Western Area Power Administration

1
Western Area Power Administration

• Transmission Customer Meeting
• August 20, 2007

2
Agenda

• CVP Transmission System Mariam Mirzadeh
• Compliance with NERC Standards Arun Sethi
• Westerns OATT Darren Buck
• Westerns Transmission Rate Melinda Grow

3
CVP Transmission Network

• Long Transmission Lines High Reactive Losses
• Integrating CVP Base Resource, Third Party
  Generation or Import to Load Hubs or Designated
  Loads at Elverta and Tracy and Other Delivery
  Points
• Simultaneous Import Limitations Nomogram
• Internal (local) Generation vs. Import
• COI Impact vs. the Parallel 230 kV

4

• CVP Customer Loads
• 50 Direct Connect
• 50 Off-System
• Project Use Loads
• 50 Direct Connect
• 50 Off-System

5
Network Reliability Projects

• Sacramento Valley
• 31 Miles of DCKT 230kV OBanion to Elverta
• Folsom Loop
• Loop SMUDs Orangevale/Lake into Folsom
  Substation
• Two New 230kV Bays at Folsom

6
Long Import Lines to Load Center Delivery Points
7
(No Transcript)
8

• Questions/Discussion

9

• Westerns Compliance with NERC Reliability
  Standards

10
Reliability Standards

• Eighty-three mandatory standards, and 700
  requirements became effective on June 18, 2007.
• All bulk power system owners, operators, and
  users must comply with these standards. 
• All entities are required to register with NERC
  through the appropriate regional entities.

11
NERC Registration

• Western-SNR Operations has registered with NERC
  as
• Transmission Owner (TO)
• Transmission Operator (TOP)
• Transmission Service Provider (TSP)
• Transmission Planner (TP)
• Planning Authority (PA)

12
Western Standards Review Compliance

• Western has self-reported 14 Compliance
  Violations and Mitigation Plans to WECC.
• Six Mitigation Plans have been completed.
• All but one of the remaining Mitigation Plans
  will be completed in 2007.

13
Western Compliance Audits

• As a TO and TOP, Western is required to perform a
  Self-Certification by December 2007.
• Western is scheduled to have a WECC On-Site
  Compliance Audit in December 2008.

14

• Questions/Discussion

15
Westerns OATT

• Transmission Reservation Process
• Transmission Upgrades

16
Western OATT Requests/Planning

• Service or Interconnection Request Submitted
• Feasibility Analysis Performed
• System Impact Study (SIS)
• Study of TX and impacts
• Must be coordinated with neighboring TX owners
  and potentially WECC

17
Western OATT Requests/Planning (cont.)

• Facility Impact Study (FIS)
• Substation Impacts
• Lands, Environmental
• Design
• Cost Estimates Determined
• Mitigation On Neighboring Transmission
• Anticipated Rate Impacts
• Determined from FIS Estimates
• Includes existing TX service and additional
  service as a result of the new line (if SIS
  indicates new TX results)

18
Transmission Service Constraints

• Transmission Reliability Impacts All Customers
• Firm Off-System Sales are Considered Direct
  Connect Load and are subject to Schedule Cut like
  On-System
• Cuts due to Transmission Outages are shared
  Pro-rata for all customers
• All Network Upgrades benefit All Customers

19
Network VS. Direct Assignment Upgrades

• Network Upgrades Modifications or additions to
  transmission-related facilities that are
  integrated with and support the TPs overall
  Transmission System for the general benefit of
  all users of such Transmission System.
• Direct Assignment Facilities Facilities or
  portions of facilities that are constructed by
  the Transmission Provider for the sole
  use/benefit of a particular Transmission Customer
  requesting service under the Tariff. Direct
  Assignment Facilities shall be specified in the
  Service Agreement that governs service to the
  Transmission Customer

20
FERC Bright Line Test For Facility Designation

• (1) whether the new facility additions would
  improve service to existing system load (other
  than the load that requested it)
• (2) whether the additional facilities, that have
  been demonstrated to be the most cost-efficient
  alternative, are needed to maintain the
  reliability of the existing transmission system
• (3) whether the new facilities are mandatory
  requirements for a load interconnection to
  satisfy a utilitys planning criteria, or whether
  they far exceed what those criteria require
• (4) whether customers other than the customer
  that requested the facilities would experience a
  degradation in service if installation of the new
  facilities at issue were not undertaken and
• (5) whether the facilities are integrated with
  the rest of the transmission system, and provide
  integrated benefits to the overall transmission
  grid.

21

• Questions/Discussion

22
Transmission Revenue Requirement (TRR)

• Recovered by
• Firm and Non-Firm Point to Point (PTP) Service
• Network Integrated Service (NITS)
• Must be fully recovered
• Current recovery is estimated at
• 26 - PTP
• 74 - NITS

23
Estimated Impact on TRR

• Assumptions
• 50 year capitalization beginning in 2012
• Revenue impact represented as an annual average
  increase
• change reflected based on April 2007 TRR
• Interest on loan (from third party) is expensed
  based on the amortization of loan payment
• Capitalization of project for repayment will
  probably be different than represented but the
  approach used provides a standardized basis

24
Estimated Impact on TRR

• Partial Funding (22M) Option Scenario
• Project Capitalization of 92 million
• Loan Interest Paid off in 3 years

25
Estimated Impact on TRR

• Full Funding Third Party Option Scenario
• Project Capitalization of 97 million
• Loan Interest Paid off in 18 years

26

• Questions/Discussion