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3 E‐RSC MEETING

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7 Meeting held at The W Hotel, 333

8 Poydras Street, New Orleans, Louisiana,

9 70130, commencing at 9:00 a.m., on Thursday,

10 the 22nd of April, 2010.

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0002

1 P R O C E E D I N G S

2 PRESIDENT SUSKIE:

3 Good morning, everyone. Thank you

4 for being here. At this time, I'll call the

5 meeting of the E‐RSC to order. I'd like to

6 ask Ken Anderson to go over the roll call and

7 proxy.

8 SECRETARY ANDERSON:

9 I believe we're all present.

10 PRESIDENT SUSKIE:

11 And the representative ‐‐

12 SECRETARY ANDERSON:

13 And the representative from New

14 Orleans is here, and I have the proxy.

15 PRESIDENT SUSKIE:

16 Okay. I declare a quorum.

17 And we'll begin with some

18 administrative items. Well, before we go to

19 administrative items, I'd like to point out

20 that we have Leslie here with us as a court

21 reporter, and, therefore, please state your

22 name before you speak, and I told her feel

23 free to interrupt anybody, including myself, 24 if I'm ‐‐ we're speaking too fast or need to

25 clarify who's speaking and so forth.

0003

1 Also, before we go any further, I'd

2 like to ask those in attendance to get up and

3 state their name and who they're here on

4 behalf of before we go to the phone, and

5 we'll start over here on the right‐hand side.

6 So, for the record, for those who are in

7 attendance.

8 MR. CHILES:

9 John Chiles with GDS Associates.

10 MR. SPARKS:

11 Michael Sparks, SUEZ.

12 MR. MITTENDORF:

13 Brad Mittendorf, Southern Strategy

14 Group Louisiana.

15 MR. SHUMATE:

16 Walt Shumate Consulting.

17 MS. VOSBURG:

18 Jennifer Vosburg, NRG Energy and

19 Louisiana Generating.

20 MR. COLLINS:

21 Peter Collins, NRG.

22 MS. LANE: 23 Sarah Lane, Tenaska.

24 MR. DASPIT:

25 Larry Daspit, Entergy Corporate

0004

1 Communications.

2 MR. THUMM:

3 Brian Thumm, ITC Holdings.

4 MR. CASPARY:

5 Jay Caspary, Southwest Power Pool

6 staff.

7 MR. NEWELL:

8 Gary Newell, representing

9 Lafayette, LEPA, MEAM and MDEA.

10 MR. BIHM:

11 Kevin Bihm, the Louisiana Entergy &

12 Power Authority.

13 MR. CLAREY:

14 Patrick Clarey, FERC staff.

15 MR. LONG:

16 Robert Long, SUEZ Energy.

17 MR. ERBACH:

18 Don Erbach, (inaudible).

19 MR. BROWN:

20 Matthew Brown on behalf of Entergy

21 Louisiana, Entergy/Gulf States Louisiana. 22 MR. SUFFERN:

23 Matt Suffern on behalf of Entergy

24 Arkansas, Inc.

25 MR. CASTELBERRY:

0005

1 Kurt Castleberry, Entergy Arkansas,

2 Inc.

3 MR. HARLAN:

4 Dave Harlan on behalf of Entergy

5 Arkansas.

6 MR. HENTSCHEL:

7 Brandon Hentschel, SPP.

8 MR. HUNTWORK:

9 Nathan Huntwork with Phelps Dunbar

10 on behalf of CLECO Power.

11 MS. McCULLOUGH:

12 Amy McCullough, Mississippi

13 Business Journal.

14 MS. BURROWS:

15 Lori Burrows, Arkansas Commission

16 Staff.

17 MS. BARFIELD:

18 Carol Barfield, Marathon Oil.

19 MS. TURNER:

20 Becky Turner with Entegra Power 21 Group.

22 MR. ORR:

23 John Orr with Constellation Energy.

24 MR. ESTES:

25 Chip Estes, Southern Strategy.

0006

1 MS. KING:

2 Katherine King with Kean, Miller,

3 representing the Louisiana Entergy Users

4 Group.

5 MR. REED:

6 Presley Reed, representing the City

7 Council of New Orleans.

8 MS. CARLISLE:

9 Lynn Carlisle, South Mississippi

10 Electric.

11 MR. MOVISH:

12 Phil Movish, City of New Orleans.

13 MR. PATTERSON:

14 Kirk Patterson, Louisiana

15 Commission.

16 MR. DARCE:

17 Noel Darce, Louisiana Commission.

18 MR. THOMPSON:

19 Henry Thompson, Consultant, 20 Arkansas Cities Hope, Prescott, Benton,

21 Conway, West Memphis, Osceola.

22 MR. PEDERSEN:

23 Todd Pedersen, West Memphis

24 Utilities, West Memphis, Arkansas.

25 MR. WILSON:

0007

1 Dave Wilson, counsel for Arkansas

2 City.

3 MR. HENLEY:

4 Rick Henley, City, Water & Light,

5 Jonesboro, Arkansas.

6 MR. DODSON:

7 Terry Dodson, Cottonwood Energy.

8 MR. GRENFELL:

9 Bob Grenfell, Entergy Mississippi.

10 MR. WHITMORE:

11 Terry Whitmore, CLECO Power.

12 MR. HILTON:

13 Shane Hilton, CLECO Power.

14 MR. McCULLA:

15 Mark McCulla with Entergy.

16 MR. VONGKHAMCHANH:

17 Kham Vongkhamchanh with Entergy.

18 MR. HURSTELL: 19 John Hurstell with Entergy.

20 MS. PROFETA:

21 Pat Profeta on behalf of Entergy.

22 MS. DESPEAUX:

23 Kim Despeaux with Entergy.

24 MR. SCHNITZER:

25 Michael Schnitzer on behalf of

0008

1 Entergy.

2 MR. PIONTEK:

3 Luke Piontek, Roedel, Parsons,

4 representing Cottonwood.

5 MS. PARSLEY:

6 Julie Parsley, representing

7 Cottonwood.

8 MR. BAUGH:

9 David Baugh, Cottonwood.

10 MR. GREFEE:

11 Richard Grefee, Texas Commission

12 Staff.

13 MR. BRIGHT:

14 Ben Bright, SPP staff.

15 MR. LOUDENSLAGER:

16 Sam Loudenslager, Arkansas Public

17 Service Commission. 18 MS. SCHMIDT:

19 Kristine Schmidt, ESPY Energy

20 Solutions, on behalf of the E‐RSC.

21 MR. CAMET:

22 Greg Camet on behalf of Entergy.

23 MR. BERNSTEIN:

24 Glen Bernstein for Entergy.

25 MR. OFFRING:

0009

1 Charles Offring [phonetic], East

2 Transmission.

3 MR. CRUTHIRDS:

4 Dave Cruthirds with The Cruthirds

5 Report.

6 MS. BIGELOW:

7 Christina Bigelow with Entergy.

8 MR. HOLLAND:

9 Jody Holland, SPP ICT.

10 MR. REW:

11 Bruce Rew, Southwest Power Pool

12 ICT?

13 PRESIDENT SUSKIE:

14 All right. Thank you. I'm proud

15 of Mr. Cruthirds for not advertising his

16 product. 17 CHAIRMAN PRESLEY:

18 He's glad for you to do it for him.

19 PRESIDENT SUSKIE:

20 With that, we appreciate everybody

21 being here present.

22 And those on the phone?

23 MR. OLSEN:

24 Carl Olsen from Entergy Texas.

25 MR. THOMSON:

0010

1 Rob Thomson on behalf of Entergy.

2 MS. RATLIFF:

3 Joan Walker Ratliff, Conoco

4 Phillips.

5 MR. CASHIN:

6 Joe Cashin from Electric Power

7 Supply Association.

8 PRESIDENT SUSKIE:

9 Thank you.

10 Next?

11 MR. WARREN:

12 This is Bary Warren with Empire

13 District Electric Company.

14 MR. RALSTON:

15 Al Ralston, Entergy. 16 MR. MILLS:

17 Roger Mills, Entergy.

18 MS. WATSON:

19 Melissa Watson, Louisiana

20 Commission Staff.

21 MR. HALLER:

22 Peter Haller, Brickfield,

23 Burchette, Ritts & Stone.

24 MR. ROE:

25 Doug Roe, FERC staff.

0011

1 PRESIDENT SUSKIE:

2 Could you repeat that, please?

3 MR. ROE:

4 Doug Roe, FERC staff.

5 PRESIDENT SUSKIE:

6 Doug Roe; Doug Roe, FERC staff.

7 Doug, I know you speak a little bit

8 later on the agenda. You might want to see

9 if you can work out the sound, because that

10 did not sound very good.

11 MR. ROE:

12 Okay.

13 PRESIDENT SUSKIE:

14 Next? 15 MR. PALIZA:

16 Roberto Paliza, Paliza Consulting.

17 PRESIDENT SUSKIE:

18 Thank you.

19 Anyone else on the phone?

20 (No response.)

21 Okay. Next, we'll go to

22 administrative items. Stated at the end of

23 last month's meeting, you may recall the

24 E‐RSC went into executivee session. Th five

25 consultants that submitted proposals, we

0012

1 interviewed two, and at the end of the

2 interviews, the E‐RSC unanimously voted to

3 hire ESPY Energy Solutions, LLC, to be a

4 consultant, and Kristine Schmidt is here

5 sitting next to Sam. They've been a part of

6 our team and will provide an invaluable

7 resource to us, particularly with the FERC

8 experience.

9 And we appreciate you joining us

10 and becoming a part of our team.

11 Last night I asked Kristine if she

12 would take action items notes from various

13 items that we discuss today. Staff talks 14 about how they'd have to go back and look at

15 the transcript to remember all the various

16 action items we have out there. So if

17 Kristine asks you any questions related to an

18 action item, she's going to help track for us

19 today. We appreciate your assistance with

20 Kristine.

21 Next, we have a report from FERC.

22 Patrick?

23 MR. CLAREY:

24 Thank you. I don't have too much

25 to report since the last meeting. After my

0013

1 brief report, Doug will provide you all with

2 an update on the cost/benefit study. I'll

3 just go over the recent addition of the final

4 document to the stakeholder process.

5 First, I'm pleased to report now

6 that Commissioners Moller and Spitzer have

7 committed to attend your E‐RSC meeting in

8 connection with the SEARUC meeting in June.

9 Also, yesterday it was announced that

10 Commissioner Moeller and nominee LaFleur will

11 attend the confirmation hearing before the

12 Senate Energy and Natural Resources Committee 13 on April 27th.

14 On March 18th, the Commission

15 issued a policy statement regarding penalty

16 guidelines for the purpose of adding greater

17 fairness and consistency to its civil penalty

18 authority. Last week the Commission

19 determined that the public interests would be

20 served by affording interested entities a

21 broader opportunity to comment on the

22 proposed guidelines before a final order is

23 issued. Thus, the Commission will suspend

24 the policy statement and the application of

25 the penalty guidelines. The Commission

0014

1 considers its March 18th action as an interim

2 proceeding, and interested parties are

3 invited to submit comments within 60 days of

4 the date of the order.

5 Also, last week the Commission

6 Staff issued their State of the Markets

7 Report for 2009. Not surprisingly, the

8 report noted that 2009 saw lower natural gas

9 prices, on average, down 50 percent from

10 2008, as well as lower demand for

11 electricity, down 4.2 percent in 2009. 12 According to the Staff report, 2009 saw the

13 greatest decline in demand in a single year

14 in the past 60 years. Likewise, with lower

15 demand in fuel costs, wholesale electricity

16 fell by half. During 2009, 25 gigawatts of

17 new generation was added, with 84 percent of

18 the 25 gigawatts being wind and natural gas

19 fuel.

20 This concludes my report. I'd be

21 happy to answer any questions. Thank you.

22 PRESIDENT SUSKIE:

23 When you mentioned the decrease, if

24 I'm tracking right, that was the decrease in

25 electricity sales or consumption?

0015

1 MR. CLAREY:

2 Consumption.

3 PRESIDENT SUSKIE:

4 Okay.

5 CHAIRMAN PRESLEY:

6 4.2 percent, Patrick?

7 MR. CLAREY:

8 4.2. I can ‐‐ I'll e‐mail you all

9 a link to the full Staff's report.

10 PRESIDENT SUSKIE: 11 Any questions of Patrick? Any

12 questions of Patrick?

13 VICE‐PRESIDENT FIELD:

14 Did I understand you to say that

15 was the largest drop in 60 years?

16 MR. CLAREY:

17 Yes. That's correct.

18 VICE‐PRESIDENT FIELD:

19 Thank you.

20 PRESIDENT SUSKIE:

21 Next, we have stakeholder input on

22 the FERC funded CBA, as well as just an

23 update on the CBA.

24 Doug Roe at FERC, or on the phone,

25 could you please give that report?

0016

1 MR. ROE:

2 Sure thing, Chairman Suskie. Can

3 you hear me okay?

4 PRESIDENT SUSKIE:

5 Yes, much better.

6 MR. ROE:

7 Okay. Good deal.

8 Before we proceed with the details

9 of the stakeholder input process, I'd like to 10 take one step back and provide a very brief

11 update on the progress of the CBA. We had an

12 update, conference call and WebEx meeting on

13 Tuesday with CRA stakeholders, and if I'm not

14 mistaken, we had close to 50 persons attend,

15 if not more, on the call. During that

16 meeting, CRA provided an update on its

17 progress towards developing the base case and

18 change case model. We're shooting to present

19 a base case run in May for the Baton Rouge

20 face‐to‐face update meeting.

21 In terms of the work we've done in

22 the past month, this past month was

23 monumental from a data‐requiring standpoint.

24 We were successful in executing nondisclosure

25 agreements and validating generation data

0017

1 with stakeholders. The bottom line is that

2 I'd really like to thank the participating

3 stakeholders for their effort. We've been

4 asking a lot of people, you know, in addition

5 to their already overloaded schedules, and

6 everyone has cooperated extremely well. I'd

7 also like to do especially well of the

8 efforts of Entergy and SPP Staff. They've 9 been working with CRA on data consumption

10 requirements on a daily basis for weeks, and

11 it has not gone unnoted.

12 And to sum up, you know, I noted

13 when the first ‐‐ when the study first

14 started, that stakeholder involvement would

15 be critical to the strength of the study, and

16 I have to report that we've had great

17 participation so far. On to the stakeholder

18 input process itself, I do apologize for not

19 being able to present this in person, but I

20 will be present at the next E‐RSC meeting in

21 May. Now, to sum up from the last E‐RSC

22 meeting on March 18th, I believe, we heard

23 concerns from stakeholders that the input

24 process wasn't clear enough and there wasn't

25 enough detail. So after going back to the

0018

1 drawing board and adding some additional

2 details, and thanks to the efforts of ESPY

3 and the ERC working group, a complete

4 document was rolled out last week for

5 stakeholder review that clarifies the entire

6 stakeholder input process. No comments were

7 received to this document, and it is that 8 exact document that is supposed to be used

9 going forward. The process itself is pretty

10 simple, and the bones of that are the process

11 that I originally discussed in Dallas at our

12 first update meeting. However, this time

13 we've added far more details, and the message

14 remains the same: Now is the time to get

15 involved in the study. We have seen CRA

16 consumption documents on several occasions,

17 and at this point, I expect stakeholders to

18 begin submitting comments either in agreement

19 or disagreement with CRA on those

20 consumptions and input. Now, in terms of

21 providing input into the study's feedback,

22 there are two opportunities. The first way,

23 although it's a little bit more informal, is

24 doing the monthly update meetings that we

25 have at CRA. The second way is through

0019

1 submitting your comments and issues to the

2 E‐RSC Working Group through e‐mail for

3 review. This is accomplished by simply

4 sending an e‐mail with the subject line

5 Entergy SPP CBA and send the issue and

6 explanation to the ERC Working Group and CC 7 Patrick and myself. This is the primary

8 method and the only way to ensure that

9 stakeholder feedback comments will be

10 reviewed. So, for example, if the

11 stakeholder suggests changes to pearl

12 [phonetic] rates and commitment charges

13 during the monthly update meeting, that

14 stakeholder must e‐mail feedback to the ERC

15 Working Group formally to preserve its

16 comments.

17 Now, as part of this process and

18 under the review process, any stakeholder may

19 challenge either any input or assumption that

20 is used by CRA, or the stakeholder may

21 challenge any input or comment submitted by

22 another stakeholder. If that's the case, the

23 stakeholder will have two days to post

24 comments to the previous ‐‐ you know, first

25 spoken stakeholder's comments. Now, once a

0020

1 decision is made by the ERC Working Group,

2 the stakeholder will be notified by e‐mail.

3 If the issue is rejected, the stakeholder

4 will have two business days to ask the ERC

5 Working Group for reconsideration. Now, 6 lastly, as a reminder, all actions taken by

7 the ERC Working Group will be posted and

8 documented on the SPP ERC website.

9 And so that brings up the last

10 holdover issue from the March 18 E‐RSC

11 meeting, and, that is, whether monthly CBA

12 meetings would be transcribed or not. And

13 the answer is that, no, they will not be

14 transcribed. In my opinion, transcription is

15 best suited and usually reserved for

16 hearing‐type situations. The update meetings

17 that we're holding are not hearings and are,

18 rather, intended to promote a productive

19 environment whereby CRA stakeholders can

20 engage in a dialogue ‐‐ in a healthy dialogue

21 regarding the input and assumptions that will

22 be used in the study. Now, effectively, the

23 documentation that I just discussed of the

24 stakeholder process, that documentation

25 effectively eliminates the need for

0021

1 transcription, and, therefore, we can

2 maintain a productive and engaging work

3 environment going forward.

4 So, at this time, I'd like to open 5 the floor to any discussion or questions

6 regarding the stakeholder process. Thank you

7 for your time.

8 PRESIDENT SUSKIE:

9 Thank you, Mr. Roe.

10 Any questions from anybody or

11 comments?

12 To our surprise, Jennifer has a

13 question.

14 MS. VOSBURG:

15 No. First, it's a comment. I do

16 want to recognize the work that FERC and the

17 E‐RSC Working Group did to move forward with

18 the stakeholder process. You know, from

19 where we started back in October with no

20 process to this, while it's not ‐‐ it's not

21 perfect and, you know, we're understanding

22 we're in a unique situation, it does answer

23 the questions about what stakeholders are

24 supposed to do, how it is going to be

25 documented and handled, so it is a great

0022

1 improvement from where we started, and we do

2 appreciate your efforts for that.

3 I would encourage all of the 4 stakeholders to really look at this document,

5 because the burden is placed on the

6 stakeholders to follow‐up. We need to know

7 what the procedure is, so when something goes

8 on and we miss it, you know, the process is

9 here for us to follow to make sure that your

10 issues are documented.

11 One comment I will make, while this

12 doesn't divert on stakeholders and since the

13 Working Group ‐‐ the face‐to‐face meetings

14 and the updates are not going to be

15 transcribed, one of the things that's very

16 important is for the meeting materials be

17 provided to the stakeholders as soon as

18 possible. The meeting on Tuesday that we

19 had, the presentation by Charles River, the

20 stakeholders had not seen it before, and then

21 you get into a situation thate you'r moving

22 very rapidly through it with, you know, okay,

23 does anybody have any question; anybody have

24 issues; moving on. And we understand the

25 need for speed, but there has to be a

0023

1 recognition on the back end that we're seeing

2 it for the first time. Some of the stuff, 3 we're going to have to really think about it.

4 An example was, the commitment pool issue

5 came up. Well, let's throw out what we have

6 and just go with one commitment pool with a

7 ten‐dollar (inaudible). Whoa. You know,

8 it's going to take some time for us to look

9 at that to see, and we can't make a decision

10 right on the phone. But that's just one

11 caution that materials need to be provided to

12 us with enough time that we can have a good

13 dialogue.

14 And, again, I just wanted to thank

15 everybody for their efforts and paying

16 attention to this and recognizing the

17 stakeholder process and procedure for it is a

18 very important issue.

19 PRESIDENT SUSKIE:

20 Thank you, Jennifer. Doug, do you

21 think there will be any problem with helping

22 getting stakeholders the material as soon as

23 possible?

24 MR. ROE:

25 Well, let me first thank Jennifer

0024

1 for her help in the process in completing the 2 stakeholder documents. But in terms of her

3 comment, I totally agree, and I understand

4 that it's very difficult to see information,

5 you know, for the first time and then expect

6 to be able to discuss it right away. We

7 understand it's fairly impossible.

8 You know, the problem we've been

9 having with distributing materials ahead of

10 time is just the time it takes for CRA to

11 accomplish it. It's not that they're behind

12 in doing their work. It's just that the

13 schedule that we imposed did not give them

14 enough time to be able to have a buffer of a

15 one‐week time to distribute materials to get

16 stakeholders enough time. Now, in the

17 future, we're ‐‐ and in the past, we tried

18 our best to distribute ahead of time as much

19 as we can, but in this circumstance, things

20 were a bit delayed, and CRA did not have the

21 opportunity to release documents ahead of the

22 meeting. But we will try our best to do so

23 ahead ‐‐ in the future, and I appreciate your

24 comment.

25 PRESIDENT SUSKIE:

0025 1 Thank you.

2 Any other questions or comments?

3 Sam? Sam, be sure to state who

4 you're with.

5 MR. LOUDENSLAGER:

6 Sam Loudenslager. I gave her my

7 business card.

8 PRESIDENT SUSKIE:

9 Because you're going to be talking

10 a lot today.

11 MR. LOUDENSLAGER:

12 Well, hopefully not.

13 Doug, this is Sam. Charles Rivers

14 owes us a ‐‐ Bruce owes us a follow‐up from

15 the Tuesday call. That material ‐‐ I don't

16 believe it's been sent out yet on the

17 exploder. So would you please remind him?

18 The GE assumptions memo, in particular, and

19 then the four‐page presentation on the NEEM?

20 MR. ROE:

21 Yes, Sam. That document is

22 actually with me right now. I'm not

23 purposefully holding it up. There's just

24 been a backlog. So expect to see that

25 distributed today. 0026

1 PRESIDENT SUSKIE:

2 Thank you, Doug.

3 Anybody else?

4 (No response.)

5 All right, Doug. Thank you very

6 much.

7 And, Jennifer, you're on the agenda

8 next. Do you still wish to comment or ‐‐

9 MS. VOSBURG:

10 No. That was it.

11 PRESIDENT SUSKIE:

12 Okay. Well, thank you very much,

13 Jennifer, for your leadership in that.

14 Sam?

15 MR. LOUDENSLAGER:

16 Yeah. Sorry, Boss. This is an

17 action item. The Working Group and I think

18 ERC was hoping that the E‐RSC would take this

19 process document and either approve it, gut

20 it, do something with it.

21 PRESIDENT SUSKIE:

22 Okay. We have a motion to approve

23 the process before us.

24 SECRETARY ANDERSON: 25 So moved.

0027

1 VICE‐PRESIDENT FIELD:

2 Second.

3 PRESIDENT SUSKIE:

4 With a motion and a second, all

5 those in favor say aye.

6 (All ayes.)

7 All those opposed?

8 (No response.)

9 Motion carries unanimously.

10 Thank you very much for your work

11 and input on this, and thanks for reminding

12 me, Sam.

13 Next, we have the reports from SPP

14 on the SPP ICT. If we could, I think

15 that's ‐‐ Bruce Rew is first.

16 MR. REW:

17 Good morning, President Suskie, and

18 to the E‐RSC. My name is Bruce Rew, spelled

19 R‐E‐W, with the Southwest Power Pool ICT. I

20 have a brief presentation this morning to

21 update you on a couple of the ICT activities.

22 First, I'd like to discuss the SPP

23 reliability coordination. We have performed 24 a summer assessment for 2010. Overall, we

25 see no foreseeable concerns during the

0028

1 summer, with the exception of the Acadiana

2 Load Pocket area, so I want to provide you a

3 brief update on the Acadiana Load Pocket

4 activities that we have under way in

5 progress.

6 As I think you're well aware,

7 there's been agreement for transmission

8 expansion construction in the Acadiana Load

9 Pocket area. Those facilities are in

10 progress, but they're not in‐service yet, so

11 we do anticipate the system to continue to be

12 stressed this summer prior to those

13 facilities coming in‐service. Generation in

14 the Acadiana Load Pocket has limited

15 flexibility for the peak conditions, and we

16 do have and outage and evaluation action plan

17 that's in place for typical weather and other

18 conditions in that area.

19 PRESIDENT SUSKIE:

20 We're on there. It took us a

21 while, though.

22 MR. REW: 23 Okay. Page ‐‐ I'm sorry. Page 4,

24 the reliability coordination for this summer.

25 For the last several years, the Acadiana Load

0029

1 Pocket has experienced high loads during the

2 summer, and we have taken that into account,

3 the historical trends, and worked with the

4 other entities in that area to come up with a

5 mitigation plan. There is still a high

6 probability of congestion management being

7 required due to projected load levels, and if

8 they're anywhere close to what we've received

9 in 2009, we'll have to most likely include

10 curtailment of firm service during the

11 summer.

12 So some of the actions that we're

13 looking at is, certainly, there will be a

14 high level of communication between the

15 entities within the Acadiana Load Pocket to

16 coordinate any situation or event that

17 requires congestion management actions to be

18 taken, and we'll continue to adhere to the

19 NERC reliability standards in facilitating

20 that coordination to assure that we maintain

21 reliability as much as possible during 22 that ‐‐ any situations that are high‐loading

23 or extreme stress in the Acadiana Load Pocket

24 area. We are making progress on the

25 transmission ‐‐

0030

1 PRESIDENT SUSKIE:

2 Bruce, Commissioner Field has a

3 question.

4 MR. REW:

5 Commissioner Field?

6 VICE‐PRESIDENT FIELD:

7 I don't mean to interrupt you, but

8 that is fair, I'll represent. And when you

9 say, "firm curtailments," has there been any

10 investigation to see if there are any

11 industrial or commercial customers that could

12 be interruptible temporarily? I know maybe

13 they're not interruptible on an interruptible

14 tariff now. Any investigation whether some

15 of those could be interrupted with some

16 notice?

17 MR. REW:

18 I think you probably need to talk

19 to the specific load‐serving entities about

20 that. Certainly, any contractual nonfirm 21 customers will have been recognized, but as

22 far as additional customers that will

23 voluntarily do it, I'm not aware of any.

24 You'd have to speak to those load‐serving

25 entities.

0031

1 VICE‐PRESIDENT FIELD:

2 Secondly, are you getting full

3 cooperation and communication from all the

4 load‐serving entities in the Acadiana Load

5 Pocket area?

6 MR. REW:

7 Yes. All the entities in that area

8 are communicating and working together to

9 attempt to solve projected problems during

10 the summer.

11 VICE‐PRESIDENT FIELD:

12 Thank you, Bruce. I will have my

13 office just suggest to them to see if some

14 people might be willing to voluntarily be

15 interruptible and give them some economic

16 incentives to do so during ‐‐ during the

17 summer, because if you've got to interrupt

18 firm demand, it's going to cause problems.

19 MR. REW: 20 And I'll make sure that I pass that

21 on to the reliability coordination folks to

22 communicate that fact to the Acadiana Load

23 Pocket entities, as well.

24 VICE‐PRESIDENT FIELD:

25 How do you make a decision on who

0032

1 is going to be interrupted? In other words,

2 residences and then businesses or...

3 MR. REW:

4 Well, our process would use the TLR

5 process, where we look for transactions that

6 are part of the process that get curtailed.

7 In other words, they are identified as having

8 an impact on the transmission facilities, and

9 they would be curtailed using that recognized

10 process.

11 VICE‐PRESIDENT FIELD:

12 Well, I want to make sure that the

13 load‐serving entities are all advising their

14 customers this might happen, because, you

15 know, nobody can do business anymore without

16 electricity. My home might get hot and be

17 uncomfortable for a few hours, but if it

18 shuts businesses down and causes people to be 19 sent home, then that's a problem.

20 Well, just keep me posted, Bruce,

21 if you will, and I appreciate you

22 coordinating it with the load‐serving

23 entities.

24 MR. REW:

25 Will do, Commissioner Field.

0033

1 The next line, I just have a brief

2 definition of Transmission Loading Relief and

3 Local Area Problem. There's been some

4 discussion about that. Transmission Loading

5 Relief is the interconnection‐wide process

6 that looks at congestion, and it uses

7 interchange transactions involving other

8 Balancing Authorities to reduce the

9 congestion or reduce the loading on

10 transmission facilities, and these

11 transactions are usually considered regional

12 or interregional in nature and caused due to

13 the flows on the transmission system. So

14 these are ones that are entered into what's

15 called the NERC IDC process, and the

16 reliability coordinators across the country

17 all use the standardized process for TLR. 18 And in a minute, I'm going to get into the

19 metrics, and it talks about the different

20 levels of TLR from firm service and nonfirm

21 service.

22 So any questions on the TLR

23 process?

24 CHAIRMAN PRESLEY:

25 I've got one, Bruce, not on TLR but

0034

1 on LAP. I'm just wanting to see, have y'all

2 ever been advised of any issues related to ‐‐

3 in the Choctaw County Entergy tie‐in with TVA

4 and north central Mississippi any type of LAP

5 problem there that you've been made aware of?

6 I had talked with some people at TVA that

7 kind of brought this up, and I didn't know if

8 that was on your radar or not.

9 MR. REW:

10 I'm not aware of it. I could, you

11 know, double check and see if it's been

12 mentioned, but may be not a high concern for

13 us. But I'm personally not aware of an issue

14 in that area.

15 CHAIRMAN PRESLEY:

16 If you could check and let me know. 17 It's the tie‐in with TVA, Choctaw County.

18 Thank you.

19 MR. REW:

20 Okay. And then the Local Area

21 Problem, or LAP, this is a condition where

22 the NERC TLR process is identified as not

23 being the most effective. In other words,

24 there's usually no transactions that are

25 impacting it, or very few transactions, and

0035

1 the problems are usually inside the Entergy

2 Balancing Authority and are considered local

3 in nature. And this is where, you know, we

4 would look at using that procedure to provide

5 relief on the transmission system other than

6 using the TLR process. So this is entirely

7 within the Entergy Balancing Authority

8 Process.

9 MR. BOOTH:

10 Bruce, quick question: Do

11 transmission owners in SPT also have an LAP

12 equivalent? I mean, TLRs are for

13 interregional transactions, right? The LAPs

14 are vital to intra and Entergy transactions.

15 I'm just curious if other transmission 16 owners, those in SPP, have a corollary for

17 the intra.

18 MR. REW:

19 Yes. The SPP RTO, it would be

20 different because of the Entergy imbalance

21 market. So they would use the Entergy

22 imbalance re‐dispatch if there is a condition

23 like that.

24 MR. BOOTH:

25 So if Entergy ultimately ended up

0036

1 doing SPP, would the LAPs go away?

2 MR. REW:

3 Yes, I would assume that they

4 would, that you wouldn't continue to use that

5 LAP procedure.

6 MR. BOOTH:

7 Okay. Thank you.

8 PRESIDENT SUSKIE:

9 All right.

10 MR. REW:

11 Next, I would like to give you an

12 update on the construction plan. Entergy

13 Services provides a report that's posted on

14 OASIS that gives information related to the 15 progress of construction plan projects, and I

16 provided you the OASIS link there. This

17 report includes projects that are in

18 completed, that are under construction and

19 that are in the design and scoping stage.

20 The data that's included in that report

21 includes the project driver, project name,

22 the LE, or local entity ‐‐ this is like

23 Entergy/Gulf States, for example ‐‐ the

24 current projected in‐service date, the 2010

25 funding comments, the project status and then

0037

1 any other comments. There's an open comment

2 field. And on the next line, I've provided

3 you just an example of one page from that

4 report that's posted to give you an idea of

5 what it looks like, and that's updated on a

6 quarterly basis.

7 Any questions on that report before

8 I transition to a metrics update?

9 PRESIDENT SUSKIE:

10 I would like to ‐‐ one question.

11 And I think I ‐‐ I believe I have it right,

12 looking at the reports. If I recall, there

13 were two projects that were in the ICT base 14 plan but not in Entergy's construction plan.

15 Is that ‐‐ am I correct with that?

16 MR. REW:

17 Okay. Jody just informed me that,

18 right now, it's exactly the same; there is no

19 difference.

20 PRESIDENT SUSKIE:

21 But there was two, and the issue

22 was Entergy had asked SPP to re‐evaluate it,

23 is my understanding, and then y'all were in

24 the re‐evaluation process, and I assume,

25 through that, came into an agreement with

0038

1 Entergy, and now the ICT base plan and the

2 Entergy construction plan are identical.

3 MR. REW:

4 (Nods head.)

5 PRESIDENT SUSKIE:

6 Okay. I just want to make sure I

7 understood that correctly.

8 VICE‐PRESIDENT FIELD:

9 Bruce, just since we're in charge

10 of the rates, is it correct that if it's a

11 169 kV line and above, then it's shared by

12 all Entergy customers, and if it's 138 or 13 anything below 169, then it's paid for by the

14 rate payers of the utility in which district

15 it's serving?

16 MR. REW:

17 Well, remember, we don't deal with

18 the cost allocation and that. You should

19 really ask Entergy on that.

20 PRESIDENT SUSKIE:

21 Commissioner Field, I think Kim

22 can.

23 Is it 230 and above?

24 MS. DESPEAUX:

25 Yes, Commissioner. It's generally

0039

1 230 kV ‐‐

2 VICE‐PRESIDENT FIELD:

3 230.

4 MS. DESPEAUX: ‐‐ and above that's

5 equalized among the operating companies under

6 the system agreement, and then ‐‐ but there's

7 also a piece of the cost that is paid for

8 under our open access transmission tariff by

9 third parties, as well. But below 230 is ‐‐

10 generally, the cost stays with the legal

11 entity. 12 VICE‐PRESIDENT FIELD:

13 The territory in which it's being

14 built.

15 MS. DESPEAUX:

16 Yes.

17 VICE‐PRESIDENT FIELD:

18 Okay.

19 CHAIRMAN PRESLEY:

20 Bruce, one question.

21 PRESIDENT SUSKIE:

22 And that was Kim Despeaux.

23 COURT REPORTER:

24 Thank you.

25 CHAIRMAN PRESLEY:

0040

1 One question. Going back, I just

2 happened to pull the sample page in your

3 presentation that had some Mississippi

4 projects on it, so it raised my level of

5 questioning. I see Getwell to Church Road,

6 and then the last ‐‐ on the last box, Getwell

7 Area Improvements. If I remember best, prior

8 to the Charleston meeting, there was a

9 Batesville to Getwell recommendation. Just

10 for your information, Sardis is a little 11 north of Batesville.

