Updated May 5, 2016

BULK POWER SYSTEM OVERVIEW AND IT’S EVOLUTION TO THE FUTURE GRIDOctober 6, 2016

MGA Grid Modernization: Understanding Technology Advancements

Jay Caspary, Director – Research, Development & Tariff Services

Southwest Power Pool

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SPP OVERVIEW

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Helping our members work together to

keep the lights on …

today and in the future.

Our Mission

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ELECTRIC INTERCONNECTIONS / 8 NERC REGIONS

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NORTH AMERICAN INDEPENDENT SYSTEM OPERATORS (ISO) AND REGIONAL TRANSMISSION ORGANIZATIONS (RTO)

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SPP’s 2015 Capacity and Energy Mix

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42.6

33.3%

4.1%

14.9%

3.2% 0.2%

Gas

(42.58%)

Coal

(33.25%)

Hydro

(4.11%)

Wind

(14.86%)

Nuclear

(3.16%)

Other

(0.15%)

Installed Capacity

21.6%

55.1%

1.5%

13.5%

8.1% 0.1%

Gas

(21.63%)

Coal

(55.06%)

Hydro

(1.54%)

Wind

(13.52%)

Nuclear

(8.11%)

Other

(0.14%)

Energy Consumption

SPP Generation Expansion Over the Last Decade

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TRANSMISSION PLANNING AT SPP

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SPP Transmission Expansion Over the Last Decade

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Projects

Constructed

WHY WE NEED MORE TRANSMISSION?

• In the past, built least-cost transmission to meet local needs

• Today, proactively building “highways” to benefit region

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HOW SPP MAKES TRANSMISSION DECISIONS• Generation Interconnection Studies

Determines transmission upgrades needed to connect new generation to electric grid

• Aggregate Transmission Service Studies

Determines transmission upgrades needed to transmit energy from new generation to load

• Integrated Transmission Planning process

Iterative study process to assess SPP transmission system reliability and economic needs

• Specific transmission studies

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MEMBER DRIVEN APPROACH

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ESWG

TWGMOPC

CAWG

SPC

RTWG

RENEWABLEENERGY

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Annual Average Wind Speed

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Solar in the U.S.

APPROVED RENEWABLES

• Wind (In-Service)

13GW on wires

• Wind/Solar (under GIA) including I.S. Grandfather

10.1GW

• Total Approved - 23GW +

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APPROVED + REQUESTED RENEWABLES

• Existing Wind/Solar plus GIAs = 23GW+

• Wind/Solar in DISIS-2015-001/002 = 10.2GW

• Wind/Solar in DISIS-2016-001 = 10.7GW

• Total Potential Wind/Solar = 44GW +

• OPERATIONAL CHALLENGES TO DATE SPP Actual Minimum Load is less than 20GW Actual Wind Penetration Rates Have Exceeded

49%

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DOE-FUNDED, NREL-LED EI-WECC SEAMSSTUDY

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BEST US RENEWABLE RESOURCES STRADDLE EXISTING SEAM

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All DC ties from

EI to ERCOT and

almost all from EI

to WECC via the

SPP/IS System

B2B HVDC STATIONS BETWEEN EI AND WECC

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DOE-FUNDED, NREL-LED SEAMS STUDY

• $1.2M, 18 month EI-WECC Seams and HVDC Overlay Study approved as part of GMLC

• Strong industry support

• Scope finalized in March Opportunity to not just replace in-kind the aging

B2B HVDC Ties between EI and WECC Three DC Scenarios

Status Quo

Modernized/Optimized Seam with Rightsized/Relocated B2B and/or Links

Macro Grid Overlay

• Kickoff meeting for TRC held June 27-28.

• Promising preliminary results

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VALUE OF TRANSMISSION

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SPP’s Value of Transmission Study

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• Evaluated 348 projects from 2012-14, representing $3.4B of transmission investment

• Evaluated benefit metrics

Adjusted Production Cost (APC) Savings

Reliability and Resource Adequacy Benefits

Generation Capacity Cost Savings

Market Benefits

Other industry and SPP-accepted metrics

• APC Savings alone calculated at more than $660k/day, or $240M/year.

• Overall NPV of all benefits for considered projects are expected to exceed $16.6B over 40 years.

For every $1 of transmission investment made in 2012-2014, SPP

expects at least $3.50 of benefit to be provided to rate-payers