Option for an Enhanced SPP
Regional Project Review Process
Presentation to the Regional State Committee
January 24, 2011
Lisa M. Barton
SVP American Electric Power Transmission
Process Goals

Regional collaboration is needed to establish process for
ensuring that there is:
– “Transparency” with respect to projects scope and cost
– “Predictability” with respect to process, decision making and
reporting
– While minimizing the administrative burden on SPP in terms of
project oversight.
Process
Best
Practices
Reporting
As the SPC task force begins its deliberations on new process
objectives the following process outline is one of many which could be advanced.
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Process Transparency

Process
Best
Practices
Reporting
New processes should recognize that:
– Accurate and consistent information on project costs, project scope and inservice dates promotes greater transparency and understanding.
– States have the responsibility to make determinations on siting and balancing
potentially competing interests within the state with the cost of the project.
– SPP provides expertise in the determination of needed transmission facilities.
– TOs provide expertise on cost estimation and the ability to site, construct, own
and maintain transmission assets within the region.
– SPP as an independant regional transmission organization is well positioned to
make determinations on:
•
•
•
•
What is “good utility practice” within the SPP region.
The feasibility of project alternatives, in consultation with TOs.
Consistent and transparent reporting requirements.
Determinations as to the appropriateness of designs and costs; based on information
reported by TOs.
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Overview of Proposal: Planning
and Project Review Process
Process
Best
Practices
Reporting

Understanding the scope, challenges and costs of a given transmission
project is important when the project costs are supported regionally
 Facilitation of this goal can be secured by SPP establishing a more formal
process
 TO who are familiar with the project can then provide guidance and
information on local matters such as:
– Environmental issues (habitat, Tribal lands)
– Geographic challenges (terrain)
– Estimated project costs

With input from this consultation, SPP can make the determination as to
whether the “preliminary scope” of the project is accurate
 Subsequent to this review SPP would determine the “recommended” scope
and size of the project and would issue an NTC pursuant to the SPP Tariff
 Upon receipt of the NTC, the TO would provide information on project costs
 The TO would submit an application to SPP specifying the cost of the given
project to secure recovery of the project costs through the regional rate
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Overview of an Option to Increase
Transparency and Accuracy of Information:
Prior to Issuance of NTC
Process
Best
Practices
Reporting
Understanding the scope, challenges and costs of a given transmission project is important
when the project costs are supported regionally. Facilitation of this goal can be secured by
SPP establishing a more formal process
SPP
Preliminary Benefit
Analysis &
Identification of
Needed Projects
TO
Rough Estimate of
Cost
(straight line)
SPP Consult w/TOs
Vetting with
TO Committee
•Is Scope Correct?
•Is Cost In Line?
Questions/Concerns
RSC/Stakeholders
SPP
Revalidation of
Benefit Analysis*
Final SPP
Determination
NTC Issued
*As Needed
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Overview of an Option to Increase
Transparency and Accuracy of Information:
Prior to Issuance of NTC
Process
Best
Practices
Reporting
TOs who are familiar with the project can then provide guidance and information on local
matters such as: Environmental issues (habitat, Tribal lands); Geographic challenges
(terrain); estimated project costs.
SPP
Preliminary Benefit
Analysis &
Identification of
Needed Projects
TO
Rough Estimate of
Cost
(straight line)
SPP Consult w/TOs
Vetting with
TO Committee
•Is Scope Correct?
•Is Cost In Line?
Questions/Concerns
RSC/Stakeholders
SPP
Revalidation of
Benefit Analysis*
Final SPP
Determination
NTC Issued
*As Needed
6
Overview of an Option to Increase
Transparency and Accuracy of Information:
Prior to Issuance of NTC
Process
Best
Practices
Reporting
With input from this consultation, SPP can make the determination as to whether the
“preliminary scope” of the project is accurate and determine the final “recommended”
scope/cost and issue a NTC.
SPP
Preliminary Benefit
Analysis &
Identification of
Needed Projects
TO
Rough Estimate of
Cost
(straight line)
SPP Consult w/TOs
Vetting with
TO Committee
•Is Scope Correct?
•Is Cost In Line?
Questions/Concerns
RSC/Stakeholders
SPP
Revalidation of
Benefit Analysis*
Final SPP
Determination
NTC Issued
*As Needed
Transparency and Predictability require open dialogues and informational
exchanges to ensure decisions are made based on the best known information.
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Best Practices Guidelines
Process
Best
Practices
Reporting

Predictability in what constitutes good utility practice can assist
transmission owners and stakeholders alike.

To assist the SPP in its review of projects, regional TOs in concert
with the SPP could develop a Best Practices Guideline (BPG).
– BPG could be used to provide guidance to developers within the region.
– If a project is designed and constructed in a manner that is consistent
with the BPG, the design is presumptively in accordance with good
utility practice within the region.
– If the design is outside of the BPG, the TO would submit an application
detailing deviations from the BPG outlining why the deviation is
appropriate.
– Periodic updates could ensure that the guidelines continue to reflect
“regional best practices” in the area of transmission design and
engineering; while minimizing SPP administrative costs.
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Consistent Reporting and
Project Reviews




Process
Best
Practices
Reporting
TOs would submit information specifying the cost of a individual
projects (>300kV).
Project costs that are consistent with good utility practice (as
outlined previously) would be fully recoverable in the regional rate.
SPP could establish procedures and common templates to be used
to ensure consistent reporting and adopt requirement for the TO to
notify SPP in the event that costs exceed an established bandwidth
(e.g.+/-25%).
Timely reporting of changes in project costs could be encouraged by
adopting a mechanism which requires costs in excess of those
approved to be reported to SPP prior to inclusion in the regional
rate.
– Obligation for reporting would be on the TO, to detail the nature of the
changes to SPP.

Final report to SPP on actual costs; reported after project ISD.
Transparency and Predictability can be secured by establishing a:
Defined Process; Adoption and use of “Best Practices” and Consistent Reporting.
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