12 And my question is: Does this

13 represent bringing in those ‐‐ that base plan

14 action item, say from, I think, 2008 that was

15 taken off the table by Entergy? Is that

16 now ‐‐ does these ‐‐ do these two

17 recommendations fully encompass what att tha

18 time was one action item? Does that make

19 sense? Are we catching up to where we ‐‐ it

20 was left off a year ago?

21 MR. HOLLAND:

22 Yes. This is Jody Holland with

23 SPP. Yes, Commissioner Presley. We worked

24 with Entergy, and Entergy has developed the

25 construction plan a year later. And I'm

0041

1 looking at the notes, and the latest update

2 talks about the Getwell area improvements and

3 the Getwell to Church Road. I would have to

4 confirm exactly, but I believe this is a

5 progress ‐‐

6 CHAIRMAN PRESLEY:

7 That's like from here to the

8 hallway out there. That's very close. But

9 Batesville to Getwell is a long way. I don't 10 see any reference to that.

11 MR. HOLLAND:

12 In the latest update that was

13 posted a couple of days ago, maybe yesterday,

14 actually, it states in the other comments,

15 creates first leg of Getwell to Batesville

16 230 kV conversion, so it's the start. So

17 it's showing progress, but it's not

18 everything. I might point to Charles Long.

19 CHAIRMAN PRESLEY:

20 Before you do that, ‐‐

21 MR. HOLLAND:

22 Okay.

23 CHAIRMAN PRESLEY: ‐‐ when ‐‐ let me

24 make sure I've got my years right. When we

25 were in Charleston last year, in '09, this

0042

1 was ‐‐ this was part of the base plan in '08

2 that was taken off the table by Entergy in

3 their construction plan; is that correct? So

4 even with this, we're two years behind on the

5 Batesville to Getwell upgrade?

6 MR. HOLLAND:

7 I don't recall. I can do some

8 research, and I can take an action item. 9 CHAIRMAN PRESLEY:

10 Well, that would be ‐‐ I mean, if

11 you could just shoot me a quick e‐mail on

12 that. I know in the 2009 presentation that

13 Chairman Suskie made, that's when ‐‐ that was

14 part of that difference in the reports, so it

15 had to been the 2008. My concern is that

16 we're now, two years later, building a

17 transmission facility that was recommended

18 two years ago, and I'm just trying to make

19 sure what you've shown ‐‐ you just happened

20 to pull this page, and it has to do with it,

21 Bruce. But I just want to make sure that

22 what these two items are encompass the entire

23 project that was recommended two years ago,

24 that we're not piecemealing it.

25 MR. HOLLAND:

0043

1 Okay. I don't know the answer. I

2 do know that we've had, for instance, load

3 changes in the last couple of years, and that

4 may have played into it.

5 CHAIRMAN PRESLEY:

6 If I could just get the year that

7 it was first recommended in the base plan ‐‐ 8 MR. HOLLAND:

9 Okay.

10 CHAIRMAN PRESLEY:

11 ‐‐ and when Entergy decided not to

12 do it and then when they decided that,

13 obviously, this year that they're ‐‐ since

14 they're symmetrical, the base and the

15 construction are, we know the answer to that.

16 MR. HOLLAND:

17 So Getwell to Batesville?

18 CHAIRMAN PRESLEY:

19 Yeah.

20 MR. HOLLAND:

21 Batesville.

22 CHAIRMAN PRESLEY:

23 Thank you, sir.

24 PRESIDENT SUSKIE:

25 Does Entergy have any comments on

0044

1 that?

2 MR. LONG:

3 No.

4 PRESIDENT SUSKIE:

5 Okay. Thank you.

6 All right. Sam has question. 7 MR. LOUDENSLAGER:

8 Sam Loudenslager, Arkansas

9 Commission. I know ‐‐ I heard that there is

10 no difference in the construction and base

11 plan. Does that include ‐‐ are those plans

12 in sync in terms of a needed‐by date?

13 MR. HOLLAND:

14 No. They are not in sync in terms

15 of a needed‐by date. As far as projects go,

16 they are completely in sync, but there are

17 some need‐by dates that, I guess, cannot be

18 constructed in time. Some need‐by dates may

19 be this summer, for instance, so there are

20 mitigation plans in Entergy's construction

21 plan to meet those needs, just not the

22 ability to construct by, for instance, this

23 summer.

24 PRESIDENT SUSKIE:

25 Do you think it's possible ‐‐

0045

1 because I know what Sam is talking about

2 there, when there's a difference ‐‐ this is

3 one of the things we talked about last

4 month ‐‐ when there's a difference in the

5 date that it can be in‐service. I realize 6 there's a number of reasons that can affect

7 that. Theoretically, one could be regulatory

8 delay by one of our commissions. And so I

9 think it would be helpful to us and I don't

10 know if Entergy would ‐‐ may be best, since

11 y'all would actually go through the

12 regulatory process, when there's a difference

13 in the in‐service ‐‐ the need date and the

14 actual in‐service date, if we could have some

15 type of explanation. What's the difference?

16 And it could be, hey, Mississippi Commission

17 or Arkansas Commission, we'd like your

18 approval. You know, it could be along those

19 lines, or it could be court actions, eminent

20 domain, or whatever the case may be. I think

21 that probably would be helpful to us so that

22 we can see this is going to be delayed a year

23 or six months. Well, maybe the Commissions

24 can do something to help facilitate and move

25 that long.

0046

1 CHAIRMAN PRESLEY:

2 Are the differences in the need‐by

3 date ‐‐ could you just kind of go ‐‐ are they

4 ‐‐ could you explain a little bit further on 5 that? I mean, are your need‐by dates earlier

6 than Entergy's?

7 MR. HOLLAND:

8 Typically, yes.

9 CHAIRMAN PRESLEY:

10 Your base plan shows that these

11 transmission updates are needed earlier than

12 they show they're needed.

13 MR. HOLLAND:

14 At least than they show they can be

15 in‐service. It's typically an issue of

16 construction or, as you said, Chairman

17 Suskie, a issue of some other delay. So I

18 believe the answer to your question is, yes,

19 we can work with Entergy to provide that.

20 Let ‐‐ Entergyt migh want to answer that

21 themselves.

22 And then as far as the question,

23 Commissioner Presley, on the need‐by date, we

24 show that maybe a project is needed this

25 summer of 2010, but the in‐service date

0047

1 couldn't be till maybe summer of 2012 due to

2 that construction lead time. And so there

3 would be some mitigation plan in place to 4 make sure the system is reliable.

5 CHAIRMAN PRESLEY:

6 Well, we're talking about two

7 different things here. You're talking about

8 your perspective as a need‐by date and their

9 perspective as ‐‐ perspective of an

10 in‐service date.

11 MR. HOLLAND:

12 Yes.

13 CHAIRMAN PRESLEY:

14 I'm talking about, are there

15 differences between SPP, ICT and Entergy on

16 the need‐by, just a pure, we need it by this

17 summer? Is there an argument there?

18 MR. HOLLAND:

19 Typically not, because we're

20 looking at the reliability, and we compare

21 the reliability assessments that we do and

22 that Entergy does.

23 CHAIRMAN PRESLEY:

24 I mean, if there were to be a

25 difference, if you were to say it's needed by

0048

1 July of 2010, and they would say, no, it's

2 not needed till July of 2011, at that time, I 3 just feel, personally, we should have some

4 sort of trigger in which we're able to, at

5 least, go through that and see what the

6 reason is behind it. Because that is the

7 type of thing that can just get bigger that

8 delays these projects out because there's a

9 ‐‐ there is a dispute between the ICT and the

10 company on just a pure need‐by, not the

11 in‐service. That's a whole different item.

12 Just the basic premise of when we need it.

13 MR. HOLLAND:

14 We do ‐‐ by the tariff, we do

15 perform a reliability assessment separate

16 from Entergy's reliability assessment. We

17 present that to the Long‐Term Transmission

18 Issues Working Group, and if there is

19 something that we can't work out, then it's

20 discussed there.

21 CHAIRMAN PRESLEY:

22 Mr. Chairman, I guess what I'm

23 trying to get at is, we've had every kind of

24 problem in the world with the base load ‐‐

25 with the base plan, excuse me, and the

0049

1 construction plan, and if this is a nuance in 2 which, again, we could have space between

3 what the ICT says and what Entergy says, I

4 think that, at that point, ought to come to

5 us to look at what's going on, why there's an

6 argument on need‐by.

7 PRESIDENT SUSKIE:

8 Yeah. So if you could, an

9 additional report, if there is a difference

10 in Entergy's view of in‐need ‐‐ need date and

11 SPP's need date, that would be beneficial.

12 Mr. Schnitzer?

13 MR. HOLLAND:

14 We'll commit ‐‐ we'll commit to

15 that.

16 PRESIDENT SUSKIE:

17 Okay.

18 MR. SCHNITZER:

19 I'm Michael Schnitzer on behalf of

20 Entergy. Mr. Chairman and Commissioner

21 Presley, I think, in response to what you

22 just asked for, we'll get at this, but my

23 understanding is, presently, where there is a

24 difference in the date betweene th ICT's base

25 plan and Entergy's construction plan, the

0050 1 date in Entergy's plan is the earliest date

2 that they think it's feasible. So it's not a

3 case where we have a difference of opinion

4 between two different in‐service dates, both

5 of which are feasible. The dates that are in

6 the Entergy plan may be later than some of

7 the dates in the ICT plan, but it's because

8 Entergy doesn't believe that particular

9 upgrade can be built by the earlier date.

10 So I don't think it's ‐‐ getting to

11 your question, I don't think it's a

12 difference in when is the need; it's a

13 difference in how quickly can the facility be

14 put in‐service. And I think the information

15 you asked for, which will be provided, will

16 make that distinction, which I think is the

17 nature of your question.

18 CHAIRMAN PRESLEY:

19 Mr. Schnitzer, I guess, again, I

20 understand where you're coming from on that,

21 but, obviously, this is a area, again, where

22 there could be space between the company and

23 the ICT in which delays are made just because

24 there's an argument, and that, then, puts

25 this control particularly in Entergy's hands 0051

1 of whether to say, well, no; we don't need it

2 by then; go fly a kite; we don't want to do

3 it. At that point, it needs to be triggered

4 where, at least, this committee has a chance

5 to understand what's the reasoning behind it.

6 MR. SCHNITZER:

7 I understand, Commissioner, and I

8 wasn't in any way trying to suggest that your

9 question ‐‐

10 CHAIRMAN PRESLEY:

11 I guess, though, just ‐‐ we're

12 talking about apples and oranges.

13 MR. SCHNITZER:

14 That's right. I just want toe mak

15 clear that in the current situation, that the

16 difference between the schedule in the ICT

17 base plan and construction plan, to the

18 extent that there is a difference on some of

19 these elements, it's a feasibility issue from

20 a construction feasibility time frame issue,

21 not ‐‐

22 CHAIRMAN PRESLEY:

23 So you're representing today that

24 there are no disagreements on need‐by? 25 MR. SCHNITZER:

0052

1 I think that Entergy has the dates

2 in there that it thinks are the earliest it

3 can for of all the elements that ‐‐

4 CHAIRMAN PRESLEY:

5 No, no, no. I understand that.

6 I'm saying is there a difference ‐‐ wait a

7 minute. Let's let him answer. You've been

8 talking about this.

9 MR. SCHNITZER:

10 Yes.

11 CHAIRMAN PRESLEY:

12 I just want to know is there a

13 difference between today, when the SPP ICT

14 says we need it by this date and y'all say,

15 no, we don't need it by that date. It's that

16 simple.

17 MR. SCHNITZER:

18 Yeah. I would have to ‐‐ that's a

19 slightly different point than the one I was

20 making. I'll let ‐‐ I'll let Charles Long

21 respond to it. But I think Entergy is

22 looking at how quickly they can get it done

23 and, you know, whether their need date is 24 exactly the same or not, it's can they get it

25 done by when they need it. But I'll let ‐‐

0053

1 with your permission, I'll let ‐‐ I'll let

2 Charles Long respond to that specific

3 question.

4 MR. LONG: In the ‐‐ this is Charles

5 Long with Entergy. In the current plan, the

6 ICT and Entergy agreed on the need‐by dates

7 on all the projects that are in there, so the

8 delays in the current plan are simply ‐‐ we

9 may need it by 2011, but we have 20 miles of

10 line to build and it's going to take longer

11 than that. That's all the difference is.

12 But your point ‐‐ there still could

13 be an opportunity in the future where we may

14 not agree, although I think the chances are

15 pretty slim. You know, we look at the same

16 reliability metrics when we do the studies,

17 so I think the chances are pretty small that

18 would happen, but it's not impossible.

19 PRESIDENT SUSKIE:

20 And I think the request is, if

21 there is that agreement, we'd like to get

22 briefed on it. And, also, the issue of, if 23 there's a practical ‐‐ the in‐service date

24 and need date don't match because of

25 practical things, I think it would be helpful

0054

1 to us ‐‐ for instance, the Acadiana Load

2 Pocket. I don't understand it, but Jimmy

3 Field is very familiar with it. He can help

4 facilitate that. The same thing if you have

5 issues in Arkansas. It could be regulatory.

6 You know, commissioners ‐‐ we could make

7 phone calls to county judges and say, hey, we

8 really need this line in‐service; can you

9 help. And so I think that's going to be a

10 good ‐‐ for us to be educated so we can go

11 back to our perspective states and maybe

12 assist and facilitate that moving forward.

13 MR. BOOTH:

14 Mr. Long, if Entergy's need date is

15 earlier than Entergy's feasibility date, does

16 Entergy identify mitigation measures that it

17 will take to ensure that the need is

18 satisfied?

19 MR. LONG:

20 Yes, we do. And those are shared

21 with the ICT. 22 MR. BOOTH:

23 Thank you.

24 PRESIDENT SUSKIE:

25 Thank you.

0055

1 Bruce?

2 MR. REW:

3 Next, I would like to transition us

4 to the metrics. The ICT has worked with

5 several folks to put together a draft of ICT

6 metrics. The metrics report that you're

7 going to see today is based off the one that

8 Southwest Power Pool has been using in its

9 quarterly reporting to its boards for the

10 last several years. We've identified several

11 of those that we would like to present today

12 as an example for discussion. Let me just

13 briefly describe each of these as I walk

14 through them.

15 The first one, 1a, is congestion.

16 In this graph, it shows the hours and the

17 gigawatt hours curtailed for the last year on

18 the Entergy system. I'll just kind of slowly

19 step through these, and ask me questions.

20 PRESIDENT SUSKIE: 21 Sure. Is there any way to do a

22 comparison to the Entergy system to other

23 systems as in, you know, what ‐‐ if you take

24 the entire number of megawatts the system

25 has, you know, let's say in a month or a year

0056

1 or however you want to categorize it, and

2 compare it to how much was required to be

3 curtailed, then, say, compare that to SPP or

4 Southern Company or TVA? You know, it's just

5 a thought I have for a good comparison.

6 MR. REW:

7 Well, with the SPP system, that

8 would be pretty easy, because the reports are

9 very similar. We already developed that

10 metric. For other reliability coordinators,

11 that could be significant work to develop it,

12 because it is some work for us to develop

13 these metrics. It's not readily available,

14 where we just pull it down, so that's

15 something I would just have to check on to

16 see if there are reliability coordinators

17 that had similar reports that we could pull

18 the data from.

19 PRESIDENT SUSKIE: 20 Yeah. I would be curious to see ‐‐

21 I guess since it's simpler, since you have

22 the data to ‐‐ easier for you to compare SPP

23 versus Entergy ‐‐ and, of course, you can't

24 ‐‐ it's not ‐‐ you can't just do the number

25 of TLRs. I think what ‐‐ you've got to

0057

1 compare it to the scope and size of the

2 systems, I think would be a fairer analogy.

3 And I know after Charleston, Entergy

4 submitted some filings in rebutting comparing

5 that they were similar to other

6 organizations. But I'll be kind of curious

7 to try to get a ‐‐ the best apples‐to‐apples

8 comparison. I think that would be helpful.

9 Yes, sir?

10 MR. PEDERSEN:

11 Todd Pedersen, Westminster

12 Utilities. Just looking at this 1a, I was

13 just quickly looking at the table itself

14 where December '09, January '10, February are

15 exactly the same hours. But if you look at

16 the graphs, they're not the same, so

17 somewhere in there, it appears to me that the

18 link from your graph to your table is not 19 matching up.

20 MR. REW:

21 Okay, yeah. I see that. Yeah,

22 we'll check up on that, Todd, and see. But

23 the graph ‐‐ obviously, the graph is

24 fluctuating, so those numbers should be

25 correct in the graph. We probably just need

0058

1 to carry eit over in th table down below.

2 MR. PEDERSEN:

3 Okay. If you look ‐‐ if you

4 compare the TLR times for January '10, it's

5 showing 138, and the actual, just for that ‐‐

6 I don't ‐‐ I just think the link between the

7 graph ande th table are not...

8 MR. REW:

9 Okay. We'll follow up on that,

10 Todd.

11 MR. PEDERSEN:

12 Thank you.

13 PRESIDENT SUSKIE:

14 So you believe the graph is

15 correct, but numbers in the table below may

16 not be?

17 MR. REW: 18 Yes. These numbers here are all

19 the same, but when you look in the graph

20 right here, they do vary in the graph.

21 PRESIDENT SUSKIE:

22 Thank you.

23 Patrick?

24 MR. CLAREY:

25 Following up on a question of other

0059

1 reliability coordinators reporting this. I

2 think Midwest ISO reports it in a similar

3 fashion, Bruce. I'll send you their monthly

4 link.

5 MR. REW:

6 Thanks, Patrick.

7 PRESIDENT SUSKIE:

8 Commissioner Field?

9 VICE‐PRESIDENT FIELD:

10 Bruce, do you have the ability or

11 havee th technology to know if any of these

12 curtailments were interruptibles or firm?

13 Are these all firm?

14 MR. REW:

15 In the next couple of metrics, I'll

16 go into the different TLRs ‐‐ 17 VICE‐PRESIDENT FIELD:

18 Okay.

19 MR. REW:

20 ‐‐ that have occurred, what levels

21 they're at.

22 Okay. So it's a good transition,

23 Commissioner Field, to the next slide, which

24 is 1b, and that shows ‐‐

25 PRESIDENT SUSKIE:

0060

1 Did y'all coordinate that

2 transition?

3 VICE‐PRESIDENT FIELD:

4 We have records of that.

5 MR. REW:

6 This shows congestion by TLR level,

7 and then we break it down into 3A all the way

8 up to 5B and NNL. So this depicts what your

9 question was, Commissioner .Field

10 VICE‐PRESIDENT FIELD:

11 Explain it to me, because I don't

12 see it just looking at it.

13 MR. REW:

14 If you look at ‐‐ I'll just pick

15 the first one, March of '08. 16 VICE‐PRESIDENT FIELD:

17 All right.

18 MR. REW:

19 We have a ‐‐ level 3A is

20 color‐coded there, which is the ‐‐ I guess

21 like the teal color, and it's at the bottom,

22 and then you move up from there. Level 3B

23 has .9, and Level 4 is .3, and that's all

24 depicted on the graph under the first column

25 of March '08. It probably would be better to

0061

1 look at, like, October '08, which has much

2 larger numbers. You can see the very large

3 one, the bottom color there, which is like

4 the teal color.

5 VICE‐PRESIDENT FIELD:

6 Does the teal color mean that ‐‐

7 are those customers firm customers?

8 MR. REW:

9 The firm customers are in ‐‐ TLR

10 Level 5 are the firm customers.

11 VICE‐PRESIDENT FIELD:

12 So that's ‐‐

13 MR. REW:

14 So that would be the gigawatt hours 15 curtailed at TLR Level 5.

16 PRESIDENT SUSKIE:

17 Is that 5A and 5B?

18 MR. REW:

19 Yes.

20 VICE‐PRESIDENT FIELD:

21 Both of them. Okay. So that the

22 brown and the light brown or tan are the firm

23 customers?

24 MR. REW:

25 Yes, that's correct.

0062

1 VICE‐PRESIDENT FIELD:

2 Okay.

3 MR. REW:

4 It would be the top ‐‐ top ‐‐

5 actually, the top three.

6 VICE‐PRESIDENT FIELD:

7 Well, that makes sense, then. The

8 interruptibles are curtailed first, and then

9 you move into the current customers.

10 MR. REW:

11 Yes, that's correct.

12 VICE‐PRESIDENT FIELD:

13 Okay. 14 PRESIDENT SUSKIE:

15 And what is "NNL Assigned"?

16 MR. REW:

17 That's Needed Network Load. That's

18 the ‐‐ when you have a firm curtailment and

19 part of it's assigned to the network service,

20 that represents the amount of generation

21 re‐dispatch that they've had to do to curtail

22 their loading on the transmission line.

23 Okay. The next slide is 1c, and

24 that also covers congestion, but this in the

25 amount of hours, versus 1b was the gigawatt

0063

1 hours. So this is ‐‐ this represents the

2 amount of time that you're in it.

3 Any questions on this one?

4 MR. SCHNITZER:

5 Bruce?

6 MR. LONG:

7 This is Charles Long with Entergy

8 again. I just want to make sure there's no

9 confusion about what a TLR is, because some

10 of the questions that Commissioner Field has

11 asked just makes me aware. These aren't

12 actual load curtailments of customers 13 curtailed. This is TLR 5 where generation

14 (inaudible) takes place essentially, right?

15 MR. REW:

16 Yeah. That's correct. Like, for

17 the TLR 5, that is a transaction that is

18 curtailed. And what usually happens is, the

19 load‐serving entity obtains other resources

20 to continue providing the service. It's not

21 shedding load at TLR level 5. They're two

22 different things. It's not a load shedded.

23 It merely represents a firm transaction

24 that's been curtailed.

25 VICE‐PRESIDENT FIELD:

0064

1 Gee, I'm glad you clarified that,

2 because I had the impression that maybe these

3 were ‐‐ would have actually been interrupted

4 and curtailed.

5 MR. REW:

6 No. I'm sorry, Commissioner Field.

7 That's not where we're shedding load ‐‐ we're

8 shedding load at all. It's curtailing firm

9 service.

10 VICE‐PRESIDENT FIELD:

11 All right. 12 MR. LOUDENSLAGER:

13 Sam Loudenslager, Arkansas Staff.

14 Would be it be helpful for Bruce to kind of

15 walk through for you folks what each of the

16 different TLR levels kind of means?

17 PRESIDENT SUSKIE:

18 Please. I thought about asking

19 that question myself, so please.

20 MR. REW:

21 The TLR Level 3, that is your

22 nonfirm service, and the different levels

23 there entail the different length of service

24 for nonfirm. So you curtail the shorter

25 nonfirm service first and then longer

0065

1 nonfirm. For example, you curtail a daily

2 nonfirm service first before you curtail a

3 monthly nonfirm. So you do recognize the

4 length of time for nonfirm curtailments. The

5 Level 4 are other readjustments to the system

6 that can occur prior to a TLR Level 5. And

7 then level 5 ‐‐

8 PRESIDENT SUSKIE:

9 What are some examples of a Level 4

10 curtailment? 11 MR. REW:

12 A Level 4 would be, for example,

13 cutting all nonfirm. If there's anything

14 else left on it prior to going into firm

15 curtailments.

16 PRESIDENT SUSKIE:

17 Okay.

18 MR. REW:

19 And then the TLR ‐‐ I'm trying to

20 recall the difference between 5A and B.

21 There's two levels of firm curtailment in TLR

22 Level 5. One of them is whether you curtail

23 it immediately, and then the second one is if

24 you curtail it at the top of the next hour.

25 So that's in anticipation of the next hour

0066

1 still being ‐‐ experiencing a loading. And

2 then, again, the NNL is where it's been

3 identified that network service is also

4 contributing to the loading on the

5 transmission facility, and because it's a pro

6 rata, share the paying type of curtailment,

7 they do get assigned part of that reduction

8 in flow requirement on the line, and they

9 provide some NNL relief is what we call it, 10 where they do some re‐dispatch to reduce the

11 loading on the identified transmission

12 facility. So the network customers also

13 contribute to that.

14 VICE‐PRESIDENT FIELD:

15 Bruce, is it safe to say that the

16 utility's obligation is to dispatch the most

17 economical power that it can for its

18 customers under normal conditions?

19 MR. REW:

20 I don't ‐‐ I can't answer that.

21 VICE‐PRESIDENT FIELD:

22 Assume that that's true.

23 MR. REW:

24 Okay. Assume that that's true.

25 VICE‐PRESIDENT FIELD:

0067

1 At what level ‐‐ is it TLR 4 or 5

2 that they have to re‐dispatch from other

3 units which may not be as economical?

4 MR. REW:

5 Well, they would have to do that at

6 a TLR Level 5.

7 VICE‐PRESIDENT FIELD:

8 5. So every time you have a 5, 9 then that signals that the ‐‐ if my

10 assumption is right, and I believe it is,

11 that they, under an obligation to supply

12 those customers released cost power, then

13 when we reach TLR 5, then they're

14 re‐dispatching from somewhere in the system,

15 and the units are not as economical; it's

16 costing the ratepayers every time we have a

17 TLR 5, if my assumption is correct?

18 MR. REW:

19 Yes. If your assumption is correct

20 that they're dispatching it based on those

21 economic units, then, if we would require

22 them to re‐dispatch it, it would be

23 re‐dispatched into a higher cost unit.

24 VICE‐PRESIDENT FIELD:

25 So, see, that's why it's important

0068

1 to us as regulators to know how they compare

2 to other companies, as Chairman Suskie asked,

3 because we think there ‐‐ it appears that

4 there's quite a few TLRs, but we don't know

5 whether that's inordinate or whether that's

6 typical. In other words, but this is a lot

7 of re‐dispatching; every time you get to a 8 TLR 5, we know the most economical power is

9 not reaching the consumer, and they're paying

10 additional dollars in their rate, if my

11 assumption is correct.

12 PRESIDENT SUSKIE:

13 Jimmy and Patrick, I just can't

14 help but pass up this opportunity. So every

15 time it's re‐dispatched and Louisiana gets

16 higher costs, Arkansas pays more money to

17 Louisiana. Sorry. Couldn't pass that one

18 up.

19 VICE‐PRESIDENT FIELD:

20 Thank you.

21 PRESIDENT SUSKIE:

22 Well, it's $391 million this year.

23 Anyway, I couldn't pass up that opportunity.

24 Sorry about that, Patrick.

25 CHAIRMAN PRESLEY:

0069

1 He knows ‐‐ he knows that figure

2 down to the penny.

3 VICE‐PRESIDENT FIELD:

4 (Inaudible) ‐‐ a bunch this year.

5 PRESIDENT SUSKIE:

6 Every time I go to my mother's 7 house, she pulls out her energy bills and

8 sees the line that says, "FERC‐ordered

9 payments."

10 MR. REW:

11 Okay. Let me go on to 1f. 1f

12 identifies congestion by flowgate, and this

13 is for the previous 12 months. So this

14 identifies the flowgates in which we've had

15 the largest number of gigawatt hours

16 curtailed on it, and it also shows the

17 percent of time in the TLR.

18 Any questions on 1f?

19 MR. LOUDENSLAGER:

20 I ‐‐ this is Sam Loudenslager with

21 the Arkansas Staff. I would just point out

22 that in the SPP RTO, this chart is very

23 important. We use this ‐‐ the Cost

24 Allocation Working Group uses this kind of as

25 a starting point in trying to figure out

0070

1 where those ‐‐ where projects might be most

2 economic in relieving congestion issues

3 across the footprint. One of the things that

4 we've asked the ICT to do is to pull this

5 data together for you folks and to break it 6 down on a state‐by‐state level, as well.

7 What we should be able to do is compare these

8 over time to figure out if congestion

9 problems are getting fixed or not, put pretty

10 simply.

11 Now, having said that, Bruce I do

12 actually have a question. I know the SPP,

13 there's the ‐‐ looks like a greater reliance

14 on temporary flowgates than I see in the

15 Entergy region. Is that ‐‐ is that true or

16 not? Do you know what I'm talking about?

17 MR. REW:

18 Yes. In the SPP RTO, there is a

19 mechanism in place where they issue temporary

20 flowgates to relieve constraints that are not

21 in the permanent list, and a lot of times

22 those will pop up as being in their most

23 constrained list; whereas Sam pointed out in

24 the Entergy one, there isn't the use of ‐‐

25 the large use of temporary flowgates. So the

0071

1 flowgates that we've identified here are, you

2 know, ones that have been in place and are

3 recognized.

4 CHAIRMAN PRESLEY: 5 Bruce, let me ask you: I noticed

6 we're on the ‐‐ Mississippi only shows up on

7 here twice, but we're at the top, with 115

8 gigawatts curtailed, and then the percentage

9 of 4.73 percent in TLR. Is there any way to

10 know, of that 4.73, is that a TLR 5, or can

11 you quantify that?

12 MR. REW:

13 Jody is telling me that we do have

14 that information, we just don't have it with

15 us. But you can ‐‐ it is available to

16 identify, you know, exactly what the TLR

17 level is on that particular flowgate, whether

18 it's 3 or 5 and the amount of time, so that

19 is available.

20 CHAIRMAN PRESLEY:

21 Okay. Over here in the proposed

22 solutions, I'm looking at this ‐‐ so we're

23 looking at a time frame of when?

24 MR. HOLLAND:

25 So, Commissioner Presley, these are

0072

1 shown as economic projects and suggestions

2 for the economic study process that we call

3 the ISTEP. So these ‐‐ though these are 4 solutions, there's no commitment to

5 construct.

6 CHAIRMAN PRESLEY:

7 And so using the assumption that I

8 think is right that Commissioner Field used a

9 minute ago, if involved in this ‐‐ I mean,

10 115 gigawatts curtailed is the largest on the

11 page,d an so, at that point, we're having to

12 run higher‐cost units from Mississippi

13 ratepayers to make up for that. Can y'all

14 just kind of let us know, maybe, again, in a

15 ‐‐ just a follow‐up e‐mail, what of that was

16 a TLR 5 so that we can have some sort of

17 idea; also, any type of chart for the

18 solution, if you can.

19 MR. HOLLAND:

20 Certainly. We'll take that up next

21 time.

22 PRESIDENT SUSKIE:

23 Mr. Long?

24 MR. LONG:

25 There are ‐‐ several of these on

0073

1 here do have solutions that are already

2 underway. The top one that he mentioned is 3 under construction right now. I think we had

4 half of it finished a few days ago. We're

5 still working on the other end of the line,

6 but it should be done very shortly, within

7 the next couple weeks.

8 CHAIRMAN PRESLEY:

9 Okay.

10 MR. LONG:

11 And then there ‐‐ the ones that are

12 in the ISTEP are studied, you know, through

13 the economic process, and they're evaluated,

14 you know, as kind of a cost/benefit to see

15 what needs to be done with those. But

16 several of these, we are under construction

17 already.

18 CHAIRMAN PRESLEY:

19 Since that's such a big amount, I

20 just ask maybe you could coordinate that with

21 some EMI officials and give the PSC in

22 Mississippi official notice when that's

23 completed. Also, Bob Grenfell in the room

24 from Entergy Mississippi, we'd be interested

25 to know any data that the company has, Bob,

0074

1 related to the dispatch or re‐dispatch that 2 was made that involved that. If that's close

3 to being done, we'd like to know.

4 Thank you.

5 PRESIDENT SUSKIE:

6 Mr. McCulla?

7 If you could pass the mic. back.

8 MR. McCULLA:

9 This is Mark McCulla from Entergy.

10 I just wanted to clarify. You raised the

11 point about the generation being moved to

12 Mississippi. These flowgates ‐‐ this

13 particular flowgates in Mississippi doesn't

14 necessarily mean that generation in

15 Mississippi shifts. It means transactions

16 that flow across that flowgate have a certain

17 impact, but it doesn't necessarily mean

18 generation in Mississippi gets shifted.

19 CHAIRMAN PRESLEY:

20 But is this flowgate not tied to

21 Grand Gulf? When I say that, I mean, as I

22 read it, you're referencing ‐‐ SPP references

23 a Grand Gulf upgrade.

24 MR. McCULLA:

25 He'll have to answer that.

0075 1 CHAIRMAN PRESLEY:

2 I feel like we're on Donahue. Just

3 start throwing the mic. out there.

4 MR. LONG:

5 Mr. McCulla's statement is correct

6 about the generators and how they move. They

7 can be ‐‐ you know, they have to be sort of

8 near, but they don't necessarily have to be

9 in Mississippi, but we ‐‐

10 CHAIRMAN PRESLEY:

11 I understand. I've got all that.

12 My concern is this, to save you some time,

13 and that is that Grand Gulf obviously is the

14 cheapest generator, period, for Entergy's

15 customers. And so if this flowgate issue is

16 barring that generation and we're having to

17 fire up something else to make up for it, you

18 know, common sense tells us that we're

19 costing ratepayers money.

20 MR. LONG:

21 Yeah. I can assure you Grand Gulf

22 will never re‐dispatch, because, if it's not

23 100 percent, something is typically wrong

24 with the plant, not the transmission.

25 CHAIRMAN PRESLEY: 0076

1 I understand.

2 MR. LONG:

3 The reason Grand Gulf is mentioned

4 is because this was an element that was

5 identified in the Grand Gulf upgrade study as

6 an element that needed to be upgraded.

7 That's why it's listed in the comments.

8 CHAIRMAN PRESLEY:

9 Thank you.

10 PRESIDENT SUSKIE:

11 Thank you.

12 Jennifer Vosburg?

13 MS. VOSBURG:

14 Just before you move off the

15 slides, one of the ‐‐

16 UNIDENTIFIED SPEAKER:

17 Can't hear you.

18 MS. VOSBURG:

19 One of the ‐‐ one of the

20 discussions we've had in the Working Group

21 meeting was in employing our LAPs. Have we

22 made any progress on that particular issue?

23 PRESIDENT SUSKIE:

24 Sam? 25 MR. LOUDENSLAGER:

0077

1 We're getting there, and we're

2 trying to pull the information together so

3 that it can be reported by state, as well, as

4 we discussed at the stakeholder meeting.

5 We've gotten some additional information

6 that ‐‐ it's ‐‐ we still have to kind of look

7 at it a little bit, Jennifer.

8 MS. VOSBURG:

9 And the issue was that the ICT did

10 not have LAP information; it was going to

11 have to come from Entergy?

12 MR. LOUDENSLAGER:

13 Right. And that exchange has been

14 made. That information has gone from Entergy

15 to the ICT and to the Working Group, and

16 we'll be talking about it next week.

