Minutes No. [32] Southwest Power Pool ECONOMIC STUDIES WORKING GROUP July 22nd, 2010 AEP Offices Renaissance Towers 1201 Elm Street, Dallas, TX

• Summary of Action Items •

1. SPP Staff should query the ESWG about meeting time options for the next few meetings.

2. In addition to answering the questions about the Strategist runs at the meeting, Debashis committed to developing a list of the questions. The members and stakeholders were asked to provide additional questions or feedback via email. SPP Staff will setup an informal ESWG conference call with Black and Veatch on July 26th, to review the feedback and provide additional data and descriptions about the Strategist results.

3. All requested changes to the generation siting plan should be returned to Black and Veatch and SPP staff by noon on July 26 th. Changes to the siting plan, based on stakeholder feedback, will also be discussed at Monday’s informal conference call.

4. SPP Staff should provide zone name info for each of the generation sites to Black and Veatch.

5. SPP Staff and the ESWG should determine if the ESWG and the TWG should provide a joint recommendation and presentation of the ITP manual.

6. SPP Staff should implement changes to the wind siting plan based on guidance from the ESWG. Minutes No. [32]

Southwest Power Pool ECONOMIC STUDIES WORKING GROUP MEETING July 22nd, 2010 AEP Offices Renaissance Towers 1201 Elm Street, Dallas, TX

• M I N U T E S •

Agenda Item 1 – Administrative Items SPP Chair Alan Myers called the meeting to order at 10:04 a.m. The following members were in attendance:

Alan Myers ITC Great Plains David Hudson Xcel Energy Kip Fox American Electric Power Doug Kallesen Nebraska Public Power District Greg Sweet Empire District Electric Co. Al Tamimi Sunflower Electric Power Corp. Jason Atwood Kelson Energy Mark Loveless Oklahoma Municipal Power Authority Paul Dietz Westar Energy, Inc.

Jim Sanderson Kansas Corporation Commission Mike Proctor Consultant to SPP Regional State Committee

It was noted that Doug Kallesen held a proxy for Bruce Merrill and Mike Collins held a proxy for Leon Howell.

Motion: The minutes from the ESWG meeting in Dallas, TX on July 22nd, 2010 were reviewed. Kip Fox made a motion for the ESWG to approve the minutes. The motion was seconded and it passed unopposed.

The dates and topics for future meetings of the ESWG was discussed. There will be another meeting on July 28th, 2010 in Omaha to approve the futures plan and generation siting. Beyond that, other possible meeting times were discussed. SPP Staff should query the ESWG about these meeting time options:

Week of August 30 th (probably August 31 st ): Provide guidance to the consultant selected to quantify the metrics for the ITP20 after reviewing the consultant’s draft metrics manual. Possibly review the robustness white paper after filling in the placeholders for the info from the consultant. Also, the consultant’s input should be added to the ITP manual.

Week of Sept 6 th or 13 th: Review draft results from the application of the metrics manual and present the finalized metrics manual.

Late September meeting: Review progress on the EHV expansion plan. Minutes No. [32]

October meeting: Review final EHV expansion plan.

Next, the meeting agenda was reviewed and approved. An agenda item was added for Alan Myers to describe his updates to the Market and Operations Policy Committee (MOPC) and Regional State Committee (RSC).

Agenda Item 2 – MOPC and RSC updates Alan Myers said he provided MOPC a high level update, focusing on the resource planning, ITP Manual, Robustness White Paper. These two documents would be sent to MOPC for approval in October. Alan said the update to the RSC on July 26th, 2010 would be similar.

Agenda Item 3 – Resource Planning a. Futures Plan

Debashis Bose presented the generation expansion plans for SPP South and SPP North. During this presentation the ESWG members and stakeholders asked questions and provided guidance. For example, Steve Gaw asked how the wind capacity values were developed. Debashis said that he started with the wind energy values in MWh and developed the MW values based on the capacity factors used. Mike Proctor pointed out that more Natural Gas Fired Combustion Turbines (CT) were being added in SPP North compared to SPP South. Debashis said that the new wind in the models is being added along with CT’s and SPP South has some extra CT capacity to offset the additional wind.

