Transmission Expansion Transmission Expansion REV REVOLUTION: Oklahoma W TION: Oklahoma Wind nd Ener Energy Conf Confer erence ence Oklahoma Cit Oklahoma City, y, OK y, y, OK December 3, December 3, 2008 2008
O O Overv verview i i ew SPP Backgro nd SPP Background • 1. Unprecedented interest to build EHV transmission and develop wind resources SPP Transmission Expansion Plan SPP Transmission Expansion Plan • Oklahoma Electric Power Transmission Task Force • Balanced Portfolio almost complete • 2008 EHV Overlay Study being finalized 2008 EHV Overlay Study being finalized • • Joint Coordinated System Plan being finalized • Federal leadership to address need for standard • interconnection protocols and siting challenges, as well interconnection protocols and siting challenges, as well as Seam Agreements with fair / simple cost allocations are critical success factors www.spp.org 3
3 I 3 I 3 I t 3 Interconnec erconnecti ti ti tions ons / / 8 NERC / 8 NERC / 8 NERC R 8 NERC Reg egions i ons www.spp.org 4
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SPP Transmission Expansion SPP Transmission Expansion Plan Plan • F Focus has been comprehensive reliability assessment h b h i li bilit t and documentation of other commitments for approved generator interconnections, long term firm service agreements and other economic / sponsored service agreements and other economic / sponsored upgrades for transmission expansion which have been reviewed and approved by SPP. • Most recent plan 2008-2017 STEP included $2.2 B of transmission projects over 10 year horizon with almost $800M of transmission projects requiring financial $800M of transmission projects requiring financial commitments in 2008-2011 and $465M of major economic upgrades primarily in KS (costed at 345 kV). www.spp.org 10
Transmission Expansion Transmission Expansion Transmission Expansion Transmission Expansion Minimum Transmission SPP Today Cost Congestion Management Cost Need for More Transmission Expansion Transmission Reliability Infinite Bus Amount of Transmission www.spp.org 11
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Economic Planning Economic Planning Reliability and Economics are Inseparable Reliability and Economics are Inseparable Economic Upgrades – sponsored under existing t tariff but eligible for credits based on new service iff b t li ibl f dit b d i sold Balanced Portfolio Postage stamp cost allocations for a portfolio of • Economic Upgrades which benefit SPP as a whole, and for which each zone realizes benefits in excess of their for which each zone realizes benefits in excess of their costs FERC Approved 10/16 in Docket ER08-1419 • Balanced Portfolio in final stages of development Balanced Portfolio in final stages of development • www.spp.org 14
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EHV Overlay Studies EHV Overlay Studies • • SPP hired Quanta Technologies to perform long range SPP hired Quanta Technologies to perform long range visionary expansion plan. Original study updated in early 2008 due to GI queue • requests. $8B, 2,250 mile 765 and 500 kV plan with significant $8B 2 250 il 765 d 500 kV l ith i ifi t • expansion into and within Entergy, MISO and PJM systems. • 765 kV, not 345 kV, expansion was recommended when p wind development exceeds 4,600 MW in SPP. • Foundation for 2008 EHV Overlay Study in process at SPP to identify optimal expansion and economic benefits to identify optimal expansion and economic benefits • Incorporated into JCSP study with MISO, TVA, PJM, ISO- NE, NYISO, MAPP, and others. www.spp.org 16
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OEPTTF Study OEPTTF Study Okl h Oklahoma Electric Power Transmission Task El t i P T i i T k • Force (OEPTTF) created by OK legislature Identify need for SPP study to identify • transmission expansion needs for OK and beyond Scope and assumptions approved late Scope and assumptions approved late • December, 2007 Final Report posted March 31, 2008 • www.spp.org 18
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15,000 MW www.spp.org 20
