Schedule 11 INPUTS and IMPACTS

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2 Schedule 11 INPUTS and IMPACTS April 25, 2012 Steve Davis

3 Transmission Settlements SCHEDULE 11 INPUTS AND IMPACTS 3

4 OUTLINE 1. RRR FILING 2. BASE PLAN REVENUE REQUIREMENT ALLOCATION SPREADSHEET 3. IMPACTS TO CHARGES AND REVENUES 4. ATRR 10 YEAR FORECAST 5. CHARGES AND REVENUES BY UPGRADE ID 4

5 Summary of Revenue Requirements and Rates RRR FILING 5

6 RRR FILING Snapshot of Currently Effective Revenue Requirements and Rates: Created to streamline the Rate/ATRR filing process for annual formula rate updates Broken down by Zone Separated by Schedule 1, 7, 8 and 11 Used as inputs into the Settlement e Terra System (ETS) Began in December, 2011 Published on under Governing Documents Header 6

7 RRR FILING TABS UPGRADE COST/ALLOCATIONS FOR SCHEDULE 11 LAST 12 MO CP DATA 7

8 TAB FORMATS FROM RRR FILE Example: WR Sh11 Sch PTP Rate Rt Tb Tab Example: Midwest PTP Rate Rt Att T Tab Tb 8

9 RRR FILE LINK 9

10 Summary of Upgrades BASE PLAN REVENUE REQUIREMENT ALLOCATION SPREADSHEET 10

11 BASE PLAN REVENUE REQUIREMENT ALLOCATION SPREADSHEET Breakdown of Base Plan Upgrade Allocations to Zones: Summarized by T.O. AREAS (Zones) Broken down by REGION WIDE and ZONAL ATRR figures Main input for PTP Rates and NITS ATRRs used in Schedule 11 calculations $s per Zone are based on MW Mi Mi allocations of the Upgrade or Highway / Byway allocations Publishedin in the RRRfiling 11

12 HIGHWAY / BYWAY HIGHLIGHTS Notification To Construct issued after 6/19/2010 / Three tiers of Cost Allocation based on Voltage of Upgrade Highway/Byway Voltage Paid for by Region Paid for by Local Zone 300 kv and above 100% 0% above 100 kv and below 300 kv 33% 67% 100 kv and below 0% 100%

13 Base Plan Revenue Requirement Allocation Spreadsheet *This sheet shows total $ s allocated to each ZONE, by Upgrade ID, sorted by T.O. PROJECTS BY AREA *These numbers affect both the Schedule 11 Regional and Zonal calculations, and can be a great indicator of future invoices. 13

14 Preparing for Change IMPACTS TO CHARGES AND REVENUES 14

15 IMPACTS TO SCHEDULE 11 CHARGES & REVENUES How the Inputs from Regulatory Impact Your Invoices: Impacts to Point To Point Charges and Revenues Impacts to Network (NITS) Charges and Revenues Sample Calculations and Rules What to Watch For with Regard to the Regulatory Inputs 15

16 Condensed Version of Spreadsheet *This will be used in examples going forward 16

17 TOTALS OF IMPORTANCE TOTALS by T.O. AREA (Zones): Used as numerator in Pro Rata Share calculations l for Revenue Allocation REGIONWIDE TOTAL: Used as denominator in Pro Rata Share for Regional Revenue Allocation, and as numerator for PTP Schedule 11 Regional Rates *ZONAL TOTALS: Used as denominator in Pro Rata Share for Zonal Revenue Allocation, and as numerator for PTP Schedule 11 Zonal Rates 17

ATTACHMENT H TIE IN The totals of Columns 4 + 5 in Attachment H will correspond to the total Schedule 11

18 ATTACHMENT H TIE IN The totals of Columns in Attachment H will correspond to the total Schedule 11 Zonal ATRR for charges in the same Zone. This total will determine that Zone s Schedule 11 Zonal Rates for PTP 18

19 ATTACHMENT H TIE IN The total displayed in Line 5 of Table 2 in Attachment H will correspond to the total Schedule 11 Region Wide ATRR for charges in the footprint. This total will determine the Regional Schedule 11 Rates for PTP 19