In addition to answering the questions about the Strategist runs at the meeting, Debashis committed to developing a list of the questions. The members and stakeholders were asked to provide additional questions or feedback via email. SPP Staff will setup an informal ESWG conference call with Black and Veatch on July 26th, to review the feedback and provide additional data and descriptions about the Strategist results.

Paul Dietz asked about the price elasticity issue. Greg Sweet said the ESWG made the decision to keep the load levels the same in each of the futures. Kip Fox said this is reasonable because the reduction may not be severe since electricity is still cheaper than other options. Also, determining the exact levels of load reduction would be like a separate study. Doug Kallesen added there were such a large range of variables involved, that the ESWG determined the demand values should not be lowered. It was stated that the ESWG should document its reason why the demand values were not lowered.

b. Generation Siting Plan

Debashis said Black and Veatch used the generation siting criteria described on the ESWG conference call on July 9th. Debashis said that new generation facilities were sited at brownfield sites in zones that needed additional capacity. After reviewing the siting plan spreadsheet and maps for each future, the ESWG members and stakeholders made recommendations to correct and enhance the map and spreadsheet. Debashis requested that all requested changes to the generation siting plan be returned to Black and Veatch and SPP staff by noon on July 26 th. Changes to the siting plan, based on stakeholder feedback, will also be discussed at Monday’s informal conference call.Mike Proctor said that the stakeholders should let Black and Veatch know if any of these sites would not be appropriate for this study even if they met the siting criteria. Doug Kallesen said the Nebraska entities mainly took into account the water and environmental issues at the brownfield site. Minutes No. [32] Nathan McNeil had a concern with a bus in Midwest Energy being labeled as belonging to Westar. Paul Dietz added that the utility name labels should be changed to “Transmission Zone” because it is not known whether the new generator would be owned by an Independent Power Producer or the utility (example: put WR Zone instead of Westar). SPP Staff should provide zone name info for each of the generation sites to Black and Veatch.

Tim McGinnis presented the wind generation siting plan. He said that the amount of new wind per future was obtained from the CAWG survey results shown in the ITP Futures document. The ESWG members and stakeholders requested some changes that should be made for the final version of this plan. For example, Adam McKinnie said that the amount of wind in Missouri and Arkansas should be 0 MWh for futures 2 and 4 since these futures included a federal renewable energy standard. He said this would probably result in the state not providing incentives for siting wind in Missouri. The consensus of the ESWG was to make this change and some others that were requested.

Agenda Item 4 – Revision of ITP Manual Brett Hooton gave a high level overview of the ITP Manual and asked the ESWG to first provide edits to the list of sections in the Table of Contents. Then, the ESWG reviewed and edited as many sections of the ITP Manual as time allowed. During this review, it was stated that SPP Staff and the ESWG should determine if the ESWG and the TWG should provide a joint recommendation and presentation of the ITP manual. Also, it was suggested that an ESWG member should attend the RTWG meeting when this document is reviewed to provide assistance from the ESWG perspective.

Agenda Item 5 – Closing Items The meeting was adjourned at 4:00 pm.

Respectfully Submitted,

Tim McGinnis/Tim Miller Secretaries Minutes No. [33] Minutes No. [33]

Phone Attendees Jason Atwood Kelson Energy Mark Loveless Oklahoma Municipal Power Authority Al Tamimi Sunflower Electric Power Corp.

Jim Sanderson Kansas Corporation Commission

Mark Griffith Black & Veatch Corporation Chris Jones Duke Energy Zack Stica Associated Electric Cooperative, Inc. Bennie Weeks Xcel Energy

Jay Caspary Southwest Power Pool, Inc. Cary Frizzell Southwest Power Pool, Inc. Brett Hooton Southwest Power Pool, Inc. Tim Miller Southwest Power Pool, Inc. Ben Roubique Southwest Power Pool, Inc.