocated to that Zone (ZATRR)
Network Customers pay a Load Ratio share of the allocated ATRR
The Load Ratio shares are calculated in January each year based on the previous Calendar year period
(Customer 12 mo. Avg.. Peak / Zonal 12 mo Avg. Peak)
PTP rates are shown in Attachment T of the SPP Tariff
Total Allocated ATRR / Zonal 12 mo Avg. Peak from formula = Annual Rate.
10/22/2010

6. SPP Tariff – Cost Recovery
Zonal charges
Transmission Plant in existence prior to Jan. 1, 2006
Reliability Upgrades needed to meet local area criteria
Costs of new transmission projects assigned to the Zone by SPP
Regional charges
ATRR of each project is allocated to all Zones on a load ratio share basis
12 mo. Zonal Avg. Load / (Σ 12 mo. Zonal Avg. Load for all zones)
Based on previous calendar year load values
Direct Assigned Costs
Costs assigned to specific transmission customers or Transmission Project Sponsors
10/22/2010

7. SPP Tariff – Cost Recovery
Certain Transmission Projects can also qualify for Base Plan Funding (BPF)
Costs of BPF projects are recovered: 33% Regionally; 67% Zonally
Zonal costs are primarily allocated to the zone where the upgrade is built
Zonal Costs may be allocated to other Zones based upon benefit
10/22/2010

8. SPP Tariff – Cost Recovery of New Transmission Upgrades
Reliability Projects
Normally BPF
If needed to meet local area reliability criteria that are more strict that SPP criteria, then its costs are assigned to the specific Zone
Upgrades related to requests for Transmission Service
Costs may qualify for Base Plan Funding
Otherwise, costs direct assigned to Customer
Economic Balanced Portfolio Upgrades
Regional
Sponsored Upgrades
Costs direct assigned to Sponsor
Generation Interconnection Service
Upgrades assigned to Generator, with credits from Attachment Z
10/22/2010

9. Revenue Requirements from Transmission Owners to SPP Pricing Zones
Westar’s Total ATRR
SPP Tariff
Westar Zonal ATRR
Westar Zone
Regional Charge
33% of Total
BPF
Projects
BPF ATRR
BPF Zonal
Charges 67%
OGE’s Total ATRR
OGE Zone
BPF ATRR
OGE Zonal ATRR
All Other SPP Price Zones
All Other SPP TO’s Total ATRR
BPF ATRR
Zonal ATRR
10/22/2010

10. Example of BPF Cost Allocation
Total BPF
Allocated Costs
BPF Projects
Regional Rate
Rev. Req. Allocated
By Load Ratio Share
Westar Pricing
Zone
LRS=20%
$3.20
$8.00
$1.20
$12.40
$3.20 (20%)
$8.00 (100%)
$16
$1.20
(5%)
BPF ATRR=$12 $4
Project 1
33% Regional
67% Zonal Allocation
$4.80 (30%)
SPP Pricing
Zone 2
LRS=30%
$4.80
$9.60
Zonal Rate
Rev. Req. Allocated
By Zonal Benefit
(This is Done
by Project) $8
$4.80 (20%)
BPF ATRR=$36
$12
Project 2
33% Regional
67% Zonal Allocation
$8.00 (50%)
SPP Pricing
Zone 3
LRS=50%
$8.00
$18.00
$26.00
$24
Zonal Rate
Rev. Req. Allocated
By Zonal Benefit
(This is Done
by Project)
$18.00 (75%)
Total BPF ATRR for all Projects = $48.00
Sum of Allocated BPF ATRR = $48.00
10/22/2010

11. Customer Bill Make up SPP
SPP keeps Admin fees to support the RTO (Anc. 1A)
SPP pays suppliers for Ancillaries 2 & 4
Ancillaries Supplied by SPP
SPP Admin Charge (Schedule 1A)
SPP
Ancillary 2 - RV
Ancillary 4 - EIS
Customer 1
Ancillaries 3, 5 & 6
Supplied on behalf of SPP by Westar
as necessary
Westar’s Share
of BPF
Westar
Generation
Ancillary
Services
Ancillary 1 - SC
BPF
ATRR
Allocated
To Westar
Zone
Westar
Retail = Acct
Other Whsle. bus. =
Acct. 565.
Schedule 11
Westar
Transmission
Cost
Recovery
Total
Westar
Zonal
ATRR
Schedule 9
Other Transmission Owners in SPP
Other TO’s Share
of BPF
10/22/2010

12. Looking at
10/22/2010

13. Comparison between 2010 and 2009
10/22/2010

14. BPF Transmission Projects
Westar
41 BPF Projects totaling over $19.3 million (Rev. Req.) $126 million E&C.
Second phase of Wichita-Reno-Summit 345 kV line $101.4 million
AEP
17 BPF Projects, Total=$12.6 million
Westar’s direct Zonal share, $0
OGE
10 BPF Projects, Total = $3.3 million
Westar’s direct Zonal Share, $296,630
SPS, NPPD
6 BPF Projects, Total = $2.0 million
Westar’s direct Zonal Share, $0
10/22/2010

15. Estimated Westar Zonal Costs for 2010
2009 Zonal ATRR
$115,050,240
2010 Zonal ATRR
$128,879,788
Estimated 12% Increase
10/22/2010

17. Questions?
10/22/2010