17 MS. VOSBURG:

18 Just looking at the 1b slide, if

19 you could pull that up. And I noticed the

20 NNL is listed on here. I don't want to get

21 down to the details, but just maybe some

22 background information on what's actually

23 being captured here. Just looking at the 24 numbers, the difference between the Level 5

25 and the NNL responsibilities seems so off.

0078

1 We thought they were kind of supposed to be

2 done at the same time. I'm just trying to

3 figure out what you're actually capturing

4 there. They're supposed to be re‐dispatched

5 at the same time you have the Level 5.

6 MR. REW:

7 Well, Jennifer, this is Bruce

8 again. That's something we'd have to look

9 into. It could be a situation where there

10 weren't any TLR Level 5 transactions

11 available for re‐dispatch. It could be a

12 situation where you have a lot of

13 transactions on it, so the amount of TLR

14 Level 5 on the transactions is significantly

15 greater than the NNL. So there's a lot of

16 different things that can occur that can

17 cause it to maybe look unusual up there, but

18 that's something we could follow up on.

19 MS. VOSBURG:

20 Is there any additional reporting

21 that can be done on the NNL? Just what

22 additional reporting can be done on the NNL 23 side of it? I mean, we're hearing that, you

24 know, that the nuclears don't get backed

25 down, but we do have coal that is being

0079

1 backed down.

2 PRESIDENT SUSKIE:

3 Give the mic. back. You know, this

4 kind of is like a talk show, but something

5 tells me we'd have very few viewers.

6 CHAIRMAN PRESLEY:

7 Pull us the first day.

8 MR. REW:

9 Jennifer ‐‐ this is Bruce again ‐‐

10 I don't know if off the ‐‐ offhand what would

11 be available for reporting on the NNL.

12 That's something we'd just have to look into

13 to see what we could report.

14 PRESIDENT SUSKIE:

15 Mr. Newell?

16 MR. NEWELL:

17 This is Gary Newell. The actual

18 TLR 5 reports that are submitted to NERC have

19 in them a chart that shows the assignment of

20 this NNL responsibility among control areas

21 that are affected by a Level 5 TLR. So if, 22 for example, during a TLR 5, it may be that

23 more than one control area is assigning an

24 NNL target by the reliability coordinator.

25 And, in fact, in the Acadiana Load Pocket,

0080

1 when there has been TLR 5s there, typically,

2 there's an NNL responsibility, some of which

3 goes to Entergy, some of which goes to CLECO,

4 some of which goes to Lafayette and the NRG,

5 Louisiana Generating.

6 One question I did have, Bruce,

7 about this, when you showed me ‐‐ and this

8 may explain some of the discrepancy. I don't

9 know. But when you show "NNL Assigned," is

10 that just the NNL assigned to the Entergy

11 control area? Because you may have a

12 curtailment that's, you know, saying 3

13 gigawatt hours and maybe one gigawatt hour is

14 assigned to Entergy and would show up here,

15 and there might be two other gigawatt hours

16 assigned to other control areas. Do you

17 know?

18 MR. REW:

19 I believe that's NNL assigned to

20 the Entergy Balancing Authority, but I'll 21 have to confirm that. My understanding was

22 that it was really the Balancing Authority in

23 Entergy. Let me ‐‐ let me confirm that.

24 MR. NEWELL:

25 Okay.

0081

1 PRESIDENT SUSKIE:

2 There was something I've been

3 curious about. If there's numbers out there

4e of th cost of the curtailment to address

5 whether it's by, you know, utility or what.

6 What are the costs to these things? You

7 know, not just Entergy, but also other

8 Entergy customers, but also other, you know,

9 utilities and other customers. And I don't

10 know ‐‐ I assume, obviously, it varies year

11 to year. That's something I'd be curious

12 about.

13 Mr. Newell?

14 MR. NEWELL:

15 Yeah, President Suskie. This is

16 Gary Newell again. I ‐‐ you'd have to look

17 at each ‐‐ you know, each TLR and see which

18 units moved to satisfy the NNL

19 responsibility. It would be a task, but I 20 can tell you this much just from Lafayette's

21 experience: When Lafayette's generation has

22 been re‐dispatched during a TLR 5, typically,

23 what happens is that their firm transmission

24 schedule for delivery of energy from the

25 Rotamaker station, which is up on the CLECO

0082

1 transmission system, that schedule is

2 reduced, and Lafayette is forced to operate

3 their gas‐fired generation within the ‐‐

4 basically, within the city limits. It's very

5 close inside the city system. And the cost

6 spread between those two is the cost between

7e th relatively low cost coal, powder

8 [phonetic] river coal, burned at Rotamaker

9 versus natural gas‐fired boilers that are

10 very old and relatively inefficient. So I ‐‐

11 I think, you know, rough numbers, the

12 Rotamaker is ‐‐ usually generates somewhere

13 in the 30 ‐‐ 30‐dollar‐megawatt‐hour range,

14 and the units inside the city generate more

15 like up around $70 a megawatt hour. And it's

16 a huge penalty whenever Lafayette is

17 re‐dispatched during TLR 5, and those

18 typically occur because of congestion on 19 flowgates located outside Lafayette's system.

20 They're on Entergy flowgates which, just

21 because of the topology of the system, happen

22 to be best ‐‐ the loading is reduced best by

23 operating Lafayette generation and CLECO

24 generation, and then we get ‐‐ we get the

25 cost penalty, ande th relief goes to the

0083

1 flowgate. That will give you an order of

2 magnitude on the difference.

3 SECRETARY ANDERSON:

4 You know, without the ‐‐ it seems

5 to me that the actual cost is really

6 critical. We get that every ‐‐ every month

7 in ERCOT, the cost of economic dispatch, the

8 amount and the cost. Otherwise, how do you

9 make a decision on whether transmission is

10 economic or not?

11 VICE‐PRESIDENT FIELD:

12 I think you're right, Ken. We need

13 that information. When you look at hthe grap

14 at the bottom right‐hand corner ‐‐ that's not

15 the same one.

16 SECRETARY ANDERSON:

17 You're talking about on page ‐‐ 18 VICE‐PRESIDENT FIELD:

19 No.

20 CHAIRMAN PRESLEY:

21 Page 1c.

22 PRESIDENT SUSKIE:

23 I think you're 1c.

24 VICE‐PRESIDENT FIELD:

25 Average monthly TLR 5s in time of

0084

1 hours is increased from 2007, at about 70 or

2 75; 2008, to maybe 90; and then, in 2009,

3 it's all the way up to 150 hours a month

4 average. So that's a ‐‐ that's quite a bit

5 of re‐dispatch that's being required on the

6 system.

7 CHAIRMAN PRESLEY:

8 And, obviously, 2010 is not ‐‐ I

9 mean, our TLRs mainly are in the summer, so

10 that's ‐‐ when we look at that number,

11 there's no grand reduction.

12 MR. REW:

13 Yeah. That's just for the first

14 quarter.

15 VICE‐PRESIDENT FIELD:

16 If they can do it in ERCOT, why 17 can't we have that information? As

18 regulators of a monopoly, it seems like we

19 should be ‐‐ I'm not saying you, Bruce, have

20 ‐‐ are the one to have it. We should have

21 that information to know how much re‐dispatch

22 costs.

23 That's interesting, Ken, that y'all

24 have that information. Then you can make a

25 judgment, well, if we can cure it with a

0085

1 $40 million transmission relief, then ‐‐ and

2 we might save, you know, hundreds of millions

3 of dollars, that seems like that's

4 information that this committee needs to help

5 make the decisions.

6 PRESIDENT SUSKIE:

7 Kind of throw that as an action

8 item, you know, what would be a good way to

9 gather that information. Because I assume

10 Entergy doesn't have the information on

11 Lafayette's costs and ‐‐ but where Lafayette

12 can say, hey, when had to curtail these four

13 or five times, they cost "X" amount of

14 dollars to our ratepayers. So I assume it's

15 almost each utility‐specific. 16 Mr. Newell?

17 MR. NEWELL:

18 Actually, President Suskie, we've

19 screamed about it everywhere we can and as

20 many times as we can.

21 PRESIDENT SUSKIE:

22 Well, you're now in the forum, I

23 believe.

24 MR. NEWELL:

25 Great. It ran to a total of about

0086

1 $2 million last summer for Lafayette, and

2 Lafayette is a small ‐‐ a pretty small piece

3 of the total picture. You know, there has

4 been some progress made on, as I understand

5 it, dealing with re‐dispatch costs related to

6 the construction‐related outages in the

7 Acadiana Load Pocket. But I think you're

8 still ‐‐ that's just sort of a subset of the

9 hours that are expected in the future to have

10 TLRs, but it ‐‐ you know, it ran, as I say,

11 about $2 million for just one summer for a

12 small system, so it ‐‐ if you look at it in

13 totals, it's probably going to be a pretty

14 significant number. 15 PRESIDENT SUSKIE:

16 That would be something for the

17 Working Group to throw up a curious study or

18 something along those lines. All right.

19 Thanks.

20 Mr. McCulla, at one point did you

21 have your hand up during all that discussion?

22 MR. McCULLA:

23 No.

24 PRESIDENT SUSKIE:

25 Okay. I thought I may have

0087

1 forgotten you. I apologize.

2 MR. REW:

3 Okay. I think we've completed 1F,

4 and we're moving on to 3b. 3b transitions us

5 to looking at transmission utilization in

6 megawatt hours, and this provides ideas to

7 the amount of network service as well as

8 point‐to‐point service that's being sold on a

9 monthly basis.

10 Any questions on this slide?

11 PRESIDENT SUSKIE:

12 Any questions anyone?

13 (No response.) 14 MR. REW:

15 Okay. Then the next several

16 slides, which we're switching to 16a, this

17 covers transmission service studies and

18 generation interconnection studies. On 16a,

19 we discuss the amount of transmission service

20 that's in progress in the different phases,

21 whether it be a system impact study or a

22 facility study. And this kind of gives you a

23 trend over the past five quarters as to the

24 amount of transmission service request volume

25 that we're working with.

0088

1 MR. LOUDENSLAGER:

2 What is SISR? What is FSR?

3 MR.W: RE

4 Okay. SISR is a System Impact

5 Study Report. FSR is Facility Study Report.

6 PRESIDENT SUSKIE:

7 And "service granted"?

8 MR. REW:

9 That would be the service that has

10 definitely signed a service agreement with so

11 that we've gone through the study process and

12 the customer has agreed to take service to 13 the point where we've signed the service

14 agreement for a long‐term service.

15 PRESIDENT SUSKIE:

16 Okay. Questions?

17 MR. CHILES:

18 Bruce ‐‐ John Chiles here ‐‐ a

19 question about your graph. Does this include

20 the affected system studies, as well, or is

21 this just a request for transmission service

22 in the Entergy footprint?

23 MR. REW:

24 Just the Entergy footprint.

25 MR. CHILES:

0089

1 Okay. So I guess the studies

2 you're doing for transactions of SPP,

3 transactions to TVR are not included in these

4 numbers?

5 MR. W:RE

6 That's correct.

7 MR. CHILES:

8 Is there any way we could get those

9 included?

10 MR. REW:

11 Yeah. We could create a graph that 12 would show those.

13 MR. CHILES:

14 Thank you.

15 PRESIDENT SUSKIE:

16 Any other questions?

17 (No response.)

18 All right. Next slide.

19 MR. REW:

20 Okay. 16b, this shows the amount

21 of proposed transmission upgrades for the

22 different studies. For example, System

23 Impact Study Report that have been completed,

24 we have identified so many dollars in

25 transmission upgrades that would be needed to

0090

1 provide the transmission service that's

2 requested.

3 Okay. Then the next ‐‐ actually,

4 the last two slides switch over to generation

5 interconnection. Wee have th feasibility

6 study, this FBS, and System Impact Study is

7 SIS, and then FS is Facility Study. So the

8 steps are you move from the Feasibility Study

9 to System Impact Study to the Facility Study.

10 And then the next slide, which is 11 16d, covers the amount of megawatts that have

12 been completed in the facility studies for

13 generation interconnections. We do have

14 LGIA, which is a large generator

15 interconnection agreement, executed.

16 PRESIDENT SUSKIE:

17 Is that it? Any questions from

18 anybody?

19 Sam?

20 MR. LOUDENSLAGER:

21 I think I'm Jennifer's ‐‐ male side

22 of Jennifer. No offense, Jennifer.

23 Bruce, I think it might be helpful

24 if you go through and define for the

25 Commissioners and for the folks in the room

0091

1 that may not be as familiar as some folks are

2 what each of those studies actually reflect

3 that were ‐‐ I think it was on the previous

4 slide. Yeah.

5 MR. REW:

6 I'll let Jody Holland walk through

7 that process.

8 MR. HOLLAND:

9 This is Jody Holland, SPP. Sam, 10 you were talking about the generation

11 interconnection slide?

12 MR. LOUDENSLAGER:

13 FS, SIS, FBS.

14 MR. HOLLAND:

15 Yes, yes.

16 MR. LOUDENSLAGER:

17 You defined what they ‐‐ you

18 spelled out the acronym, but didn't define

19 it.

20 MR. HOLLAND:

21 Okay. The Feasibility Study is a

22 really high‐level study to help a customer

23 determine whether he wants to move forward

24 with the process. So it has a short time

25 line and a short cost. Then if they decided

0092

1 to move forward, there is the System Impact

2 Study, which is a lower in‐depth study, but

3 not as in depth as a facility study. And so

4 as the studies progress, the customer gets a

5 better feel for the actual cost. So by the

6 time the Facility Study is performed, there

7 is a guarantee on the bandwidth of the cost

8 of the estimate and then cost of the upgrade. 9 And then once you have a Facility Study, the

10 customer can determine whether he wants to go

11 forward with the large generator

12 interconnection agreement, which would then

13 have the customer interconnecting to the

14 transmission group.

15 Does that suffice?

16 MR. LOUDENSLAGER:

17 Yes.

18 MR. HOLLAND:

19 So on the next page, it would be

20 when the LGIA is executed. That would be

21 actually interconnecting to the grid.

22 PRESIDENT SUSKIE:

23 Any other questions?

24 Sam, again.

25 MR. LOUDENSLAGER:

0093

1 I take it we're moving off this

2 topic, so I'd like to get some feedback, and

3 I'm sure SPP would like some feed ‐‐

4 PRESIDENT SUSKIE:

5 Dave Wilson, I think, had a

6 question on this topic, so before we

7 transition ‐‐ 8 Mr. Wilson?

9 MR. WILSON:

10 Thank you. John asked for an

11 update on these charts to show the similar

12 data for SPP. Is that going to be able to

13 show simultaneous requests on both systems?

14 MR. REW:

15 Well, my understanding is John

16r asked fo Affected System Studies, which are,

17 when there's a transmission request in one

18 area, if it's identified that it affects

19 facilities in another area ‐‐ for example, if

20 a SPP transaction was identified to affect an

21 Entergy facility, then we would do an

22 Affected System Study in Entergy system to

23 see what the impact is, and that's ‐‐ we'll

24 gather data on and provide additional

25 information for.

0094

1 MR. WILSON:

2 So it's not going to be a discrete

3 study of ‐‐ studies on the SPP system without

4 comparisons of what's going on in the Entergy

5 system?

6 MR. REW: 7 I'm not sure I understand your

8 question. If you're looking for metrics on

9 the SPP system, that's provided quarterly

10 already for the processes that they have.

11 MR. WILSON:

12 All right. Thank you.

13 PRESIDENT SUSKIE:

14 Sam? Jimmy?

15 MR. LOUDENSLAGER:

16 I never talk over a Commissioner.

17 Go ahead, Jimmy.

18 VICE‐PRESIDENT FIELD:

19 Thank you, Sam.

20 Bruce, you may do this and I'm just

21 not aware of it. But, like, you make a

22 monthly report on TLR 5s to the utilities and

23 to the state Commissions?

24 MR. REW:

25 Well, the TLR 5 reports ‐‐ any time

0095

1 we have a TLR 5, we report it to NERC, and we

2 have a limited amount of time to report it.

3 But other than that, we provide a summary of

4 all the TLR events in our quarterly reports.

5 VICE‐PRESIDENT FIELD: 6 So on a quarterly basis, all the

7 Commissions could have access to them, and

8 then if we wanted to delve into them and try

9 to ascertain the economic cost to someone

10 whether, it's LUS or Entergy's ratepayers or

11 somebody else's, we could do that just by

12 looking at those reports?

13 MR. REW:

14 Yes. And we're sending those to

15 the Commissions, and if you're not getting

16 it, just let us know, and we'll make sure

17 that you get one directly, the quarterly

18 reports.

19 VICE‐PRESIDENT FIELD:

20 We may have and I'm not aware of

21 it, but that's good. I just wanted to make

22 sure we get that information.

23 MR. REW:

24 The plan is that, once we come to

25 agreement on these metrics, that we'll

0096

1 include these in the quarterly reports, as

2 well.

3 VICE‐PRESIDENT FIELD:

4 Thank you. 5 MR. THOMPSON:

6 Commissioner, I don't believe that

7 the quarterly reports will ‐‐ Henry Thompson

8 with Arkansas Cities. I don't believe the

9 quarterly reports will give you the

10 information to determine the economic impact

11 that you're asking about. It will simply

12 show what the TLR 5s were. I may be wrong

13 about that.

14 VICE‐PRESIDENT FIELD:

15 No, I think you're right.

16 Mr. Thompson, I think you're absolutely

17 correct, but, at least, that would be a

18 starting point to make an inquiry to

19 determine what the re‐dispatch costs were to

20 the ratepayers ‐‐ somebody's ratepayers.

21 PRESIDENT SUSKIE:

22 Looking at the Working Group

23 members, kind of a thought I have ‐‐ like for

24 stakeholders' thought, one, could you look at

25 2009 and have each load‐serving entity say,

0097

1 here is how much this re‐dispatch costs our

2 company, and if it's feasible to break it

3 down to, say, a typical residential customer 4 or something. And then, on the flip side,

5 and if you are a merchant plant and you were

6 curtailed, how much did that cost you. And

7 if you had to, you know, shave your product

8 that you're selling. Just ‐‐ I'm just

9 thinking out loud. I don't know the details

10 of what would be best, but just some ideas

11 out there to help take a good look at it.

12 I'd be curious to see if Entergy can trace

13 these curtailments and the impact it has by

14 state.

15 Ms. Turner?

16 MS. TURNER:

17 Becky Turner with Entegra. We

18 do ‐‐ we've tracked that information over the

19 last several years, and we'd be happy to

20 provide it to the E‐RSC Working Group or the

21 E‐RSC in terms of costs.

22 PRESIDENT SUSKIE:

23 Thank you, Becky. Work with the

24 Working Group to come up with some mechanism

25 so we can ‐‐ kind of a standard reporting

0098

1 form in, say, the same time frame or whatever

2 that they're on. 3 MS. TURNER:

4 Okay. Sure. Absolutely.

5 PRESIDENT SUSKIE:

6 Jennifer?

7 MS. VOSBURG:

8 NRG Louisiana Generating would be

9 more than willing to work with the Working

10 Group on that issue, as well.

11 PRESIDENT SUSKIE:

12 Okay. Does Entergy ‐‐

13 Mr. Schnitzer?

14 MR. SCHNITZER:

15 Just ‐‐ can everybody hear me all

16 right?

17 PRESIDENT SUSKIE:

18 What's important, I think, is the

19 court reporter.

20 MR. SCHNITZER:

21 Michael Schnitzer. Just a couple

22 of things here. The first with respect to

23 your suggestion about using 2009 and trying

24 to see what could be done with that. I think

25 that's something we could work with. But I

0099

1 just wanted to point out that, at least, 2 Entergy believes that a lot of the TLR 5s ‐‐

3 and those are the ones that were of

4 particular concern ‐‐ a lot of them related

5 to the Acadiana situation, where there is a

6 plan to resolve it. So I would just suggest

7 that any historical analysis that we

8 contemplate, kind of separate out what's

9 already been attending ‐‐ what's already been

10 attended to versus maybe what hasn't been

11 focused on thus far. Otherwise, you might

12 get a little bit of a misleading picture, you

13 know, if we don't reflect what's already in

14 process to be resolved.

15 PRESIDENT SUSKIE:

16 Yeah. And I think it would be fair

17 to say, okay, well, how much did this cost,

18 and then what's being done to remedy it? And

19 I think that shows, you know, things that

20 work well. Let's do more of that.

21 MR. SCHNITZER:

22 That's right. You know, Bruce can

23 speak to that, but I think that the work in

24 the Acadiana area coordinating the systems

25 had a reliability piece, had an economic

0100 1 piece, and that was all part of the plan, and

2 it was based on just that kind of analysis,

3 and that's ‐‐ I just wanted to point out ‐‐ I

4 can't speak to other systems, but from

5 Entergy's perspective, a lot of the 5s

6 were ‐‐ you know, were in that.

7 The second point is, I think Sam

8 was getting ready to ask for feedback on some

9 of these metrics, and I think that we would

10 like to suggest some changes or some

11 complimentary information having just gotten

12 this yesterday. And, in particular, I think,

13 Commissioner Field, it's what you were

14 indicating, that Schedule 1f, for example,

15 broken out by TLR level might be more

16 meaningful than just all 3, 4s and 5s

17 together, as the ‐‐ as the chart is shown, is

18 one thing that we think might be either a

19 substitution or an addition. But if there is

20 going to be a process for providing feedback

21 on these proposed metrics, we'll kind of save

22 the more comprehensive set of comments for

23 that. It's whatever you want to do.

24 PRESIDENT SUSKIE:

25 Okay. We'll go to that next, I 0101

1 believe.

2 Mr. Newell?

3 MR. NEWELL:

4 This is Gary Newell. I guess I

5 wanted to disagree with Mike's suggestion and

6 we not take a look at the Acadiana Load

7 Pocket. I think he's right; it is a

8 situation that's being addressed through

9 transmission upgrades, but those are not

10 going to be completed for another two

11 summers. And I think, you know, we're

12 looking at the prospect of significant

13 potential re‐dispatch during the next two

14 summers. So until those are done, it's going

15 to be continuing to be a significant issue

16 for the load‐serving entities in the Acadiana

17 areas. And I think it might be informative

18 and useful to see what the magnitude of that

19 is and the magnitude of the upgrades that are

20 being undertaken, which is also very

21 significant. So I think that remains a good

22 case study, and, obviously, everyone will

23 recognize that progress is being made to

24 resolving that. But it would be, I think, 25 useful and informative to be able to see what

0102

1 the magnitude of re‐dispatch costs has been

2 in that area.

3 PRESIDENT SUSKIE:

4 And we're open to the time frame.

5 I just threw up 2009, you know, to get some

6 boundaries. But who knows? I'd definitely

7 like to defer to the Working Group.

8 MR. SCHNITZER:

9 Just a quick response,

10 Mr. Chairman. I don't believe I stated what

11 Mr. Newell said I stated. I've said ‐‐ I

12 didn't say that we shouldn't look at

13 Acadiana. I said that we should break that

14 out so that we don't look at 2009 on an

15 aggregate basis. And, matter of fact, we'd

16 be happy to look at Acadiana as an example.

17 We, of course, have a different

18 interpretation of the events there as

19 Mr. Newell expresses, but we'd be happy to

20 actually have a pretty full discussion from

21 our perspective of what's going on there and

22 what the plans will do. So we would welcome

23 that opportunity. 24 PRESIDENT SUSKIE:

25 Sounds good. And I always think

0103

1 it's real interesting. I think the leader in

2 helping bring solution to that was

3 Commissioner Field, so I appreciate your

4 leadership on that.

5 VICE‐PRESIDENT FIELD:

6 It was needed.

7 MR. LOUDENSLAGER:

8 Chairman?

9 PRESIDENT SUSKIE:

10 Yes.

11 MR. LOUDENSLAGER:

12 If we're ready to move off, before

13 we do that, I would like to get some feedback

14 from you folks. I would encourage the

15 stakeholders to provide any input they have

16 on these proposed metrics by the 28th, next

17 Wednesday, so the Working Group can start

18 kind of reviewing and reflecting on that ‐‐

19 those suggestions at our meeting next

20 Thursday, but ‐‐ and their input is very

21 important, as is y'all's input. So if y'all

22 have issues or ‐‐ and we've got a list of 23 action items that I'm going to, if it's okay

24 with you guys, ask Kristine to go through

25 before we move on to the next topic, just so

0104

1 we make sure we've captured those correctly,

2 so...

3 PRESIDENT SUSKIE:

4 Great thought, Sam. As far as the

5 information we would like, I think we

6 expressed it as we went through the

7 presentations earlier.

8 Any other thoughts?

9 MR. LOUDENSLAGER:

10 Let me put it a little bit

11 different. Is this generally the

12 direction ‐‐ is this helpful for you guys in

13 terms of a general direction of reporting

14 information to you? It's a graphical way of

15 seeing what's happening. I know you want

16 more, but is this generally the right

17 direction?

18 CHAIRMAN PRESLEY:

19 The only thing I would just make a

20 suggestion on is, we had ‐‐ I think on 16f ‐‐

21 well, on several of them, where we're in the 22 first ‐‐ obviously, we're in the first

23 quarter of '10, if there could be just a

24 little bit more of a comparison of the

25 quarter that we're in or where we are in the

0105

1 calendar year compared to where we were in

2 the calendar year before. Obviously, I know

3 you've got three full years.

4 Bruce, I'm looking at ‐‐ such as,

5 on 1c, Congestion, Average Monthly TLR 5 Time

6 In Hours. You've got 2007, 8 and 9, the full

7 year there, and then 10 so far. Is there any

8 way to break out kind of where in '07, '08

9 and '09, during the first quarter, it was?

10 You see what I mean?

11 MR. REW:

12 Commissioner Presley, what we do

13 when we try to capture that is we'll look

14 at ‐‐ on the individual months up above, you

15 can look at, like, March '09 versus

16 March 2010, and I'm on 1c. And you'll see

17 that there was more congestion in March '09

18 than there was in March 2010.

19 CHAIRMAN PRESLEY:

20 Right. 21 MR. REW:

22 So it gives you an idea there.

23 CHAIRMAN PRESLEY:

24 I didn't know if maybe in those

25 small graphs just on the TLR 5, you know, on

0106

1 the bottom right, if there could just be an

2 adjustment. It's not a bigm proble if it is.

3 MR. REW:

4 Okay. We'll look at that.

5 CHAIRMAN PRESLEY:

6 Sometimes just have that

7 side‐by‐side comparison.

8 MR. LOUDENSLAGER:

9 Before the break, do you want to go

10 through the action items real quickly?

11 PRESIDENT SUSKIE:

12 Sure.

13 Kristine?

14 MS. SCHMIDT:

15 I'm Kristine Schmidt of ESPY Energy

16 Solutions. And, actually, I'm going to go

17 all the way back to the first action item,

18 which was the request of Doug ‐‐ Doug Roe

19 from FERC to get the CRA promised documents, 20 and Doug committed that he'd get those out

21 today. Oh, they're being posted as we speak.

22 Excellent. So that's done.

23 On the ICT update, the Load Pocket

24 Acadiana, Commissioner Field asked that if

25 any of the industrials had volunteered or

0107

1 could volunteer for interruptible options in

2 lieu of firm load, and you committed to go

3 back to your staff and ask if there was some

4 kind of analysis or some kind of other way to

5 do that.

6 Commissioner Presley asked if the

7 ICT had been aware of the potential LAP

8 impact in the Choctaw County area with TVA.

9 And Bruce indicated he would look into that

10 and report back to the Work Group for that

11 action item.

12 For the 2010 construction plan, the

13 question was regarding the Getwell project,

14 if what's being reflected in the current 2010

15 construction plan was representative of what

16 was originally placed into the 2008 base

17 plan. That was originally on hold. Jody

18 Holland is going to review the base plan and 19 get back to Commissioner Presley on that.

20 Regarding the construction plan

21 reconciliation with the base plan, they are

22 now consistent in terms of the projects;

23 however, the in‐service and the need date may

24 not be in alignment. For the in‐service

25 dates that are out of sync, Chairman Suskie

0108

1 asked that the ICT ‐‐ for an explanation for

2 issue of delaying the in‐service. Is it due

3 to eminent domain, siting, court decision or

4 whatever? Entergy indicated their dates

5 are ‐‐ from their view, those are the

6 earliest in‐service dates that are feasible

7 from a construction perspective, and the

8 E‐RSC would like to be briefed on an ongoing

9 basis on any differences going forward on

10 those differences.

11 PRESIDENT SUSKIE:

12 Kristine, could I interrupt on that

13 a little bit?

14 MS. SCHMIDT:

15 Sure.

16 PRESIDENT SUSKIE:

17 So if Entergy couldn't get ‐‐ the 18 need date and the in‐service date are

19 different, if you could explain why. And it

20 may be, hey, our Public Service Commission

21 speed up the CCM document, whatever the case

22 may be. That would be helpful. Thank you.

23 MS. SCHMIDT:

24 And then regarding the TLR reports,

25 previously, at the March 18th meeting, it was

0109

1 requested to include the LAPs and an analysis

2 on a state‐by‐state basis, and Entergy has

3 committed to provide that information going

4 forward with the SPP.

5 In addition to these now proposed

6 reports, 1a has a discrepancy between the

7 graph and the table, and Bruce is going to

8 get that updated. Patrick Clarey will

9 provide, excuse me, Bruce with other RTO ISO

10 reports which appear to be very similar. And

11 Commissioner Presley asked if that 1f include

12 the TLR levels for each of the flowgate that

13 is listed and asked for the cost to run

14 generation re‐dispatch to mitigate the TLR,

15 what solutions have been identified to reduce

16 the congestion and also include some 17 year‐on‐year comparative analysis.

18 Jennifer had a question on slide 1b

19 regarding the NNL levels which were

20 inconsistent with the 5A/5B levels when there

21 is a correlation between the two, and they

22 should me more in alignment, and Gary Newell

23 asked a question if that NNL is

24 representative of just what is on the Entergy

25 system, or is it the broader balancing area?

0110

1 Bruce indicated he would look into the

2 discrepancy and provide additional

3 information and how and what area the NNLs

4 are covering.

5 On the Studies Status Report, John

6 requested to include the SPP and TVA system

7 studies that impact Entergy facilities, and

8 Bruce will look into how this additional

9 information can be added.

10 And then the one formal action I

11 have from the E‐RSC to the E‐RSC Working

12 Group is the request that the ICT provide the

13 re‐dispatch cost of the TLRs, and what will

14 be required is input from the stakeholders

15 and Entergy. And the E‐RSC Working Group 16 will work with all stakeholders on this to

17 develop some type of an ongoing report for

18 the E‐RSC. We'll first look at 2009 data and

19 see the cost impact to retail consumers as

20 well as the cost to merchant transmission,

21 and will also identify what remedies are

22 underway or have ‐‐ or been planned to

23 continue to reduce these events. Entegra,

24 NRG and Entergy all committed to work with

25 the E‐RSC Working Group to provide this

0111

1 information.

2 MR. BOOTH:

3 Jennifer [sic], it's merchant

4 generation.

5 MS. SCHMIDT:

6 I'm sorry. Merchant generation,

7 not transmission. And, again, these are not

8 very articulate, but I think the point of

9 what Sam was asking for is that it give ‐‐

10 just keep people on notice right now this is

11 an oral request. The Working Group will

12 follow up with a formal request after the

13 meeting.

14 PRESIDENT SUSKIE: 15 Okay. Thank you. Did she miss

16 any? I'd be shocked if she did, it was so

17 thorough.

18 (No response.)

19 All right. With that, let's take a

20 ten‐minute break and come back.

21 (Recess.)

22 SECRETARY ANDERSON:

23 I had a request to remind everybody

24 that they need to sign in. There's a sign‐in

25 sheet, apparently, and it's making its way

0112

1 around. You need to sign in that sign‐in

2 sheet in order for the court reporter to make

3 sure that all names are recorded.

4 PRESIDENT SUSKIE:

5 Yes. So just make sure you sign

6 the sign‐in sheet, and that will also help

7 our court reporter with the names.

8 I'd like to actually go back to the

9 first item on the agenda. We forgot to put

10 on there approval of the minutes, and Ben

11 reminded me of that.

12 So do I have a motion?

13 CHAIRMAN PRESLEY: 14 I so move we approve that.

15 PRESIDENT SUSKIE:

16 Second?

17 MR. BOOTH:

18 Second.

19 PRESIDENT SUSKIE:

20 It's been seconded. All those in

21 favor of approval of minutes from our last

22 meeting, say aye.

23 (All ayes.)

24 All those opposed?

25 (No response.)

0113

1 The motion carries.

2 Next on the agenda is a report from

3 Entergy about the proposal they submitted at

4 our last meeting about Section 205 FERC

5 filing rights.

6 MR. LOUDENSLAGER:

7 Excuse me.

8 PRESIDENT SUSKIE:

9 Sorry.

10 Sam? Ben?

11 MR. BRIGHT:

12 Did you want to do the budget? I 13 think it was after Bruce's presentation on

14 ICT. We also have a budget update.

15 PRESIDENT SUSKIE:

16 I apologize.

17 MR. BRIGHT:

18 It will take just a second.

19 PRESIDENT SUSKIE:

20 Okay.

21 MR. BRIGHT:

22 What I've included here was a

23 version of the approved budget. This budget

24 was approved back on December 16th, 2009, in

25 an E‐RSC conference call, I believe. And

0114

1 then what I have here is the budget versus

2 actuals year‐to‐date. This is a ‐‐ so what

3 we're tracking as far as travel expenses,

4 meeting expenses. We haven't accrued any

5 money into our audit yet. That's later ‐‐

6 coming later in the year, but it is budgeted

7 for Patricia Salman. And then SPP

8 administrative, one thing I found out over

9 the last couple of weekst is tha we haven't

10 been real good about getting that part

11 billed, and so we're going to do a catch‐up 12 bill with Entergy on the next one and make

13 sure that stuff gets included, and, also,

14 there's some additional meeting expenses from

15 this year that need to go on there, as well.

16 And then the E‐RSC consultant, which is ESPY,

17 we got that aftere th first of the month, so

18 we'll ‐‐ that will be caught up by the next

19 update, as well.

20 PRESIDENT SUSKIE:

21 Okay. So these are as of ‐‐

22 MR. BRIGHT:

23 As of March 31st.

24 PRESIDENT SUSKIE:

25 ‐‐ March 31st.

0115

1 MR. BRIGHT:

2 Yeah.

3 PRESIDENT SUSKIE:

4 I was hoping ESPY was working for

5 free.

6 MR. BRIGHT:

7 They are so far.

8 PRESIDENT SUSKIE:

9 Okay.

10 MR. BRIGHT: 11 Does anybody have any questions

12 about the budget or that process?

