Transmission Expansion and Cost
Allocations for FERC SPP-Entergy CBA
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Background
•
FERC is funding a SPP-Entergy Corporation Cost
Benefit Analysis (CBA) to evaluate the merits and
costs of Entergy joining, or not joining, SPP (FERC
SPP-Entergy CBA)
•
The FERC SPP-Entergy CBA provides a foundation
for the APSC-directed Cost Benefit Analysis to
evaluate the merits and costs of Entergy Arkansas,
Inc. (EAI) joining, or not joining, SPP (APSC EAI
CBA)
•
The APSC EAI CBA leverages models, data, and
assumptions in the FERC SPP-Entergy CBA
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Background, cont.
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“SPP Ready” costs - incremental investments
required by Entergy (and EAI) to join SPP to
meet SPP reliability requirements are zero

•
SPP has not identified any reliability issues, assuming
completion of transmission expansion projects in the
Entergy Construction Plan, including horizon projects.
Note that focus for this conclusion has been end state,
e.g., 2022. It is expected that Entergy will need to
develop and SPP would approve mitigation plans so
system needs are met given several projects will not
be installed until after need date
Entergy transmission expansion plans are the
same in all studies and scenarios
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Transmission Cost Allocation Notes
•

Study 1-All Regional Costs: Entergy and Cleco are exposed to
regional recovery of SPP upgrades completed after March, 2006
coincident with first regional recovery in SPP. (Same approach
used when Nebraska entities joined SPP in April 2009)

Study 2- Regional Costs after 1/1/13: Entergy and Cleco are only
exposed to regional recovery of SPP upgrades needed after the
proposed “bright line” date of January 1, 2013. (Prospective)

Study 3-Regional Costs (Excluding BP and PP) After 1/1/13:
Entergy and Cleco, as in Study 2, are only exposed to regional
recovery of SPP upgrades needed after the proposed “bright
line” date of January 1, 2013. Additionally, Entergy and Cleco
were not exposed to Balanced Portfolio or Priority Project
regional recovery. (Modified Prospective)
For all Studies, SPP members are exposed to regional recovery of
Entergy and Cleco projects beginning January 1, 2013
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Transmission Cost Allocation Notes, cont.
•
Differential results subtract Base Case Annual
Transmission Revenue Requirement (ATRR)
from Change Case ATRR; where:
 Differential = Change Case – Base Case
 Change Case: Entergy and Cleco join SPP and
share in regional recovery. SPP traditional
Transmission Owners also support Entergy and
Cleco upgrades.
 Base Case: Entergy and Cleco do not join SPP
and therefore do not share in regional recovery.
Entergy and Cleco fund their own upgrades
without SPP Transmission Owner support.
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Methods
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ATRR forecast was constructed for SPP Transmission
Owners, Entergy, and Cleco incorporating several
upgrade types with several simplifying assumptions,
e.g., maintain MW-MIs & BP balancing transfers, 3%
depreciation rate for all upgrades, etc.
•
Host zone Net Plant Carrying Charge was applied to
each upgrade to develop total ATRR for each upgrade
•
Cost allocation was performed for each upgrade
•
Focus was reallocation of regional, not zonal, ATRRs
and the differential amounts ($M) between the base
and change case over the 2013-2020 period
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Key Inputs
•
•
Net Plant Carrying Charges

Entergy = 17.49% (self reported)

Cleco = 16.87% (self reported)
Load Ratio Shares

Entergy = 35.42% (calculated using ETR’s 2009 hourly loads)

Cleco = 3.21% (calculated using CLE’s 2009 hourly loads)
•
Entergy and Cleco upgrades self-supplied to SPP ITC
•
Project lists were posted 8/16 in zip file at
http://www.spp.org/section.asp?group=1784&pageID=27.
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Key Inputs, cont.
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Study 1 – All Regional Costs
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Study 2 – Regional Costs After 1/1/13
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Study 3 – Regional Costs (Excluding
BP and PP) After 1/1/13
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Concluding Remarks
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Focus of these transmission cost allocation
studies have been exclusively costs, not
benefits
•
It should be noted that PP costs assume
double circuit 345 kV, not 765 kV, projects in
plains
•
End effects and depreciation are driving
results for 2017 +
•
Results for 2020 will be extrapolated for 2021
and 2022 to complete 2013-2022 impacts
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