**\`**

122 FERC ¶ 61,060

UNITED STATES OF AMERICA

FEDERAL ENERGY REGULATORY COMMISSION

Before Commissioners: Joseph T. Kelliher, Chairman;

Suedeen G. Kelly, Marc Spitzer,

Philip D. Moeller, and Jon Wellinghoff.

+--------------------------------------------+----------+-------------+
| Southwest Power Pool, Inc.                 | Docket   | ER          |
|                                            | Nos.     | 07-1311-000 |
|                                            |          |             |
|                                            |          | ER          |
|                                            |          | 07-1311-001 |
+--------------------------------------------+----------+-------------+

ORDER ACCEPTING IN PART, AND REJECTING IN PART, REVISED TARIFF SHEETS

(Issued January 25, 2008)

1.  On August 30, 2007, Southwest Power Pool, Inc. (SPP) filed proposed
    revisions to its: (1) Open Access Transmission Tariff (OATT)
    (related to the interconnection of large generators to SPP's
    transmission system); (2) *pro forma* Large Generator
    Interconnection Agreement (LGIA); and (3) *pro forma* Large
    Generator Interconnection Procedures (LGIP) (August 2007 filing).
    SPP contends that each of its proposed tariff revisions satisfies
    the "independent entity variation" standard established by the
    Commission in Order No. 2003.[^1] As discussed below, we will accept
    in part, and reject in part, SPP's proposed tariff revisions to
    become effective November 1, 2007 and will require a compliance
    filing.

    **[Background]{.underline}**

2.  On January 20, 2004, SPP filed revisions to its OATT proposing to
    adopt a *pro forma* LGIP and LGIA based on the Commission's Order
    No. 2003 *pro forma* LGIA and LGIP. The Commission accepted and
    suspended SPP's January 20 filing, subject to refund, and required
    SPP to incorporate the Order No. 2003 *pro forma* language into
    SPP's OATT, including the Order No. 2003 crediting provisions.[^2]
    SPP submitted the required filing on April 19, 2004, which was
    conditionally accepted by the Commission effective April 26,
    2004.[^3] In addition, in an order issued on August 10, 2004, the
    Commission accepted SPP's subsequent compliance filing.[^4]

    **[The Instant Filing]{.underline}**

3.  SPP's proposed tariff revisions generally fall into four
    categories: (a) converting the Commission's two-party LGIA and LGIP
    to three-party agreements and procedures (to recognize the structure
    of the SPP Regional Transmission Organization (RTO) as the
    Transmission Provider); (b) replacing the Order No. 2003 crediting
    provisions for Network Upgrades with provisions that provide
    financial compensation for subsequent use of certain limited Network
    Upgrades; (c) providing that the dispute resolution process in SPP's
    OATT will apply to disputes arising in connection with the
    interconnection process; and, (d) modifying provisions in SPP's *pro
    forma* LGIA and LGIP to be consistent with provisions in SPP's OATT.

4.  SPP's August 2007 filing states that each of its proposed tariff
    revisions was developed through the SPP stakeholder process, with
    all interested entities able to participate in the development and
    approval of the proposed revisions. Further, SPP states that, based
    on its experience in administering the interconnection process over
    the last few years, among other factors, it concludes that its
    proposed revisions will improve upon the Commission's *pro forma*
    LGIA and LGIP for the benefit of all parties involved.\
    \
    **[Notice of Filings]{.underline}**

5.  Notice of SPP's August 2007 filing was published in the *Federal
    Register*, with motions to intervene and protests due on or before
    September 20, 2007.[^5] Timely motions to intervene were filed by:
    the Electric Power Supply Association; American Wind Energy
    Association, together with the Wind Coalition (collectively AWEA);
    Golden Spread Electric Cooperative, Inc.; Arkansas Electric
    Cooperative Corporation; the East Texas Cooperatives (consisting of
    East Texas Electric Cooperative, Inc., Northeast Texas Electric
    Cooperative, Inc., and Tex-La Electric Cooperative of Texas, Inc.);
    and American Electric Power Service Corporation, as agent for Public
    Service Company of Oklahoma and Southwestern Electric Power Company.
    Timely motions to intervene accompanied by comments were filed by
    Western Farmers Electric Cooperative (WFEC) and ITC Great Plains,
    LLC (ITC GP). On October 4, 2007, AWEA revised its motion to
    intervene to add a protest to SPP's August 2007 filing. On October
    19, 2007, SPP filed an answer to the protest filed by AWEA.

