ATSS Backlog Clearing Process Recommendation1

Southwest Power Pool, Inc.

ATSS Backlog Clearing Process Recommendation1

Southwest Power Pool, Inc.

Revision History

Date or Version Number / Author / Change Description / Comments
1.0 / BPWG / Initial Version Approved by MOPC 4/16/2013
1.1 / BPWG / Modified draft for consideration 6/24/2013 / Approved by BPWG 7/2/2013
Approved by MOPC 7/16/2013 with TRR-091
Approved by BOD 7/30/2013 with TRR-091

Overview

As part of its charge by the SPP Board of Directors and MOPC to develop a new Aggregate Transmission Service Study (ATSS) Process, per MOPC’s direction, BPWG has reviewed the timeline for transitioning to the new process and approved a proposed ATSS Backlog Clearing Process. The intention of this proposed Backlog Clearing Process is to ease the transition into the new ATSS Process by modify the existing ATSS process in a manner that will allow some of the existing outstanding study processes to be completed prior to the implementation of the new ATSS process planned for the first half of 2014. In order for this Backlog Clearing Process to be effective, both the principles of the process as well as proposed tariff language should be available for MOPC and the SPP Board to approve in the July 2013 cycle of meetings.

By July 2013, it is expected that six ATSS study processes will be in progress. It is anticipated that without changes to SPP’s current tariff, several more study processes would be initiated before the new, proposed ATSS Process can be implemented, resulting in roughly eight or nine open study processes that will need to be completed before the new ATSS Process can be implemented without a backlog of existing studies. While all existing study processes could be clustered with any new requests and all existing studies resolved simultaneously upon the first implementation of the new ATSS Process, SPP Staff and BPWG are concerned that such clustering may cause an excessive burden on the initial operation of the new process, and therefore desire that as many existing ATSS study processes be completed as possible prior to the implementation of the new ATSS Process.

The primary changes to the existing ATSS process needed to implement the recommended ATSS Backlog Clearing Process are the implementation of a new study agreement called the ATSS Completion Agreement (“ACA”) and permitting clustering of future study processes by extending the Open Season currently in process on the date the Backlog Clearing Process becomes effective. The ATSS Backlog Clearing Process was initially approved by the MOPC and Board during their April 2013 meetings. The BPWG has approved the following revised ATSS Backlog Clearing Process for recommendation to the MOPC at its July 2013 meeting. The “retrospective” clustering of existing study processes previously recommended to the MOPC in April 2013 is no longer part of the Backlog Clearing Process, and additional details and clarifications have been added.

Recommended ATSS Backlog Clearing Process

ATSS Completion Agreement:

A significant aspect of the Backlog Clearing Process is the implementation of the ATSS Completion Agreement (ACA). Instead of being an agreement to enter a new study iteration (like the current Letter of Intent (LOI) currently signed by customers between study iterations), the ACA is an agreement that allows SPP greater flexibility to complete the study process and obligates the customer to effectively accept transmission service for its request(s) in the study when SPP declares the study complete. Mutually exclusive requests shall not be recognized under the terms of the ACA, and any service request for which an ACA is signed shall be deemed independent of all other requests for which an ACA has been signed by the same customer. In the ACA, the customer agrees that SPP may declare the study complete if the following conditions occur for each request in the study, together known as the “New Completion Requirements”:

  • DAUC assigned to any service requests in the study do not exceed the amount specified in the ACA, which are either the amount assigned in the most recent study iteration results posted prior to the signing of the ACA or a higher DAUC amount elected by the customer,
  • The Deferred Start Date and Start Date with interim redispatch, if applicable, are not later than those dates specified in the ACA, which are either the dates assigned in the most recent study iteration results posted prior to the signing of the ACA or later dates elected by the customer, unless otherwise dated “as soon as possible”,
  • The Letter of Credit amount for a customer requesting Point to Point service in the study does not exceed the amount specified in the ACA, which is either the amount assigned in the most recent study iteration results posted prior to the signing of the ACA or a higher Letter of Credit amount elected by the customer, and
  • Third party upgrade costs are identified and do not exceed the amount specified in the ACA, which is either the amount assigned in the most recent study iteration results posted prior to the signing of the ACA or a higher amount elected by the customer.

If these conditions are not met in the study iteration following the customer entering into the ACA, then the currently existing terms of study completion will apply, which is that the study may be declared complete if either no further service requests are withdrawn after the study results are posted or if the withdrawn requests have only a negligible impact. However, after ACAs are signed, only the customers with service requests that do not meet the conditions above will be permitted to withdraw prior to completion of the study. Therefore, withdrawals of service requests on OASIS that do not meet one or more of the conditions above will be processed by SPP after the study is declared complete. If a customer elects to keep its request in the study after the conditions of the ACA are not met, then it shall do so by executing an amendment to the ACA that changes the terms of the ACA to either meet or exceed the condition parameters to which the customer agrees to permit the study to complete.

When SPP declares the study process complete under either the new set of conditions or the existing requirement for completing the study, under the ACA, customers are required to either accept transmission service for their requests in the study (by either executing the Service Agreement or allowing SPP to submit the Service Agreement to FERC unexecuted) or withdraw from the study within five business days and agree to pay a Make Whole Payment (MWP). The MWP amount would be equal to any additional DAUC amounts that would be imposed on other customers in the study after reallocation of shared facility upgrade costs to remaining customers’ requests after the removal of the withdrawing request from the study. This includes any upgrades that need to be added as a result of a request withdrawal. Costs of non-shared upgrades will not be included in this MWP calculation and such upgrades will not be included in SPP’s transmission expansion plan based on the results of such study process.

