OMAHA PUBLIC POWER DISTRICT

Procedures

For Implementation of the

STANDARDS OF CONDUCT

Relating to

Employee Compliance Guide For

Energy Marketing

And

Transmission System Operation

Procedures Implementing

Standards of Conduct
Table of Contents

Introduction to Employee Compliance Guide………………………………Page 1

Background………………………………………………….Page 2

Definition……………………………………………………Page 4

General Rules……………………………………………….Page 5

Rules Governing Employee Conduct……………………………………….Page 6

Prohibitions…………………………………………………Page 6

Transfers…………………………………………………….Page 6

Information Access…………………………………………Page 6

Disclosure…………………………………………………...Page 7

Implementing Tariffs………………………………………..Page 7

Discounts……………………………………………………Page 8

Books and Records………………………………………….Page 8

Training……………………………………………………..Page 8

Shared Facilities…………………………………………….Page 8

Chief Compliance Officer…………………………………..Page 9

Maintenance of Written Procedures………………………………………...Page 9

Creditworthiness of Wholesale Transmission Customer…………………..Page 9

OASIS and Information to be posted on the OASIS………………………..Page 10

Comments………………………………………………………………...... Page 11

Background:

The Federal Energy Regulatory Commission (FERC or “Commission”) has issued a series of orders that require Omaha Public Power District (OPPD) to provide its transmission customers with information that enables customers to obtain open access non-discriminatory transmission service, and to perform its electric transmission operations in conformance with certain standards of conduct. These orders consist of Order Nos. 889, 889A, 889B, 2004, 2004A, and 2004B. In order to fully comply with these requirements, prior to April 1, 2009, Omaha Public Power District had participation agreement with the Mid-Continent Area Power Pool (MAPP)OASIS., and on April 1, 2009, OPPD has joined South West Power POOL (SPP) a FERC mandated Regional Transmission Organization. SPP is the Tariff Administrator and Transmission Services Provider for OPPD.

These orders require OPPD to implement Standards of Conduct to separate its Transmission Function from its wholesale marketing. OPPD’S Transmission Function is required by these orders to operate separately from its Energy Marketers and any other Energy Affiliates, if they exist. The Standards of Conduct require organizational charts, job descriptions, and lists of OPPD’S Marketing and the facilities they share to be posted on the OASIS, and updated as required. In addition, annual employee training is required for a broad group of employees that may have access to transmission information, and these procedures for the Standards of Conduct implementation are required to be maintained and posted on the OASIS.

The Standards specify how utilities must conduct their wholesale transmission and marketing business to conform to FERC orders. Specifically, the Standards require that employees conducting tariff administration, and transmission system operations and reliability duties (Transmission Systems Operations) be separated from and act independent of employees engaged in wholesale merchant functions (Energy Marketing). This requirement is referred to as functional separation. OPPD has no affiliates as that term is defined by 18 C.F.R. §§37.3(f) and 161.2(a). Consequently, the rules regarding affiliates engaged in wholesale merchant functions do not apply in OPPD's case.

OPPD submitted an open-access transmission tariff (Tariff) to the Commission on October17, 1996 and in so doing obligated itself to adhere to the terms and conditions set out by the Tariff and the Standards. By reference the Tariff (and all amendments and supplements thereto) is herein made part of this employee document. Consequently, OPPD personnel involved in the administration of the Tariff and transmission reliability functions shall conduct their respective business activities in a manner consistent with the Tariff and the Standards detailed in this Employee Compliance Guide.

Functional separation requires that OPPD separate the traditionally integrated functions of transmission operations, and Energy Marketing and generation operations. In accordance with Commission rules, OPPD has developed written procedures implementing the Standards and specifying how OPPD will conduct wholesale transmission and energy marketing functions. The procedures are designed to ensure the Commission and Wholesale Transmission Customers that OPPD is in compliance with the Standards, specifically, that the energy marketing function accesses wholesale transmission information in the same manner as all other Wholesale Transmission Customers.

This Employee Compliance Guide has been developed to serve two purposes; (1) to demonstrate how OPPD intends to conduct its wholesale transmission and marketing in conformance with the Standards, and (2) to set forth in some detail the conduct expected from each OPPD employee affected by the Standards.