6.  On October 29, 2007, in response to SPP's August 2007 Filing,
    Commission Staff issued a deficiency letter that directed SPP to
    provide additional information on eight specific issues. On November
    28, 2007, SPP filed a response to the deficiency letter. Notice of
    SPP's filing was published in the *Federal Register*, with motions
    to intervene and protests due on or before December 19, 2007.[^6]

7.  Timely comments in response to SPP's November 28, 2007 filing were
    filed by AWEA, ITC GP and WFEC. In addition, Sunflower Electric
    Power Corporation and Mid-Kansas Electric Company, LLC (jointly,
    Sunflower), filed a timely motion to intervene and comments
    supporting SPP's position on the direct assignment of the costs of
    Attachment Facilities.\
    \
    **[Discussion]{.underline}**\
    \
    **A. [Interventions]{.underline}**

8.  Pursuant to Rule 214 of the Commission's Rules or Practice and
    Procedure,[^7] the timely, unopposed motions to intervene serve to
    make the entities that filed them parties to this proceeding.
    Although AWEA's motion to admit its protest was filed after the
    comment period, the Commission will accept it, given the early stage
    of the proceeding, and the absence of undue prejudice or delay to
    other parties from acceptance. Moreover, while AWEA's motion to
    admit its protest was filed after the initial comment period, it was
    filed prior to the expiration of the additional comment period
    afforded when notice was given of SPP's October 29, 2007 filing.

9.  Rule 213(a)(2) of the Commission's Rules of Practice and
    Procedure,[^8] prohibits an answer to a protest or an answer unless
    otherwise ordered by the decisional authority. The Commission will
    accept SPP's answer to AWEA's late-filed protest, as it has provided
    information that assisted the Commission in its decision-making
    process.

    **B. [SPP's Proposed Tariff Revisions]{.underline}**

10. As discussed below, the Commission will accept a number of SPP's
    proposed changes and will reject others. Most of these changes are
    warranted under the "independent entity variation" outlined in Order
    No. 2003 and supported by SPP's operating characteristics as an
    independent RTO. Under this standard, the Commission will permit
    RTOs and ISOs the flexibility to deviate from the *pro forma* LGIP
    and LGIA to meet regional needs.[^9]\
    \
    **1. [Conversion from Two-party to Three-party
    Documents]{.underline}**

11. SPP states that its *pro forma* LGIA and LGIP are two-party
    documents that contemplate that the Transmission Provider and the
    Transmission Owner would be one entity. SPP explains that, under the
    SPP RTO structure, it is the sole Transmission Provider on behalf of
    13 separate Transmission Owners. SPP states that, with regard to
    interconnections, both SPP and the affected Transmission Owner have
    separate roles. Thus, SPP argues, SPP's *pro forma* LGIP and LGIA
    should both be revised to reflect the rights and responsibilities of
    both SPP and its Transmission Owners. SPP states that its August
    2007 proposed tariff revisions include the necessary OATT
    modifications that define SPP's and the Transmission Owners'
    respective roles. Specifically, SPP proposes that the Transmission
    Provider and the Transmission Owner, along with the Interconnection
    Customer, be parties to the interconnection agreement. This change
    results in agreements that are three-party in nature, setting forth
    the rights and responsibilities of SPP, the Transmission Owners and
    the Interconnection Customers.\
    \
    **[Commission Determination]{.underline}**

12. We accept this proposal reflecting the three-party nature of the
    agreements under the SPP RTO and find it consistent with the
    "independent entity variation" standard. In Order No. 2003, the
    Commission recognized that in an RTO or ISO, where the transmission
    provider is not the transmission owner, the RTO or ISO's compliance
    filing may propose a modified interconnection agreement that
    provides different respective rights and obligations in the
    region.[^10]\
    \
    **2. [Pricing Policy for Upgraded Facilities ]{.underline}**

