Generator Data Updates

Shih-Min Hsu, Transmission Planning

Outline

NERC Generator Verification Project

What does this mean to you (Generator Owner)

Implementation Timeline

Other Applicable Standard

NERC Generator Verification Project

Five standards included in this project (2007-09) are – MOD-025-2 Real and Reactive Power Capability Verification

– MOD-026-1 Excitation Response Verification

– MOD-027-1 Frequency Response Verification

– PRC-019-1 Coordination of Voltage Controls, Limiters and Protection

– PRC-024-1 Frequency and Voltage Ride-Through Settings

MOD-025-2 Real and Reactive Power Capability Verification

• Combined MOD-024 (Real Power) and MOD-025 (Reactive Power)

• Facilities: – Individual generating unit greater than 20 MVA (gross nameplate rating) directly

connected to the Bulk Electric System

– Generating plant/Facility greater than 75 MVA (gross aggregate nameplate rating)

directly connected to the Bulk Electric System

• Five year periodicity

Four Point Verification

MOD-025-2 (cont.)

Operational data is allowed but with lots of caveats

– Operational data from within two years prior to the verification date

• Data meets the criteria 2.1~2.4 (one page long process)

• Data demonstrates at least 90 % of a previously staged test that

demonstrated at least 50 % of the Reactive capability shown on thermal

capability curve.

Real and Reactive Capability Test Scheduling

• SCS BPO-33 (Generation Outage and Output Test Scheduling)

• To accommodate this process, contact the PCC at least three

weeks ahead of the requested test period (Contact info at the

end of PPT). Information required includes: – Type of generator tests to be conducted, e.g., real power and/or reactive power

(production and/or absorption).

– Expected generator output amount (maximum and/or minimum).

– Specific dates, times and durations of testing.

– Alternate dates and times the testing could be conducted, if the preferred

dates/times cannot be granted.

MOD-026-1 Excitation Response Verification

Applicability – Eastern Interconnect: >100 MVA (Individual Unit or aggregate plant)

– Wind and Solar Facility Voltage Controls Included

– “Sister Unit” exemption for units < or = 350 MVA at the same physical location

– Exemption for <5% Capacity Factor (Most recent three years)

Periodicity – Except for some special Circumstances, ten years

MOD-026-1 (cont.)

• Staged Test or Ambient Monitoring allowed

• Transmission Planner gives Generator Owner model data

sheets.

• Generator Owner “owns” the model

– Responsible for determining parameters

– Responsible for determining if match is “good enough”

– Peer Review process is included to facilitate technical discussions

between the GO and the TP

Sample Excitation System Model

VRMIN

VRMAX

VEMIN

EEE

FDDFEMAX

VSK

IKV

+

-

++

VRef

VS

VC

VUEL

DR

DRIRPR

sT1

K

s

KK

+

-

s

KK IA

PA

VAMIN

VAMAX

VA

KP VT

+

-KL VFE

EsT1

1

VE

EFD-

F

F

sT1

sK

KF2+

+

VFE

+

+

+KE

KD

VX = VE SE [VE] FEX = f [IN]

E

FDCN

V

IKI

+

VX

KF1

IFD

FEX

IN

Sample Excitation Response

Generator Terminal Voltage

Measurement

(Green)

Simulation

(Blue)

MOD-027-1 Frequency Response Verification

Applicability

– Same MVA thresholds as MOD-026

– Applies to active power/frequency control systems of Variable

Energy Resource facilities

– Same “Sister Unit” and “Capacity Factor” exemptions as MOD-

026

Periodicity

– Ten years or following equipment or settings change.

MOD-027-1 (cont.)

Acceptable Methods of Verification

– Ambient monitoring (probably most often used)

– On-line frequency reference step test

– Partial load rejection test

Model Ownership – same as MOD-026

PRC-019-1 Coordination of Voltage Controls, Limiters & Protection

• Applicability – Registered units

• Periodicity – Five years – Prior to performing a MOD-025 Reactive Capability Test

• Engineering Analysis of: – Capabilities (D-curve, V/Hz, SSSL)

– Limiters (UEL, OXL)

– Protection (24, 40)

• Verify analyzed settings are applied to in-service equipment

PRC-019-1 (Cont.) Coordination Sample

PRC-024-1 Frequency and Voltage Ride-Through Settings

16

• Applicability – Registered units

• Relay setting standard

– Exemption available for documented technical reasons

• GO shall provide the trip settings to the PC or TP per written

request, and subsequently will provide any updated trip

settings

PRC-024-1 Frequency Ride-Through

57

58

59

60

61

62

63

0.1 1 10 100 1000 10000

Fre

qu

en

cy (

Hz)

Time (sec)

Southern Balancing AreaGenerator Frequency Ride-Through Capability Curve

PRC-024-1 - Attachment 1

PRC-024-1 Voltage Ride-Through

00.05

0.10.15

0.20.25

0.30.35

0.40.45

0.50.55

0.60.65

0.70.75

0.80.85

0.90.95

11.05

1.11.15

1.21.25

1.3

0 0.5 1 1.5 2 2.5 3 3.5 4

PO

I Vo

ltag

e (p

u)