20 How Do These #s Affect Your Bottom Line? Point To Point Service Schedule 11 Zonal Charge Schedule 11 Regional Charge Schedule 11 Zonal Revenue Allocation Schedule 11 Regional Revenue Allocation Network Service (NITS) Schedule 11 Zonal Charge Schedule 11 Regional Charge Schedule 11 Zonal Revenue Allocation Schedule 11 Regional Revenue Allocation 20

21 Breakdown for Examples For our examples, we ll concentrate on upgrades in TO AREA #3, and ATRR $s designated to their corresponding ZONE 3. 21

22 Point To Point Charges Schedule 11Zonal Charges : The Sch11Zonal Rates are derived from the total ATRR per ZONE. Schedule 11Regional Charges: The Sch 11Regional Rates are determined from the combined Regional ATRRs of all T.O. PROJECT AREAS. **KEEP IN MIND : Each additional $ to these ZONAL TOTALS will drive up rates for that ZONE. **KEEP IN MIND : Each additional $ to this REGIONAL TOTAL will drive REGIONAL rates up. TOTAL 22

23 Point To Point Revenue Allocation Schedule 11 Zonal Revenue This revenue allocation splits the charge amount to each T.O. with ATRR amounts in the total Zonal ATRR amount, via Pro Rata Share. = T.O. TOTAL / ZONAL TOTAL NOTE: Assumes a $1000 Zonal lcharge 23

24 Point To Point Revenue Allocation Schedule 11 Regional Revenue This revenue allocation splits the charge amount to each T.O. with Region wide ATRR amounts via Pro Rata Share of the TOTAL Region wide ATRR amount. ** ASSUMES A $1000 REGIONAL CHARGE TO REGIONWIDE TOTALS PRS % REVENUE TO T.O. T.O. #1 $ 2,143, $ TO T.O. #2 $ 3,349, $ T.O. #3 $ 2,699, $ TOTAL = T.O. TOTAL / **KEEP IN MIND: If a T.O. REGIONAL TOTAL Area has increased Regional ATRR $, they can expect increased revenue if everything else stays the same. 24

25 Network Charges Schedule 11 Zonal Charges : Monthly charges to the TC are calculated by multiplying the Load Ratio Share of TSR Prior Year ZCP to the total Prior Year CP for the entire ZONE by 1/12 th the total ZONAL Schedule 11 ATRR for that ZONE. **KEEP IN MIND : Each additional $ to this ZONAL ATRR TOTAL will drive this charge up. 25

Network Charges Schedule 11 Regional Charges: Monthly

Load Ratio Share of the TSR Prior Year ZCP to the

26 Network Charges Schedule 11 Regional Charges: Monthly charges to the TC are calculated by multiplying the Load Ratio Share of the TSR Prior Year ZCP to the total REGION WIDE Prior Year ZCP by 1/12 th the total REGION WIDE Schedule 11 ATRR. **KEEP IN MIND : Each additional $ to this REGIONAL TOTAL will drive this charge up. 26

27 Network Revenue Allocation Schedule 11 Zonal Revenue This revenue allocation splits the charge amount to each T.O. with ATRR amounts in the total Zonal ATRR amount, via Pro Rata Share. = T.O. TOTAL / ZONAL TOTAL NOTE: Assumesa $1000 Zonal Charge 27

28 Network Revenue Allocation Schedule 11 Regional Revenue This revenue allocation splits the charge amount to each T.O. with Region wide ATRR amounts via Pro Rata Share of the TOTAL Region wide ATRR amount. ** ASSUMES A $1000 REGIONAL CHARGE TO REGIONWIDE TOTALS PRS % REVENUE TO T.O. T.O. #1 $ 2,143, $ TO T.O. #2 $ 3,349, $ T.O. #3 $ 2,699, $ TOTAL = T.O. TOTAL / REGIONAL TOTAL 28

29 Applying This Knowledge Transmission Customers For both PTP and NITS, if a TC has a TSR with Load in T.O. AREA / ZONE 3, that TC s TSR charges would be affected as follows: Schedule 11Regional Charge: Increases with every $ added to the total REGION WIDE SCH 11 ATRR / PTP RATE regardless of which T.O. AREA the $s $ s are added. Schedule 11Zonal Charge: Increases with every $ added to ZONE 3 s NITS SCH 11 ATRR / PTP RATE figure. 29