13. In Order No. 2003, the Commission required that Interconnection
    Customers pay initially the full cost of Interconnection Facilities
    and Network Upgrades that would not be needed but for the
    interconnection.[^11] The costs of Interconnection Facilities on the
    generator's side of the point of interconnection are directly
    assigned to Interconnection Customers with no credits for those
    costs.[^12] The costs of Network Upgrades are refunded, with
    interest, to the generator through transmission service credits, and
    if necessary, a lump-sum payment after 20 years.[^13] On August 10,
    2004, the Commission accepted the Order No. 2003 crediting mechanism
    for SPP.[^14]

14. In the instant filing, SPP proposes to adopt an interconnection
    pricing policy under Order No. 2003's "independent entity variation"
    standard. SPP proposes to amend Article 11.4.1 of its LGIA to remove
    the provisions for Order No. 2003 crediting and provide for
    financial compensation in accordance with Attachment Z. Under
    Attachment Z, transmission customers that pay for Network Upgrades
    receive revenues from new transmission service that makes use of the
    Network Upgrades.[^15] Any revenues received from such new
    transmission service flow to the funding transmission customer until
    the funding customer is fully compensated for the costs of the
    Network Upgrades.[^16] SPP proposes to remove the provision in the
    LGIA that would require full reimbursement of all amounts advanced
    by the Interconnection Customer for Network Upgrades within 20 years
    of the operation date of the upgrade.[^17] Attachment Z does not
    guarantee full reimbursement; rather, it provides financial
    compensation to the funding customer when use is made of the Network
    Upgrades funded by the customer.

15. Additionally, SPP proposes to amend Articles 12.2.2 and 12.2.3 of
    its LGIP to create different cost allocation and financial
    reimbursement mechanisms for two categories of Network Upgrades. SPP
    proposes that Interconnection Customers will be entitled to
    reimbursement for Stability Upgrades, defined as Network Upgrades
    that are required for stability of the generating facility and the
    transmission system, in accordance with Attachment Z. For Attachment
    Facilities, defined as Network Upgrades required to interconnect the
    generating facility to the existing Transmission System or
    extensions of the existing Transmission System, SPP proposes that
    the Interconnection Customer would not be eligible for reimbursement
    of the costs it paid for these Network Upgrades. SPP states that
    Attachment Facilities are a narrow category of facilities around the
    point of interconnection, such as ring busses or switchyard
    facilities that are sole-use facilities of the Interconnection
    Customer.

16. SPP states that assigning the costs of Attachment Facilities
    directly without crediting or future reimbursement represents a
    reasonable balance between the interests of transmission owners and
    Interconnection Customers. SPP also states that, in order to carry
    out the Order No. 2003 crediting approach, transmission owners need
    to receive incremental transmission revenues that can be used to
    provide credits. Otherwise, SPP contends, under the SPP RTO
    structure, there will be inadequate incremental revenues.[^18] SPP
    states that the scope of the Attachment Facilities that would be
    paid for by Interconnection Customers and for which reimbursement
    under Attachment Z would not be available, is limited.

    **[Comments and Protests]{.underline}**

17. WFEC supports SPP's proposed revisions related to the direct
    assignment of the costs of Attachment Facilities, stating that SPP's
    proposal reflects a reasonable balance among the interests of
    generators, transmission customers, transmission owners, and the
    load that ultimately bears the costs of the Attachment Facilities.
    WFEC also states that SPP's proposal would help ameliorate the
    problem of inadequate incremental revenues for transmission
    crediting purposes.[^19]

18. ITC GP objects to SPP's proposal to assign the entire cost of
    certain Network Upgrades to interconnecting generators. However,
    while it objects, ITC GP also states that it will not protest the
    filing. ITC GP states that interconnecting generators that meet
    certain prerequisites, (*e.g.,* designation as a Network Resource or
    a power purchase agreement of one year), should be reimbursed for
    the cost of all Network Upgrades. ITC GP argues that SPP's proposal
    will have a detrimental impact on the development of new generation
    within SPP. ITC GP further argues that full reimbursement for
    Network Upgrades would "level the playing field" between generation
    constructed by incumbent utilities, which can recover the
    un-reimbursed cost of interconnection through regulated retail rates
    and generation constructed by independent entities, which have no
    such rate recovery mechanism.[^20] ITC GP requests that the
    Commission's determination in this proceeding be without prejudice
    to subsequent revisions to the SPP OATT proposed by independent
    transmission companies under which Interconnection Customers would
    be reimbursed fully for the cost of Network Upgrades that meet
    certain prerequisites.