The Compliance Officer is authorized to ensure that all OPPD employees adhere to these Standards. The Compliance Officer shall report periodically to OPPD's Senior Management on the status of the Tariff and these Standards, and in the event an incident is deemed appropriate for review and/or action.

Consistent with the fact that OPPD's open-access transmission tariff filed to meet the reciprocity requirement of Order No. 888 tariff is purely voluntary, OPPD may choose to withdrawn these Standards in the event the current standards governing reciprocity are altered by the Commission or a court in a manner that is unacceptable to OPPD. Further, these Standards may be amended from time to time due to changes in Commission policy.

Definitions:

See Common Service Provisions - Definitions, Section 1 of OPPD's Open-Access Transmission Tariff for other common definitions not herein included.

(1)Energy Marketing means the Wholesale Merchant Function including generation operations.

(2)OASIS means the Open Access Same-Time Information System established and maintained by Open Access Technology International (OATI) for the Mid-Continent Area Power Pool (MAPP). The system is used to post the Tariff, its wholesale transmission system information, and general broadcasts regarding transmission system operation including disclosure of activities subsequent to potential emergency conditions.

(3)Reseller means any Wholesale Transmission Customer who offers to resell wholesale transmission capacity it has purchased.

(4)Tariff means OPPD's Open Access Transmission Tariff as submitted to the Commission on October 17, 1996 and all amendments and supplements thereto.

(5)Transmission Provider means any utility that owns, operates, or controls facilities used for the transmission of electric energy in interstate commerce.

OPPD is a Transmission Provider because it voluntarily provides open access to wholesale transmission and ancillary services. TheManager of Transmission Services shall be the responsible party for administering and meeting the requirements regarding wholesale transmission and ancillary services.

(6)Transmission System Operations shall include (1) the administration of the Tariff and (2) maintaining the reliable operation of the interconnected 345 kV and 161 kV transmission systems on a 24/7 basis.

(7)Wholesale Merchant Function means the sale for resale, or purchase for resale, of electric energy in interstate commerce.

(8) Wholesale Transmission Customer means any eligible wholesale transmission customer (or its designated agent) that can or does execute a wholesale transmission service agreement or can or does receive wholesale transmission service subject to the terms of Tariff Section11.

(9) Chief Compliance Officermeans the OPPD officer with responsibility for compliance with these Standards of Conduct, including training, answering employee questions. Manager of Transmission Services, Douglas G. Peterchuck has been designated Chief Compliance Officer for

OPPD. He can be reached at 402-552-5181 (telephone), (email), or 4325 Jones Plaza, Omaha, NE 68105 (mail). The Chief Compliance Officer may assign compliance duties to designated individuals subject to his supervision and direction.

Standards of Conduct (Standards):

OPPD as a Transmission Provider shall conduct its business in a manner that conforms to the following rules:

(a)General Rules

(1)Except as provided in paragraph (a) (2) of this section, OPPD employees engaged in Transmission System Operations must function independently of other OPPD employees engaged in Energy Marketing. (See All Comments)

(2)On May 18, 2006, the Federal Energy Regulatory Commission (“FERC”) clarified that the Standards of Conduct are not intended to impede communications related to safety or reliability between transmission operators and nuclear plant operators. The transmission operator can share the following information with the nuclear plant operator:

•Coordination of Switching and maintenance

•Information on Grid Disturbances

•Day-to-day operational information

•breaker operations and transformer availability

•Anyother operational information necessary to maintain the safety and reliability of the transmission system and the nuclear power plant.

•Plant owners or operators are forbidden from passing this transmission information on to our marketers because it is non-public information and would violate the no-conduit rule.