Time (sec)

Southern Balancing AreaVoltage Ride-Through Time Duration Curve

PRC-024-1 - Attachment 2

Implementation Timeline

MOD-025, PRC-019, PRC-024:

– 40 % of the facilities by 2 years 60 % of the facilities by 3 years,

80% by 4 years, 100% by 5 years

MOD-026 and 027:

– 30 % of the entity’s applicable unit gross MVA by 4 years, 50 %

of the entity’s applicable unit gross MVA by 6 years, 100 % of the

entity’s applicable unit gross MVA by 10 years

Other Applicable Standard

• MOD-032-1 (Data for Power System Modeling and Analysis)

– FERC approved (May 1, 2014)

– GOs required to provide data

• Power Flow and Dynamic modeling data

– No blackbox/confidential models

– Shareable across interconnection

20

Questions ?

Contacts:

Shih-Min Hsu Jim Viikinsalo Rebecca Henderson

smhsu@southernco.com jwviikin@southernco.com rjhender@southernco.com

(205) 257-6128 (205) 257-6823 (205) 257-5775

Transmission Planning Bulk Power Operations Bulk Power Operations

Formula Rate Process Overview

Don Mooney, Manager – Transmission Rates & Analysis

Formula Rate Process Overview

• Rate History

• Informational Rate Filings

• Informal Review Period

• Process Timeline

• Rate Calculation Overview/Sample Calculation – Transmission System Load

– Investment

– Expenses

– Credits

• Questions

Formula Rate

Formulary Rate was approved by the FERC in 2003

• Open Access Transmission Tariff (OATT) Provisions

― Attachment M - Formula Rate Manual

― Attachment N - Formula Rate Data Input Update and True-Up

Procedures

• Bulk Transmission Rate (facilities rated above 44/46 kV)

• Subtransmission Rate (facilities rated 44/46 kV)

• Forward-looking Rates with Annual True-Up

Formula Rate

• Forward-looking Informational Rates

– Filed with the FERC by November 1 each year

– Budgeted Investment and Expense Data

– Projected Monthly Transmission Loads

– Effective on January 1

• Rate Schedules are Posted on OASIS

• Detailed Workpapers are available upon request

Formula Rate

True-up Informational Rates

• Filed with the FERC by May 1 of the Following Year

• Actual Investment and Expense data (FERC Form No. 1)

• Actual Monthly Transmission Loads

• Refunds/Surcharges of Prior Year’s Charges completed by July 1

– Long Term Firm Point-to-Point Service

– Conditional Long Term Firm Point-to-Point Service

– Network Integration Service

Formula Rate

Each filing has a 90-day Informal Review Period

• Customers can make reasonable requests and inquiries related to: – Data Inputs

– Fundamental Predicates, changes that impact the formulary rate that existed in 2002,

related to the following: • FERC Uniform System of Accounts

• Accounting Policies/Practices/Procedures

• FERC Accounting Directives and Precedents

• Ratemaking Practices at Federal and State Levels

– Fundamental Predicate changes that impact the rate will be “un-wound”

• Good Faith Effort to respond to requests within 10 Business Days

FERC Informational Filings

True-up

Filing

May 1st

Info

Filing

Nov 1st

JAN FEB MAR APR MAY JUNE JUL AUG SEP OCT NOV DEC

PRIOR YEAR TRUE-UP INFORMATIONAL

90-Day Question Period

JAN

90-Day Question Period

Twice a Year

• FERC Filing

• Customer Meeting

• 90 Day Informal Review

Refund or

Surcharge

July 1st

Rate Calculation Overview

OATT Rate

OATT Revenue Requirements

Company Revenue

Requirements

Investment Revenue

Requirements

Rate of Return

(WACC)

Income Tax Rate

Expenses Income Tax

Credit

Revenue

Credits

Load Divided

By (/)

Minus

(-)

Minus

(-)Plus

(+)

Times

(X)

Plus

(+)

2014 Rate

2.53 $/kW-mo

Rate Base

Times

(X) Rate Base Rate of Return

(WACC)

Times

(X)

Transmission System Load

Monthly Transmission System Peak Load

• Maximum Coincident Hourly Firm Usage during a Calendar Month

– Southern Companies’ Territorial Load

– Network Service Load

– Long Term Firm Point-to-Point Reservations

– Grandfathered Long Term Firm Transmission Agreements

Transmission Load used in the Rate

• Average of the 12 Monthly Coincident Transmission System Peak

Loads for the Calendar Year (12-CP Load)

2014 Projected Bulk Transmission Load – 32,984 MW

Territorial – 26,650 MW

Network –

2,274 MW

Firm Point-to-Point – 4,060 MW

83%

7%

10%

2014 OATT Rate – Gross Investment

Bulk - $8.4B

Facilities rated

above 44/46 kV

Excluded - $611M

Generator Step-up

Transformers ~ $225M

Interconnection Facilities ~

$54M

Radial Facilities ~ $332M

SubT - $778M

44 – 46 kV lines

2014 Bulk Rate Base (Net Investment)- $5.3B

Land Held for Future Use

Working Capital (cash plus 128 and 165)