19. AWEA objects that there is no actual regional need for this revision
    and that the only reason SPP would lack incremental revenues to fund
    crediting is because it proposes not to roll-in the costs of these
    network upgrades into its cost-of-service network transmission rate.
    AWEA argues that, if the cost of these facilities is added to the
    revenue requirement for SPP's cost-of-service transmission rate,
    then SPP would have the additional revenues to credit the
    interconnecting generator for its initial funding of these
    facilities.[^21] AWEA argues that SPP's proposed revision is not
    needed because Attachment Facilities are, by definition, *Network
    U*pgrades, and distinct from radial or generation-tie facilities.
    AWEA maintains that, for decades, the Commission has adhered to the
    general principle that such network facilities should not be
    directly assigned to individual customers because all customers
    benefit from the integrated network.[^22]

20. In addition, AWEA distinguishes SPP's proposal from that approved by
    the Commission in a proceeding involving the Midwest Independent
    Transmission Operator, Inc. (Midwest ISO) in which the Commission
    approved Midwest ISO's proposal to split the costs 50-50 between the
    interconnecting generator and the other network customers.[^23]
    Moreover, AWEA references two recent Midwest ISO orders in which the
    Commission, in separate cases, allowed ATC and ITC to reimburse
    generators for the full cost of their upgrades under certain
    circumstances, which marked a departure from the Midwest ISO's
    general structure providing for a 50-50 split of interconnection
    costs.[^24] AWEA argues that SPP's proposal for the interconnection
    costs to be borne totally by the interconnecting generator is
    contrary to the approach approved by the Commission in the ATC and
    ITC Orders because it would not result in any cost-sharing, much
    less a 50-50 split of costs between the interconnecting generator
    and the other network customers as provided in Midwest ISO's tariff.

21. Finally, according to AWEA, SPP's rationale (that its proposal
    promotes economic efficiency) is flawed. AWEA argues that because
    these Attachment Facilities are not the type that will vary by the
    location of the generator, they cannot provide an incentive for a
    generator to locate in a more economically efficient location. AWEA
    also argues that location-constrained renewable resources such as
    wind and solar generators cannot respond to incentives to choose
    more economically efficient locations, because these generators must
    be sited where the resources are located.

    **[SPP Answer]{.underline}**

22. In its answer, SPP states that its August 30 filing demonstrates
    that its proposal is consistent with Commission policy. With regard
    to the Midwest ISO orders cited by AWEA, SPP states that the
    Commission made clear in those orders that it would not impose
    Midwest ISO's approach on others.[^25] SPP further states that, in
    approving Midwest ISO's revised cost allocation, the Commission did
    not indicate that it was overriding the Commission's policy
    permitting RTOs to propose different methods of addressing
    interconnection pricing issues.

    **[Deficiency Letter and SPP Responses]{.underline}**

23. In the October 29 Deficiency Letter, Commission Staff requested that
    SPP further explain a number of issues related to its crediting
    mechanism for assigning the costs of Network Upgrades associated
    with Interconnection Facilities directly to the Interconnection
    Customer. SPP responds that its proposed treatment of
    Interconnection Facilities, Attachment Facilities, and Stability
    Upgrades is set out in its proposed LGIP/LGIA revisions, and that
    any Network Upgrade not classified as an Attachment Facility would
    be deemed to be associated with transmission delivery service. SPP
    states that the cost of such upgrades will be allocated in
    accordance with the provisions of Attachment Z.

24. SPP also responds that Interconnection Customers funding network
    upgrades will have the same rights as any Transmission Customer
    funding Network Upgrades; payment of credits to the Interconnection
    Customer, pursuant to Attachment Z, for all subsequent incremental
    utilization of any Stability Upgrade paid for by the Interconnection
    Customer. SPP argues that the opportunity to receive financial
    compensation for a Stability Upgrade pursuant to Attachment Z
    fulfills the Commission's vision in Order No. 2003 by giving
    customers the ability to receive a valuable right to revenue derived
    from Network Upgrades in return for the direct payment of upgrade
    costs. SPP further claims that when the upgrades are located in
    areas that benefit the transmission system the most, Interconnection
    Customers receiving financial compensation pursuant to Attachment Z,
    have the potential to be paid at a faster rate than the SPP's Order
    No. 2003 crediting mechanism.