13 PRESIDENT SUSKIE:

14 Any questions about the budget?

15 (No response.)

16 All right. Thank you.

17 Next, we'll go to a report from

18 Entergy about the proposal of ‐‐ from the

19 last meeting.

20 MR. CAMET:

21 Hi. My name is Greg Camet, and

22 I'm ‐‐

23 PRESIDENT SUSKIE:

24 I don't think the mic. is on.

25 MR. CAMET:

0116

1 Hi. My name is Greg Camet. I'm

2 with Entergy, and I'm going to run through

3 right now the amendments to the OATT to

4 address E‐RSC authority over construction and

5 transmission cost allocation. I believe all

6 the red lines to the actual tariff sheets

7 were distributed at the last meeting and by

8 e‐mail after that.

9 Do you want to start with the first 10 slide?

11 There are two categories of

12 amendments. The first addressed cost

13 allocation and provides that the E‐RSC can

14 direct Entergy to make a filing pursuant to

15 Section 205 to change the way transmission

16 upgrade costs are allocated. The second ‐‐

17 the second set of amendments addresses

18 construction plan, and provides the E‐RSC has

19 authority to direct Entergy to add specific

20 projects to the construction plan.

21 Getting into even more detail with

22 respect to the first one, cost allocation.

23 Cost allocation is covered by Attachment T to

24 the Entergy OATT. The high‐level revisions

25 we added there were definitions to address

0117

1 the E‐RSC, the E‐RSC Board and the E‐RSC

2 Members. And the key provision provides that

3 the E‐RSC Board may, after referral to Member

4 state agencies and upon the unanimous vote of

5 all five of the E‐RSC's directors, direct the

6 transmission provider to file, pursuant to

7 Section 205 of the Federal Power Act, changes

8 to the methodology for allocating 9 transmission upgrade costs under this

10 Attachment T.

11 PRESIDENT SUSKIE:

12 Greg, I have a question for you.

13 "After referral to Member state agencies,"

14 I'm just thinking through. You know, what is

15 Entergy's ‐‐ I'd say intent ‐‐ you know, its

16 thoughts on that? For instance, when we do

17 cost allocation voting in SPP, the rep of the

18 of the ‐‐ of each state makes the vote, but

19 it's never a formal proceeding back in the

20 state. For instance, balanced portfolio, I

21 voted in favor of on behalf of the Arkansas

22 Commission with the support of state

23 regulators, but we never had a formal

24 proceeding before the Arkansas Commission.

25 MR. CAMET:

0118

1 I think, in general, that's the

2 idea. I think the referral then comes from

3 the E‐RSC bylaws, which talk about a

4 referring ‐‐ provision that relates to policy

5 statements, how the E‐RSC can develop policy

6 statements after referring the issue to their

7 Member Commissions. And so that's where this 8 language comes from, and, in our mind, at

9 least, it's just a ‐‐ it's just a notice type

10 of requirement. It doesn't ‐‐ it doesn't

11 mean that the individual states would need a

12 formal proceeding in effect. That's

13 something the individual states would decide

14 whether they want anything or not.

15 I think, traditionally, if Entergy

16 is making a change to these provisions, we

17 would have provided notice to the state ‐‐ to

18 the states. And I think the way this is set

19 up is that that notice would now come from ‐‐

20 from the E‐RSC members, but we don't have any

21 notion about what has to happen after that or

22 what preconditions there are ‐‐

23 PRESIDENT SUSKIE:

24 Yeah.

25 MR. CAMET:

0119

1 ‐‐ for you guys to work out with

2 your individual Commissions.

3 PRESIDENT SUSKIE:

4 Commissions, yeah. I think,

5 obviously, each jurisdiction is different as

6 to what they would require. There may be 7 some things that ‐‐ items, you know, Arkansas

8 Commission may want to have a full‐fledged

9 proceeding. There may be some matters, as we

10 have done the entire time we've been a member

11 of the SPP RSC, just represented ‐‐ whether

12 it was myself, Commissioner Honorable or

13 Commissioner Hochstetter or now Byrd, you

14 know, they, with their discretion ‐‐ I think

15 Texas does that, as well, under the SPP RSC.

16 But it, obviously, reports back to the

17 Commission. I was just curious as to what

18 that meant, maybe something could be flushed

19 out.

20 MR. CAMET:

21 Right. And I think the specific

22 provision in the bylaws was Section 9.

23 MR. BOOTH:

24 To avoid confusion, so what we're

25 trying to do is accommodate the SPP bylaws ‐‐

0120

1 (Talking over one another.)

2 UNIDENTIFIED SPEAKER:

3 Microphone, please.

4 PRESIDENT SUSKIE:

5 All right. 6 MR. BOOTH:

7 If what Entergy is proposing to do

8 is to accommodate the E‐RSC bylaws, maybe the

9 simpler way to do that is to eliminate these

10 requirements to just say, E‐RSC Board of

11 Directors may, consistent with its bylaws, do

12 the following. And then to the extent that

13 there were differences between the bylaws and

14 tariff language, you won't have that

15 inconsistency. The conditions would be in

16 the bylaws. You follow what I'm saying?

17 MR. CAMET:

18 Yeah, I do see what you're saying.

19 I think, in general, I mean, that's certainly

20 something we'd be willing to consider. I

21 don't think ‐‐ I think the provision that we

22 pulled this language from relates to policy

23 statements. So the ‐‐ unless the E‐RSC

24 bylaws were changed to add this as it relates

25 to changes in methodology to a filed by

0121

1 requirement, you'd have to add something

2 there if you wanted to pick that up ‐‐ pick

3 that up that way.

4 SECRETARY ANDERSON: 5 I don't ‐‐ and it may be there. I

6 was just looking. I didn't actually see that

7 language in the bylaws. I mean, obviously,

8 it's implied, because we don't ‐‐

9 MR. CAMET:

10 Section ‐‐ I believe it's Section 9

11 on policy statements.

12 UNIDENTIFIED SPEAKER:

13 Section 1.

14 MR. LOUDENSLAGER:

15 In Section 9.

16 SECRETARY ANDERSON:

17 I'm looking at it right now.

18 MR. CAMET:

19 Yeah, this is it. The E‐RSC will

20 get direction in formation of policy

21 statements, which will then be referred to

22 Member state regulatory agencies.

23 SECRETARY ANDERSON:

24 All right.

25 MR. CAMET:

0122

1 Entergy customers. That's where

2 the referral came ‐‐ that referral language

3 came from. 4 MR. BOOTH:

5 I guess the point is, the E‐RSC

6 will do that ‐‐ each E‐RSC member would have

7 that discussion with its state Commission or

8 the City Council before reaching a conclusion

9 at the E‐RSC. So once the E‐RSC votes, there

10 shouldn't be a requirement to go back to the

11 state Commissions to then confirm the vote.

12 MR. CAMET:

13 I think that's ‐‐ I think we're in

14 agreement. I don't think this is a ‐‐ this

15 is a requirement, after the vote, to go back.

16 I think it's before the ‐‐

17 PRESIDENT SUSKIE:

18 See, I read that, the E‐RSC Board

19 of Directors will give direction and

20 formation on policy statements pursuant to

21 that section above, which will then be

22 referred to a state regulatory agency. The

23 way It see tha is, what I do with the E‐RSC

24 within SPP, I go back and notify my

25 Commissioners, you know, notify them, by the

0123

1 way, at last month's or last week's SPP

2 meeting that we voted and approved the cost 3 allocation, and they're, like, thank you for

4 the update. It's just one of the issues I

5 think we've got to resolve. Because it would

6 be odd to me to have a federal tariff tell

7 the Arkansas Commission how to conduct its

8 business.

9 MR. CAMET:

10 Right. And that wasn't our intent.

11 PRESIDENT SUSKIE:

12 Yeah.

13 MR. CAMET:

14 We're not trying to lock you guys

15 into any procedure. I think ‐‐ and maybe one

16 thing that would address our concern is

17 making sure that we're not obligatedt ‐‐ tha

18 notice, that discussion, you guys are going

19 to handle that; that's not ‐‐ that's not on

20 us.

21 PRESIDENT SUSKIE:

22 Maybe that's something we can work

23 on our words.

24 MR. CAMET:

25 Yeah.

0124

1 PRESIDENT SUSKIE: 2 And, clearly, you know, another

3 state Commission may say, I want to have a

4 full‐fledged hearing on it. That's that

5 state's prerogative. Okay.

6 MR. CAMET:

7 And then I guess the ‐‐ one other

8 point, the voting requirement, unanimous

9 voting requirement, that was also picked up

10 from the ‐‐ from the E‐RSC bylaws.

11 Next.

12 Entergy's rights under this

13 proposal. We can file our own cost

14 allocation proposal pursuant to Section 205

15 of the FPA, and this tracks a similar

16 provision in the (inaudible) SPP to file a

17 competed proposal. And then we've also

18 clarified that Entergy can oppose any aspect

19 of a filing, seek rehearing or take whatever

20 action. You know, the idea there being we'll

21 make the filing, but we still want to reserve

22 our right ton explai why we don't necessarily

23 think it's the best idea, and then FERC ‐‐

24 FERC would ultimately resolve it.

25 PRESIDENT SUSKIE:

0125 1 On that, I think that's totally

2 reasonable. Entergy should be able to

3 support or oppose the filing, just like

4 another state Commissioner or whoever can

5 oppose any Entergy filing at FERC. So my

6 opinion of that, it's very reasonable.

7 MR. CAMET:

8 Next.

9 And the second ‐‐ the second set of

10 changes relate to the construction plan, and

11 the relevant set of provisions here are in

12 Attachment K. As with Attachment T, we added

13 definitions for the various entities. One

14 set of provisions ensures thate th E‐RSC

15 Board has added, as part of the normal

16 construction plan development process, and

17 that quotes through a couple of sections,

18 Sections 6.2 and 6.4.

19 The key provision here is Section

20 6.51, which is similar to the provision on

21 transmission cost allocation, and it ‐‐ it

22 has the same "after referral to Member states

23 and upon unanimous vote of all five of the

24 E‐RSC Directors, direct the transmission

25 provider to include facilities or upgrades in 0126

1 the construction plan. And as was discussed

2 at the prior meeting, the idea here is that

3 the facilities would be added to the

4 construction plan rather than starting with

5 the ‐‐ with the ICT's base plan and then

6 coming back to the E‐RSC to get approval to

7 take anything out. And the reason for that

8 were ‐‐ are related to this ‐‐ in our view,

9 make the transmission ‐‐ make the ICT, the

10 transmission provider, and puts us in the

11 position of potentially having ‐‐ having a

12 basen pla that does include all the

13 facilities that we think are necessary to

14 meet whatever NERC standards are in effect at

15 the time.

16 And so the idea ‐‐ the idea here is

17 that the E‐RSC would have the authority to

18 add facilities to the construction plan

19 rather than change the structure between the

20 base plan and the construction plan

21 themselves.

22 PRESIDENT SUSKIE:

23 I have two questions on this one

24 again. Bullet 3 again has the referral to 25 state agencies. I guess that's the issue.

0127

1 We've got to resolve this.

2 MR. CAMET:

3 Right.

4 PRESIDENT SUSKIE:

5 You know, if there's a line in

6 Louisiana that Commissioner Field needs to

7 be ‐‐ put in to help congestion, do I need to

8 have a hearing in Arkansas about whether I

9 need that line? I think that's some of the

10 issues, you know, there ‐‐ that language

11 might need some wordsmithing.

12 Then I go back to the question I

13 asked of Kim last time is, you have the ICT

14 base plan, and then, say, Entergy comes in,

15 in which they have now what the abandonment

16 of note B says, okay, they're the same, but

17 we want to add the following projects. The

18 question then becomes, well, who's vetted

19 whether that's da goo project or not. See my

20 question on that one?

21 MS. DESPEAUX:

22 Can you ask it one more time?

23 PRESIDENT SUSKIE: 24 You need a microphone.

25 So, Kim, I want to clarify my

0128

1 question. My question is: The ICT base ‐‐

2 ICT comes up with a base plan of, say, ten

3 projects, and Entergy then comes up and says,

4 hey, we've abandoned the use ofe not B, and,

5 as a result, we're going to build those ten,

6 plus another ten. Then my question is kind

7 of, how is the process that's independent to

8 ensure those are needed, along those lines?

9 And I've been trying to think, then, at that

10 point, I guess the only authority to say

11 whether there's a need is whether that state

12 has ‐‐ the state it's being built in has

13 jurisdiction over it to even hear it and

14 whether they say there's a need for the

15 facility.

16 MS. DESPEAUX:

17 I think that's right, and if it was

18 not in the ‐‐ if it wasn't in the base plan

19 but it was in the construction plan ‐‐ so if

20 it's not in the base plan, then it would be

21 viewed as a supplemental project. And I

22 think that if there was a debate about 23 whether that was actually needed, certainly

24 FERC would be a venue, but it would also, to

25 the extent there's a licensing ‐‐ like, a

0129

1 certificate needed, we would have to come to

2 the individual retail commissions, as well.

3 PRESIDENT SUSKIE:

4 So then, on the flip side, so that

5 would be a supplemental upgrade. And then on

6 my ‐‐ say, go back to my hometown of North

7 Little Rock, if they needed some upgrades

8 made for their purposes, the cost allocation

9 today, then North Little Rock would pay for

10 it, that upgrade, but it wouldn't appear on

11 your construction plan ‐‐ no, actually, it

12 would.

13 MS. DESPEAUX:

14 It would. Yeah. If, for instance,

15 North Little Rock wanted an upgrade that the

16 ICT had not ‐‐ it wasn't in the ICT's base

17 plan, then it would be a supplemental project

18 that, if North Little Rock committed to, it

19 would go into our construction plan.

20 PRESIDENT SUSKIE:

21 Okay. Okay. So then, ultimately, 22 you could have things in the construction

23 plan not in the base plan, but it's not

24 Entergy wanted to build it; it could be NRG

25 or whoever?

0130

1 MS. DESPEAUX:

2 Yes. Today we have projects, it's

3 my understanding, that are in the

4 construction plan that aren't in the base

5 plan that really are the supplemental type

6 projects, where either the operating

7 companies or another market participant has

8 agreed to fund those.

9 PRESIDENT SUSKIE:

10 Okay. I'm just trying to think

11 through that option, how the process would

12 work.

13 Mr. Newell?

14 And, you know, and I give that as

15 an example of ‐‐ of the challenges. You

16 know, say, you know, Jimmy Field thinks the

17 line between Mississippi and Louisiana needs

18 to be, you know, built or upgraded, you know,

19 that sort of thing, so why would that need to

20 come back to the Arkansas Commission, you 21 know, along those lines, but ‐‐

22 MS. DESPEAUX:

23 And I think one of the reasons,

24 and, certainly, one of the things we were

25 focused is on that because, under the system

0131

1 agreement, 230 kV and above would be

2 equalized and could affect customers in all

3 the operating companies' jurisdictions.

4 PRESIDENT SUSKIE:

5 Clearly, the costs are ‐‐ I'm just

6 trying to think through why we need to have a

7 proceeding back in Arkansas.

8 MS. DESPEAUX:

9 Oh, I'm sorry. No. You mean ‐‐

10 you're back here on the referral language.

11 PRESIDENT SUSKIE:

12 Yeah.

13 MS. DESPEAUX:

14 I think that we definitely need to

15 work on the, ‐‐

16 PRESIDENT SUSKIE:

17 Wordsmithing.

18 MS. DESPEAUX:

19 ‐‐ yeah, wordsmithing the referral 20 language. Yeah.

21 PRESIDENT SUSKIE:

22 Mr. Newell?

23 MR. NEWELL:

24 Greg, two quick questions on this.

25 In the second to last bullet, you say the

0132

1 E‐RSC Board can direct the transmission

2 provider to include facilities in the

3 construction plan, and then in the last one,

4 it says, Entergy may oppose. If the RSC

5 proposed the addition of a facility and

6 Entergy opposed it, presumably, there would

7 be some process to figure that out. I'll get

8 to that in a second. But while whatever that

9 dispute resolution process is moving forward,

10 is the process in the construction plan and

11 being prosecuted, or is it held out of the

12 construction plan while the disagreement is

13 being resolved?

14 MR. CAMET:

15 Gary, I don't know that we really

16 gave that a lot of thought, but I can get

17 back to you on that. I think this provision

18 actually ‐‐ 6.52, I think it relates more of 19 reserving rights to the extent that this

20 issue were to come up in a specific retail

21 proceeding or a FERC proceeding. And so I

22 don't think we really addressed the issue

23 that you raise there. And, obviously, in the

24 205 filing context, you know where it's all

25 going to be resolved. It's going to be

0133

1 resolved at FERC, and the effective dates for

2 205 filings and changes to the OATT would

3 control when it goes into effect. We haven't

4 addressed that, so I'd have to get back to

5 you on that.

6 MR. NEWELL:

7 Yeah. This is ‐‐ there's two ‐‐ I

8 sort of had two discrete questions. One is,

9 where would the dispute be resolved, or,

10 actually, what's the mechanism; the second

11 is, while that process is underway, is the

12 project in the construction plan and being

13 prosecuted, or is it held back?

14 MR. CAMET:

15 Right. Those are fair questions,

16 and we'll get back.

17 MR. NEWELL: 18 Thanks.

19 MR. BOOTH:

20 Are there any circumstances that

21 you're aware of where SPP and Entergy have

22 proposed two different projects to resolve

23 the same issue, same reliability issue?

24 MR. CAMET:

25 Yeah. I'd defer to Charles on that

0134

1 one. I'm not ‐‐ I'm not sure.

2 MR. LONG:

3 There have been some occasions

4 where we proposed two different projects.

5 And, actually, the base plan and construction

6 plan this year, we were looking at a project

7 in lieu of the two different projects that we

8 had in the initial ‐‐ in the initial

9 construction plan, base plan, and after we

10 studied that a little further, we ‐‐ we went

11 back and adopted what the ICT had suggested

12 in lieu of the one we were pursuing.

13 MR. BOOTH:

14 Thank you.

15 Mr. Chairman, do you think there

16 might be circumstances where the E‐RSC would 17 want the authority to remove a project from

18 the construction plan?

19 PRESIDENT SUSKIE:

20 I mean, I guess that could always

21 happen, but if the ICT and Entergy are in

22 agreement, one of them would.

23 MR. BOOTH:

24 What if they're not? If there's

25 two competing projects, then ‐‐

0135

1 PRESIDENT SUSKIE:

2 Oh, I see what you're saying.

3 Something to consider.

4 MS. DESPEAUX:

5 I would have ‐‐ this is Kim ‐‐ and

6 in terms of removing a project from the

7 construction plan, I would have great

8 concerns about that since we are the

9 transmission provider and are the one liable

10 under the NERC standards, the reliability

11 standards in that. I think, if there was a

12 disagreement, certainly, then that would be

13 something, as we talked about earlier, that

14 may not be in the base plan that would be

15 considered a supplemental upgrade. But I 16 would ‐‐ I would have serious concerns about

17 allowing projects to be pulled out that we

18 think are needed for reliability.

19 PRESIDENT SUSKIE:

20 And would that be ironic if this

21 group wanted less transmission. But she

22 makes a good point. And I think, at that

23 point, if something like that happened,

24 that's where I think we'd probably have this

25 forum.

0136

1 MS. DESPEAUX:

2 Yes.

3 PRESIDENT SUSKIE:

4 Have a meeting on it, a lot of

5 input, and then we can have a policy

6 statement vote and say, hey, Entergy, we vote

7 unanimously ‐‐

8 MS. DESPEAUX:

9 You're overbuilding.

10 VICE‐PRESIDENT FIELD:

11 Yeah, we shouldn't build this.

12 We'd all look forward to that day.

13 CHAIRMAN PRESLEY:

14 Great timing. 15 PRESIDENT SUSKIE:

16 Any other questions from the

17 stakeholders?

18 Yes?

19 MS. KING:

20 This is Katherine King on behalf of

21 Louisiana Entergy Users Group. So under this

22 process, if the E‐RSC directs an addition to

23 the construction plan and that upgrade is not

24 included in the base plan, it's a

25 supplemental upgrade. So does there have to

0137

1 be a decision made on who's going to pay for

2 that upgrade before its added to the

3 construction plan, or how do you see that

4 working?

5 PRESIDENT SUSKIE:

6 That's a good question.

7 MR. CAMET:

8 I would think the normal ‐‐ the

9 normal cost allocation provisions under

10 Attachment T would control, but we can think

11 about that more and get back to you.

12 PRESIDENT SUSKIE:

13 That is a good question, though, 14 whether ‐‐ is it economic, or is it

15 reliability? And, of course, a lot of people

16 say there's not much difference between the

17 two, but...

18 SECRETARY ANDERSON:

19 I think that really is an issue

20 that we'll be discussing when we get into

21 cost allocation, I guess, in May.

22 PRESIDENT SUSKIE:

23 Yeah, absolutely.

24 VICE‐PRESIDENT FIELD:

25 At this stage, I think we build it;

0138

1 the electrons will come.

2 PRESIDENT SUSKIE:

3 Any other questions?

4 (No response.)

5 All right. Thank you very much.

6 MR. CAMET:

7 Thanks.

8 PRESIDENT SUSKIE:

9 And I figure this ‐‐ we'll probably

10 get into this with the next section. This

11 will be a type deal that we will address at

12 our May meeting, and one thing I would like 13 to ask Entergy and the Working Group to work

14 on the language issue about the referral back

15 to the state Commission, maybe, whatever that

16 state or jurisdiction considered, New

17 Orleans, their procedure would be. So, you

18 know, obviously, you know, we could vote on a

19 base plan ‐‐ or a conduction plan and say,

20 hey, we agree with it; go forth and do great

21 things. Well, it's still got to go to the

22 Louisiana Commission, where it's being built,

23 or Arkansas Commission, depending on if the

24 state must approve it and chooses to approve

25 it.

0139

1 All right. Thank you.

2 So if you could add that to an

3 action item. Thank you.

4 Sam?

5 MR. LOUDENSLAGER:

6 Sam Loudenslager, Arkansas. Yeah.

7 I just want to make sure that the E‐RSC

8 understands that the Working Group is also

9 working on tariff language, and one of the

10 issues that we're ‐‐ we haven't started

11 really discussing in earnest yet is the issue 12 of exactly how much ‐‐ "authority" may be the

13 right word; I'm not sure ‐‐ that the E‐RSC

14 would like to have. And as we kind of work

15 through that at the Working Group level,

16 we'll certainly be bringing that back to you

17 guys in May,t and tha discussion will also

18 include, not just the Working Group, but

19 stakeholders, as well. And it's my intent,

20 anyway, to bring that to you guys in May.

21 So I don't know if this is a good

22 time or not, Chairman, but if y'all want to

23 start having that conversation this morning,

24 I'd look forward to any input that y'all

25 could provide us with.

0140

1 PRESIDENT SUSKIE:

2 Let's start and ask Entergy, is

3 there any other authority that y'all could

4 foresee that would be reasonable for the

5 E‐RSC to have?

6 MS. DESPEAUX:

7 I will say these are the two items

8 that we heard, you know, early on, and

9 that ‐‐ so these are the two that we focused

10 on, and we haven't identified anything 11 additional to this point. We're willing to,

12 you know, certainly listen, but, at this

13 point, we haven't identified ‐‐ we thought

14 these two covered the fundamental issues that

15 we'd have discussions about.

16 PRESIDENT SUSKIE:

17 But, you know, I go back to some of

18 the conversations where some of the criticism

19 of the ICT was that it was not doing enough

20 in regards to tariff language filing and so

21 forth, and I'm wondering if the E‐RSC could

22 be a good vehicle to address some of those

23 items.

24 Do you have any thoughts on that,

25 Bruce?

0141

1 MR. REW:

2 No. I mean, that's consistent with

3 what we were thinking, you know, your

4 comments.

5 PRESIDENT SUSKIE:

6 Because I know ‐‐ I believe it was

7 SPP's ‐‐ or the ICT's recommendation that

8 y'all did not want 205 filing rights.

9 MR. REW: 10 That's correct. The ICT did not

11 think it's appropriate for us to have 205

12 filing rights.

13 PRESIDENT SUSKIE:

14 And, as a result, y'all thought we

15 should have the 205 filing rights.

16 MR. REW:

17 There's a recommendation for that,

18 and we supported that.

19 PRESIDENT SUSKIE:

20 And then, in y'all's thought, 205

21 filing rights, to what extent do you think

22 those rights should be? Should they just be

23 these two items, or should they be broader?

24 MR. REW:

25 I think we're probably neutral on

0142

1 that.t I can' give a specific answer on

2 that, but it's probably neutral. It's up to

3 the E‐RSC ‐‐

4 PRESIDENT SUSKIE:

5 Sure.

6 MR. REW:

7 ‐‐ to make a decision on that.

8 PRESIDENT SUSKIE: 9 I would ask that, as the ICT, if

10 you could, you know, offer some input to the

11 Working Group to think ‐‐ and even

12 stakeholders, hey, these are issues that we

13 want changed with the tariff that haven't

14 been done or should have ‐‐ need to be done

15 to help remedy some problem with this

16 process. And then, as a result, the

17 stakeholders can even provide and say, these

18 are the type things we look like have a

19 vehicle to the E‐RSC. So there's a concern

20 about the tariff; a stakeholder can raise it.

21 Then, at that point, the level would have to

22 be ‐‐ assuming, you know, that we would have

23 these additional filing rights, you'd have to

24 unanimously have the E‐RSC say, hey, we

25 support this change to the tariff, and then

0143

1 Entergy would file at FERC, and if Entergy

2 disagreed with that, they could obviously

3 oppose it or do other things. And I don't

4 know what that is. I just offer that out.

5 Before we go to this, don't want to limit too

6 much. Because correct my recollection, but

7 there ‐‐ some of the stakeholders have been 8 critical that the ICT has not filed things at

9 FERC; is that correct? I see heads nodding

10 in the room. So I'll offer that.

11 MS. DESPEAUX:

12 Can I just ‐‐ that was ‐‐ we

13 actually said over the longer term that we

14 certainly would be willing to have the ICT

15 become the transmission provider, and that's

16 what happens when they have filing rights,

17 and we're certainly ‐‐ we felt like that the

18 appropriate time to look at that was after we

19 knew whether we were going to the RTO versus

20 the staying with the modified ICT over the

21 longer term. But we certainly indicated we'd

22 be willing to consider having the ICT be the

23 transmission provider, which means they would

24 have the 205 rights and the tariff. I mean,

25 the tariff would be theirs.

0144

1 PRESIDENT SUSKIE:

2 Just a thought. I throw that out

3 there. As we develop what's going to be

4 filed at FERC for an enhanced ICT, that, you

5 know, maybe we should ‐‐ don't limit

6 ourselves if it's needed. 7 Sam, did you have a question?

8 MR. LOUDENSLAGER:

9 No. I was just going to provide

10 you guys with a little more information on

11 what things, at least, have been tossed out

12 in terms of filing rights. Okay? And I

13 don't know if that's helpful for you today or

14 not, so...

15 PRESIDENT SUSKIE:

16 Sure.

17 MR. LOUDENSLAGER:

18 One way to approach it would be

19 filing rights on all matters related to the

20 ICT, everything. One would be similar to the

21 same rights that the SPP RSC has right now on

22 fairly narrow areas that, not insignificant,

23 but certainly not as broad as the previous

24 approach. Filing rights related to all

25 matters tied to the ICT and matters related

0145

1 to cost allocation and participant funding

2 and rights on all Entergy OATT matters.

3 So, I mean, literally, we're

4 running the gamut. That's kind of the stream

5 right now. So a lot of what you'll be 6 hearing me say today is, if you have guidance

7 to provide us with, do so now. I mean, we'll

8 certainly bring something back to you. As

9 much as we can get accomplished between now

10 and May, I think we're all better off, so

11 that's my pitch.

12 PRESIDENT SUSKIE:

13 My advice would be stakeholders

14 present that to y'all and if any individual

15 Commissioner has an idea of additional

16 possible filing rights under this, to submit

17 it to the Working Group, as well.

18 MR. LOUDENSLAGER:

19 Okay.

20 CHAIRMAN PRESLEY:

21 Sam, has there been any ‐‐ when you

22 discussed 205 rights on all matters related

23 to the ICT, is there a push‐back by that

24 or ‐‐

25 MR. LOUDENSLAGER:

0146

1 We hadn't even made the pitch

2 publicly. This is ‐‐ this is breaking news.

3 I mean, this is just kind of ‐‐ the Working

4 Group has just ‐‐ we've gotten it tossed out 5 in front of us, and we're trying to figure

6 out what direction to go. And my desire was

7 to hope that we'd hear some feedback from you

8 folks on what direction you'd like for us to

9 go. You know, if broader is better, we'll

10 start broader. If narrower is better, we'll

11 start narrower. And I think I know the

12 answer to that question, but...

13 PRESIDENT SUSKIE:

14 Okay. Any other questions,

15 comments on the 205 issue?

16 (No response.)

17 All right. Thank you very much for

18 that presentation. Next, we'll go to the

19 Working Group.

20 Sam or Kristine?

21 MR. LOUDENSLAGER:

22 Yeah. I'm going to hand it off to

23 Kristine to talk about state siting issues.

24 MS. SCHMIDT:

25 This is Kristine Schmidt with ESPY

0147

1 Energy Solutions. And one of the issues that

2 came up in the last meeting was the question

3 of what are the different state 4 jurisdictional requirements for siting new

5 transmission or upgrades in the respective

6 states. Everybody had a sense of what was

7 going on in their own state, but they wanted

8 a broader perspective. So working with the

9 Commission Staff members that were

10 identified, this presentation ‐‐

11 Ben, if you can go to the second

12 page.

13 We're going to start with

14 Louisiana, because it's the simplest. There

15 is a regulatory authority and a siting

16 approval process, a certification process;

17 however, Louisiana, to date, has not

18 exercised that authority. Now, there's an

19 open docket in Louisiana right now reviewing

20 merchant transmission, construction and

21 ownership. And this may change going

22 forward, but, to date, again, there has not

23 been a certification process that has been

24 formalized that the Louisiana Service ‐‐

25 Public Service Commission has pursued. So in

0148

1 terms of regulatory barriers, there are very

2 few in Louisiana as a state. 3 Questions?

4 SECRETARY ANDERSON:

5 Who determines, then, where the

6 line goes?

7 VICE‐PRESIDENT FIELD:

8 Entergy, usually, or CLECO, they'll

9 come in and tell us they want to build it,

10 and we're so glad to get it. We're just both

11 ready to go. I don't think we've ever turned

12 down any.

13 SECRETARY ANDERSON:

14 Okay.

15 PRESIDENT SUSKIE:

16 So those delays are not your fault.

17 VICE‐PRESIDENT FIELD:

18 Not our fault.

19 MS. SCHMIDT:

20 The review is actually when they

21 put it in rate base.

22 Going to the next page, the City of

23 New Orleans. And there haven't been a whole

24 lot of transmission upgrades; however, they

25 do have the process in place.

0149

1 And I apologize. I need to give 2 credit to the folks that worked on this.

3 Paul Zimmering was the one who provided us

4 the Louisiana. And Jeff Wilkerson ‐‐

5 Wilkinson, rather, provided us with

6 information on New Orleans and identified

7 that the transmission would be determined 60

8 kV and higher, and it require a Certificate

9 of Public Need and Convenience, and the City

10 Council would actually have to approve it.

11 And, generally, and in broad brushes, the

12 allocation considers load‐serving needs,

13 environmental impact, economic impact and

14 reliability. And there is a requirement that

15 they actually have to rule within one year;

16 however, depending on the size of the

17 project, that they would anticipate that that

18 may take a little longer time, so for good

19 cause, they will extend their deadline.

20 Moving on to Mississippi. And

21 Vernon Jones helped us on this one. And,

22 generally, the transmission lines are defined

23 as 115 kV and higher; however, there have

24 been occasions where 69 kV lines could be

25 deemed transmission, either for upgrades or

0150 1 for new transmission. And Facilities

2 Certificates are required for these projects.

3 And, again, the same type of ‐‐ the

4 application considers load‐serving needs,

5 environmental impact, economic impact and

6 reliability; however, there are no deadlines

7 that are in place; however, Mississippi could

8 impose some deadlines if they wanted to as

9 the Commission tried to move things forward,

10 but it is up to them as to how they want to

11 proceed with it.

12 Moving on to the next page. In

13 Arkansas, Lori Burrows was helpful on this

14 one for us. There are two types of projects.

15 The major project are anything that are 100

16 kV and higher and they are longer than

17 10 miles in distance, or they're 170 kV and

18 more than one mile in distance. And, again,

19 the Certificate of Environmental Capability

20 and Public Need is required for those types

21 of major projects. For smaller projects, a

22 Certificate of Convenience & Necessity is

23 also required. Again, similar types of

24 considerations are made in evaluations that

25 are made for the applications. Again, no 0151

1 deadline here in Arkansas, but, again, the

2 Public Service Commission could actually pose

3 or try to move something in a time frame

4 depending on what kind of flexibility they

5 wanted to put in place and what kind of

6 review they wanted to have in place.

7 And, finally, Texas. And this is a

8 little bit more complicated. There are two

9 parts to the Texas transmission siting

10 process. And Brian Almond was, again, very

11 helpful to us on this one. Transmission

12 projects are major projects that are 60 kV

13 and higher. And what's required is a

14 Certificate of Convenience & Necessity. And

15 they are actually more granular in terms of

16 what they look for in their applications,

17 including some of the renewable objectives in

18 the state, as well as some constraints,

19 costs, et cetera. There are no deadlines for

20 these ‐‐ for the normal types of projects

21 that go through, and the Texas Commission

22 does approve these.

23 And if you'd flip to the next page,

24 the more challenging one ‐‐ transmission 25 siting projects are those that are under the

0152

1 CREZ, and those are the newer ones that are

2 actually the competitive renewable energy

3 zones that the State of Texas has identified

4 and has actually laid out. So transmission

5 projects that are 60kV and higher that are

6 accessing those CREZ zones would have to go

7 through this process, and a Certificate of

8 Convenience & Necessity is required.

9 Considers the same issues that the other new

10 lines would consider; however, the biggest

11 distinction here is that the rulings have to

12 be made within 100 days ‐‐ 180 days, and if

13 there is no decision, then there is an

14 approval that goes into effect by operation

15 of law. So the CREZ zoning ‐‐ I'm sorry ‐‐

16 the CREZ siting is much more stringent than

17 the normal types of siting that's in place.