The only exception to this MWP calculation and process is that if a customer has a service request with third party impacts and has not been able to resolve with the Third Party the upgrades and costs associated with those impacts in a commercially reasonable manner (potentially including litigation) by the date service is scheduled to start or within one year of study completion, whichever is sooner, then such customer shall inform SPP of such situation, SPP shall terminate the requested transmissions service, and the customer shall pay a MWP, if any is due. At such time, if any originally non-shared upgrades have become shared upgrades as a result of confirmation of later transmission service requests that utilize such upgrades, then the customer’s share of such originally non-shared upgrades that later became shared shall be determined by SPP and included in the MWP calculation.

The MWP amount calculated for a customer may be paid either up-front or over time, but in any event, it would be trued-up to actual cost upon completion of the facility upgrades. Such MWP may also be creditable, as applicable, under the terms of SPP’s then-effective OATT.

Procedure Details:

  1. Upon the effective date, SPP shall begin accumulating future transmission service requests submitted during the current Open Season period and shall extend such Open Season until such time as the second preceding study is completed and the immediately-higher priority study becomes the Active Study, as defined below.
  2. Upon the effective date and for a period of 45 days after a posting on OASIS by SPP, Customers with an existing Transmission Service Request may withdraw such requests from any existing Aggregate Facility Study without incurring restudy costs. All Eligible Customers' requests remaining after this 45-day period, or submitted in later open seasons, will be subject to the existing provisions of the Tariff.
  1. Upon the effective date, SPP shall apply the process detailed below, starting with the earliest queued incomplete study (e.g., currently 2011 AG3), termed the “Active Study”, and proceeding sequentially from the earliest to the latest queued incomplete study. If the earliest queued incomplete study is in the middle of a study iteration, then the process will be applied when that study iteration completes.
  1. After the 4th Aggregate Facilities Study (AFS) has been completed for an incomplete study process and it becomes the Active Study, LOIsshallno longer be tendered for the Active Study. Instead, SPP shalltender to customers the ACAs described above. ACAs shallonly be tendered for the Active Study. ACA amendment forms may be tendered by SPP to specific customers if the Active Study needs more than one round to complete after ACAs have been executed. SPP shall continue to use LOIsfor any queued incomplete study, not including the Active Study, that SPP determines should be continued with an additional study iteration. Aggregate Facility Study Agreements (AFSAs) shall continue to be used to initiate a newly queued study process after the close of an Open Season.
  1. Prior to customers entering into ACAs for the active study, SPP will provide, upon request, its best estimate of potential new upgrade costs that could be included in the MWP calculation for the requesting customer as a result of counterflow provided by their service request.
  1. If any customers’ requests in the Active Study have Third Party impacts that are not resolved in an executed agreement with such Third Party, then such customers may elect to transfer such service requests out of the Active Study and into the next queued incomplete study rather than entering into the ACA for the Active Study.
  1. Upon posting of the first study iteration subject to the ACA, SPP may declare the study complete and issue Service Agreements if the results meet the following conditions:
  2. DAUC assigned to any service requests in the study (other than out-of-zone DAUC for wind resources) is no more than the amounts documented in the ACA,
  3. The Deferred Start Date and Start Date with interim redispatch, if applicable, are not later than those dates documented in the ACA, unless otherwise dated “as soon as possible” that service may start,
  4. The Letter of Credit amount for a customer requesting Point to Point service has not increased, and
  5. Third party upgrade costs are identified and do not exceed the amounts documented in the ACA.

If the study iteration results do not meet the above conditions upon posting, then SPP will revert to the current process of allowing customers fifteen (15) days to determine whether to remain in the study process. However, after signing an ACA, only those customers with study results that did not meet the above conditions documented in their ACA may withdraw at such time. As with the current study process, if no customers withdraw their requests, or the requests withdrawn do not merit another study iteration, SPP shall declare the study complete and start preparing Service Agreements for issuance to customers.

  1. Any customer desiring to withdraw from the study and pay a MWP rather than accept transmission service shall inform SPP of such decision no later than five (5) business days after SPP declares the study complete. Upon notification of such post-completion withdrawal by a customer, SPP will calculate that customer’s MWP amount and provide the customer with that information within sixty (60) days. For any customer that does not notify SPP of its intent to withdraw within five (5) business days, SPP will prepare and issue a Transmission Service Agreement for execution or for submission to FERC unexecuted as may be appropriate.
  1. For study timing purposes, SPP Staff may delay starting any new study iteration for queued incomplete studies that are not the Active Study by up to seventy-five (75) days from the date on which it would otherwise have started in order to more appropriately match the timing of study process needs.

SHL Waiver Interaction with Backlog Clearing Process:

Regarding the interaction with the new Backlog Clearing Process with the existing Safe Harbor Limit Waiver Process, it is presumed that any waiver needed would have been requested prior to the completion of the 4th Aggregate Facilities Study (AFS) performed for any given study when it is presumed that DAUC is at its highest levels. If such waiver has not already been requested prior to the issuance of ACAs for the Active Study, then it is recommended that a waiver, if needed, should be requested when such ACAs are tendered. Waivers can also be requested after results of the final completed study are posted if DAUC increases to an amount greater than the level requested in the waiver, but the customer must still accept service or withdraw under the terms and timing of this process rather than waiting on the approval of any such requested waiver.

Process Flowchart

ATSS Backlog Clearing Process Recommendation1