30 Applying This Knowledge Transmission Owners For both PTP and NITS, TSR revenue is allocated via Pro RataShare of that T.O./ZONE portion to the total ATRR figure: Schedule 11Regional Revenue: Increases if TO T.O. Area s REGION WIDE ATRR increases proportionately, in comparison to other T.O. Areas. Schedule 11 Zonal Revenue: Increases with additional ATRR $s $ s added to TO T.O. AREA S Zonal component of total ATRR. 30

31 Key Results to Remember When REGION WIDEATRR $s increase, Schedule 11 Regional Charges increase for both PTP and NITS. When a T.O. TO s ZONAL ATRR figure increases, Schedule 11 Zonal Charges will increase if you have a load in that Zone. 31

32 Looking Ahead ATRR 10 YEAR FORECAST 32

33 ATRR 10 YEAR FORECAST Indicator of Future Costs and Allocations: Study of Expected Upgrades and Impacts to Each Zone Accounts for Upgrade Depreciation Based on Current Load Ratio Shares of the Footprint Uses inputs provided by Transmission Owners 33

34 ATRR 10 YEAR FORECAST LINK 34

35 ATRR Forecast Purpose and General Notes 35

36 36

37 37

38 ATRR Sources 38

39 Upgrade Summary with ITP Near Term *As of Jan 14, 2012, these amounts are subject to change (Board Action, NTC additions, withdrawals, Est. Updates, etc.) 39

40 Upgrade Summary *As of Jan 14, 2012, these amounts are subject to change (Board Action, NTC additions, withdrawals, Est. Updates, etc.) 40

41 *As of Jan 14, 2012, these amounts are subject to change (Board Action, NTC additions, withdrawals, Est. Updates, etc.) 41

42 Applying This Knowledge Transmission Customers For both PTP and NITS, if a TC has a TSR with Load in T.O. AREA / ZONE 3, that TC s charges would be affected as follows: Schedule 11Regional Charge: Increases with every $ added to the total REGION WIDE SCH 11 ATRR / PTP RATE regardless of which T.O. AREA the $s $ s are added. Schedule 11Zonal Charge: Increase with every $ added to ZONE 3 s NITS SCH 11 ATRR / PTP RATE figure. 42

43 Applying This Knowledge Transmission Owners For both PTP and NITS, TSR revenue is allocated via Pro RataShare of that T.O./ZONE portion to the total ATRR figure: Schedule 11Regional Revenue: Increases if TO T.O. Area s REGION WIDE ATRR increases proportionately, in comparison to other T.O. Areas. Schedule 11 Zonal Revenue: Increases with additional ATRR $s $ s added to TO T.O. AREA S Zonal component of total ATRR. 43

44 Collecting the Data CHARGES AND REVENUES BY UPGRADE ID 44

45 CHARGES AND REVENUES BY UPGRADE ID New Tool to Track Monies Associated with Upgrades: Charges and Revenues Summarized by Upgrade ID Shown in Excel Format, Mirroring Monthly TC/TO Summaries Data Collected for CURRENT MONTH S Settlement Runs Only Does Not Account for Net Charges/Revenues from Other Periods 45

46 RECAP The RRRFile, including Base Plan Funding Allocation information, are key indicators of upcoming changes to Schedule 11 dollars. Use these inputs to be aware of Zonal Rates and RevenueRequirements Requirements that affect your invoice. These are posted on Prepare yourself for upcoming changes by knowing which Zones your load is in, and be mindful of forecast changes to those Zones. 46

47 CONTACTS RRR FILING: Nicole Wagner, Regulatory Supervisor Alfred Busbee, Regulatory Analyst III YEAR ATRR FORECAST: Dan Jones, Lead Regulatory Engineer TRANSMISSION SETTLEMENTS: Ryan Gay, Transmission Supervisor Steve Davis, TransmissionLead Dickie Hooton, Settlement Analyst III Denise Martin, Settlement Analyst

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