18 So those ‐‐ that's basically our

19 summary. In the ‐‐ in our packet and also

20 posted on the Web site is a matrix that

21 provides a little bit more description and

22 details. I ‐‐ you know, one of the issues is

23 always, you know, how much is transmission 24 siting a barrier to transmission, and, quite

25 frankly, given the process that's out here

0153

1 and that's been laid out, you don't see

2 anything that's abnormal to transmission

3 siting that you may see in other states and

4 other regions. Back to, you know, like we

5 were saying earlier, Louisiana is probably

6 the easiest place to get your transmission

7 cited.

8 So any questions or follow‐up

9 issues that you'd like us to take on?

10 PRESIDENT SUSKIE:

11 Any questions?

12 (No response.)

13 Very, very helpful. And I notice

14 that you point out how the Arkansas

15 Commission is looking at transmission riders

16 currently.

17 MS. SCHMIDT:

18 Absolutely. And I think all the

19 Commissions are taking some form of looking

20 at some alternatives. I think the

21 interesting one in particular is merchant

22 transmission. To the extent that a 23 transmission line is determined to be needed

24 in some functionality, whether it's through

25 the SPP or some other entity determines or ‐‐

0154

1 you know, the example earlier, North Little

2 Rock. If they want to build their own, the

3 question then becomes could somebody else

4 come in and build it and then turn over the

5 operation and control of it to another

6 entity. So I believe Arkansas, you have

7 something in your statutes that allow for

8 merchant transmission, but it's really

9 narrowly defined and probably not best

10 defined. And then, in Louisiana, of course,

11 they have that open docket looking at

12 merchant transmission. So there could be a

13 opportunity for looking at alternative ways

14 of getting transmission than just the

15 traditional ways.

16 PRESIDENT SUSKIE:

17 Any other questions? Stakeholders?

18 Ms. Burrows?

19 MR. WILSON: Dave Wilson. If a

20 stakeholder or group of stakeholders thought,

21 as an example, the Arkansas methodology ought 22 to be the same as Louisiana, is the E‐RSC

23 Working Group the forum for that sort of

24 discussion, or should we just go the normal

25 political process?

0155

1 PRESIDENT SUSKIE:

2 Say that again. What's the

3 question?

4 MR. WILSON:

5 If a stakeholder, as an example, in

6 Arkansas thought that the Arkansas siting

7 methodology ought to be as simple as the

8 Louisiana siting methodology, would the E‐RSC

9 Working Group be a foreman to talk about

10 that ‐‐ forum to talk about that, or should

11 that stakeholder proceed in the normal

12 political process?

13 PRESIDENT SUSKIE:

14 I mean, at least, from Arkansas, we

15 could certainly discuss it here, but I think,

16 ultimately, that's our legislature's

17 decision, and, you know, the Commission's

18 decision.

19 MR. WILSON:

20 Well, I dagree. An I didn't ‐‐ I'm 21 not so sure I agreed with the

22 characterization of the status of things in

23 Arkansas, but ‐‐ thank you very much.

24 PRESIDENT SUSKIE:

25 Sure. I mean, so when you say,

0156

1 "discussion," what's the thought? To bring

2 something here in the forum that should align

3 them or keep them similar?

4 MR. WILSON:

5 Get rid of that CECPN, to begin

6 with, from 1973.

7 PRESIDENT SUSKIE:

8 I think the Arkansas Supreme Court

9 is reviewing that right now about a Turk

10 plant in southwest Arkansas. It's funny.

11 We've been planning a briefing on CECP and

12 statute which, for those that ‐‐ in the room,

13 the Arkansas Supreme Court is currently

14 hearing the appeal from the Turk plant, and

15 so we decided to put off that briefing until

16 we see what the Supreme Court tells us it

17 says. It's a good point.

18 MS. BURROWS:

19 I just wanted to clarify. This is 20 my mistake, Kristine, for not catching it

21 when I reviewed this. You sent it to me

22 before. For the CECPN, which you were

23 referring to, that law does actually have a

24 timing issue. It used to be 90 days the

25 Commission had to commence a hearing. Now

0157

1 it's 180 days on any application, and then

2 they have to issue a decision 60 days after

3 the hearing concludes; however, unlike Texas

4 and the CREZ regions, if the Commission

5 doesn't follow that, it doesn't automatically

6 grant the CECPN application. And I'd be more

7 than happy to talk to you about the CECPN

8 law, as the attorney arguing that at the

9 Supreme Court, so...

10 MS. SCHMIDT:

11 What I'll do is, I'll update that,

12 and we'll get that re‐posted on the Web site

13 ‐‐ the SPP Web site with that.

14 SECRETARY ANDERSON:

15 One note in your chart about the

16 timing for rate base is that, in Texas, once

17 a line is energized, it's conditional. It's

18 conditionally put into rates. In other 19 words ‐‐ in other words, every year ‐‐ every

20 year, all new additions are added into rates

21 immediately. They don't have to come in for

22 a separate proceeding in order to get ‐‐ you

23 don't have a prudence review on the cost

24 before it goes into rate base.

25 MS. SCHMIDT:

0158

1 Is that because of the formula

2 rates that are in place?

3 SECRETARY ANDERSON:

4 I'm sorry?

5 MS. SCHMIDT:

6 Is that because there's a formula

7 rate in place or ‐‐

8 SECRETARY ANDERSON:

9 Yes.

10 MS. SCHMIDT:

11 Okay. I'll make that correction,

12 too.

13 SECRETARY ANDERSON:

14 And, ultimately, the prudence issue

15 and other issues are ‐‐ it's all reconciled

16 in a rate case when they come in for a rate

17 case. But in the meantime, it goes in. 18 MS. SCHMIDT:

19 Okay. I'll make that correction.

20 Thank you.

21 PRESIDENT SUSKIE:

22 All right. Any other questions,

23 comments?

24 (No response.)

25 All right. Next?

0159

1 MR. LOUDENSLAGER:

2 Ten minutes before lunch.

3 PRESIDENT SUSKIE:

4 So can you bite off onec topi in

5 ten minutes, or do we need to break for

6 lunch?

7 MR. LOUDENSLAGER:

8 I think I can. After our last ‐‐

9 after the last E‐RSC meeting, it occurred to

10 me that the ‐‐ it would probably be a good

11 idea to begin to gather on a very regular

12 basis the E‐RSC Working Group and also gather

13 together with the stakeholders on a very

14 regular basis. So what we've done is, we've

15 established a series of dates on the calendar

16 where we will be meeting, and because of 17 something that happened yesterday, I'm going

18 to ask for input from the stakeholders,

19 not ‐‐ just come up to me later, and we can

20 talk about it, but...

21 So after the March meeting of the

22 E‐RSC, the Working Group met on April the ‐‐

23 I can't read that ‐‐ the 7th and then ‐‐

24 behind closed doors just to kind of gather

25 our thoughts and start going through some of

0160

1 the additional enhancements and talking about

2 the initial set of enhancements. Then, on

3 the 8th, we met with the stakeholders, and I

4 think both days were very productive

5 meetings. They were from my perspective,

6 anyway. And so the way the schedule works

7 is, within a ‐‐ probably about two weeks

8 prior to the next scheduled E‐RSC meeting,

9 the Working Group and the stakeholders will

10 gather to meet. Because we're on such a fast

11 track, we're trying to get a lot of work

12 done. That gives us a couple of weeks to try

13 to finalize work product for you folks and

14 get it to you in a timelye basis befor the

15 next face‐to‐face meeting. And so our next 16 face‐to‐face meeting is next Thursday and

17 Friday in Dallas. After that, we meet again

18 face‐to‐face on May the ‐‐

19 MR. BRIGHT:

20 17th.

21 MR. LOUDENSLAGER:

22 ‐‐ 17th and 18th. I anticipate ‐‐

23 the Arkansas Commission set a hearing for the

24 17th that I am ‐‐ expect that a number of

25 the stakeholders will be in attendance. So

0161

1 if the stakeholders would like to consider

2 moving that face‐to‐face from Dallas to

3 Little Rock, let me know during the lunch

4 hour so we can get that sorted out before

5 close of business today. And then we have

6 another face‐to‐face in ‐‐

7 Ben, do we have another one after

8 the one in May?

9 MR. BRIGHT:

10 No.

11 MR. LOUDENSLAGER:

12 Okay. So you say, okay, so what?

13 Well, every Friday in those weeks where we're

14 not meeting with you folks or meeting 15 together face‐to‐face, we have a conference

16 call just to try to make sure that everybody

17 is on track with whatever tasks they have.

18 And that's closed for the Working Group

19 members only.

20 So my point is, we're trying to get

21 active participation by all the stakeholders

22 in face‐to‐face settings. My experience has

23 been is that always works out a lot better in

24 terms of building relationships. And the

25 other thing, at our first face‐to‐face, we

0162

1 had very good attendance from all the

2 stakeholders. Entergy was there and was very

3 helpful.

4 At our next face‐to‐face, one of

5 the topics that we're going to start trying

6 to get a better handle on is how Entergy

7 defines and how they evaluate the topic of

8 their flexible needs. Another topic that

9 we've got teed up for face‐to‐face is

10 probably going to be the weekly procurement

11 process. I'm ‐‐ personally, I'm still

12 struggling with that process, and it's my

13 understanding that it has been modified a 14 little bit to include automatic generation

15 control as part of it, and I just need to

16 better understand that. But I'm sure the

17 rest of the Working Group would find that

18 helpful, as well.

19 So, administratively, that's kind

20 of the way things are going. At our last

21 face‐to‐face, the Working Group put together

22 a series of data requests to Entergy to

23 specific ‐‐ and to other specific

24 stakeholders and had asked for a responsive

25 and very quick turnaround, and for the most

0163

1 part, that happened. Ourn pla is to ‐‐ to

2 the extent that the responses aren't ‐‐ don't

3 include any confidential information, our

4 intent is to paste those responses on the Web

5 site so that everybody has access to the

6 responses.

7 Let's see. Okay. So that's kind

8 of where the ‐‐ how the Work Group is moving

9 forward with the stakeholders and welcome any

10 suggestions or questions that you might have.

11 You can stop me in the hall, too, today.

12 PRESIDENT SUSKIE: 13 I'd like to ask questions of the

14 stakeholders, your thoughts on how those

15 face‐to‐face discussions are going with the

16 Working Group.

17 Jennifer?

18 I'm shocked. She's got a question

19 or a comment.

20 MS. VOSBURG:

21 The meetings that we had so far

22 have been very good, and, you know, I know

23 the last one probably had a little less

24 participation just because of the very short

25 notice to get over there. I know I've asked

0164

1 before ‐‐ there are times we just can't get

2 there, that if we could have the materials,

3 it would help the discussion, especially with

4 the people on the phone. I agree with Sam.

5 It's always best to be there in person. We

6 do our best, but for those who just can't

7 make it, that would be best. But I think

8 they're going good. We're trying not to have

9 meeting fatigue. The more that we can set

10 them up in kind of conjunction with meetings,

11 like you're doing with the Arkansas hearing 12 and the ITC meetings, the better off we'll

13 be.

14 PRESIDENT SUSKIE:

15 And then about the WebEx, Ben could

16 you check into that?

17 MR. BRIGHT:

18 I will.

19 PRESIDENT SUSKIE:

20 Okay. Thanks.

21 MR. LOUDENSLAGER:

22 As somebody that attends a lot of

23 meetings, as Paul will attest ‐‐ I attend

24 them in person and ‐‐ because when I try to

25 do them over the phone, it is ‐‐ it is

0165

1 impossible. And I appreciate a comment I

2 heard from a wise man named Ricky Bittle

3 once, who said,t if you can' hear, you should

4 have been here, so...

5 PRESIDENT SUSKIE:

6 That sounds like Ricky.

7 MR. LOUDENSLAGER:

8 Comments from other stakeholders?

9 PRESIDENT SUSKIE:

10 Anybody else? 11 Kim?

12 MS. DESPEAUX:

13 I will just say that we actually

14 found the Working Group very helpful in terms

15 of being able to have ‐‐ you know, understand

16 better some of the issues and maybe better

17 articulate some of our issues so that people

18 understood them. And, also, it's helpful in

19 terms of figuring out what's going to be

20 coming up at this Commission so we can be

21 better ‐‐ or at this meeting so that we can

22 be better prepared, so we very much

23 appreciate being included in those

24 discussions.

25 PRESIDENT SUSKIE:

0166

1 Any others?

2 (No response.)

3 Any Commissioners?

4 Jimmy?

5 VICE‐PRESIDENT FIELD:

6 I just wanted to mention, although

7 we passed over the transmission issue, we are

8 really concerned about transmission. We are

9 talking to Entergy and CLECO about the 10 possible transmission rider or some way to

11 ensure them that they get great recovery for

12 any investments in transmission. So I just

13 wanted to let everybody know that.

14 MR. LOUDENSLAGER:

15 Thank you.

16 PRESIDENT SUSKIE:

17 Anything else?

18 (No response.)

19 One thing ‐‐ since we're talking

20 about meeting times, we'll talk about this at

21 the end. A couple of the Commissioners have

22 brought up that, currently, we're planning in

23 July a meeting in Houston when the SPC meets.

24 That's the same week as NARUC, and it would

25 be somewhat problematic going there ‐‐ from

0167

1 Sacramento to Houston. So one thing we're

2 considering ‐‐ we'll probably talk about it

3 at lunch or so forth ‐‐ is not having that

4 meeting in July, considering that, two weeks

5 later, we have the Annual Transmission

6 Summit. We may not meet in July; instead,

7 have the Transmission Summit. Just something

8 to throw out to think about, so... 9 Any other questions for Sam on that

10 topic?

11 (No response.)

12 My stomach is telling me I'm

13 hungry, so let's break for lunch. And, Ben,

14 if I'm correct, lunch is right next door.

15 MR. LOUDENSLAGER:

16 When do we regather?

17 PRESIDENT SUSKIE:

18 .1 o'clock

19 MR. LOUDENSLAGER:

20 Thank you.

21 PRESIDENT SUSKIE:

22 1 o'clock.

23 (Recess.)

24 PRESIDENT SUSKIE:

25 We'll continue with item No. 7 on

0168

1 the agenda, Sam Loudenslager with the E‐RSC

2 Working Group.

3 I see him looking for a microphone.

4 MR. LOUDENSLAGER:

5 Before I go through the

6 presentation ‐‐ and for the folks in the

7 room, you don't have my presentation. It 8 will be posted sometime today or tomorrow.

9 But at the last E‐RSC meeting, there were a

10 couple of questions that the Commissioners

11 asked, and I just wanted to go over the

12 responses that we got.

13 This first one, I think,

14 Commissioner Field asked, and y'all will have

15 to look on the screen. And the question was:

16 Have you ever refunded moneys to someone

17 that's upgraded on the system; and, if so,

18 when and to whom? I got this response last

19 night, so I haven't spent much time with it.

20 I can read it to you.

21 "Entergy's understanding is that

22 this question asks whether Entergy has

23 provided financial compensation under

24 Attachment T to the Entergy OATT to

25 third‐party transmission customers for

0169

1 supplemental upgrades that are later

2 determined to be necessary to grant new

3 transmission service or maintain reliability

4 and existing service. Since the ICT went

5 into effect in November of 2006, three sets

6 of supplemental upgrades have been funded by 7 third parties. Two of the three sets of

8 upgrades are currently being constructed and

9 are not in‐service and, therefore, are not

10 eligible yet for financial rights payments.

11 While a portion of the third set of upgrades

12 is in‐service, no payments of financial

13 rights have been made to this point."

14 So, Commissioner Field, I think

15 that was responsive to your question.

16 VICE‐PRESIDENT FIELD:

17 It is. No payment has been made.

18 MR. LOUDENSLAGER:

19 The reason I'm going over these

20 two, in particular, since y'all asked for it,

21 if y'all have got any follow‐up.

22 PRESIDENT SUSKIE:

23 I've got a follow‐up. So ‐‐ and I

24 know supplemental upgrades fall under

25 Attachment T; am I correct there? There's

0170

1 been a lot of issues where stakeholders ‐‐

2 and I know they did ‐‐ stated it in the

3 Arkansas docket that's going to go to the

4 cost allocation questions ‐‐ but that,

5 essentially, what's been said by some, there 6 have been no upgrades under Attachment T, and

7 I know there's obviously been three based

8 upon the response. Who did those three

9 upgrades? Who paid for those, I guess ‐‐

10 paid those, or whose projects were they?

11 MS. DESPEAUX:

12 Wait. Greg, do you know? Okay.

13 Wait. I'll pass it to Greg.

14 The other thing I wanted to point

15 out is the Entergy operating companies have

16 also done supplemental upgrades, but we

17 understood Commissioner Field to be focused

18 on the third parties who have done it, but

19 I'll pass it to Greg.

20 PRESIDENT SUSKIE:

21 But when you look at supplemental

22 upgrades to about 230, that's really the

23 system.

24 MS. DESPEAUX:

25 Yeah.

0171

1 PRESIDENT SUSKIE:

2 And so it's really still Entergy.

3 MS. DESPEAUX:

4 It's the supplemental upgrades that 5 operating companies fallen above 230, yes.

6 PRESIDENT SUSKIE:

7 Yeah. And then, below that, it's

8 each state.

9 MS. DESPEAUX:

10 It's the individual operating

11 company, yeah. The wholesale customers ‐‐

12 well, the transmission customers, it does not

13 go into the open access transmission tariff,

14 so they don't pick up those costs. But

15 here's Greg.

16 MR. CAMET:

17 And I believe that it was TVA, the

18 second set was OGE Aquila, and Westar was the

19 third. And these were the ones that were

20 identified in the SEARUC presentation. Those

21 were the three third‐party customers as to

22 upgrades. TVA did one set, OGE Aquila did

23 the second set, and then the third was

24 Westar.

25 PRESIDENT SUSKIE:

0172

1 Where were those, out of curiosity?

2 I assume TVA was probably Mississippi or ‐‐

3 MR. LONG: 4 I think it's ‐‐ and this is by

5 memory, but it's noted in the construction

6 plan, but I believe the OGE Aquilas were in

7 Arkansas, the TVA was in Mississippi, and

8 Westar ‐‐ I don't remember where Westar is.

9 But if you look ate th construction plan,

10 there are some projects that have those names

11 in there you can see.

12 PRESIDENT SUSKIE:

13 Thank you.

14 VICE‐PRESIDENT FIELD:

15 I guess my follow‐up question would

16 be, so why haven't payments been made to the

17 one that has completed and is in‐service?

18 MS. DESPEAUX:

19 I think generally, Commissioner,

20 the payments are made when those upgrades are

21 not just needed to serve that customer, but,

22 also, they actually get money when an upgrade

23 is needed to either serve low growth or for

24 reliability purposes. So they haven't yet

25 been determined to be required to serve low

0173

1 growth or reliability yet.

2 VICE‐PRESIDENT FIELD: 3 I see. And whose system is

4 complete?

5 MS. DESPEAUX:

6 Greg, do you remember?

7 VICE‐PRESIDENT FIELD:

8 Which transmission project?

9 MS. DESPEAUX:

10 Is it ‐‐

11 MR. CAMET:

12 Well, none of them are complete.

13 This is Greg Camet for Entergy.e Th third

14 set, a portion of those upgrades have been

15 placed in‐service, but that full set is not

16 complete, my understanding is. And that is

17 TVA.

18 SECRETARY ANDERSON:

19 And who makes that determination of

20 when it's needed for reliability or ICT?

21E VIC ‐PRESIDENT FIELD:

22 What size projects are these? If

23 you could just give us an idea. Are these

24 large projects or just short?

25 MR. LONG:

0174

1 They're a mix. I think the ‐‐ each 2 of the projects had multiple pieces to them.

3 So from that respect, they were not just one

4 line. They were ‐‐ I think the TVA was

5 actually two lines. Westar was two or three,

6 and then the OGE and the Aquila were several,

7 five or six. So they were a pretty good

8 scope, many millions of dollars.

9 PRESIDENT SUSKIE:

10 What size were the lines? That's

11 in capacity.

12 MR. LONG:

13 As far as the capacity in

14 megawatts?

15 PRESIDENT SUSKIE:

16 KV.

17 MR. LONG:

18 eOh, kV. Th ones in Arkansas, I

19 believe, were primarily 161; and the ones in

20 Mississippi were 115 kV; and, again, I can't

21 remember exactly what the Westar grades were

22 to tell you.

23 PRESIDENT SUSKIE:

24 Jody?

25 MR. HOLLAND:

0175 1 Yes. I concur with what Charles

2 says, that they're all 115, 161 upgrades.

3 There are some capacitor banks, switches,

4 pretty sizeable upgrades.

5 CHAIRMAN PRESLEY:

6 Where specifically in Mississippi

7 were the TVA upgrades?

8 MR. LONG:

9 They were on the south Jackson to

10 Florence 115 line, which is south of Jackson,

11 and Morton to Tallahatchie 115 line, which

12 is, again, south of Jackson, kind of heading

13 in towards the southern area.

14 CHAIRMAN PRESLEY:

15 South Jackson to Florence, Morton

16 to Tallahatchie?

17 MR. LONG:

18 Yes, sir.

19 MR. LOUDENSLAGER:

20 Jody, do you remember where the

21 Westar facility was located?

22 MR. HOLLAND:

23 I thought it was in Arkansas. I'm

24 trying to confirm.

25 MR. LOUDENSLAGER: 0176

1 Okay. All right.

2 MR. HOLLAND:

3 I'll get that as an answer.

4 MR. LOUDENSLAGER:

5 So not hearing any follow‐up

6 questions for us to try to ‐‐ okay.

7 PRESIDENT SUSKIE:

8 We've got a question in the back.

9 MR. DODSON:

10 Terry Dodson with Cottonwood. I

11 just have a question for Entergy. Were any

12 or all of these upgrades in Attachment T

13 associated with transmission service

14 requests; and if so, what were the synchs for

15 those requests?

16 MR. LONG:

17 I don't ‐‐ I don't know the sources

18 of the synchs. We typically just get the

19 facility studies as far as what needs to be

20 upgraded, but I don't pay any attention to

21 where the sources of the synchs were. I'm

22 sure there's a facility study out there for

23 them. I think one was an affected system

24 study, as well, so... 25 MS. DESPEAUX:

0177

1 Somebody else. We can find out.

2 PRESIDENT SUSKIE:

3 Is there any way we could make that

4 a ‐‐

5 MR. LOUDENSLAGER:

6 Is that a question for the ICT?

7 This is Sam Loudenslager.

8 MR. LONG:

9 Yeah. I think the ICT would most

10 likely have that data.

11 PRESIDENT SUSKIE:

12 If you could action‐item the answer

13 to that question. Good question.

14 Any others on this topic?

15 MR. LOUDENSLAGER:

16 Okay. The second question that was

17 asked, and I believe President Suskie asked

18 this: That portion of the Entergy load

19 that's served through the WPP. And here's

20 the response that we got. It reflects that

21 beginning in April of '09 and goes up through

22 March of this year, the percent of their net

23 area load that is served by the WPP. 24 PRESIDENT SUSKIE:

25 I have a question about this, and

0178

1 I'll try not to be kind of too negative about

2 this. And the question is for Entergy, and I

3 don't know who the proper person is. I'll

4 begin by saying, I was not at the Commission

5 when the WPP was proposed, and I don't know

6 all of the background necessarily behind the

7 ICT being proposed.

8 I do know that I've read FERC's

9 order. I mean, I was very surprised by these

10 numbers, and maybe John is the person to

11 answer this. But I remember reading the FERC

12 order that was issued approving the WPP, and

13 I read the FERC order to be FERC thought the

14 WPP was the end‐all, be‐all to solve these

15 problems as promised by Entergy. That's ‐‐

16 you know, I'm going by what FERC said. I was

17 not here when the ICT or the WPP was first

18 proposed by Entergy.

19 Looking at those small numbers,

20 then hearing the concerns from stakeholders'

21 last meeting that they ‐‐ for whatever

22 reason, whether it's their fault or whoever's 23 fault it is, are not participating in the WPP

24 process as buyers. I was pretty stunned by

25 this, and I'm just kind of curious as to

0179

1 response, and I won't even get into the delay

2 issue of how long it took to get up. That's

3 pretty small. That's my gut reaction to this

4 when I saw this last week.

5 MR. HURSTELL:

6 I need to give you a couple of

7 pieces of information about it. John

8 Hurstell. What you see there is energy that

9 was purchased. If we'd have purchased all

10 the energy that was offered, it would be ‐‐ I

11 think this accounts for about 18 percent of

12 all the energy that was offered in the WPP.

13 And if the prices would have been more

14 attractive, we would have bought more. So

15 what determines how much we buy in the WPP

16 is ‐‐ are the prices that are offered to us.

17 I mean, I don't think anybody has ‐‐ has an

18 objective for us to pay more for energy than

19 what we can produce for it ourselves.

20 Now, I think the other thing to

21 keep in mind is that these are the WPP 22 purchases. If you were to look at our total

23 purchases, then you'd see numbers close to

24 30 percent, because we still purchase on a

25 seasonal basis, we still purchase monthly, we

0180

1 still purchase daily and hourly. So these

2 aren't ‐‐ these are all of our purchases. If

3 you look at all our purchases, those numbers

4 are closer to 30 percent.

5 PRESIDENT SUSKIE:

6 And so that's what's been confusing

7 to me, is that unless ‐‐ FERC may have

8 misunderstood, but when that FERC order that

9 was eissued at th time the WPP was approved,

10 they were ‐‐ seemed to be critical of the

11 fact that this was supposed to be the

12 end‐all, be‐all. And you're even telling me,

13 you know, with the 30 percent you purchase

14 from people other than Entergy, even it's a

15 small, small percent of the overall what you

16 purchase, so what's the purpose of the WPP,

17 if it's so insignificant?

18 MR. HURSTELL:

19 The purpose was to give merchant

20 generators a chance to compete with our 21 generators to provide the flexible capability

22 that we need, and it was to give them an

23 ability to commit for the whole week. We

24 generally commit our units for a seven‐day

25 period, five to seven days, and the current

0181

1 markets that we had, the next‐day market, the

2 monthly market, really didn't do that.

3 So the WPP was intended to give

4 them an opportunity to compete, and that's

5 what they have. They have an opportunity to

6 compete. Some choose not to compete, and

7 others offer pricing that isn't competitive.

8 So the fact that we don't buy more is because

9 of the pricing and the terms that are offered

10 to us, and, Mr. President, I can't control

11 what they offer.

12 PRESIDENT SUSKIE:

13 Yeah. I understand that. But I'm

14 just ‐‐ I'm surprised, after reading the

15 April order ‐‐ I just need to get a better

16 understanding. After reading FERC's order

17 last year and plus how it's scaled down to

18 just ‐‐ it's not ‐‐ the time for the bids was

19 restricted, reduced from the original filing. 20 I'm just perplexed. I mean, was FERC wrong

21 when they said this was going to be a major

22 solution, when it seems like it's very small?

23 MR. SCHNITZER:

24 Mr. Chairman, I was involved in

25 that part of the process. Let me offer my

0182

1 recollection of that.

2 The first is to state that, to my

3 knowledge and recollection, at the time,

4 Entergy never made a forecast of what the

5 benefits of the WP would be for precisely the

6 reason that Mr. Hurstell said, that it

7 depends on what the bids are. We tried to

8 quantify ‐‐ the whole purpose of the WPP, as

9 he explained, was to provide another

10 opportunity for displacement of the legacy

11 generation. And what the company did provide

12 was some estimates of how much value might be

13 created per percentage point or per certain

14 amount of reduction of legacy generation, but

15 we didn't include a forecast of how much of

16 that would result for the reasons just

17 stated; that that was a function, not just of

18 the pricing that was bid,t bu of the terms of 19 the bids; in particular, the flexible

20 capability.

21 But in answer to what was the

22 purpose of the WPP, and from Entergy's point

23 of view ‐‐ I can't ‐‐ I can't speak for the

24 FERC, but it was ‐‐ it was another

25 opportunity to provide for more displacement

0183

1 of the legacy generation, and it had the

2 potential of additional benefits of first

3 allowing people to bid a different product,

4 the AGC product, which, in fact, has been bid

5 to a limited degree, and, secondly, to

6 provide for this simultaneous optimization of

7 transmission and generation so that

8 additional transmission service might be

9 forthcoming for some of these displacing

10 units. That was the ‐‐ those were the

11 principal rationales. Whether those are, you

12 know, big numbers or small numbers on a

13 percentage‐wise, everyone, I guess, can have

14 their own opinion.

15 I think, just for openers, if you

16 were to ‐‐ more than half of Entergy's

17 kilowatt‐hours are served by nuclear coal and 18 QF, and I don't think anybody ever had an

19 expectation that the WPP was going to have

20 any impact on the percentage of load served

21 by nuclear coal or QF. And so the

22 denominator provided is the one requested. A

23 different denominator would give ‐‐ would

24 give numbers two to three times higher. You

25 might still think that those are small.

0184

1 And, as well, as I think Mr. Lucas

2 from SPP discussed two or three meetings ago,

3 you know, the gas prices during WPP's

4 operations have not hbeen as hig as they had

5 been previously, and I know from an Arkansas

6 perspective, you're not sorry about that.

7 But, again, ‐‐

8 PRESIDENT SUSKIE:

9 We were real sorry about it in

10 2008, ‐‐

11 MR. SCHNITZER:

12 Well, I understand, but that has ‐‐

13 PRESIDENT SUSKIE:

14 ‐‐ which we pay for today.

15 MR. SCHNITZER:

16 But that has an indication, you 17 know, for ‐‐ the dollar savings are, of

18 course, very sensitive to the gas prices,

19 natural gas prices. But, again, it's ‐‐ the

20 potential for the WPP always depended on the

21 nature of the bids, both in terms of the

22 price and the structure. And that's, as ‐‐

23 as John has said on a couple of occasions,

24 and I think is going to do a presentation to

25 the Working Group at the end of next week,

0185

1 that flexible generation piece is critical.

2 The WPP is a place for people to provide that

3 service. Thus far, we've gotten some, and we

4 welcome more. I don't know ‐‐

5 PRESIDENT SUSKIE:

6 Certainly.

7 MR. SCHNITZER:

8 ‐‐ if that's responsive.

9 PRESIDENT SUSKIE:

10 This Working Group will work on

11 that next week. And who sets the parameters

12 of the terms of the bid that will be bid?

13 That's where FERC, in April '09, went through

14 and said that, and there was some discussion

15 where the time ‐‐ the conditions of the bid 16 or the scope of the bid was shrunk by

17 Entergy's filing. Is that accurate?

18 MR. SCHNITZER:

19 In terms of ‐‐

20 PRESIDENT SUSKIE:

21 Sam, help me out on the ‐‐

22 MR. LOUDENSLAGER:

23 They weren't able to get the models

24 to solve for 24 hours a day, so the off‐peak

25 didn't make it. The system would crash

0186

1 whenever they would try to fix it. And I

2 don't think anybody anticipated that when

3 they went into this process of trying to

4 develop the WPP. So ‐‐

5 PRESIDENT SUSKIE:

6 My next question is ‐‐

7 SECRETARY ANDERSON:

8 Can I follow up?

9 PRESIDENT SUSKIE:

10 Sure.

11 SECRETARY ANDERSON:

12 So there was just a technical

13 problem with the software?

14 MR. LOUDENSLAGER: 15 Well, as long as they been on it,

16 Commissioner, it was more than a technical

17 problem. It was something they couldn't ‐‐

18 they could not make the software ‐‐

19 SECRETARY ANDERSON:

20 Who is "they"?

21 MR. LOUDENSLAGER:

22 The consultant that was in on that

23 processT, and the IC I think it was ‐‐

24 SECRETARY ANDERSON:

25 It seems to me one of the ‐‐ I

0187

1 don't mean to cut you off, but one of the

2 biggest problems, I think, with the WPP is

3 that it's ‐‐ its limited time.

4 MR. LOUDENSLAGER:

5 Absolutely.

6 MR. REW:

7 Commissioner Anderson, the ICT and

8 our WPP group was heavily involved in the

9 testing and development, and we supported the

10 scaling back of the time frame from 24 hour/7

11 to essentially on peak so that we could be

12 successful in getting the results, and it was

13 really the limitation of the software, 14 looking at the perplexity of solving for an

15 entire week in advance. It's a very complex

16 process that ‐‐ we were able to scale it back

17 and be comfortable with the results; whereas,

18 we couldn't get good results going 24 by 7.

19 So the ICT was in support of that change that

20 was filed and approved.

21 SECRETARY ANDERSON:

22 Kind of sounds to me like tail

23 wagging the dog a little bit. Well, ‐‐

24 MR. LOUDENSLAGER:

25 Commissioner Anderson ‐‐ Sam

0188

1 Loudenslager ‐‐ that was kind of the source

2 of my questions the last time you guys were

3 meeting about, well, has there been any

4 evaluation of changes ‐‐ low‐cost changes

5 that could be made and incorporated into the

6 procurement process so that ‐‐ because, you

7 know, I mean, looking out a week ahead,

8 that's a tough nut to crack. Okay? I

9 recognize that. And so I was thinking, what

10 about day‐ahead; what about realtime? Are

11 there ‐‐ and I'm not suggesting that there

12 are low‐cost alternatives. I just don't 13 know. I'm just asking the question.

14 PRESIDENT SUSKIE:

15 I have two kind of follow‐ups on

16 that topic. So who ‐‐ on the WPP process,

17 who determines if it's ‐‐ what's the ‐‐ if

18 it's the lowest bid option, the ICT or

19 Entergy?

20 MR. REW:

21 That's a good question.

22 MR. HURSTELL:

23 It's the transmission group.

24 MR. McCULLA:

25 The bids come in, and the algorithm

0189

1 goes through and chooses ‐‐ selects which

2 bids are selected. As long as the production

3 costs go down as a result, then those bids

4 are selected. So the software ‐‐

5 PRESIDENT SUSKIE:

6 Hold on one second.

7 MR. McCULLA:

8 Oh, I'm sorry. Mark McCulla with

9 Entergy.

10 So it's the software that puts out

11 and then selects the bids. 12 PRESIDENT SUSKIE:

13 Okay. Now, ‐‐

14 MR. McCULLA:

15 The ICT reviews it when it's done.

16 They review that, as well, so they're getting

17 the same results that we are in reviewing

18 that each week.

19 PRESIDENT SUSKIE:

20 Okay. Now, my next question is:

21 So that's for this small percent, for

22 whatever reason. Who makes that

23 determination for the other bids that are

24 bought from other generators, what you said

25 30 percent ‐‐

0190

1 MR. HURSTELL:

2 Monthly and ‐‐

3 PRESIDENT SUSKIE:

4 Yeah.

5 MR. HURSTELL:

6 Well, of the 30 percent, about

7 10 percent ‐‐ not 10 percent of the 30, but

8 10 percent of the total come from QFs. So

9 it's the Commissions that set the price. The

10 remaining ‐‐ 11 PRESIDENT SUSKIE:

12 So out of the ‐‐ 10 percent of the

13 30?