(3)During emergency conditions that affect or may affect system reliability, OPPD employees may take whatever steps are necessary to keep the system in operation, including, direct communication between Energy Marketing and the Transmission Provider. The Transmission Provider shall report to the Commission all emergencies that result in deviations from the standards of conduct and shall report on the OASIS each emergency that resulted in any deviation from the standards of conduct within 24 hours of such deviation. Reporting to the Commission will be at the discretion of the Compliance Officer. (SeeComment [7])

(b)Rules Governing Employee Conduct

(1)Prohibitions: Any OPPD employee engaged in Energy Marketing is prohibited from:

(i)Conducting Transmission System Operations; and,

(ii)Having access to OPPD's EnergyControlCenter or any other OPPD facility used for Transmission System Operations that differs in any way from the access available to other Wholesale Transmission Customers. (See Comment [2], [3], and [5])

(2)Transfers: Employees engaged in either the (i) Energy Marketing or (ii)Transmission System Operations functions are not precluded from transferring on an inter-divisional basis (herein defined as between divisions reporting to the same vice president) as long as such transfers are not used as a means to circumvent the Standards. Notices of any employee transfer to or from Transmission System Operations must be posted on the OASIS.

The information to be posted must include; the name of the transferring employee, the respective titles held while performing each function for the Transmission Provider, and the effective date of the transfer. The information posted under this section must remain on the OASIS for 90 days.

(3)Information Access: Any OPPD Energy Marketing employee:

(i)Shall have access to only that information available to all other OPPD Wholesale Transmission Customers (i.e., the information posted on the OASIS), and must not have preferential access to any information about the OPPD transmission system that is not available to all users of the OASIS; and

(ii)is prohibited from obtaining information about the OPPD transmission system (including information about available transmission capability, price, curtailments, storage, ancillary services, balancing, maintenance activity, capacity expansion plans or similar information) through access to information not posted on the OASIS that is not otherwise also available to the general public without restriction, or through information through the OASIS that is not also publicly available to all OASIS users. (See Comment [3] and [11])

(4)Disclosure: OPPD and its employees are responsible for ensuring compliance with the following provisions of Order No. 888, 889, 889A, 2004, 2004A, and subsequence modifications:

(i)Any OPPD employee engaged in Transmission System Operations may not disclose to OPPD employees engaged in Energy Marketing any information concerning OPPD's or another utility's transmission system (including information received from non-affiliates or information about available transmission capability, price, curtailments, storage, ancillary services, balancing, maintenance activity, capacity expansion plans or similar information) through:

(A)Non-public communications conducted off the OASIS;

(B)Access to information not posted on the OASIS that is not at the same time available to the general public without restriction; or,

(C)Information on the OASIS that is not at the same time publicly available to all OASIS users (e.g., E-mail, facsimile, etc.).

(ii)If an OPPD employee engaged in Transmission System Operations discloses information not posted on the OASIS in a manner contrary to the requirements of the Standards, OPPD, specifically the manager of the department or division with responsibility for such employee, shall be responsible for immediately posting such information on the OASIS and reporting the disclosure to the Compliance Officer; and,

(iii)OPPD employees engaged in Transmission System Operations may not share any market information, acquired from present or potential Wholesale Transmission Customers, or developed in the course of responding to requests for wholesale transmission or ancillary service on the OASIS, with OPPD employees engaged in Energy Marketing, except to the limited extent information is required to be posted on the OASIS in response to a request for wholesale transmission service or ancillary services.

(5)Implementing Tariffs: OPPD employees engaged in Transmission System Operations:

(i)Must strictly enforce all Tariff provisions relating to the sale or purchase of wholesale transmission and ancillary services, if these provisions do not provide for the use of discretion;

(ii)Must apply all Tariff provisions relating to the sale or purchase of wholesale transmission and ancillary services in a fair and impartial manner that treats all Wholesale Transmission Customers in a non-discriminatory manner, if these provisions involve discretion; (See Comment [7] and [8])

(iii)Must post on the OASIS in accordance with 18 C.F.R. §§37.4(b)(5)(iii) and 37.6(g)(4) all details of the circumstances and manner in which Transmission System Operations employees exercised discretion under any terms of the Tariff. This information will be retained for the time periods set out in Order 889-A.

(iii)Must not, through the Tariff or otherwise, give preference to sales for resale made by the wholesale merchant function over the interests of any other wholesale customer in matters relating to the sale or purchase of wholesale transmission and ancillary services (including issuesof price, curtailments, scheduling, priority, ancillary services, etc.).

(6)Discounts: All offers of discounts for transmission service shall be posted at the time the offer is contractually binding. Discounts for transmission and ancillary services shall be in accordance with provisions stated in the OPPD OATT.