25. While SPP's Attachment Z refers solely to Requested and Economic
    Upgrades associated with transmission delivery service, SPP states
    that credits for subsequent incremental use of any Stability Upgrade
    paid for by the Interconnection Customer would be determined in a
    manner similar to the process used for subsequent incremental use of
    Economic Upgrades. SPP further responds that it is willing to modify
    the language in Attachment Z to include provisions of credits for
    Stability Upgrades in a compliance filing.

26. SPP reiterates that its treatment of Attachment Facilities is
    consistent with Order No. 2003 because Attachment Facilities are
    believed to be sole-use facilities. SPP states that, while it does
    not expect there to be a subsequent interconnection to Attachment
    Facilities, it recognizes the possibility this may occur. SPP states
    that it is willing to file modifications to its proposal to allow
    for sub-allocation or proration of the costs of Attachment
    Facilities to address potential future uses of such upgrades.

    ­ **[Comments on SPP's Deficiency Response]{.underline}**

27. AWEA and ITC GP argue that SPP's submittal is inadequate and that,
    because Attachment Facilities are Network Upgrades by definition,
    the Commission should not allow SPP to directly assign the costs of
    such facilities without the opportunity to receive transmission
    credits.

28. WFEC and Sunflower agree with SPP that Attachment Facilities are
    sole-use facilities that would not be necessary but for the
    interconnecting generator's request to interconnection. They contend
    that SPP has correctly observed that, without the proposed changes
    concerning direct assignment of the costs of Attachment Facilities,
    there will be insufficient incremental revenues for the SPP
    Transmission Owners to provide the refunds to interconnecting
    generators. Sunflower further states that a mechanism that provides
    for the Interconnection Customer to advance the costs for Network
    Upgrades then recover those costs, with interest, through credits
    and refunds works well where a single transmission owner's system is
    used or an RTO has a single rate structure. However, Sunflower
    contends that this approach is not equitable in the SPP system in
    which essentially all load is Network Load that is forced to pay for
    credits for Network Upgrades that do not benefit the load.[^26]
    Sunflower claims that its customers are facing significant rate
    increases due to wind generators interconnecting on their small,
    rural transmission system that sell their output primarily to
    distant urban systems.[^27]

29. Similarly, WFEC states that a generation project located on WFEC's
    system has constructed approximately \$2 million in what would be
    Attachment Facilities under SPP's proposed changes. WFEC states that
    the electrical output from the project will be purchased by AEP for
    load on AEP's system. However, WFEC contends that under SPP's
    current approach, SPP must provide transmission credits for the \$2
    million in upgrades, and it will look to WFEC to fund the credits
    because the upgrades are located in WFEC's zone, even though its
    native load did not require the Attachment Facilities or benefit
    from them.[^28]

    **[Commission Determination]{.underline}**

30. The Commission conditionally accepts SPP's proposal to allocate the
    costs of Network Upgrades to Interconnection Customers and provide
    for reimbursement of those costs pursuant to its Attachment Z
    mechanism as consistent with the Commission's interconnection
    pricing policy. In Order No. 2003, the Commission found that
    objections to its crediting policy were valid and warranted a
    flexible approach. Therefore, the Commission permitted, in limited
    circumstances, the use of participant funding for Network Upgrades
    for generator interconnections. The Commission noted that it would
    allow interconnection pricing policies implemented by independent
    Transmission Providers "in which the Interconnection Customer bears
    the costs of all facilities and upgrades that would not be needed
    but for the interconnection of the new Generating Facility and
    receives valuable transmission rights in return. . . ."[^29] We find
    that SPP's proposal to provide Interconnection Customers funding
    Network Upgrades with financial compensation from subsequent uses of
    those upgrades is consistent with the Commission's interconnection
    pricing policy. Pursuant to SPP's proposal, Interconnection
    Customers will pay the 'but for' costs of the interconnection and in
    return receive a valuable right to future revenues when the Network
    Upgrades funded by the customer are used by other customers. We
    agree with SPP that the right to receive these revenues on an
    accelerated basis as compared with the timeframe for receiving
    credits under Order No. 2003 benefits Interconnection Customers that
    fund upgrades.