14 MR. HURSTELL:

15 No, no. 10 percentage ‐‐ 10

16 percent of our total system needs come from

17 QFs.

18 PRESIDENT SUSKIE:

19 QFs. So, in other words,

20 20 percent, then, goes from non‐QF purchases

21 Entergy makes?

22 MR. HURSTELL:

23 Correct.

24 PRESIDENT SUSKIE:

25 And then who makes those

0191

1 determinations?

2 MR. HURSTELL:

3 We ‐‐ my group does. We get the

4 bids in, and we do an evaluation, and we make

5 a determination as to whether they're

6 economic or not.

7 PRESIDENT SUSKIE:

8 I think a challenge for the Working

9 Group is, can that process or those bids be 10 incorporated in something along the line ‐‐

11 and I'm not offering a solution, just

12 throwing out an idea. Part of the WPP

13 process ‐‐

14 MR. LOUDENSLAGER:

15 I think they ‐‐ and I'm speaking

16 for Entergy, so John, correct me. I think ‐‐

17 MR. HURSTELL:

18 I probably won't.

19 MR. LOUDENSLAGER:

20 I think what they do, they go

21 through a regular procurement process where

22 they issue RFPs and then evaluate the bids

23 that come in in response ‐‐

24 MR. HURSTELL:

25 Well, that's when we get the

0192

1 monthly ‐‐

2 MR. LOUDENSLAGER:

3 Right.

4 MR. HURSTELL:

5 ‐‐ monthly processes, then the

6 long‐term processes. But the hourly

7 purchases or the next‐day purchases, we

8 evaluate what our needs are, and we take bids 9 on the phone, through e‐mails, any way we can

10 get them, and we accept the offers then.

11 That makes sense for us.

12 PRESIDENT SUSKIE:

13 And then I guess, just go back, you

14 know, the transparency concern or issue is,

15 then maybe it should be on the state

16 Commissions, but since it's done centrally,

17 what kind of reviews, if that's ‐‐ you know,

18 if those are the best ‐‐

19 MR. HURSTELL:

20 Well, it's up to the state

21 Commissions. Mississippi just did a very

22 extensive audit on our purchases, and we're

23 going through a field reconciliation in Texas

24 right now, where they're going to come in and

25 evaluate what we've done.

0193

1 PRESIDENT SUSKIE:

2 I think that's where the challenges

3 come in. You've got different states looking

4 at different things, and it's all done

5 centrally.

6 CHAIRMAN PRESLEY:

7 Is there an independent monitor? 8 MR. HURSTELL:

9 There's an independent monitor for

10 the long‐term transactions, locking into

11 long‐term purchases. Yes, there is for that.

12 PRESIDENT SUSKIE:

13 Define "long‐term." Greater than a

14 year?

15 MR. HURSTELL:

16 Greater than a year.

17 CHAIRMAN PRESLEY:

18 There's not for the short‐term?

19 MR. HURSTELL:

20 No, sir.

21 CHAIRMAN PRESLEY:

22 So that decision lies with your

23 group?

24 MR. HURSTELL:

25 Ultimately, it resides with me, and

0194

1 then I have to come before each one of you

2 guys and be willing to stand up and defend

3 us.

4 Now, one thing I want to be clear,

5 as Mr. McCulla made the point, is that the

6 merchants submit their bids and ‐‐ they 7 actually submit their bids to us, and we pass

8 them on to transmission, but our generation

9 goes in at cost. So I think it's important

10 that you guys understand that the more

11 information you make us put out about what

12 our savings are, it's providing information

13 to the merchants as to how much they can

14 raise their bid, because what they're

15 competing against is essentially a fixed

16 number, our cost.

17 So if we come here and report that

18 we saved a million dollars, then they know

19 thaty the can raise their bids and collect

20 more of those savings for themselves and not

21 for our customers. So I think it's just

22 important that you guys understand, the more

23 information we give out, the better

24 information they have to capture the savings

25 of the WPP.

0195

1 CHAIRMAN PRESLEY:

2 Can I ‐‐

3 PRESIDENT SUSKIE:

4 Go ahead, Brandon.

5 CHAIRMAN PRESLEY: 6 Let me follow‐up. Go ahead. Go

7 ahead with your question.

8 PRESIDENT SUSKIE:

9 I'll bet Sam and I are thinking the

10 same thing. Help me understand. The SPP ‐‐

11 and I'm not disagreeing with what you're

12 saying. It's a good, valid point. But like

13 an SPP, doesn't everybody know what the other

14 generators ‐‐ their costs are?

15 MR. LOUDENSLAGER:

16 Well, you know what ‐‐ generally,

17 what bid sets the price. That's what you

18 know. It's a marginal unit that sets the

19 price for everybody, and that price is

20 transparent, and everybody knows what it is.

21 PRESIDENT SUSKIE:

22 And, see, so then my question goes:

23 So then, of that 20 percent, what is that

24 marginal price? What is that price in the

25 market, so to speak?

0196

1 MR. HURSTELL:

2 It's going to be ‐‐

3 PRESIDENT SUSKIE:

4 Go to you, and then we have to ‐‐ 5 the state Commission may choose to come and

6 look at that and say, was that's the best

7 decision in hindsight.

8 MR. HURSTELL:

9 Right. And what we did and what

10 we're prepared to do ‐‐ and we actually did

11 it in Mississippi ‐‐ is for every purchase

12 that we make, we have what our alternative

13 costs would have been, and we can then show

14 that, when we made this purchase, a next‐day

15 purchase, we purchased it ‐‐ purchase power

16 at $45. We can show that we did an analysis

17 that showed, if we hadn't made that purchase

18 and generated it ourselves, our cost might

19 have been $50, so that's why we made the

20 purchase.

21 And if somebody comes in and offers

22 us 52, and our alternative generation cost is

23 50, well, then we won't make the purchase.

24 But what we don't do is, if somebody comes in

25 and offers us 42, we don't tell them, well,

0197

1 our alternative cost is 50, because that

2 price isn't going to be 52 the next day.

3 CHAIRMAN PRESLEY: 4 I had one follow‐up. I want to

5 make sure we're clear about this, what you

6 just said a minute ago when I raised the

7 point of an independent monitor. And you

8 said that if it were a contract or a purchase

9 contract more than a year, then the

10 independent monitor is triggered; if it's

11 less than that, you make the decision.

12 MR. HURSTELL:

13 No. I don't think it triggers it,

14 Commissioner. I think, in essence what it

15 is, though, we use an RFP process that's a

16 little more formal for the long‐term

17 purchases, and to be very candid with you, I

18 don't handle those. For the long‐term

19 process, we do have independent monitors.

20 CHAIRMAN PRESLEY:

21 For those purchases ‐‐ for those

22 purchases that are not required to goh throug

23 the RFP, those or below, you say you are the

24 decision‐maker for that?

25 MR. HURSTELL:

0198

1 My group is ‐‐ are the

2 decision‐makers, yes. 3 CHAIRMAN PRESLEY:

4 So if the report that was submitted

5 to the Mississippi Commission ‐‐ if ‐‐ I

6 don't have it in front of me. But if

7 language in that report says that these

8 purchases were all checked by an independent

9 monitor, in fact, that wouldn't be correct,

10 would it, because you just said that if it's

11 less than a year, you do; you make the

12 decision; there's no independent monitor

13 involved.

14 MR. HURSTELL:

15 And let me ‐‐

16 CHAIRMAN PRESLEY:

17 So if the language in that report

18 said that an independent monitor observed all

19 those, that wouldn't be correct, would it?

20 MR. HURSTELL:

21 If it said they observed them on a

22 realtime basis, that wouldn't be correct, but

23 I don't know whether they mean that there was

24 an independent (inaudible) after the fact,

25 then which is ‐‐

0199

1 CHAIRMAN PRESLEY: 2 Well, I don't have a copy of it in

3 front of me. I was just raising that to try

4 to get an understanding of exactly the

5 process.

6 MR. HURSTELL:

7 I want to be clear. There is no

8 independent monitor looking over our shoulder

9 on hourly purchases or next‐day or monthly

10 purchases.

11 CHAIRMAN PRESLEY:

12 And, in fact, in the audit in

13 Mississippi, the auditors testified, I think

14 under questioning by me, that they didn't

15 check those purchases, that they go through

16 the procedures. And I just want to make sure

17 that's clear. We don't want to leave with

18 the wrong picture here today.

19 MR. HURSTELL:

20 Well, I don't know what they said.

21 I know that I met with the auditors and went

22 through transactions with them, so butI ‐‐ I

23 don't know what they said.

24 CHAIRMAN PRESLEY:

25 Sure. Thank you.

0200 1 MR. LOUDENSLAGER:

2 John ‐‐ Sam ‐‐ is any of that data,

3 the prices for the shorter‐term purchases,

4 are they not provided to FERC or available

5 anywhere?

6 MR. HURSTELL:

7 Well, Sam, I think they're always

8 available to the Commissions.

9 MR. LOUDENSLAGER:

10 No, no, no. Are they reported on a

11 regular basis?

12 MR. HURSTELL:

13 I don't think our purchases are

14 reported on a regular basis. Our sales, our

15 wholesale sales, will be reported to FERC,

16 but not our purchases.

17 MR. LOUDENSLAGER:

18 Okay.

19 MR. HURSTELL:

20 We just don't make many of these

21 wholesale sales.

22 MR. BOOTH:

23 Well, let me put clarification on

24 it. If an independent power producer is

25 selling power through the WPP to Entergy, 0201

1 those are wholesale sales, correct?

2 MR. HURSTELL:

3 Yes.

4 MR. BOOTH:

5 So then those independent power

6 producers have to report those energy prices

7 hour by hour through their electric quarterly

8 reports to FERC, right?

9 MR. HURSTELL:

10 I don't think they have to report

11 it hour by hour. I think they have to ‐‐

12 well, I'll let them speak to what they have

13 to report.

14 PRESIDENT SUSKIE:

15 Any merchant generators care to

16 answer that? I cannot believe the merchant

17 generators are being quiet. Okay. Let that

18 be an action item to find out what has to be

19 reported at FERC by merchant generators.

20 Mr. Cruthirds?

21 MR. CRUTHIRDS:

22 Yes. Dave Cruthirds with The

23 Cruthirds Report.

24 PRESIDENT SUSKIE: 25 By the way, he's got a brochure

0202

1 outside. We're going to start charging you

2 for the use of that table.

3 MR. CRUTHIRDS:

4 That's fair enough. I guess I

5 wanted to clarify. You said there's an

6 independent monitor of all your long‐term

7 procurement processes, and I guess I'm only

8 familiar with the Louisiana PSC. The only

9 RFP process ‐‐ I'm not sure about Texas, but

10 I don't think New Orleans, Arkansas or

11 Mississippi have formal RFP processes that

12 require independent monitors, and I wouldn't

13 want there to be confusion on that point.

14 MR. HURSTELL:

15 I appreciate the clarification.

16 I'm not involved in the long‐term processes.

17 I'm just ‐‐ when somebody mentioned an

18 independent monitor, the only time I know

19 that we use one is in long‐term processes.

20 Whether it's in all long‐term processes, I

21 can't answer.

22 MR. LOUDENSLAGER:

23 This is Sam Loudenslager with 24 Arkansas. Arkansas procurement practices

25 there mirror what takes place in Louisiana,

0203

1 so there is a third‐party monitor that

2 evaluates ‐‐ looks over the shoulder of the

3 bids that come in.

4 VICE‐PRESIDENT FIELD:

5 I had a question for Mr. Hurstell.

6 John, you said if you accept a bid that's

7 short‐term ‐‐ it could be a WPP ‐‐ then you

8 have to send it to Mark or transmission; is

9 that correct? Is that what you said?

10 MR. HURSTELL:

11 It's pretty ‐‐ yes, that's right.

12 It's a pretty perfunctory process. It only

13 is verified at the part that the bidder is on

14 our approved vendor list. We have to have a

15 contract with ‐‐ we have to have a contract

16 with the party; we have to have, you know,

17 good credit relations ewith th party. It's a

18 pretty perfunctory process. We don't scream

19 out and say, "This bid doesn't look good."

20 VICE‐PRESIDENT FIELD:

21 No. I'm just wondering if you

22 know, when you accept the bid, that 23 transmission is available or whether you have

24 to ‐‐ if you accept a good price, then do you

25 have to run it by transmission to see if

0204

1 actually there is interconnection and so

2 forth?

3 MR. HURSTELL:

4 Let me clarify. I'm being told

5 that I'm not clear. In the WPP process, we

6 just take the bid. Whether there's ‐‐ we

7 don't know whether there's transmission

8 available or not, and we pass it over to

9 the ‐‐ what's called the Weekly Operations

10 Group in transmission. They will send back

11 to us the bids that we have accepted, and

12 there will be transmission, and we'll just

13 consummate the deal with the third party.

14 Now, if it's outside of the WPP, so

15 it's a purchase for the next ‐‐ it's an offer

16 for the next day, we'll evaluate the terms,

17 and if we choose to accept it, then we'll

18 have to go and try and secure the

19 transmission. Now, it could be incumbent

20 upon us to secure the transmission, or it

21 could be incumbent upon the seller, depending 22 upon the terms of the arrangement, but we do

23 that through the OASIS, like any other market

24 participant.

25 VICE‐PRESIDENT FIELD:

0205

1 So do you have a record of the

2 number of purchases that have to be rejected

3 because they're not adequate transmissions?

4 MR. HURSTELL:

5 We ‐‐ we keep a report of every one

6 of our rejected offers, and we have a reason

7 why we rejected it. So I'm trying to go

8 through in my mind the reasons for the

9 rejections, and I don't know whether or not

10 that's a specified reason, couldn't get

11 transmission, or whether or not we might have

12 put it in another category. But I guess

13 there are going to be times when we would

14 have wanted to purchase a deal, but we

15 couldn't because there wasn't transmission.

16 VICE‐PRESIDENT FIELD:

17 Right. I'm just ‐‐ that might be

18 helpful to this committee to know ‐‐ and

19 maybe it will turn up in the Mississippi

20 audit or somebody else's audit on what your 21 records show or why you had to turn it down,

22 because we're trying to find out which

23 transmission projects might be economically

24 feasible or benefit ‐‐ beneficial to the

25 ratepayers within a period of time. So I

0206

1 think that would be important, if you have

2 that information, to furnish it.

3 MR. HURSTELL:

4 How about if we take an action item

5 to find out if we have it, and if we have it,

6 we'll give it to you, and if we don't, we'll

7 let you know.

8 VICE‐PRESIDENT FIELD:

9 That's fair. Now, you mentioned

10 that the bids also have to be flexible.

11 Explain that. Does that mean that you have

12 to dispatch it? Entergy has to be able to

13 dispatch it, or ‐‐ or just what?

14 MR. HURSTELL:

15 Are you talking about for the WPP?

16 VICE‐PRESIDENT FIELD:

17 Yes, sir.

18 MR. HURSTELL:

19 All right. First of all, the bids 20 don't have to be flexible. They can bid a

21 block, and we'll evaluate the economics of

22 that. The real value of the WPP is it gives

23 merchants a chance to bid a flexible ‐‐ give

24 us flexible capability. You know, for

25 example, they may bid a minimum of ‐‐ we have

0207

1 to take a minimum of 350 megawatts, and we

2 can take up to 450 megawatts, and that gives

3 us 100 megawatts of flexibility.

4 Now, if you take the exact same

5 pricing on a deal that has a 350 ‐megawatt

6 minimum and a 450‐megawatt maximum, and you

7 change it to where it's a 100‐megawatt

8 minimum and a 450‐megawatt maximum, that will

9 significantly improve the value of that deal.

10 Pricing isn't the key dropper there. It's

11 the amount of flexible capability that we're

12 offering, and in order to provide that

13 flexible capability, a merchant has to have

14 the equipment, the physical equipment, that

15 can be turned down that low and up that high,

16 and they have to have the fuel supply, that

17 they cant ge gas at a low volume and at a

18 high volume. 19 So those are the things that play

20 into the merchant's decision as to what to

21 offer us in terms of flexible capability.

22 The more flexibility that's offered to us,

23 the higher value that's going to be assigned

24 to that generation. So we're not saying they

25 have to offer, but the more flexibility they

0208

1 offer, the higher value the offer is to us.

2 And that's what ‐‐ we're going to go over

3 that at the Working Group meeting, and I

4 would love to have the opportunity to work

5 through some simple examples before this

6 group to help understand how important the

7 flexibility is to our economics.

8 VICE‐PRESIDENT FIELD:

9 Okay. Well, I don't ‐‐ I think

10 maybe we better not get sidetracked on it

11 today, but I think it would be good to show

12 the Working Group how you make that analysis

13 and how you assign economic value to

14 flexibility and so forth.

15 MR. HURSTELL:

16 Sure.

17 PRESIDENT SUSKIE: 18 And I think that's the concept, to

19 let the Working Group work through it and

20 help get us educated on it, as well. Thanks

21 for those clarifications.

22 MR. LOUDENSLAGER:

23 Yes, sir. I am anticipating that

24 y'all's May agenda is going to be incredibly

25 heavy, as it ‐‐ as it stands now. And so

0209

1 would it be acceptable to y'all that, once we

2 get ‐‐ maybe June is a good time to do it,

3 but to give us an opportunity, the Working

4 Group and stakeholders an opportunity ‐‐ or

5e th Working Group an opportunity to kind of

6 review some of that bid information you were

7 asking about and ‐‐ just to see what was

8 going on, what's been going on. I don't know

9 how ‐‐ what I'm ‐‐ I don't know what I'm

10 chewing ‐‐ I'm biting off here when I suggest

11 that, but we can talk about that at the

12 Working Group level next week. And if you'd

13 like, in June, we can ask some folks to pull

14 together a presentation on the WPP process

15 today, and so everybody has a ‐‐ is on a

16 level ‐‐ a level understanding of the 17 process, what does happen, what doesn't

18 happen, what gets submitted, how that doesn't

19 meet Entergy's needs.

20 PRESIDENT SUSKIE:

21 I think it would be something good

22 for ‐‐ I think, obviously, the next meeting,

23 maybe the next two meetings, we've really got

24 to concentrate on enhancements to the ICT,

25 and maybe once we get those done, we'll focus

0210

1 on the market or the WPP issues.

2 MR. LOUDENSLAGER:

3 I have a concern. This is just me

4 speaking for Sam. I have a concern about a

5 lot of realtime activities that are taking

6 place with no kind of oversight. I'm not

7 saying there's anything wrong with what's

8 going on. I just don't know, and would like

9 to get a better handle on that. And when I

10 say that, I'm talking about realtime,

11 day‐ahead, which goes back to the ‐‐ one of

12 the things ‐‐ statements I made earlier

13 today, which is, can the WPP be modified to

14 deal with realtime and day‐ahead. That's

15 another day. 16 PRESIDENT SUSKIE:

17 Yeah. That's a good point. I

18 think, clearly, we all have concerns about,

19 you know, as John pointed out, what's the ‐‐

20 what was costs for ratepayers, and I think we

21 all share that, and whoever can provide that,

22 obviously, it's something thate we'r

23 interested in.

24 MR. SCHNITZER:

25 Not to prolong this, Mr. Chairman,

0211

1 but I ‐‐ you know, a meeting or two ago, when

2 Sam raised that question about whether the

3 WPP could be used for day‐ahead or realtime,

4 and I think eI just ‐‐ th point I made at

5 that point, which is that we're open to that,

6 but we didn't get ‐‐ we didn't get to the

7 weekly procurement by accident. We got to it

8 by virtue of the fact that the Entergy legacy

9 units typically have commitment runs of four

10 to five days and appreciable starting times.

11 And so if you're not going to

12 commit them because you bought something for

13 tomorrow, and then the thing that you bought

14 for tomorrow disappears, you have a bit of a 15 problem. And in organized markets, there are

16 some other ‐‐ so‐called day‐two markets,

17 there are solutions for that, which is that

18 all the generators agree that they're going

19 to bid every day.

20 And so we're open to exploring

21 those kind of options that Sam suggests, but

22 part and parcel would be a set of merchant

23 generator commitments, that if we're going to

24 only buy on a daily basis the WPP instead of

25 committing our units, that people have to be

0212

1 committed to bidding every day, not just one

2 day, et cetera. So it's an idea that's worth

3 considering, but I think it's a little more

4 involved than just focusing on the WPP aspect

5 of it.

6 PRESIDENT SUSKIE:

7 Sure. And I think the question it

8 kind of begs is, is the legacy units the

9 problem, or is it the bids? I mean, I think

10 that's the challenge. And then I just ‐‐ you

11 know how I like to just throw out little

12 things. In light of the Arkansas order

13 yesterday, I will say MISO does have a 14 day‐two market, but I just throw that out.

15 MR. SCHNITZER:

16 Well, they do. And they have

17 exactly the type of requirement that I

18 described, you know, that if you're a network

19 resource in MISO, you will bid or schedule

20 every day, if available, and we don't have

21 that in the Entergy footprints. My point was

22 not that you can't have those things. My

23 point was that you just can't say I'm going

24 to have a day‐ahead market without also

25 looking at some of the other market rules

0213

1 that make that reliable, you know, for

2 customers.

3 PRESIDENT SUSKIE:

4 Ms. Turner? Microphone?

5 MS. TURNER:

6 And I think you were hitting on

7 this, Commissioner Suskie. There are ‐‐

8 there is another reason why bids are not

9 accepted, and that's because there's

10 congestion on the system. So, I mean, if

11 there's congestion and a unit, you know,

12 is ‐‐ costs less, the bid, but it can't be 13 moved into the region where the more

14 expensive generation is running, then that's

15 another reason, which probably warrants some

16 further looking into, as well.

17 PRESIDENT SUSKIE:

18 I think you're right. And I think,

19 ultimately, the concerns state regulators

20 have raised, it really boils down to two

21 solutions, transmission and opening up

22 markets. I'm not a de‐reg guy, but I think

23 they fall into one of those two categories.

24 How do you get ‐‐ build a transmission and

25 when and how do you get the lowest cost of

0214

1 generation to the customer? I think those

2 are the challenges.

3 SECRETARY ANDERSON:

4 At least.

5 PRESIDENT SUSKIE:

6 Sorry. He's got to defend the open

7 markets.

8 SECRETARY ANDERSON:

9 No. In my perspective, the two are

10 connected. Because if you don't have robust

11 transmission, then you really can't have a 12 market.

13 PRESIDENT SUSKIE:

14 Yeah.

15 CHAIRMAN PRESLEY:

16 That's right.

17 PRESIDENT SUSKIE:

18 You noticed I said transmission

19 first, so...

20 SECRETARY ANDERSON:

21 Good point.

22 MR. HURSTELL:

23 Excuse me, but I just want to make

24 sure we address one thing here. I'd like to

25 address one issue.

0215

1 PRESIDENT SUSKIE:

2 Sure.

3 MR. HURSTELL:

4 The legacy units ‐‐ and I'm going

5 to defend them ‐‐ they run because they're

6 valuable units to us, and if we could produce

7 cheaper power by buying more from the

8 merchant generators, we would be doing that.

9 But because of the requirements of our

10 system, we need flexibility. And when you 11 have a legacy ‐‐

12 PRESIDENT SUSKIE:

13 You said the requirements of the

14 system or the requirements caused by the

15 legacy units, the QF issue?

16 MR. HURSTELL:

17 The QF issue, the generator

18 imbalance issue, the volatility in our loads

19 issue, all of those things have nothing to do

20 with the type of generation that we have.

21 Put burdens on us. It is the equivalent of

22 the wind problem, QF, and if you hear about

23 the wind problem, you'll often hear about you

24 need flexible generation that can respond to

25 the change in wind. We have that on our

0216

1 system.

2 When you have our legacy units,

3 some of them can operate 50 megawatts at a

4 minimum and 450 megawatts maximum. There is

5 not a single merchant generator that I'm

6 aware of that has a unit that can swing by

7 400 megawatts. That is a very important

8 service that those resources provide to us.

9 It makes them very valuable. 10 Merchant generators provide a very

11 valuable service when we can block‐load them,

12 and we buy them for 12 hours or 16 hours, and

13 we take them flat. That's why we take so

14 much energy in the market. But I would ‐‐

15 it's going to be my goal in life to convince

16 you that the legacy units are very valuable

17 assets to us, and we need to make sure that

18 that's understood before we just set an

19 objective to just shut them all down.

20 PRESIDENT SUSKIE:

21 Let me ask you to let your goal be

22 to help us get educated with the stakeholders

23 and let us come to that conclusion.

24 MR. HURSTELL:

25 I will work towards that goal.

0217

1 PRESIDENT SUSKIE:

2 Yes, Bill?

3 MR. BOOTH:

4 Two quick follow‐up questions,

5 John. First, with respect to flexibility, I

6 know that you're talking about the swing

7 between min. and max. Is there also a

8 characteristic of the ramp rate? I mean, do 9 you need a specific ability to change power

10 per unit of time at a specific rate?

11 MR. HURSTELL:

12 Yes. The ‐‐

13 MR. BOOTH:

14 Is it a standard fixed rate or does

15 it vary, depending on existing conditions?

16 MR. HURSTELL:

17 It varies based ton ‐‐ no so much

18 on system conditions but on the parameters of

19 many individual units. It depends on where

20 the unit is in its operating range, but it's

21 also the case ‐‐ oh, it's how fast we have to

22 come up. I thought you were talking about

23 the capability of the units. It can be

24 significantly different at different times of

25 the day.

0218

1 For example, in the summer, when

2 our loads are coming up in the morning, we

3 have to have generation that can respond

4 upward, and eat th same time, QFs that may

5 have put energy to us at night, and now

6 they've sold it off to some third party

7 during the day, so their generation is 8 disappearing from our system so that we have

9 to ramp up even more to make up for that

10 energy. So the ramping requirements on our

11 system could be several thousand megawatts in

12 an hour.

13 MR. BOOTH:

14 I guess, just to focus, my question

15 is: Do you have objective criteria, ramp

16 rates and swing rates, that you use to

17 determine whether an IPP's bid should be

18 accepted or not accepted? You said you

19 quantify bids based on ‐‐ the value of a bid

20 based on the flexibility it provides.

21 MR. HURSTELL:

22 No. Let me ‐‐ let me be clear. We

23 have models that ‐‐ just like any production

24 cost model, except ours doesn't look ten

25 years in advance. It looks seven days in

0219

1 advance. And we put all these options in,

2 and they evaluate all our requirements. We

3 need capacity to serve people, we need

4 reserves, we need to be able to turn

5 generation down to a minimum, we need to be

6 able to accept the forecast in QF put. 7 I can't sit here and tell you that

8 we evaluate each option based solely on the

9 flexibility. We let the model find the

10 cheapest solution to our problem by looking

11 at all the parameters at the same time, but I

12 can just tell you from experience, the more

13 flexibility a unit offers, the higher the

14 value.

15 Now, we take offers from merchants

16 and other third parties to buy block energy,

17 because we have room on our system to accept,

18 you know, economically‐priced block energy,

19 and we. take it But if you want to be more

20 valuable, if you want to get a higher value,

21 then you've got to offer us flexibility.

22 MR. BOOTH:

23 I guess I'm just trying to

24 understand whether the assignment of that

25 value is based on objective criteria, or is

0220

1 it a gut feel, or how do you figure out ‐‐ I

2 guess we'll go ‐‐ probably go through this in

3 more detail.

4 MR. LOUDENSLAGER:

5 Yeah. We'll go through that next 6 Friday.

7 MR. BOOTH:

8 One other question is: Have you

9 considered talking to QFs about whether or

10 not they can comply with some type of a

11 schedule? I mean, if a QF can be compensated

12 for the energy that it produces ‐‐ even Pat

13 will tell you, in New York, they have

14 something called bid production cost

15 guarantee. Maybe there's something similar

16 that Entergy can do that would provide

17 motivation for QFs and our IPPs to follow

18 some type of a schedule rather than block ‐‐

19 rather than tjust pu blocks of energy to ‐‐

20 when you don't anticipate it.

21 MR. HURSTELL:

22 What we've done is ‐‐ first of all,

23 we buy some energy from QFs under long‐term

24 contracts. We buy some energy from ‐‐ so

25 that takes them out of the QF put category.

0221

1 We buy energy from them. I believe it's on a

2 monthly basis sometimes. And others, we buy

3 on a day‐ahead basis. We have talked to the

4 QFs, I think it was in Louisiana, which is 5 where most of our QFs are, and we work with

6 the LPSC.

7 As a matter of fact, it was

8 Mr. Zimmering who came up with the idea for

9 what's called the day‐ahead mechanism, where

10 merchants ‐‐ where QFs could bid a certain

11 quantity and get ‐‐ we'd have avoided costs

12 based on the bids we received, and then they

13 would have certainty on what they were going

14 to be paid, and we'd have certainty in what

15 was delivered, and the QFs rejected that.

16 That wasn't an Entergy proposal; it was an

17 LPSC proposal. We supported it, but it was

18 an LPSC proposal.

19 And I think that ‐‐ my experience

20 has been the QFs, they look at what they

21 think they can get in the next‐day market,

22 then they make a determination as to whether

23 they're going to sell to us on a firm basis

24 or reserve the option to maybe sell to

25 somebody else on an hourly or daily basis.

0222

1 So we try, and we're happy to continue to

2 try.

3 PRESIDENT SUSKIE: 4 All right. I think our Working

5 Group is going to work on this, and we

6 appreciate delving into this issue in the

7 future in a little more detail.

8 MR. SCHNITZER:

9 Will you permit me one more minute,

10 Mr. Chairman?

11 PRESIDENT SUSKIE:

12 Sure.

13 MR. SCHNITZER:

14 The question you asked a few

15 moments ago, is it the flexible capability or

16 is it the legacy units that's the problem, I

17 think, was the ‐‐

18 PRESIDENT SUSKIE:

19 Yeah.

20 MR. SCHNITZER:

21 ‐‐ comment that you made. Let me

22 just ‐‐ let me just try and address the

23 interplay between those two. If you start

24 with the load shape that Entergy has to

25 serve, you know, which goes up and down by a

0223

1 factor of two many days, and you take out the

2 nuclear and you take out the coal and you 3 take out the QF, you know, if you've got ‐‐

4 you take out the block purchases that fit,

5 you've got a shape that doesn't look at all

6 like a base load; it doesn't look at all like

7 an on‐peak block; it looks like something

8 that has to be flexible and has to move.

9 John will have the current data,

10 but for these legacy units we've been talking

11 about, on a weekly basis, they'll be

12 committed, and they might run at a 20 to

13 30 percent capacity factor for a week, and

14 they'll sit at minimum all night long, and

15 then they'll be part of that power

16 ascendancy, and then, you know, they'll go

17 back down. So that's what we're trying to

18 displace. You know, we don't have any more

19 blocks to displace. What's left is this

20 particular shape, which is what follows the

21 load and provides the flexible capability.

22 So that's the flexible capability

23 requirement. That's what is left to be

24 displaced.

25 Where the legacy unit operating

0224

1 characteristic comes into play is, when you 2 want to displace that, when you commit that

3 unit, you don't commit it for a day, you then

4 can't de‐commit it and recommit it; you've

5 got to commit it for four or five days at a

6 time. And so when you choose not to commit

7 it, you have to be pretty sure that what is

8 going to be providing that flexibility is

9 going to be with you for more than a day.

10 And so that's ‐‐ the system requirements, net

11 of all the other generating resources, are

12 what determines that what's left over

13 requires flexibility. And then the operating

14 characteristics of the units that are

15 currently the most economic to provide that

16 flexibility, you have to keep them in line

17 when you're designing a system to compete

18 against something else against them.

19 And that's all we were trying to

20 convey, is the interplay of those two

21 concepts which got us to the WPP. I hope

22 that's helpful.

23 PRESIDENT SUSKIE:

24 Sure. Absolutely. I see what the

25 issue is.

0225 1 Sam?

2 MR. LOUDENSLAGER:

3 Yeah. I think ‐‐ I think we've got

4 ‐‐ the reason I've been kind of wandering

5 around from person to person is to help

6 somebody ‐‐ have somebody help me remember if

7 we hadn't asked for the operating guides,

8 because I think that's one of the key items

9 that we're going to have to take a look at

10 and better understand, Entergy's operating

11 guides. And that probably will be in the

12 context of the RMR issue, flexibility issue,

13 which is still wide open ate th Working Group

14 level. So that y'all know, we're just trying

15 to get our arms around what the appropriate

16 scope is in order to start addressing that

17 issue.

18 PRESIDENT SUSKIE:

19 And my thoughts are, absolutely, we

20 want to look at those higher priorities to

21 get ready for the filing at FERC for enhanced

22 ICT.

23 MR. LOUDENSLAGER:

24 Right. And my response, Chairman,

25 is that's not going to be a quick process 0226

1 anyway, so we're starting it now, not

2 deviating from the FERC filing, but aware of.

3 This is an issue I know Louisiana has been

4 trying to struggle with for years, and we're

5 just going to try to help them.

6 PRESIDENT SUSKIE:

7 Great.

8 MR. LOUDENSLAGER:

9 Y'all ready for me?

10 PRESIDENT SUSKIE:

11 Yeah.

12 MR. LOUDENSLAGER:

13 I've got three purposes for making

14 the presentation today. One we've already

15 talked about, our activity since y'all's

16 meeting on March 18th, to update you on the

17 progress we're making on the enhancements and

18 then to seek additional input and direction

19 from you as we go through this. I think I've

20 covered this, what our meeting schedule looks

21 like, and kind of ‐‐ that we've issued data

22 requests to Entergy, the ICT and some of the

23 stakeholders, some of the other stakeholders,

24 and that participation by the stakeholders is 25 significant, and that's a good thing. I

0227

1 would encourage all the stakeholders to be at

2 our face‐to‐face meetings, because we do get

3 down into the details on a lot of these

4 issues, and that's a great way for us to hear

5 your perspective on some of these items.

6 So we look at the initial

7 enhancements that were the focus of y'all's

8 conversation in March, and yesterday I went

9 through and just kind of came up with a list

10 of the nine. And whatm I' trying to do here

11 is to reflect in shorthand what the

12 enhancement was and whether or not that

13 enhancement is going to require a tariff

14 change or not. This is one of the things

15 that was the result of our last Working Group

16 meeting face‐to‐face.

17 So the first one was to change to

18 the planning and the planning arising in a

19 transmission service request process. It was

20 adopted, but, if you remember, we've still

21 got some work to do there. Entergy has been

22 helping us doinge th studies. That was

23 greater than three years but less than ten 24 years. Okay? At the end of the day, once we

25 come back with another recommendation to you

0228

1 on what that should look like, it will

2 require a tariff change.