(7)Books and Records: Neb. Rev. Stat. § 84-712 provides that public records, except as otherwise expressly provided by statute, are available for public examination. In accordance with State law OPPD will maintain its books of account and records regarding wholesale transmission and ancillary services available for public examination.

(8)Training: Omaha Public Power District shall train all employees with access to transmission information or information concerning purchase, sales or marketing functions on the Standards of Conduct. OPPD shall keep record with the list of employees received training. Transmission function, Energy Marketers, shared support employees as well as those employees who have been identified to have potential to be conduits to transmission information must at least annually attend training regarding the Standard of Conduct. All employees affected with the Standards of Conduct should receive a copy of this guide.

(9)Shared Facilities: OPPD'STransmissionSystemOperationCenter is located at the Energy Control Center (ECC), at 4325 JonesPlaza, Omaha, NE68105. Energy Marketers are located in a different building that is 2.5 miles away, at 444 south 16th Street Mall, Omaha, NE68102. Access to either facility is controlled via access cards which restrict entry to authorized personnel.

Computer Systems: The OPPD transmission system operations and wholesale merchant function employees share the same EMS and LAN. OPPD implemented a new EMSsystem in October, 2005. The EMS identifies each point in the database with categories such as transmission or marketing information. When a marketer calls up a display, if any of the information on the display is considered transmission information (analog or digital) this information will not show up on the display. The transmission system operations personnel are allowed access to all data available on the EMS.

(10)Chief Compliance Officer: OPPD has designated Douglas Peterchuck, Manager – Transmission Services, as the Chief Compliance Officer for OPPD. The Chief Compliance Officer is responsible for the Standards of Conduct compliance. The Chief Compliance Officer shall be responsible for:

  1. Employee training.
  2. Answering employee questions.
  3. Coordinating any investigation with the Commission.
  4. Receiving reports of deviation from the Standards of Conduct and assuring that the deviation is appropriately posted and reported and that mitigation measures are implemented to prevent recurrence of the same deviations.

(c)Maintenance of Written Procedures: OPPD must post on its OASIS current written procedures implementing the Standards of Conduct in such details as will enable the customers and the commission to determine that OPPD is in compliance with the requirements of the Standards of Conduct. OPPD shall maintain current copies of this Employee Compliance Guide and any subsequent amendment hereto at the following locations:

(1)Transmission System Operations;

(2)Corporate Communications;

(3)Integrated Resource Planning; and,

(4)Energy Marketing and Trading.

The Compliance Officer shall be responsible for submitting these written procedures implementing the Standards to the Federal Energy Regulatory Commission, and for submitting any changes to these procedures or the Tariff.

(d)Creditworthiness of Wholesale Transmission Customers: Section 10 of the Tariff specifies that OPPD may, when evaluating the creditworthiness of Wholesale Transmission Customers, require reasonable credit review procedures in accordance with standard commercial practices. When assessing a Wholesale Transmission Customer's creditworthiness OPPD shall take into consideration the Wholesale Transmission Customer's current financial rating issued by a third party rating service, a minimum of two years acceptable financial performance, and its past business dealings with OPPD. OPPD may, at its sole discretion, require the Wholesale Transmission Customer to provide and maintain in effect during the term of a service agreement, an unconditional and irrevocable:

(1)Letter of Guarantee from a parent organization with acceptable financial backing; or,

(2)Letter of Guarantee from a financial institution or insurance company; or,

(3)An alternative form of security proposed by the Wholesale Transmission Customer and acceptable to OPPD.

The dollar amount of such security required and the credit limit extended shall be no less than twice the Wholesale Transmission Customer's specified anticipated transmission use during a month. In the event the Wholesale Transmission Customer's wholesale transmission and ancillary services account payable balance exceeds 60% of the credit limit established by the above process, the Compliance Officer shall inform the Wholesale Transmission Customer by facsimile or E-mail of the fact and indicate that wholesale transmission and ancillary services will be withheld if the Wholesale Transmission Customer fails to provide additional security, an additional deposit, or pay down the balance of the account prior to exceeding the credit limit. (See Comment [4])