Adjustments to Rate Base (timing)

(181,182.3, 189, 190, 254, 257, 282, 283)

Net Plant in Service

$72M

$244M

($953M)

$5.9B

2014 Bulk Expenses - $458M

Depreciation

Taxes OTIT

O&M

Depreciation

$212M

$54M

Taxes Other Than

Income Taxes (OTIT)

O&M

$188M

Other

$4M

2014 Revenue Credits – ($38.5M)

Facility

Rentals - $17M

ROW and Attachment - $3M

Other - $5M

O&M Reimbursements

OATT Short-term

Revenues - $13.5M

2014 Informational Rate Summary

2014

Load (MW) 32,984

Annual Revenue Requirement

(in millions)

Return $404

Income Taxes $177

Expense $458

Revenue Credits ($38)

Bulk Revenue Requirements $1,001

Transmission Charges per kW

Monthly Transmission Capacity

Charge

$2.53

QUESTIONS

Tariff Update

Terry Mozena, Transmission Services Manager

History - FERC Policy

• Since FERC implemented its Open Access Transmission Tariff rule in

1996, transmission pricing policy has presumed transmission facilities are

needed to serve all OATT customers and such facility costs should be

“rolled in” to the OATT rate base and paid for by all OATT customers.

• However, when facilities are unquestionably radial and serve the load of

one transmission customer only, the radial facility costs are to be “directly

assigned” to the beneficiary customer and excluded from the OATT rate

base.

History - Southern OATT Practice

• Southern first submitted to FERC its cost-based formula rate for

calculating OATT charges in January 2002.

• Southern included all transmission facilities in the OATT rate base,

including radial facilities.

• Southern provides all information related to OATT filings to current

customers of record for Informal Review twice per year (May – True-Up &

November – Projected) at which time customers can audit, question,

seek adjustments, etc.

History – Radial Settlement

• During the 2009 OATT True-Up Filing process, a group of customers

expressed concern that Southern was including retail radial facilities

used to serve its retail customers in the OATT rate base, but directly

assigning the cost of wholesale radial facilities to wholesale customers.

• Also, prior to the 2009 OATT True-up Filing, Progress Energy-Florida

made a filing in April 2010 at FERC to stop including all radial facilities

in its OATT, which applied to radial facilities that were installed on or

after May 31, 2010.

• A group of OATT customers called attention to this Progress Energy-

Florida filing and began urging Southern to follow this same approach.

Radial Definition

“Retail Radial Transmission Facility” means a Southern

Companies’ transmission facility that is:

– Newly installed or rehabilitated on or after January 1, 2011

– Rated at or above 44/46 kV

– Used to serve a retail load

– Radial (i.e., not looped-in or otherwise integrated with Southern

Companies’ transmission network) in that the line has a single end

connected to the transmission network with its other end terminating at a

point where power is delivered either to (i) a single Southern Companies’

retail customer or (ii) general Southern Companies’ retail load; and,

– Excluded from the transmission network in the current planning horizon

Radial Facility

Radial Facility Looped-in Facility

Network Load Network Load

Interconnected Network Interconnected Network

Southern Owned

Customer Owned

Southern Owned

Customer Owned

Radial Settlement Agreement

• Efforts to work through this issue continued and carried over to the

2010 OATT True-Up Filing during 2011.

• Southern entered into settlement negotiations to remove the costs of

new or rehabilitated radial facilities in the OATT rate base for facilities

installed or rehabilitated on or after January 1, 2011.

• Southern subsequently entered into a Settlement Agreement regarding

the treatment of radial transmission facilities in the Southern OATT that

was filed with FERC on April 3, 2012.

Section 205 Filing

• Also on April 3, 2012 Southern made a Section 205 filing with FERC to

amend the OATT to address treatment of radial transmission facilities for

all transmission customers in the manner described in the Settlement

Agreement.

• FERC approved the Section 205 filing on May 25, 2012, which made the

treatment of radial transmission facilities binding on all OATT customers.

• Finally, Southern made another FERC filing on November 1, 2013, that

sought permission to charge OATT customers for the O&M costs

associated with new or rehabilitated radial facilities installed or

rehabilitated on or after January 1, 2011, beginning with Rate Year 2014

and every year thereafter.

Radial Cost Treatment Going Forward

What does this mean for customers served by radial facilities?

Retail…

• New facility costs will be included in retail rates

• Annual O&M costs will be included in retail rates

• Rehabilitation costs will be included in retail rates

Wholesale…

• New facility costs will be directly assigned and excluded from the OATT

• Annual O&M costs will be recovered through Direct Assignment Facilities Annual Charges

and excluded from the OATT

• Rehabilitation costs will be directly assigned and excluded from the OATT

As future OATT changes occur, all OATT customers of record will be

informed via email per our standard practice.

OATT Radial Identification Annual Milestones

In order to help facilitate the billing process, with regard to the

rehabilitation charges for direct assignment facilities, the following

target milestones will be utilized.

QUESTIONS