3 The second item is to identify the

4 list of categories of information that are

5 market‐sensitive or confidential. And one of

6 the stakeholders agreed that ‐‐ or suggested

7 that, you know, that information, that list

8 could be included as part of the tariff, and

9 if that's so in attachment whatever, it would

10 require a tariff change, as well. My concern

11 with that is, I don't know how often that

12 list would change. I just don't know. And

13 so if it changes frequently, then that means

14 you're going to have to make a number of

15 tariff changes or tariff changes on a

16 frequent basis.

17 Increase the ICT's authority over

18 the ATC and AFC calculations. Again, we

19 believe that a tariff change will be required

20 for that enhancement, as well.

21 And, let's see, go on to the next.

22 Thank you. 23 Identify RMR units and potential

24 cost‐effective transmission alternatives. As

25 we've discussed this afternoon, we're still

0229

1 working through that. We believe eventually,

2 once we come up with some ‐‐ I'll use the

3 word solutions to that situation, we believe

4 that there will be a need for tariff changes,

5 but that would not be in the initial filing

6 is the way I'm characterizing it, you know,

7 the June ‐‐ the June filing. That will be

8 something that we would have to do later,

9 simply as a matter of workload. We won't

10 have those studies completed by June.

11 MR. BOOTH:

12 Sam?

13 MR. LOUDENSLAGER:

14 Yes, sir.

15 MR. BOOTH:

16 Do you think we have to revise the

17 tariff to find what reliability must‐run in

18 the dis ‐‐

19 MR. LOUDENSLAGER:

20 I think there's a chance of that,

21 Bill. 22 MR. BOOTH:

23 That might be part of the initial

24 filing?

25 MR. LOUDENSLAGER:

0230

1 It depends on where we're at. I

2 don't want to overcommit us. I don't want to

3 over ‐‐ I don't want to boost your

4 expectations too much, Commissioners. I

5 mean, we're going to do what we're going to

6 do, everything we can, so...

7 On the Seams Agreement, one‐stop

8 shopping, elimination of pancake rates, you

9 know, that's all kind of grouped into that

10 one enhancement, and we believe that,

11 certainly, if there's a Seams Agreement, that

12 would require a tariff change. In fact, I

13 think recently, there was a partial Seams

14 Agreement filed between SPP and Entergy at

15 the FERC, addressing a couple of 890 issues.

16 But there's still more work to be done to

17 complete what I consider a confidential Seams

18 Agreement.

19 You know, if there's elimination of

20 the pancake between Entergy and SPP, I'm 21 assuming that there's going to have to be a

22 tariff change for that, too. If something

23 ultimately is adopted for one‐stop shopping

24 and agreed to between the SPP members and the

25 stakeholders and Entergy, I'm assuming that

0231

1 would need a tariff change, as well.

2 The elimination of the base case

3 overload, yeah, it would require tariff

4 changes, but it's really tied more to that

5 planning issue and the transmission service

6 request issue, which was the first item we

7 talked about.

8 Initial enhancements that do not

9 require tariff changes: The process of

10 analyzing TLRs and identifying potential

11 cost‐effective upgrades to eliminate TLRs, we

12 don't believe that that ‐‐ that's more of a

13 process, trying to get to the ‐‐ a solution

14 to the problems, and off the top, I don't

15 believe that that's going to require a tariff

16 change.

17 Comprehensive reporting of TLR data

18 to address causes, again, we don't think that

19 that would require a tariff change. 20 And the construction tracking

21 report, we don't believe will require a

22 tariff change, which ‐‐ I'm sorry.

23 Go ahead.

24 And so then I shift and I move away

25 from the nine enhancements that were

0232

1 addressed at the March meeting and focus on

2e th additional 15 enhancements; actually, two

3 less than that right off the top. Entergy

4 made two proposed enhancements that are being

5 incorporated elsewhere. So I just ‐‐ I set

6 those aside. But these are the items that we

7 don't believe should be pursued at this time.

8 The first one is the development of

9 new markets for the Entergy region. And the

10 thinking of the Working Group ‐‐ and I would

11 encourage the Working Group members to speak

12 up whenever I misspeak, because it was

13 midnight last night when I was finalizing

14 this thing, so... but the reason we decided

15 that it wasn't timely is because this issue

16 would depend largely on whether or not

17 Entergy joins the SPP RTO. If it doesn't, if

18 the decision is made not to join the RTO, 19 then I think we can go ahead and push forward

20 with the question of how can we develop

21 markets in the Entergy region short of an

22 RTO.

23 The second issue is the utilization

24 of an independent market monitor. And,

25 again, part of the basic question was, where

0233

1 is Entergy going to be? Are they going to be

2 in an RTO or not? If they're in an RTO,

3 they're going to have an independent market

4 monitor or market monitoring unit evaluating

5 their activities. And so, in the short‐term,

6 even two to three years, it could be a costly

7 enhancement and unnecessary. Also, if there

8 were market power‐related issues that

9 stakeholders have concerns about, I see the

10 E‐RSC as being a forum for people to bring

11 those issues to. Okay? And then we're

12 thinking that some of the other proposed

13 enhancements will help alleviate some of the

14 concerns over market power.

15 Turning over to page 8, the ‐‐ this

16 is a group that we're saying we're working

17 on; we're not bringing anything to you today. 18 If you have guidance that you want to provide

19 to us, you're certainly welcome to that. And

20 so these are ‐‐ again, these are things we're

21 working on. To begin to work through the

22 stakeholders ‐‐ the enhancements that were

23 proposed by the stakeholders, and some of

24 these proposals are related to ultimately

25 what happens with the 205 rights issue.

0234

1 We may find out, as we get further

2 down the road, that some of those

3 enhancements should not be pursued at this

4 time, but just so you recall, because it was

5 helpful for me to be reminded, that that

6 initial list of nine proposed enhancements,

7 we used kind of three rough criteria to

8 evaluate whether or not, of all the

9 enhancements, how do we determine what needs

10 to be done first? And so these were the

11 three criteria: They need to be relatively

12 low‐cost, they needed to be achievable in a

13 reasonable time period, and they needed to

14 result in a tangible ratepayer benefit. So

15 that's the ‐‐ kind of the criteria we're

16 starting with,n eve as we review these 17 additional ones. And I think we're still

18 talking through whether or not there are

19 additional criteria or different criteria

20 that we need to use to evaluate them.

21 So one of the proposed enhancements

22 was to determine the economic benefits of

23 upgrades in the planning process, and our

24 take on it, at least right now, is that this

25 is related to the 205 issue and what may be

0235

1 resolved, depending on what rights are agreed

2 to. So, i.e., everything seems ‐‐ well, not

3 everything. Everything either goes back to

4 planning or cost allocation.

5 So the distinction of the economic

6 versus reliability upgrades, again, that's

7 related to the planning and transmission

8 service request process. And I have asked

9 Entergy to complete the study that they were

10 asked to perform by May the 14th, I believe,

11 which would give the Working Group plenty

12 of ‐‐ well, give the Working Group some time

13 to evaluate the results of that study before

14 the June meeting, and that's going to be key,

15 because that ties ‐‐ remember the issue? 16 Three years isn't long enough; ten years may

17 be too long. What's the right study horizon?

18 And ‐‐ because it all ties back to the TSR

19 issue.

20 Evaluating the limitations of the

21 ICT contract. And I've asked ESPY, Energy

22 Solutions, to take a hard look at that

23 contract and report back to us on where there

24 might be some concerns, constraints in the

25 contract, and I imagine that will be reported

0236

1 back to you at the next meeting.

2 The issue of additional resources

3 and staff for the ICT. And this is me

4 speaking for me, not the Working Group. I

5 think that's more a question of compensation

6 under the contract. You know, if there are

7 more resources that are needed and staff

8 needed by the ICT, I think it's just a

9 question of will Entergy pay for those

10 resources or not. So that can be addressed

11 as we move forward.

12 Identification of cost‐effective

13 remedies on congestion ‐‐ to congestion on

14 flowgates. We think that this is one of 15 those items that also could be addressed

16 through proposed planning enhancements, but a

17 caveat is, is that last night, I was thinking

18 it may require additional study. This

19 morning or this afternoon, I'm thinking,

20 yeah, it's going to require additional study.

21 You're going to ‐‐ you're going to want

22 better information than will result from just

23 kind of the planning horizon study.

24 The Attachment K economic studies,

25 we're currently kind of ‐‐ have rolled that

0237

1 into the ‐‐ our work that we're going to be

2 doing on the RMR and planning issues.

3 We talked about this this morning,

4 who should have 205 filing rights and the

5 extent of such rights. Some stakeholders

6 propose that the ICT should have them. The

7 ICT doesn't want them, and nor should they

8 have them, I don't think. The Working Group

9 believes that the rights should reside with

10 the E‐RSC, and as we talked this morning,

11 we're looking for guidance on the extent of

12 such rights and need guidance on how the

13 rights would be acquired. 14 So those are two major issues. And

15 if I understood this morning, you're looking

16 for stakeholders to provide us with input on

17 that question ‐‐

18 PRESIDENT SUSKIE:

19 Yes.

20 MR. LOUDENSLAGER:

21 ‐‐ on both of those questions, I

22 guess.

23 PRESIDENT SUSKIE:

24 Yes. Stakeholders, including

25 the ‐‐ including, you know, the Working

0238

1 Group. One even thought I had was the ICT,

2 if they say, you know, these are changes that

3 need to be made to the tariff, and my thought

4 was they submit something to this ‐‐ the

5 E‐RSC, and then the E‐RSC votes it through

6 this process of all stakeholders and then

7 decide, you know, based upon the

8 recommendation of the ICT, could they accept

9 that recommendation or reject it after

10 stakeholder approval.

11 MR. LOUDENSLAGER:

12 Just to be clear, the ICT, they are 13 part and parcel of our Working Group. I've

14 made certain that they are not excluded.

15 They provide a level of independence that is

16 beneficial to us, so they're there with us.

17 PRESIDENT SUSKIE:

18 Bruce, what are your thoughts on,

19 as the Independent Coordinator Transmission,

20 the ICT, feels, hey, there needs to be some

21 changes to the tariff, that that be

22 recommended to the E‐RSC for consideration?

23 MR. REW:

24 Mr. President, is your question are

25 we willing to submit to his comments or ‐‐ I

0239

1 mean, ‐‐

2 PRESIDENT SUSKIE:

3 Well, if some of the stakeholders

4 think the ICT should have 205 filing rights,

5 since they don't want them, and so then if

6 there's something you think needs to be

7 changed, what about a process ‐‐ of course, I

8 guess we could do this to any stakeholder,

9 but a process that that be submitted to this

10 board ‐‐ committee, assuming we had 205

11 filing rights, and we could review it, 12 consider it, you know, pass something

13 unanimously and give that to Entergy to file?

14 What's your thoughts on that?

15 MR. REW:

16 Maybe I'm not thinking clearly this

17 afternoon, but I'm making sure that what

18 you're saying is that, if there's a proposal

19 for the ICT to have some limited 205 filing

20 rights?

21 PRESIDENT SUSKIE:

22 No, no, no. What do you think of

23 the concept, if you believe something needs

24 to be changed, instead of y'all having it,

25 you propose it to us, and then we determine

0240

1 whether or not to file it?

2 MR. REW:

3 Well, I think that should be part

4 of the process, that we provide our comments

5 and suggestions and changes that should be

6 made.

7 PRESIDENT SUSKIE:

8 Okay.

9 MR. LOUDENSLAGER:

10 Go ahead and go to the next page. 11 The elimination of participant

12 funding. And our feeling is, once the 205

13 issue is addressed, we can address this,

14 along with whatever other cost allocation

15 issues were directed to be tackled by the

16 E‐RSC.

17 Now, having said that, we are in

18 the process, over the next couple of months,

19 of getting ourselves and everybody else much

20 better educated on the way cost allocation is

21 done in both RTO and non‐RTO areas. And when

22 I finish up this afternoon, y'all will get a

23 taste of that at hkind of a hig level. Okay?

24 The ICT should be responsible for

25 exchanging operational and planning data and

0241

1 for coordinating with other regions on behalf

2 of Entergy. And our take on this issue is

3 that it's currently being discussed and will

4 be addressed through the AFC/ATC issue, as

5 well as the Seams issue. It's one of those

6 critical ‐‐ I think it's an issue that's part

7 of the 890 compliance process related to

8 Seams, FERC Order 890.

9 The next item is the QF put related 10 issue. You'll get a taste of that this

11 afternoon. We're going to get a lot bigger

12 drink next Friday. I've asked Entergy ‐‐

13 John is going to come in and talk to us about

14 the QF put item, as well as what's meant by

15 "flexibility." And, hopefully, we'll have a

16 much better understanding at the end of the

17 day next Friday.

18 Go ahead.

19 These are the things that we're

20 currently spending ‐‐ at least last night, it

21 appeared to me that we were spending most of

22 our time on in the Working Group and with the

23 stakeholders; the scope of the reliability

24 must‐run study, the QF put issue and

25 flexibility, the 205 rights issue and then

0242

1 the metrics issue. So those are the things

2 broadly, kind of collected, that we're going

3 to be focused on for the next month. That's

4 it.

5 Do y'all agree that those are the

6 four items that we need to be focusing our

7 attention on? Keep in mind we've got the

8 tariff ‐‐ 9 PRESIDENT SUSKIE:

10 (Talking over one another) ‐‐ of

11 the tariff filing.

12 MR. LOUDENSLAGER:

13 Yeah. And that's kind of the

14 overriding thing, and we've got ESPY working

15 on that for us right now. So...

16 PRESIDENT SUSKIE:

17 Good.

18 Jimmy, you had something about RMR,

19 that study? Because I assume y'all are going

20 to be taking that up.

21 MR. LOUDENSLAGER:

22 Yes, sir.

23 VICE‐PRESIDENT FIELD:

24 I'd like to just make a preliminary

25 statement about the RMR ‐‐ return to that,

0243

1 because I think that and the metrics are

2 critical. And at the last meeting, we

3 approved a metric that requires Entergy to

4 make quarterly reports identifying the legacy

5 units that operate at a capacity factor of

6 15 percent or higher and have a heat rating

7 in excess ofd 10,500. An I don't ‐‐ I don't 8 know whether that filing has been made or

9 not.

10 MR. LOUDENSLAGER:

11 I don't ‐‐ Commissioner Field, I've

12 seen a lot of paper over the last couple of

13 weeks. I don't think it has. But could I

14 offer something? I mean, you folks are going

15 to be meeting monthly, and it might be

16 something that you want to see more

17 frequently than quarterly.

18 VICE‐PRESIDENT FIELD:

19 I think we did quarterly because

20 they reported quarterly now. Is that

21 correct?

22 MR. HURSTELL:

23 I'm not sure we report ‐‐ I'm not

24 sure we report this particular parameter that

25 you just mentioned quarterly. My

0244

1 understanding was the first one was due ‐‐ is

2 it May 15th?

3 MR. LOUDENSLAGER:

4 I can't tell you off the top ‐‐

5 MR. HURSTELL:

6 We have no problem supplying the 7 information. We'll do it monthly, we'll do

8 it quarterly, whichever way you want to have

9 it.

10 VICE‐PRESIDENT FIELD:

11 I think ‐‐ I know I speak for

12 myself, and I think I speak for the other

13 states, but let me just tell you what we'd

14 like to focus on, because I know Mr. Hurstell

15 and Michael have explained how maybe their

16 systems differ in flexibility and so forth.

17 But just let me read out the units that we'd

18 like to focus on initially.

19 Baxter Wilson, Entergy Mississippi,

20 that's running 22 percent of the time; Gerald

21 Andrus, Entergy Mississippi, running

22 22.3 percent capacity; R.S. Nelson,

23 Entergy/Gulf States, 33.8 percent; Little

24 Gypsy, Entergy Louisiana, running

25 25.6 percent of the time. These are

0245

1 January 2008 to December of 2008 percentages.

2 Nine Mile Point, Entergy Louisiana,

3 35 percent; Sabine, Entergy/Gulf States,

4 33.6 percent; Michoud, Entergy New Orleans,

5 36.7 percent; and Lewis Creek, Entergy/Gulf 6 States, which I think that's Texas now,

7 68.6 percent.

8 There's some other ones that run

9 less, but if we could focus on those units, I

10 think that's where the low‐hanging fruit is.

11 That's good for the environment. That's good

12 for the ratepayers. And if the totals are

13 right, it's about $400 million that could

14 possibly be saved, depending on the price of

15 gas.

16 Now, I understand that, since the

17 last meeting, there has been discussions

18 between the ICT, the E‐RSC Working Group and

19 stakeholders regarding the appropriate

20 terminology to be used in identifying these

21 units. I think we need to provide clarity on

22 this issue in order to avoid slowing down the

23 process. Given the publicly available data

24 to demonstrate the historic usage of the old,

25 inefficient units, it strikes me that timely

0246

1 action is needed and justified. While we

2 debate terminology, old units keep running.

3 By definition, when a utility dispatches its

4 units out of economic order, ratepayers pay 5 more than they otherwise would. This issue

6 has troubled us for years. Entergy has

7 identified two reasons for operating these

8 old units; reliability must‐run and load

9 following.

10 Irrespective of which

11 classification an old unit falls in, its

12 characteristics are the same. They're older,

13 they're inefficient and they're costly, and

14 then they put out more emissions. The

15 analysis that needs to be done seems

16 straightforward. Identify how many hours

17 particular old units are running, input it as

18 publicly available from the Energy

19 Information Agency, the EIA, to determine

20 cost‐effective transmission solutions. If an

21 old unit is running only sparingly, it stands

22 to reason a multimillion‐dollar transmission

23 solution may not be necessary.

24 In other words, re‐dispatch may

25 make economic sense, as Mr. Hurstell showed

0247

1 us for that particular unit, given its

2 limited use; however, the historic data

3 indicates a significant number of units are 4 running for significant hours at a real cost

5 to ratepayers.

6 Our neighbors to the west, ERCOT,

7 have been quite successful in executing a

8 strategy at the wholesale energy level that

9 has reduced the use of old units in its

10 jurisdiction. If a unit is identified as an

11 RMR unit, the info ‐‐ unit's info is made

12 public, and ERCOT timely identifies a

13 cost‐effective solution. I see no reason we

14 cannot follow the same path.

15 As for old gas legacy units that

16 ETR relies on for load‐following purposes,

17 ERCOT's robust wholesale market, which is

18 facilitated by a robust transmission system

19 that we're trying to get, has driven the

20 costly, high heat rate units out of the

21 market. In other words, wholesale

22 competition has worked in that setting to

23 lower costs to ratepayers. Given Entergy's

24 2007 FERC testimony that revealed that

25 transmission accounts for only 7 percent of

0248

1 its overall production costs compared to

2 77 percent for generation, whether it's their 3 generation or purchase power, the opportunity

4 to invest dollars in transmission would

5 reduce savings in generation appears

6 significant.

7 My hope is that my fellow E‐RSC

8 Commissioners will direct the ICT and the

9 Working Group to produce a timely work plan

10 that identifies cost‐effective transmission

11 solutions for a legacy gas fleet,

12 irrespective of its particular designation.

13 And I would like to ask my fellow

14 Commission member, Ken, if they have been

15 able to reduce the average heat rate in ERCOT

16 and how it is accomplished, and are the RMR

17 units made public; in other words, do people

18 know which are RMR units and so forth?

19 SECRETARY ANDERSON:

20 The answer to your last question is

21 yes, they are, and ERCOT does have a process.

22 They typically will try tto ge a

23 transmission ‐‐ try to get a transmission

24 solution within a year, you know, of the unit

25 being designated RMR. I think there have

0249

1 been a couple of occasions where it's been a 2 little longer, but I think rarely longer than

3 two years. Over the last ten years, we've

4 retired or mothballed over 15,000 megawatts

5 of all inefficient units because they just

6 can't compete in the ERCOT market. That's

7 really an astounding ‐‐

8 VICE‐PRESIDENT FIELD:

9 That is.

10 SECRETARY ANDERSON:

11 ‐‐ you know, number, and it's

12 continuing. Just this year, I've seen ‐‐ I

13 think there have been four or five units that

14 are filed now with ERCOT to be mothballed,

15 because they're just not ‐‐ they're not being

16 called upon anymore, and the overwhelming ‐‐

17 the overwhelming majority are old gas units.

18 VICE‐PRESIDENT FIELD:

19 And they were identified as

20 reliable must‐run units?

21 SECRETARY ANDERSON:

22 Well, in some cases ‐‐ in some

23 cases, they are; in other cases, what happens

24 is, you file ‐‐ the generator files with

25 ERCOT that they want to retire or mothball,

0250 1 and then ERCOT will do a quick study to

2 determine ‐‐ you know, to determine whether

3 anything remaining, in which case they're

4 designated RMR, and they're paid under a

5 formula. But then ERCOT immediately will

6 work ‐‐ will work to get a transmission

7 solution that will allow it to be retired or

8 mothballed.

9 Generally speaking, the contract is

10 for a year at a time, the RMR contracts.

11 They can be a little shorter, but they

12 usually run about a year, or just as long as

13 it takes, you know, for ERCOT to get a

14 solution.

15 VICE‐PRESIDENT FIELD:

16 Well, I realize, as Mr. Hurstell

17 has pointed out, we may not have as viable a

18 wholesale market as ERCOT does because the

19 way we regulate it, but we do have a

20 wholesale market in Entergy's system. And

21 maybe we can't retire as many megawatts as

22 they've been able to, but when you've got

23 units running, you know, from 22 to 68

24 percent, a lot of them in the 30s, that we

25 ought to, at least, target those and see if 0251

1 there is a transmission solution, when you

2 take the fact that only 7 percent in 2007 was

3 the cost of transmission versus 77 percent.

4 We ought to see if these ‐‐ if there's

5 reasons that they have to keep running them

6 in those capacities, then we'll be

7 reasonable, but we just need to have an

8 explanation, and if there's not one, then

9 they need to see about reducing the capacity

10 that they're running at.

11 MR. LOUDENSLAGER:

12 Commissioner Field ‐‐ this is Sam

13 Loudenslager ‐‐ I want to go through the list

14 and make sure I captured the units that you

15 were focused on. Baxter Wilson, Gerald

16 Anderson ‐‐

17 VICE‐PRESIDENT FIELD:

18 Andrus, A‐N‐D‐R‐U‐S.

19 MR. LOUDENSLAGER:

20 ‐‐ Andrus, R.S. Nelson, Little

21 Gypsy, Nine Mile, Sabine, Michoud and Lewis

22 Creek.

23 VICE‐PRESIDENT FIELD:

24 That's correct. 25 MR. HURSTELL:

0252

1 Can I ask for a clarification?

2 PRESIDENT SUSKIE:

3 Sure, John.

4 MR. HURSTELL:

5 Well, first off, I welcome the

6 chance to come and talk to this group about

7 these units, like I mentioned earlier. But I

8 would like a clarification, Commissioner.

9 The names you gave were not for units. They

10 were for plants and stations. So, for

11 example, Sabine has five units. Baxter

12 Wilson has two. I just want to ‐‐ in terms

13 of the data we give you, do you want us to ‐‐

14 I always thought you were ‐‐ you were asking

15 us to give you unit‐specific information,

16 because I don't think all of the Sabine units

17 run at ‐‐ what did you say ‐‐ a 15 percent

18 capacity factor.

19 VICE‐PRESIDENT FIELD:

20 On Sabine, this chart shows

21 33 percent.

22 MR. HURSTELL:

23 Okay. But what I'm saying is, is 24 that this five units at Sabine, do you want

25 us to report based on the Sabine station, or

0253

1 do you want us ‐‐

2 VICE‐PRESIDENT FIELD:

3 I think it would be better if it

4 was per unit, because you might have some new

5 units at Sabine that I don't know about. I'm

6 just going from what the ‐‐ this percentage

7 is showing.

8 MR. HURSTELL:

9 I agree with you. It makes more

10 sense to do it by unit.

11 VICE‐PRESIDENT FIELD:

12 Right.

13 MR. HURSTELL:

14 I just wanted clarification,

15 because what that means is, when we show you

16 the numbers, if need be ‐‐ I'm not sure where

17 you got ‐‐ where the numbers come from, but

18 if we show you the numbers, we may show

19 Sabine with a different capacity factor that

20 may be higher than what you're seeing if that

21 number is based on the whole station. If we

22 give you numbers based on a smaller number of 23 units, the values are going to be different.

24 But we'll ‐‐ we'll provide you the

25 information on a unit‐by‐unit basis. I think

0254

1 that makes more sense.

2 VICE‐PRESIDENT FIELD:

3 I think that would be helpful.

4 MR. HURSTELL:

5 One clarification. You mentioned

6 the Nelson unit. That includes a coal unit,

7 so I'm assuming you don't want information on

8 the coal unit at Nelson. There are some

9 gas‐fired units at Nelson, as well, but I'll

10 exclude the coal units.

11 VICE‐PRESIDENT FIELD:

12 Well, I put ‐‐ I think we ought to

13 put them all in there. I don't know.

14 This ‐‐ this came from a publication, U.S.

15 EPA ‐‐

16 MR. HURSTELL:

17 What's the capacity factor you have

18 for Nelson?

19 VICE‐PRESIDENT FIELD:

20 For Nelson, the capacity shown here

21 is 33.8 percent. 22 MR. HURSTELL:

23 That ‐‐ that has to exclude the

24 coal.

25 VICE‐PRESIDENT FIELD:

0255

1 Right. It shows a heat rate of

2 11,959, so that doesn't ‐‐ that's not the

3 coal units or gas units.

4 MR. HURSTELL:

5 Well, the coal unit could have that

6 kind of heat rate, but the capacity factor

7 tells me it doesn't include the coal unit.

8 VICE‐PRESIDENT FIELD:

9 Okay.

10 MR. HURSTELL:

11 Okay. We'll get you ‐‐ we'll get

12 you the information.

13 PRESIDENT SUSKIE:

14 And I would say, don'te just giv

15 precise information, you know, just about

16 that. Help the Working Group study and learn

17 all the various factors.

18 MR. HURSTELL:

19 Well, don't worry about that.

20 We'll give them ‐‐ we'll give them ‐‐ 21 PRESIDENT SUSKIE:

22 And I ‐‐ and I throw this challenge

23 out to Entergy. It seems to me that ‐‐ and

24 help me understand this ‐‐ with these old

25 legacy units, they're just good, we have to

0256

1 do it, and that's it. What's y'all's

2 solution to the legacy units? More of the

3 same?

4 MR. HURSTELL:

5 Again, they provide a valuable

6 service, and when you look at the constraints

7 we have on our system ‐‐

8 PRESIDENT SUSKIE:

9 Whoa, whoa. Constraints. Does

10 that mean transmission constraints?

11 MR. HURSTELL:

12 No. All of the constraints. The

13 QF put, that's a big one.

14 PRESIDENT SUSKIE:

15 10 percent.

16 MR. HURSTELL:

17 We have ‐‐ no. That's ‐‐

18 10 percent of our energy comes from QF put.

19 If we ‐‐ if we have a QF put tomorrow, 2,500 20 megawatts, that means we need to have on our

21 system 25 megawatts of unloaded generation

22 that can respond ‐‐ 2,500, I'm sorry ‐‐

23 2,500 megawatts of generation that can

24 respond. In order for me to use the merchant

25 generators to do that, based on the bids that

0257

1 they've given us, I would need 25 merchant

2 generators operating at their minimum in

3 order to provide that flexibility. So if

4 they give me a minimum of 350 megawatts that

5 I have to take, multiply that times 25 ‐‐ and

6 I can't do that math off the top of my head,

7 but it's probably 8,000 ‐‐ I'd be buying

8 8,000 megawatts of merchant generation in

9 order to get 2,500 megawatts of flexible

10 capability, or I can rely on the legacy

11 units, where I can run a 50‐megawatt

12 legacy ‐‐ a legacy unit at 50 megawatts and

13 have 400 megawatts of flexible capability.

14 PRESIDENT SUSKIE:

15 How often do you get

16 2,500 megawatts put on the system?

17 MR. HURSTELL:

18 That's probably the peak, but 19 probably 1,500 to 2,000 is probably a good

20 daily number, 1,500 to 2,000.

21 PRESIDENT SUSKIE:

22 Daily?

23 MR. HURSTELL:

24 Yes. Oh, yes.

25 PRESIDENT SUSKIE:

0258

1 And then the question is: Is there

2 a way to solve the problem with the QFs

3 through state Commissions?

4 MR. HURSTELL:

5 We have ‐‐ we've tried. We've ‐‐

6 PRESIDENT SUSKIE:

7 That's never been before the

8 Arkansas Commission. We don't have the QF

9 that Louisiana has.

10 MR. HURSTELL:

11 We have one QF in Arkansas. We've

12 worked with the LPSC. Mr. Zimmering worked

13 with us. He ‐‐ it was his solution. He came

14 up with a solution that I thought was very

15 effective. We supported it 100 percent. But

16 the QFs weren't interested. They had the

17 option, and they haven't been willing to get 18 that out.

19 PRESIDENT SUSKIE:

20 Anything else, Sam?

21 MR. LOUDENSLAGER:

22 (Shakes head.)

23 PRESIDENT SUSKIE:

24 With that, let's take a ten‐minute

25 break and come back.

0259

1 (Recess.)

2 PRESIDENT SUSKIE:

3 As y'all know, as I think Sam

4 pointed out, it seems a lot of these issues

5 relate to cost allocation and construction

6 plans, other things. So as a result, we have

7 ‐‐ meant to do this last month, but we

8 somewhat ran out of time, and so we're going

9 to have a couple presentations about various

10 cost allocation methodologies. To let you

11 know, as a member of the SPP RSC, this is, by

12 far, one of the most challenging issues that

13 are out there.

14 Sam and the cost allocation Working

15 Group within SPP sent ‐‐ spent months trying

16 to come up with a balanced portfolio to be 17 spread evenly, those costs, because the

18 benefits would have been evenly throughout

19 the system. Recently, SPP ‐‐ and I think

20 they filed earlier this week or last week,

21 their RT ‐‐ this week, a RTO tariff to

22 allocate the costs across the system. 300 kV

23 and above is spread equally based upon load.

24 Below that, it's two‐thirds.

25 Kind of interesting, what I always

0260

1 thought, is that's very similar to how

2 Entergy allocates its costs among its

3 operating companies. It's based upon load.

4 For those 230 and above, it's spread based

5 upon load. It's different below that.

6 And, clearly, this is one of the

7 most challenging things, as the 7th Circuit

8 opinion regarding FERC points out, and this

9 is ‐‐ and I would encourage everybody ‐‐

10 Sam, is that the ‐‐ did twe pu that

11 on the ICT ERC Web site, the cost allocation

12 summary ‐‐ what is it ‐‐ PJM did?

13 MR. LOUDENSLAGER:

14 Yeah. Ben and Jay found that on

15 the PJM Web site on a cost allocation ‐‐ 16 Primer.

17 PRESIDENT SUSKIE:

18 Primer?

19 MR. LOUDENSLAGER:

20 Yeah. And we made it available on

21 the Web site, I believe.

22 MR. BRIGHT:

23 I e‐mailed the link out after the

24 March 18th meeting.

25 PRESIDENT SUSKIE:

0261

1 I would encourage anybody that has

2 a chance ‐‐ I think it is just great. I

3 mean, it analyzes ‐‐ you know, how you track

4 benefits is incredibly hard, because if you

5 build a line, somebody may benefit

6 economically from it, but somebody else may

7 benefit reliability from it. It's a great

8 paper, because there is no precise answer to

9 cost allocation, and, therefore, I look

10 forward to hearing the presentations so we

11 can learn more.

12 MR. BRIGHT:

13 I appreciate you covering my first

14 two slots. 15 PRESIDENT SUSKIE:

16 I'm not going to cover any more.

17 VICE‐PRESIDENT FIELD:

18 I request permission to walk

19 around. I've been standing up for a while.

20 PRESIDENT SUSKIE:

21 Granted.

22 MR. BRIGHT:

23 Okay. Anyway, I appreciate this

24 opportunity. I actually got to learn a lot.

25 I didn't know a whole lot about cost

0262

1 allocation. Over the last couple of months,

2 I've certainly learned a lot.

3 MR. LOUDENSLAGER:

4 You'll learn a lot more.

5 MR. BRIGHT:

6 And I'll learn a lot more, I guess,

7 in the process as we go forward. As Sam

8 talked about earlier ‐‐ I just want to make

9 sure ‐‐ you know, it's just for education,

10 and I hope you guys find it useful. And it

11 is a ‐‐ it is a ‐‐ I used that PJM document

12 that you referenced pretty much as the basis

13 for the presentation, so I got it not long 14 before that March meeting, and I found it

15 pretty useful. It sort of mimicked some of

16 the other research I did. I set it up kind

17 of like that document.

18 Anyway, I'm on this slide. We're

19 on slide 2, for people who are still on the

20 phone. There's really a couple of different

21 major ways that cost allocation ‐‐ the debate

22 around cost allocation. It's really around

23 whether or not the beneficiary pays or

24 there's some socialization on costs. And the

25 beneficiary pays really just refers to those

0263

1 entities that receive the bulk of the benefit

2 pay the bulk of the costs, and socialization

3 really is ‐‐ just goes on the notion that

4 things like reliability are shared by an

5 entire system, so those costs then should be

6 shared by everyone.

7 A couple of different ‐‐ couple of

8 main types of socialization costs, and that's

9 bullet points 2 and 3 on this slide. It's

10 really just either by an amount of megawatt

11 usage across the entire footprint or more on

12 some peak consumption usage. 13 PRESIDENT SUSKIE:

14 Now, I would like to ask Entergy ‐‐

15 now, am I accurate that 235 kV and above

16 transmission across Entergy operating's

17 company is divided based upon load? Is it

18 230 kV and above?

19 We'll come back to that, okay, when

20 they come back.

21 Correct me if I'm wrong. Then,

22 below that, is situs, based on which

23 jurisdiction that it's built in pays for

24 that. That's my understanding. I guess

25 we'll wait for Kim.

0264

1 MR. HURSTELL:

2 Yeah. You have the B team here

3 now.

4 PRESIDENT SUSKIE:

5 Okay. Let's ask the tough

6 questions now.

7 MR. CAMET:

8 Non‐system agreement team.

9 MR. HURSTELL:

10 I believe that's correct, though.

11 PRESIDENT SUSKIE: 12 Okay.

13 MR. BRIGHT:

14 Okay. And then as far as the

15 beneficiary payback, there's a couple of

16 different ways that they talk about it in

17 this document, and they're both calculations,

18 either based on a flow basis and then on a

19 monetary impact, where they go through some

20 studies and define who derives most of the

21 benefit on a given facility or a given

22 upgrade, and then they assign benefits that

23 way. Let me go back.

