Transcript www.naruc.org

Updated 1/28/2011
Cost Allocations
and
Affordability of
Tariffs
March 8, 2011
Jay Caspary
[email protected] · 501.614.3220
61 SPP Members
3
Members in 9 states
Arkansas
Kansas
Louisiana
Mississippi
Missouri
Nebraska
New Mexico
Oklahoma
Texas
Provide services to Entergy
on contract basis (ICT)
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Regulatory Environment
• Incorporated in Arkansas as 501(c)(6) non-profit
corporation
• FERC - Federal Energy Regulatory Commission
– Regulated public utility
– Regional Transmission Organization
• NERC - North American Electric Reliability Corporation
– Founding member
– Regional Entity
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Regional State Committee
• Retail regulatory commissioners:
Arkansas
Missouri
Oklahoma
Kansas
Nebraska
Texas
Mississippi
New Mexico
Louisiana maintains active observer status
• Functions
⁻ Cost allocation
⁻ Ensure adequate supply
⁻ Market cost/benefit analyses
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Who pays for transmission?
Sponsored
Highway/
Byway
Reliability
Economic
“Base Plan Funding”
“Balanced Portfolio”
Funded
33% Postage Stamp /
67% MW-MI
Postage Stamp
for 345 kV projects with
balancing transfers
Directly
assigned w/
revenue credits
Postage Stamp
/ License Plate
Reason
Criteria or Designated
Resource
Aggregate and Individual
Transmission Owner
Benefits / Cost ≥ 1
Sponsor(s)
nominate
projects
ITP; Fair &
Simple
Voltage
Transmission
345 kV and above
Effective
2005
2008
2005
2010
Type
Highway/Byway
Voltage
Paid for by Region
300 kV and above
above 100 kV and below 300 kV
100 kV and below
100%
33%
0%
Paid for by Local
Zone
0%
67%
100%
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How does SPP impact you?
•
SPP cost = 37¢ of $100 residential utility bill
•
Cost to typical residential customer for $1 billion of
incremental transmission is ~$1.34 per month
•
2005 independent analysis by Charles River Associates:
–
$500,000 cost-benefit study
–
On behalf of state regulatory commissions
–
270% ROI for SPP services over the next 10 years
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Rate Impacts Going Forward
•
Approved SPP transmission plans represent in excess
of $5B of new investment in new and upgraded
facilities through 2017.
•
SPP’s Integrated Marketplace will cost $80M+ but its
benefits have been shown to exceed the costs due to
consolidated balancing authorities, as well as day
ahead and ancillary services markets.
•
Its very important to look at the benefits of
transmission plans and market developments and not
just the cost.
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