31. However, we find that although SPP expresses in its transmittal
    letter and deficiency response its intention to allow for
    reimbursement of Network Upgrades through Attachment Z, it has
    failed to submit in this filing the necessary modifications to
    Attachment Z that would allow Interconnection Customers the
    opportunity to receive reimbursement for the Network Upgrades they
    fund. Attachment Z does not refer to either category of Network
    Upgrades, the costs of which will be assigned to Interconnection
    Customers, nor does it refer to Interconnection Customers. Rather,
    Attachment Z pertains to the study, cost allocation and cost
    recovery provisions for transmission service. Thus, we direct SPP to
    modify Attachment Z to clarify that Network Upgrades associated with
    generator interconnection requests are eligible for crediting under
    Attachment Z in a manner similar to the financial compensation
    process used for subsequent incremental use of Economic Upgrades.
    Accordingly, we direct SPP to make a compliance filing within 30
    days of the date of issuance of this order to amend Attachment Z to
    make this clarification.

32. Additionally, we reject SPP's proposal to exclude Attachment
    Facilities from financial reimbursement under Attachment Z. As AWEA
    points out, Attachment Facilities are, by definition, Network
    Upgrades, and an Interconnection Customer that pays the 'but for'
    costs of Network Upgrades should, in return, have the ability to
    receive compensation, or some other valuable right, for subsequent
    use of the Network Upgrade it funded. SPP states that Attachment
    Facilities are sole-use facilities, but also expresses some
    uncertainty as to that fact.[^30] Additionally, SPP is willing to
    modify its tariff to provide for sub-allocation of the costs of
    Attachment Facilities in the event that these facilities are used by
    subsequent customers. Given this implicit admission that subsequent
    use by others may occur, we believe it is appropriate to allow for
    financial compensation through Attachment Z for Attachment
    Facilities. Further, because we direct that Attachment Facilities
    and Stability Upgrades receive the same opportunity for financial
    compensation through Attachment Z, we see no need for a distinction
    between these types of Network Upgrades.[^31] Thus, we reject the
    distinction proposed by SPP between Stability Upgrades and
    Attachment Facilities and direct SPP to remove this distinction from
    its OATT, LGIP and LGIA in the compliance filing ordered herein.

33. WFEC and Sunflower express support for SPP's proposal to directly
    assign the cost of Attachment Facilities to an Interconnection
    Customer without credits because, they state, under SPP's current
    Order No. 2003 pricing provisions, load that does not benefit from
    certain interconnection facilities may be required to bear the costs
    of those facilities by funding credits to the Interconnection
    Customer. We note that SPP's proposed interconnection pricing
    mechanism abandons the Order No. 2003 crediting approach and adopts
    a pricing policy where an Interconnection Customer directly assigned
    the cost of a Network Upgrade is provided the opportunity to receive
    financial compensation for a customer's subsequent use of that
    facility, pursuant to SPP's Attachment Z. SPP's proposal does not
    guarantee that an Interconnection Customer will receive any
    compensation for its Network Upgrade investment. Furthermore, only
    customers subsequently using the additional capacity created by a
    Network Upgrade will pay for the Network Upgrades funded by the
    Interconnection Customer. If certain Network Upgrades are sole-use
    facilities, as SPP advocates, then Interconnection Customers would
    receive no compensation from subsequent use of those facilities for
    their investment. Accordingly, the Commission's rejection of SPP's
    proposal to treat Attachment Facilities and Stability Upgrades
    differently with regard to financial compensation will not result in
    any party paying credits for a Network Upgrade it does not use.

34. We also find that SPP has failed to explain the connection between
    the loss of point-to-point transmission revenue and an inability to
    provide compensation or credits for Network Upgrades under its
    Attachment Z. Nor has SPP explained why a loss of point-to-point
    revenues should drive interconnection pricing policy for independent
    entities. SPP puts forward a proposal that would provide an
    opportunity to an Interconnection Customer to recover its Network
    Upgrades costs, but at the same time, provides no guarantee of any
    cost recovery if there are no subsequent uses of the Network
    Upgrades. Thus, the risk of loss of point-to-point revenues in this
    case falls on the Interconnection Customer that decides to fund
    Network Upgrades rather than on Transmission Owners within SPP.