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EHV Commitments EHV Commitments • • Competition to build transmission is refreshing Competition to build transmission is refreshing. • Westar and OG&E are building major 345 kV projects in KS and OK, respectively. , p y • ITC Great Plains and ITC Panhandle, along with Prairie Wind Transmission LLC and Tallgrass Transmission LLC are proposing to build major 765 and 345 kV LLC are proposing to build major 765 and 345 kV transmission to support an SPP EHV Overlay. AEP, Westar and OG&E have expressed interest too. • Transmission Ownership Construction Task Force has addressed process and rules for deciding who has the right to build transmission in SPP. www.spp.org 22
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2007 - 2007 - 2008 JCSP Overview 2008 JCSP Overview • Evaluate 1/1/08 RPS mandates in 26 states/DC E l t 1/1/08 RPS d t i 26 t t /DC as reference scenario, as well as a 20% National RPS scenario as part of 2008-2009 NREL/DOE Eastern Wind Integration & NREL/DOE E t Wi d I t ti & Transmission Study (EWITS) • Studies will be used to demonstrate the value of bulk power transmission to harvest best wind resources in central plains for future wind resources in central plains for future scenarios. • Ch Check out www.jcspstudy.org k t j t d www.spp.org 24
JCSP Progress to JCSP Progress to Date Date MISO JOA MISO JOAs with PJM, SPP and TVA require ith PJM SPP d TVA i • periodic joint planning studies Initiated with kick off meeting Nov 1, 2007 in Initiated with kick off meeting Nov 1, 2007 in • Pittsburgh by MISO, PJM, SPP and TVA Active participants include ISO-NE, MAPP and • NYISO Interested parties continues to grow • 10 regional workshops/meetings to date 10 regional workshops/meetings to date • • FERC Order 890 emphasizes importance of • inter-regional planning and cost allocations g p g www.spp.org 25
Reference Scenario Reference Scenario Reference Scenario Reference Scenario – Current Overlay Current Overlay Current Overlay Current Overlay www.spp.org 26
20% Wind Scenario 20% Wind Scenario – Current Overlay 20% Wind Scenario 20% Wind Scenario – Current Overlay Current Overlay Current Overlay www.spp.org 27
SPP Implications SPP Implications JCSP plans are complimentary to EHV Overlay p p y y • designs for SPP. Reference scenario shows need for 765 kV • from LaCygne, KS across MO and IL to AEP in f L C KS MO d IL t AEP i Western IN, plus double circuit 500 kV from Ft Smith, AR across Entergy and TVA to SoCo. 20% Wind Scenario has 3 - 800 kV HVDC • terminals in central and southern plains sourced from 765 kV EHV Overlay in SPP at sourced from 765 kV EHV Overlay in SPP at Lawton Eastside & Muskogee in OK, and LaCygne KS with another 800 kV HVDC terminal north of KC near Omaha, NE. www.spp.org 28
JCSP T JCSP T JCSP T JCSP Transm ransmiss i ssion i on R R Resu R esult lt / lts / C / C / Cos osts t Cost per Mile Assumption 345 KV (2) - 345 kV 500 KV (2) - 500 kV 765 KV DC - 400 kV DC - 800 kV 2024$ 2,250,000 3,750,000 2,875,000 4,792,000 5,125,000 3,800,000 6,000,000 Estimated Line Mileage Summary (Miles) 345 KV (2) - 345 kV 500 KV (2) - 500 kV 765 KV DC - 400 kV DC - 800 kV Total Reference 3,329 292 508 946 3,118 282 2,400 10,875 20% Wind 2,042 193 864 279 3,977 0 7,582 14,937 Estimated Cost Summary (Millions of 2024$) (2) - 345 (2) - 500 DC - 400 DC - 800 345 KV kV 500 KV kV 765 KV kV kV Total Reference 9,363 1,371 1,825 5,668 19,975 1,698 14,400 54,298 20% Wind 5,742 905 3,106 1,671 25,478 0 45,492 82,394 www.spp.org 29
Cost Perspectives Cost Perspectives Reference Future Cumulative 20% Wind Future Cumulative Costs through 2024 Costs through 2024 Costs through 2024 Costs through 2024 Transmission Capital Transmission Capital p 2% 2% 1% Generation Capital Generation Capital 23% 30% Production 68% Production 76% www.spp.org 30
Benefit to Benefit to Cost Ratios are Impressive Cost Ratios are Impressive A Assuming an 15% annual carrying charge rate i 15% l i h t • and existing plans, the B/C for the reference and 20% Wind scenarios are roughly 1.4 and g y 1.0, respectively. Economic models are showing annual adjusted • production cost savings in either scenario in excess of $10B. $ www.spp.org 31
Estimated CO Estimated CO 2 Implications by Estimated CO 2 Implications by Estimated CO Implications by Implications by Scenario Scenario 2008 – 2024 Cumulative CO 2 Output 2008 2024 C l ti CO O t t • Reference Future (5% Wind): 34.98 B tons Reference Future (5% Wind): 34 98 B tons 20% Wind Future: 32.11 B tons Increase of 15% Wind in Eastern • Interconnection will reduce CO 2 Output by 2.87 B t B tons which some would monetize in the hi h ld ti i th range of tens of billions of dollars www.spp.org 32
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