24 I think another good point is in

25 the U.S., generally, it's always assessed to

0265

1 load, where, internationally, some countries

2 have moved to where they assess costs to

3 generation. So I think, if I'm not mistaken,

4 MISO is working through a injection

5 withdrawal method that I think would sort of

6 get into assessing and allocating costs to

7 the generation. So as far as I know, that

8 would be the first in the U.S.

9 As Chairman Suskie said, no one

10 version of either one of those four methods 11 seems to work anywhere, so it's always ‐‐

12 it's mostly a hybrid method in all of these

13 situations. So what I was going to do is

14 just kind of walk through the different RTOs

15 and ITOs and kind of talk a little bit about

16 their methods.

17 So, first of all, Cal ISO, they

18 have a 200 kV and above breaking point, and

19 so anything ‐‐ and this is ‐‐ for them, it's

20 both on reliability and economic projects.

21 They don't make a real distinction. So

22 anything 200 kV and above are shared across

23 the entire footprint on a megawatt basis. So

24 it's on a use basis. And then anything below

25 200 kV is then assigned to the specific

0266

1 utilities on an access charge basis. Okay?

2 MR. McCULLA:

3 Could I ask a question here?

4 MR. BRIGHT:

5 Sure.

6 MR. McCULLA:

7 Is transmission service request

8 covered in that first bullet over there, or

9 is that a different ‐‐ do they handle it 10 differently; do you know? Like, if a

11 transmission service request comes in and

12 requires an upgrade, is it covered under that

13 first thing?

14 MR. BRIGHT:

15 I believe so, but I'm not exactly

16 sure. I can follow up on that if I need to.

17 And I wasn't sure if anybody was

18 interested in the generation interconnection

19 side, but for CAL ISO, they generally assign

20 it directly to the interconnecting facility,

21 but they do have this location constrained

22 resource interconnection facility for remote

23 areas where they allow some socialization of

24 the upfront costs until that generator comes

25 online. And then they ‐‐ and then it's ‐‐

0267

1 anything after that is then assigned.

2 ISO New England, they have a 115 kV

3 sort of breakpoint, where anything above 115

4 kV is assigned on a peak megawatt usage, and

5 anything below 100 kv ‐‐ or 115 kV is

6 localized to a specific zone. And their

7 economics ‐‐ again, for economic projects,

8 they do it through a cost/benefit or cost ‐‐ 9 yeah, a cost/benefit evaluation, and looking

10 at the net present value of benefits and

11 costs, and then once it passes that test,

12 then they're allocated just like their

13 reliability projects. And then generation

14 interconnect again, as most of them, they are

15 100 percent responsible ‐‐ or 100 percent of

16 the cost to the interconnection facilities.

17 MISO ‐‐ and this is what's

18 currently approved at MISO. I said before,

19 they're in discussions now of doing some

20 changes to their cost allocation, looking at

21 that injection withdrawal method, and I think

22 a couple other things they might be looking

23 at, as well. But they have a 345 and above

24 where it is allocated 100 percent to the

25 load, and then, of that allocation,

0268

1 20 percent of it is allocated based on a

2 monthly peak megawatt usage, and the other

3 80 percent are calculated on a flow base

4 calculation of some line outage distribution

5 factor calculation. And then below 345 kV

6 are all done on a subregional basis, so

7 they're assigned out to their subregions 8 based on ‐‐ based on a flow basis.

9 So that was just for reliability

10 projects, and then economic projects, they go

11 through an analysis where they look at

12 benefits over a ten‐year period, and they

13 weight those ‐‐ they weight the changes to

14 production costs over that ten‐year period

15 and also their LMPs. So, again ‐‐ and then

16 they break it up into the same kind of 80/20,

17 where 20 percent of those costs are then

18 allocated on that ‐‐ on that peak monthly

19 points of megawatt usage, and then other

20 80 percent to the subregions based on a

21 monetary metric of benefits, so ‐‐ of the

22 annual benefits.

23 And then their generation

24 interconnection, some of them are a little

25 bit different. For 345 kV and above, they ‐‐

0269

1 90 percent of those costs are assigned

2 directly to the ‐‐ to the interconnecting

3 facility or the developer, and then

4 10 percent are allocated system‐wide on a ‐‐

5 on a monthly peak basis, and anything below

6 345 is assigned directly to the 7 interconnection facility.

8 And then there's some other rules

9 around. If you're interconnecting with the

10 American Transmission Company, ITC, Michigan

11 Electric or ITC Midwest, then 50 percent of

12 costs are allocated like reliability

13 projects, and the other 50 percent are

14 directly to ethe zon of interconnection.

15 PJM, they actually ‐‐ they have a

16 500 kV and above breaking point, which is the

17 highest one I've seen out there as far as

18 breaking point goes, and they ‐‐ so then they

19 allocate anything above 500 or above, and

20 that includes lower voltage products ‐‐ or

21 projects that are out there in support of a

22 500 kV project or above 500 kV. They will

23 allocate those 100 percent based on the zonal

24 share on a non‐coincident peak, and then

25 below 500 kV, if it's ‐‐ they go through a

0270

1 cost breakdown. If it's more than

2 $5 million, they do it on a flow‐based

3 factor. And then if it's less than

4 $5 million, they allocate it to the load

5 specifically in that zone of the upgraded 6 facility.

7 And then for economic projects,

8 anything over 500 kV or above, they allocate

9 exactly like reliability, and as they go

10 below 500kV, if it's an acceleration project

11 of an approved ‐‐ something that's already on

12 a reliability plan, then they allocate that

13 on a benefit calculation, and anything where

14 it's a modification ‐‐ so it's not the same

15 project, but maybe a different project ‐‐ to

16 an approved reliability project, then they do

17 that on a flow base factor. And, again, for

18 GI studies, it's 100 percent to the

19 interconnecting facility.

20 What I put up here for SPP is

21 actually what is currently in place, but

22 then, as Chairman Suskie pointed out this

23 week, they filed at FERC what's known as the

24 Highway Byway Plan. And the details of that

25 are actuallyP on the SP work Web site, on the

0271

1 main page, of what's been filed, both the

2 filing and kind of description of exactly

3 what's filed.

4 And in the Highway Byway, I'll talk 5 about that one. It's the same for both

6 reliability and economic projects. There's a

7 300 kV breakpoint, where anything 300 kV or

8 above is allocated across the entire

9 footprint on a load ratio share basis, and

10 then anything below 300 kV is actually

11 allocated onto ‐‐ between a regional and a

12 zonal charge. So between 100 kV and 344 kV,

13 I think it's 67 percent regional, 33 percent

14 zonal; and then below 100 is 100 percent

15 zonal. And I might have had those backwards,

16 but I think ‐‐ I think that's right.

17 And then as far as generation

18 interconnection, they have a couple of

19 different breakpoints on a cost per megawatt

20 being interconnected and also wind versus

21 nonwind, and then that hasn't changed there.

22 So anything in excess of $180,000 in megawatt

23 capacity is allocated directly back to the

24 facility, and then less than that, whether

25 it's wind or not, are allocated somewhat

0272

1 differently.

2 New York ISO, so they're a little

3 bit different than the others, in that they 4 directly assign the costs of upgrading for

5 reliability projects to the zone that has a

6 reliability violation. And if it happens to

7 be a New York ISO‐wide violation, then they

8 will go ahead and assign that out to the full

9 footprint.

10 And then as far as economic

11 projects, they do a cost/benefit analysis,

12 and then the costs are allocated to the zones

13 who receive the benefit, but they have one

14 little other mechanism they use, in that they

15 have the LSEs have to vote on economic

16 projects, and it takes 80 percent of the LSEs

17 voting in favor for that to continue ‐‐ for

18 that project to move forward.

19 And as far as GI studies go,

20 generally, the developers are 100 percent

21 responsible, but they do allow, if you build

22 generation interconnection upgrades and that

23 they have additional capacity, once that

24 capacity is used, you can get reimbursement

25 for that capacity.

0273

1 Bill?

2 MR. BOOTH: 3 Yeah. Just to clarify that a

4 little bit more, what happens in New York is

5 if a generation project ‐‐ if an upgrade

6 associated with a generation project will

7 replace the need for a reliability project

8 either that year or in the future, then the

9 generation developer is going to get a

10 credit, because, obviously, the upgrade has

11 also replaced reliability concerns. So, for

12 example, if the generator's interconnection

13 project will cost $20 million and replace it

14 with a $10 million reliability project, then

15 the generator only has to pay the

16 $10 million.

17 MR. BRIGHT:

18 ERCOT, it's pretty easy. Again,

19 all the reliability and economic projects

20 have to be approved by the Commission, and

21 then the costs are allocated based on a peak

22 megawatt usage between the months June and

23 September, peak months. And then for GI

24 studies, it's 100 percent to the

25 interconnection ‐‐ interconnecting facility.

0274

1 That was all. That are all the 2 RTOs and ISOs. So I don't know if you'd like

3 some additional detail on that. Again,

4 there's a lot of detail in that PJM report.

5 PRESIDENT SUSKIE:

6 One question I have: Obviously,

7 there's been a lot of, you know, concerns

8 raised by stakeholders about the Attachment T

9 and the economic investments on the Entergy

10 system, and the argument is that the way the

11 current Attachment T works ‐‐ well, it was

12 said that no economic projects are built.

13 We've learned today, no, there's one built

14 and two being built. The question I have is,

15 how many other areas in the country have that

16 type of cost allocation for economic

17 upgrades?

18 MR. BRIGHT:

19 So where it's, like, 100 percent

20 participant funded? Is that ‐‐

21 PRESIDENT SUSKIE:

22 Yeah.

23 MR. BRIGHT:

24 I could be wrong, but ‐‐

25 PRESIDENT SUSKIE:

0275 1 It's just something I'm curious

2 about. I don't know if Entergy has that

3 answer. I just wonder how many other regions

4 or places in the country use that.

5 MR. CHILES:

6 It's on the next presentation.

7 PRESIDENT SUSKIE:

8 Okay. Great. Stay tuned.

9 Any questions?

10 Yes, sir.

11 MR. DODSON:

12 I've got a question. Thanks for

13 the presentation. I think one point that ‐‐

14 some information that may be ‐‐ I'm sorry;

15 Terry Dodson, Cottonwood Energy ‐‐ is that

16 for the regions that have a bifurcation of

17 how the costs are allocated (inaudible) is go

18 back and determine how that percentage amount

19 was developed. Being a member of the

20 participants of the different parties that

21 did this way back when, it's really good to

22 represent how and why those decisions were

23 made and the issues that were used to make

24 those.

25 PRESIDENT SUSKIE: 0276

1 I will bet Sam will say SPP did it

2 very painfully.

3 MR. LOUDENSLAGER:

4 Well, I was going to actually say

5 that it was a process of negotiation within

6 SPP, and you know how that goes. The

7 position you take ine th negotiation depends

8 on kind of whatever your philosophy might be

9 at the time. And back three years ago, there

10 was a push for ‐‐ by some of the states to

11 endorse beneficiaries' pays as the

12 appropriate approach, and in order to move

13 away from 100 percent of that, you wind up

14 with a 33/67 percent. Okay? What's ‐‐

15 what's significant now is ‐‐ in the SPP is

16 that the philosophy, at least amongst the

17 state regulators, has significantly shifted.

18 And recognizing that transmission ‐‐ it's

19 harder and harder to distinguish reliability

20 versus economic upgrades, and ‐‐ because,

21 over time, it's all reliability, you know, so

22 it's kind of a short‐term versus long‐term

23 view of how you allocate those costs, which

24 is one of the reasons that the RSC decided to 25 go the Highway Byway approach.

0277

1 Now, having said that,

2 traditionally, the one metric that was

3 evaluated in SPP was changes in production

4 costs, savings in production costs, you know.

5 That's your benefit/cost metric. And they've

6 expanded that now to look at other metrics,

7 and all of that is just kind of a

8 philosophical change, Terry. It's ‐‐ so

9 that's SPP. It was a negotiated number, and

10 my understanding, MISO is going through that

11 same process of negotiation right now, and

12 it ‐‐ as Paul said, it is painful.

13 MR. DODSON:

14 That's important.

15 MR. LOUDENSLAGER:

16 When we did try to focus on

17 something other than the traditional approach

18 to economic projects in the SPP is where we

19 came up with the balanced portfolio, and that

20 took about 18 months to do all the analysis

21 and come up with a portfolio of economic

22 projects that would ensure that benefits were

23 spread out across the region. In a lot of 24 cases, that meant shifting revenue

25 requirement around, which is ‐‐ God help the

0278

1 accountants. I mean, so I don't know if

2 that's helpful for you or not, Terry.

3 MR. DODSON:

4 It was.

5 PRESIDENT SUSKIE:

6 Anything else?

7 Do you have anything to add, Bruce?

8 MR. REW:

9 No.

10 PRESIDENT SUSKIE:

11 You're just guilty of holding the

12 microphone.

13 SECRETARY ANDERSON:

14 One clarification with respect to

15 ERCOT ‐‐ and you're correct that the

16 Commission does ‐‐ if the Commission approves

17 it, then it's ‐‐ then it's uplifted. We

18 don't socialize in Texas. We uplift. It's a

19 critical role of ERCOT in the evaluation

20 process, even though it's not ‐‐ it's not

21 formally really baked into our rules. The

22 fact of the matter is that, if ERCOT doesn't 23 recommend a project, you know, either for

24 reliability or economic reason, then it

25 doesn't get built. That really provides, you

0279

1 know, 80 percent of the ‐‐ of the basis for

2 need when the Commission ‐‐ when the

3 Commission evaluates the application.

4 PRESIDENT SUSKIE:

5 Good point.

6 Anything else?

7 (No response.)

8 All right. John?

9 MR. CHILES:

10 Okay. Thank you. Talk a little

11 bit about non‐RTO regions. Going to our

12 first slide, basically, to give you an idea

13 of what I'm talking about is everything that

14 is not colored in, so we're dealing with the

15 west less Cal ISO and then the SERC region,

16 then FRCC are the only places where we're not

17 dealing with the RTO, and we tried to pick

18 some high points of each of those regions to

19 talk about today.

20 Northwest, a lot of utilities out

21 there. What happens in the northwest is the 22 WECC is the coordinator of all the regions.

23 There's actually two planning processes

24 there, and there's another Planning

25 Coordination Committee, the PCC, and there's

0280

1 a Transmission Expansion Planning Policy

2 Committee, and those drive the discussions of

3 reliability on the projects. Within those,

4 there are actually working groups that get

5 together and that make decisions on projects

6 throughout the region.

7 I think one example here is

8 Northern Tier Transmission Group. It's made

9 up of about seven utilities that cover a good

10 portion of the northern part of WECC. And

11 what they do is, in their contract, they do a

12 direct assignment of the cost of the line to

13 the beneficiaries. It's important to note,

14 in the west, because of the topology of the

15 system, that you have very long lines and

16 loads scattered abroad, that out west

17 multiple entities do own the same piece of

18 wire.

19 So, for instance, you could have ‐‐

20 three or four entities all could agree, we're 21 going to fund the line from point A to point

22 B. They will each fund that, and they will

23 each get associated rights to that facility,

24 and they will invoke tariffs to collect

25 revenues for that.

0281

1 So I think it's important to know

2 in all these non‐RTO environments the

3 topology of the system and how the new

4 planning really drives the majority of the

5 cost allocation discussion. And for economic

6 reliability projects, you know, it's the same

7 thing with this Northern Tier Group.

8 There is one interesting thing out

9 west. The State of Wyoming actually formed a

10 quasi‐governmental agency called the Wyoming

11 Infrastructure Authority, and it actually

12 allows the state to fund, own, operate

13 transmission facilities to benefit ‐‐ you

14 know, benefit the state. They've got a

15 billion dollars of bond authority set aside

16 given to them by the legislature, and the

17 State Treasurer is authorized to purchase

18 those bonds back. And they are in the

19 process of proposing ‐‐ I think there's about 20 seven projects that they have proposed that

21 are on the drawing board for them to consider

22 funding. So even out there, you know, the

23 state does have the ability to get into the

24 transmission business, you know, which is not

25 something we usually see.

0282

1 The eastern half, you know, once

2 again, looking at SERC and FRCC, we probably

3 have a couple here. We've been all over this

4 before, so we'll skip on to something else,

5 just as a comparison.

6 On the Southern, it's very simple.

7 Basically, the costs are allocated to all

8 users. It's a very clean process. There's

9 no real distinction on reliability or

10 economic upgrades. There is one wrinkle in

11 the Southern, which is the Georgia ITS.

12 PRESIDENT SUSKIE:

13 Could you further explain how

14 Southern Company does it?

15 MR. CHILES:

16 Well, in Southern ‐‐

17 PRESIDENT SUSKIE:

18 When you say ‐‐ so when it's 19 allocated to all users, that includes, like,

20 companies other than Southern?

21 MR. CHILES:

22 Well, what can happen is, it's

23 going to all ‐‐ basically, it's part of the

24 Revenue requirement. It's rolled into the

25 Revenue requirement. And then those costs

0283

1 are paid by all customers, all users of the

2 grid.

3 PRESIDENT SUSKIE:

4 So if you have, say, a

5 municipality, like, say, the City of

6 Jonesboro that's inside the grid of Southern

7 Company, would they be allocated costs?

8 MR. CHILES:

9 If it's ‐‐ if it's taking delivery,

10 they would be. That's correct.

11 PRESIDENT SUSKIE:

12 And it's not based upon what they

13 actually receive, but just what their load

14 is?

15 MR. CHILES:

16 Based on the load, that's correct.

17 PRESIDENT SUSKIE: 18 That's all upgrades, economic and

19 reliability?

20 MR. CHILES:

21 Yes. That's correct.

22 MR. BOOTH:

23 How does Southern distinguish

24 between reliability and economic?

25 MR. CHILES:

0284

1 Part of this fits into the

2 Southeastern Interregional Process, the new

3 process, and they're now making a distinction

4 in that. But even within that process, they

5 still say that all of these will rely upon

6 their own tariff and their own cost

7 allocation for the region, whether it's a

8 reliability or economic project. So Southern

9 really doesn't make any distinction within

10 the Southeastern Interregional Process, of

11 which Southern is a member and involved. Any

12 projects that come out of that, they would

13 fund, the same way they do the reliability

14 projects.

15 MR. BOOTH:

16 How do they distinguish between 17 reliability and economic?

18 MR. CHILES:

19 That's the Southeastern Process,

20 and that's done through them looking at

21 potential transfer capabilities between, say,

22 Entergy and Southern as a whole, stakeholder

23 process, which picks economic projects to

24 evaluate. They evaluate those projects to

25 the extente that peopl believe that those are

0285

1 feasible. Then there's a discussion about,

2 you know, construction and cost allocation at

3 that point.

4 PRESIDENT SUSKIE:

5 Could you explain again economic

6 upgrades?

7 MR. CHILES:

8 Well, economic in the Southern

9 Company really relates to projects proposed

10 which go across the region that aren't really

11 tied to a line with any purpose. For

12 instance, you know, like I said, the

13 Southeastern Interregional Process is the

14 best example they have of an economic study

15 process, very similar to what you have in ‐‐ 16 with the ICT on the economic studies being

17 done through ISTEP. It's a very similar

18 concept.

19 And what they would look at is,

20 people would say, we want to look at the

21 possibility of doing large bulk transfers

22 from, you know ‐‐ say, you know, TVA to Duke

23 that made up all facilities in Southern.

24 There's not a reliability basis for it, but

25 it's a ‐‐ but it's just a general transfer

0286

1 type study. And if there's any projects that

2 fall out of that that would be in the

3 southern border, then those would be

4 considered an economic project in Southern.

5 PRESIDENT SUSKIE:

6 And so how does the economic

7 upgrades differ than what's in the Entergy

8 system, comparing Southern to Entergy, or am

9 I getting too detailed?

10 MR. CHILES:

11 You're probably getting a little

12 detailed, because, in Entergy, of course, we

13 have the Attachment T and the financial

14 flowgate rights and all that that goes on, 15 and we don't have that. Southern doesn't

16 have that mechanism.

17 PRESIDENT SUSKIE:

18 Okay. Thanks.

19 MR. CHILES:

20 We can certainly get you more

21 detail on that.

22 The ITS is a little different

23 animal within Southern, because back in the

24 '70s, there was a situation where Georgia

25 Power actually sold part of its transmission

0287

1 system to these other entities. Within that,

2 you've got four entities who own pieces of

3 the Georgia Power Transmission System, which

4 would be Georgia Power, Municipal Electric

5 Agency of Georgia, City of Dawson and Georgia

6 Transmission Corporation. And their

7 allocation of costs is based upon their

8 percent load. They're required to maintain a

9 percentage, you know, ownership of the grid.

10 They do a joint reliability planning process,

11 and out of that, companies then allocate

12 those projects based upon maintaining their

13 other economic, you know, ratios that they've 14 maintained in the past and then to the extent

15 that they, you know, move projects up or back

16 when there is either a savings or a shared

17 cost to those upgrade changes.

18 On looking at the big picture,

19 we're looking at Duke and Progress Carolinas.

20 For them ‐‐ their cost is ‐‐ you know,

21 there's no type of sharing in itself ‐‐ you

22 know, Duke's costs get rolled into their

23 rates, and they get shared amongst all

24 their ‐‐ all their users. There's no

25 distinction between economic and

0288

1 reliability‐based projects. You've got a

2 North Carolina Planning Transmission

3 Collaborative Process, and even in that, you

4 know there's joint planning amongst the

5 entities in the State. There's still no ‐‐

6 no distinction on how they do their funding.

7 MR. BOOTH:

8 Does that includer requests fo

9 transmission service?

10 MR. CHILES:

11 That does.

12 MR. BOOTH: 13 So they don't employ work

14 [phonetic] pricing? If a transmission

15 customer wants to interconnect with the

16 system, the transmission customers just

17 charge the embedded cost rate?

18 MR. CHILES:

19 The interconnection, I think, is a

20 different ‐‐ is a different animal.

21 MR. BOOTH:

22 I'm talking about transmission.

23 MR. CHILES:

24 In this forum, there was no

25 distinction. I'd have to ‐‐ we'd have to go

0289

1 back and look a little harder to verify that,

2 but I can get you that information.

3 MR. BOOTH:

4 Thanks.

5 MR. CHILES:

6 In Florida, it's kind of a modified

7 Highway Byway type proposal. Basically, they

8 have a 500 kV back line system in the State.

9 Everything is 230 kV and below. So for

10 reliability projects identified through the

11 Joint Planning Process that FRCC employs, 12 anything that's greater than 230 kV is

13 allocated to all the transmission operators

14 on a ‐‐ on a load ratio share basis.

15 Anything less than that falls under the

16 additional transmission operator's own

17 tariff.

18 So they do have a semblance of a

19 Highway Byway. It has not been applied. I

20 don't think FRCC has built a 500 kV line in a

21 number of years, so it would be a lot, I

22 think, before there was actually inputs of

23 how this is going to work. And that's really

24 about it on non‐RTO regions.

25 PRESIDENT SUSKIE:

0290

1 Thank you.

2 Questions?

3 Yes, sir.

4 MR. DODSON:

5 Terry Dodson, Cottonwood Energy.

6 John, all the ones you just went through, can

7 you give a description of who participates in

8 those processes to determine what the

9 upgrades are and how they're applied?

10 MR. CHILES: 11 Sure. You know, thinking from a

12 stakeholder perspective, probably the western

13 model is the one that has the most customer

14 participation out there. You have

15 transmission customers, you have generators,

16 you have incumbent utilities that participate

17 in the planning processes most times. In ‐‐

18 in FRCC, that's usually the transmission

19 owners themselves are doing the planning

20 through the FRCC planning process, and

21 there's not a lot of, you know, participation

22 from the generators. Usually, that's on just

23 the transmission owners themselves.

24 In Southern, the planning really

25 takes place through the ‐‐ Southern has its

0291

1 own independent planning process for their

2 reliability needs. They're not factoring in

3 the other entities. The Georgia ITS is a

4 joint process with all four companies that do

5 that, that plan for the State of Georgia.

6 PRESIDENT SUSKIE:

7 Any other questions?

8 Commissioners?

9 (No response.) 10 So, Sam, will you answer my

11 question I had before?

12 MR. LOUDENSLAGER:

13 What was it?

14 PRESIDENT SUSKIE:

15 The question is: Does anybody else

16 have a cost allocation methodology for

17 economic upgrades as Entergy does?

18 MR. LOUDENSLAGER:

19 No. I mean, I think there are just

20 nuances to them all.

21 I had a question, though. Do state

22 ‐‐ John, do state regulators participate in

23 any of these planning processes in the

24 non‐RTO areas?

25 MR. CHILES:

0292

1 The only place I'm aware of that

2 does that would be in the west. They have

3 the ability to participate in the western

4 process and being involved in those planning

5 groups.

6 Now, certainly, in ‐‐ you know, in

7 Florida, the Florida Commission does have the

8 ability, through the Transmission Line Siting 9 Act, to be involved after the fact in

10 assessing, you know, the need for

11 reliability.

12 MR. LOUDENSLAGER:

13 So kind of a prudence?

14 MR. CHILES:

15 Yes.

16 MR. LOUDENSLAGER:

17 Okay. And what about the

18 Carolinas?

19 MR. CHILES:

20 The argument they have is this

21 North Carolina Transmission Collaborative,

22 and that's a NCUC.

23 MR. LOUDENSLAGER:

24 Oh, okay.

25 MR. CHILES:

0293

1 (Talking over one another) by its

2 commission‐established process so they have

3 oversight over that process.

4 MR. LOUDENSLAGER:

5 Okay. Thank you.

6 MR. CHILES:

7 Commissioner, to get to your 8 question, the only place really that has

9 anything, you know, remote, as far as direct

10 assignment and then having some type of

11 rights would be out west. The difference

12 there is, is they're actually getting a

13 physical right to the asset that they are

14 purchasing, as opposed to a flowgate

15 financial right in Entergy.

16 MR. LOUDENSLAGER:

17 So just to be clear that I

18 understand what you just said, out in the

19 western regions, the entities that fund an

20 upgrade or pay for a facility are assured

21 ythat the will be able to move power along

22 that facility?

23 MR. CHILES:

24 That's correct. They're

25 actually ‐‐ as part of that dollars they

0294

1 spend, they're actually getting rights to

2 that asset.

3 MR. LOUDENSLAGER:

4 Thank you.

5 PRESIDENT SUSKIE:

6 Any other questions? 7 Sam?

8 MR. LOUDENSLAGER:

9 No. I just wanted to thank both

10 Ben and John, because I had reached out to

11 both of them to do this, so I appreciate

12 that.

13 PRESIDENT SUSKIE:

14 We appreciate y'all helping educate

15 us. As you can see, it's a difficult issue

16 and a lot of options and alternatives.

17 Is there anything else?

18 (No response.)

19 Well, does anybody have any

20 announcements they wish to make?

21 (No response.)

22 Our next meeting is scheduled for

23 May 12th and 13th. Now, refresh my memory or

24 correct me if I'm wrong. The 12th, it will

25 begin in the afternoon after the SPC meets,

0295

1 and we anticipate then we can convene the

2 next morning and go into about noon. So it's

3 a two‐day meeting. We'll have two half‐day

4 sessions, and we'll be in Commissioner

5 Field's jurisdiction, so we expect the best 6 treatment possible.

7 MR. LOUDENSLAGER:

8 Can we take ‐‐ can we take another

9 minute and just kind of go through the list

10 of action items that ‐‐ developed over the

11 course of the rest of the day?

12 PRESIDENT SUSKIE:

13 Yeah, please.

14 MS. SCHMIDT:

15 The first item was a request for

16 Entergy to work with the Working Group to

17 discuss their proposal on the 205 filing

18 rights, and, in particular, the referral

19 language. The Working Group will also work

20 with stakeholders, SPP and Entergy, to

21 provide a proposal for the May meeting to

22 present to the E‐RSC that would include,

23 perhaps, a larger scope than what was

24 presented today, and we are to include some

25 options that would allow the ICT in their own

0296

1 discretion to present issues they identify

2 that they would propose to the E‐RSC to

3 direct a filing going forward.

4 The transmission siting matrix, 5 I'll be making a couple of changes to that

6 for the Arkansas deadlines and the timing of

7 rate base for Texas.

8 The E‐RSC Working Group meetings,

9 we may reschedule the May 18th face‐to‐face

10 meeting. Sam will be sending something out

11 regarding that. SPP will check into the cost

12 of providing the WebEx access for the

13 stakeholder face‐to‐face meetings with E‐RSC

14 Working Group.

15 Three supplemental ‐‐ on the three

16 supplemental upgrades that were identified,

17 Entergy is to provide the source and synch of

18 those upgrades that were referenced in the

19 data response.

20 In regards to the WPP purchases,

21 what data is provided to FERC in the

22 electronic quarterly reports, and the Working

23 Group will take that on. The E‐RSC has asked

24 Entergy for a explanation on the rejections

25 of the short‐term and monthly bids. ESPY

0297

1 will review the original WPP order for what

2 benefits may have been identified and present

3 that back against some of the analysis that's 4 been provided.

5 And if the request has already not

6 gone to Entergy, the E‐RSC Working Group will

7 request the Entergy operating guides required

8 for the Entergy ‐‐ for Entergy's flexibility.

9 We couldn't remember if we included that in

10 that last go‐around, Mark.

11 MR. McCULLA:

12 Okay.

13 MS. SCHMIDT:

14 And then regarding the RMR issue,

15 Commissioner Field asked for Entergy to file

16 with the E‐RSC Working Group a report that

17 identifies the megawatt hours produced by

18 each of Entergy's legacy oil and gas

19 generation units that operate under a lower

20 capacity factor and having a higher heat rate

21 than 10,500. The specific units of interest

22 are the ones that Sam mentioned earlier.

23 Also to be included in the reports is an

24 explanation of why those units were running.

25 Was it due to RMR? And if it wasn't due to

0298

1 RMR, under what must‐run requirement were

2 they running? Was it for load following? 3 Otherwise, provide a reason for those units

4 to be on line. Also to be included, once

5 studied, is a request for what transmission

6 solutions could mitigate the use of those

7 plans, and that's a longer‐term request.

8 And I believe that's all. I had

9 Was there anything that might have been

10 missed?

11 PRESIDENT SUSKIE:

12 I think John has a comment.

13 MR. HURSTELL:

14 Did you say you wanted a reason for

15 every ‐‐ why every unit was operating ‐‐

16 every one of those units was operating?

17. MS SCHMIDT:

18 In the quarter that ‐‐ you were

19 reporting it on a quarterly basis, so on that

20 order.

21 MR. HURSTELL:

22 I don't think we can provide that,

23 because we don't look at why a unit runs for

24 a particular reason. We run our production

25 cost model with all of our constraints in it

0299

1 that it is the best option. So I just don't 2 want to give you the impression that Lewis

3 Creek ran for flexible capabilities, another

4 unit ran for some other reason. So we can

5 get you all the data, but I can't give you

6 specific reasons why any particular unit ran

7 other than it was the, you know, choice,

8 given all the constraints.

9 MS. SCHMIDT:

10 Okay. And when you say you can

11 provide us the data, what data would you

12 provide us?

13 MR. HURSTELL:

14 The generation from the unit. The

15 data request you've already asked for is the

16 drivers of the flexible capability that was

17 in my testimony that you guys received, but

18 you're going to get that data tomorrow.

19 MS. SCHMIDT:

20 Okay.

21 MR. HURSTELL:

22 But we can't give you a reason

23 for ‐‐

24 MS. SCHMIDT:

25 If you can give us the megawatt

0300 1 hours as well as the hours that those units

2 were actually on line.

3 MR. HURSTELL:

4 So you want generation on an hourly

5 basis?

6 MS. SCHMIDT:

7 I'm sorry. When ‐‐ if those units

8 were running on a quarterly ‐‐ each quarter,

9 the megawatt hours that they were running, we

10 would just like to know when those hours

11 were. So if it was between noon and

12 1:00 o'clock on such‐and‐such a date.

13 MR. HURSTELL:

14 I guess, in my mind, it's not like

15 this unit runs between 2:00 and 3:00 on

16 Tuesdays. We have to give you the ‐‐ just

17 the hour ‐‐ the generation by hour for every

18 unit. I mean, we can do that, if that's what

19 you want.

20 MR. LOUDENSLAGER:

21 We'll get back to you.

22 MR. HURSTELL:

23 Okay.

24 MS. SCHMIDT:

25 We'll get back to you. 0301

1 PRESIDENT SUSKIE:

2 I'm sure they can get more

3 specific, and if it's a problem ‐‐

4 MR. HURSTELL:

5 We can give you the ‐‐ I'm not

6 objecting. I just want to make sure I know

7 what you want.

8 MS. SCHMIDT:

9 And we appreciate that.

10 MR. HURSTELL:

11 Okay.

12 PRESIDENT SUSKIE:

13 All right. Anything else?

14 (No response.)

15 And then the next meeting after the

16 meeting in Baton Rouge is SEARUC in Alabama,

17 and we know at this point two FERC

18 commissioners have committed. I would not be

19 surprised if we have more. And, also ‐‐ and

20 then we're probably going to consider moving

21 the July meeting to the ‐‐

22 MR. LOUDENSLAGER:

23 Transmission Summit.

24 PRESIDENT SUSKIE: 25 ‐‐ Transmission Summit here in New

0302

1 Orleans in August, but we'll send out whether

2 or not that move gets made ‐‐ meeting.

3 Anything else from any stakeholders

4 or parties?

5 Sam?

6 MR. LOUDENSLAGER:

7 Yeah. Just a reminder, too. You

8 know,e th Charles Rivers cost/benefit study

9 is supposed to be released, I believe, the

10 end of September, and I would encourage

11 everybody to consider being up there at FERC

12 for the release of that report.

13 PRESIDENT SUSKIE:

14 Yes. And if you're involved in the

15 Eastern Internet ‐‐ Eastern Interconnect

16 Planning Collaborative, the meeting is at the

17 same time, which there's a good chance that

18 meeting will be in Washington, so...

19 MR. LOUDENSLAGER:

20 Okay.

21 MR. BOOTH:

22 We're going to have fun.

23 PRESIDENT SUSKIE: 24 I think we'd have fun over there.

25 It's an interesting DOE issue.

0303

1 Anything else?

2 (No response.)

3 Well, thank y'all for your

4 participation. We're adjourned.

5 (MEETING ADJOURNED AT 3:46 P.M.)

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