    **3. [LGIA Article 11]{.underline}**

35. SPP proposes the addition of a new Article 11.3.1 to its LGIA to
    reflect the new facility categories of Attachment Facilities and
    Stability Upgrades. This Article provides for contingencies
    affecting Attachment Facilities, Stability Upgrades and Distribution
    Upgrades wherein SPP may modify a customer's responsibility for
    interconnection costs based on changes in interconnection requests
    higher in the queue. In addition, SPP proposes a new Article 11.3.2
    providing for an Agreement to Restudy if, at any time before the
    Attachment Facilities, Stability Upgrades, System Protection
    Facilities and/or Distribution Upgrades associated with higher
    queued interconnection requests are completed, the Transmission
    Provider determines restudy is required because of modifications
    necessitated by various changes specified in the Article.

    **[Comments and Protests]{.underline}**

36. AWEA objects to SPP's proposal to add Articles 11.3.1 and 11.3.2.
    According to AWEA, these provisions to the LGIA would require the
    Interconnection Customer to accept modifications to the
    interconnection facilities, and these modifications could increase
    the interconnecting customer's cost responsibility. Moreover, these
    modifications and concomitant cost responsibility would be imposed
    when those modifications occur even after execution of the LGIA.
    AWEA avers that such continuing uncertainty will almost certainly
    increase financing costs or make it difficult to obtain financing
    for the generation project.

    **[Commission Determination]{.underline}**

37. The Commission rejects as unsupported SPP's proposed addition of
    Articles 11.3.1 and 11.3.2. SPP has not provided adequate
    justification for the proposed changes nor has SPP shown that the
    proposed changes would improve the reliability of its transmission
    system. SPP also has not shown that this variation is necessary to
    address a specific regional need. Accordingly, we will reject these
    changes.

    **4. [Dispute Resolution Provisions]{.underline}**

38. SPP states that it proposes revising its OATT, as well as its LGIA
    and LGIP, to refer only to the dispute resolution provisions in
    section 12 of its OATT. As a result, SPP will provide only one
    dispute resolution procedure applicable to transmission service. SPP
    states that administering and maintaining only one dispute
    resolution procedure results in administrative efficiency. There
    were no adverse comments on this proposal.\
    \
    **[Commission Determination]{.underline}**

39. We accept this proposal under the "independent entity variation"
    standard and as consistent with a similar provision accepted for the
    Midwest ISO.[^32]

    **5. [Definitions]{.underline}**

40. SPP proposes to modify "Generation Interconnection Customer" in the
    LGIP to delete the word "Generation," so that the resulting term is
    "Interconnection Customer." SPP states that this change is necessary
    for consistency with its revised LGIA and LGIP.

41. SPP also proposes revising the definition of "Distribution System"
    to pertain to the Transmission Owner's facilities and equipment that
    are not included in SPP's Transmission System. SPP's Transmission
    System is defined in Attachment AI (Transmission Definition) of its
    OATT. As a result, all other facilities of a Transmission Owner are,
    by exception, distribution facilities.

42. SPP proposes adding language to the definition of "Emergency
    Condition" to include a condition or situation that, in the case of
    a Transmission Owner, is imminently likely, as determined in a
    non-discriminatory manner, to cause a material adverse effect on the
    security of, or damage to the Transmission Owner's interconnection
    facilities. SPP states that this change is necessary to reflect the
    fact that SPP and the Transmission Owner are separate entities.

43. In its October 29, 2007 submittal, SPP addresses its proposed
    modification of the definition of "Interconnection Customer" in the
    LGIA, rather than its proposed modification of the term "Generation
    Interconnection Customer" in the LGIP, as the Commission
    requested.[^33] SPP states that the definition of "Interconnection
    Customer" has been modified to exclude the Transmission Provider as
    an entity, because the Transmission Provider is the SPP RTO, who is
    never a customer.

    **[Commission Determination]{.underline}**

44. We reject SPP's proposed modification to the term "Generation
    Interconnection Customer" in the LGIP.[^34] SPP's stated reason for
    making the change is for consistency with its *pro forma* OATT. This
    is not sufficient to justify the proposed variation.[^35] However,
    the Commission finds that SPP has justified its proposed revised
    definitions of "Emergency Condition," "Distribution System," and
    "Interconnection Customer" in the LGIA[^36] under the "independent
    entity variation" standard.[^37] SPP's proposed definitions are
    similar to those of the Midwest ISO, which the Commission accepted
    in the Midwest ISO's Order No. 2003 compliance filing.[^38] In
    addition, because SPP's Attachment AI defines Transmission
    Facilities, we conclude that it is reasonable to define Distribution
    System as those facilities not included in the transmission system.

    **6. [Article 4 (Appendix A)]{.underline}**

45. SPP proposes that Articles 4.1.1.1 and 4.1.2.1 reference Appendix A
    rather than "Attachment A," as is now the case. SPP states this
    correction tracks its *pro forma* OATT.

46. SPP also proposes replacing the term "congestion" in Article 4.1.2.2
    with "additional" in the context of costs. SPP states that
    deliveries to specific loads under SPP's OATT may require payment of
    other, or "additional," charges under SPP's cost allocation process
    or SPP's real-time energy imbalance service market.

    **[Commission Determination]{.underline}**

47. We accept SPP's proposal to change the reference in Articles 4.1.1.1
    and 4.1.2.1 to Appendix A so that this reference is consistent with
    its *pro forma* OATT. In addition, this change is consistent with
    the "independent entity variation" standard.

48. We reject SPP's proposed modifications of Article 4.1.2.2 because
    SPP's stated reason for making the changes is not sufficient to
    justify the proposed variation. In addition, we note that SPP
    deleted additional portions of Article 4.1.2.2 without explanation.
    Therefore, we reject these revisions as unsupported.[^39]\
    \
    **7. [Article 5 (Construction of Facilities to
    Transmission]{.underline} [Owners Specifications) and Article 24
    (Information]{.underline} [Requirements)]{.underline}**

49. SPP proposes removal of any reference to the "Alternate Option" in
    Article 5.1 stating that it has concluded Transmission Owners should
    not be subjected to liquidated damages arrangements as outlined in
    Alternate Options section. SPP submits that the appropriate remedy
    for the Interconnection Customer when a Transmission Owner is unable
    to meet the customer's timeline is the Option to Build or the
    Negotiated Option (Articles 5.1.2 and 5.1.3, respectively).

50. SPP proposes adding language to Article 5.1.2 to require
    Interconnection Customers to construct the Transmission Owner's
    Interconnection Facilities and Stand Alone Network Upgrades in
    accordance with the Transmission Owner's material and equipment
    specifications, its design criteria and construction practices,
    because these facilities will be transferred to the ownership of the
    transmission owner or otherwise must operate together with the
    Transmission Owner's facilities. SPP contends this change will
    assure reliable operation of the facilities under local
    circumstances.

51. SPP also proposes adding language to Article 5.2(8) to require
    Interconnection Customers to transfer ownership of the Transmission
    Owner's Interconnection Facilities and Stand-Alone Network Upgrades
    to the Transmission Owner not later than the In-Service Date. SPP
    proposes adding language to Article 5.2(11) to require the
    Interconnection Customer to deliver to the Transmission Owner
    "as-built" drawings, information and other required documents
    necessary to assure the facilities are built to the standards and
    specifications required by the Transmission Owner within 120
    Calendar Days after Commercial Operation date. SPP asserts these
    changes would establish a specific deadline by which the transfers
    must be made.

52. SPP also proposes adding language to Article 5.2(11) to provide
    that, within six months after the Interconnection Customer completes
    construction of its portions of the Transmission Owner's
    Interconnection Facilities and Stand Alone Network Upgrades as
    specified in Appendix A, the Interconnection Customer will notify
    SPP and the Transmission Owner of the applicable cost for that
    entity's portion of the facilities. SPP states this revision would
    enable the settlement of accounts with the transfer of title to the
    facilities constructed by the Interconnection Customer.

53. SPP proposes modifying Article 5.5.1 to title the interconnection
    agreement as the "Interconnection Facilities Study and the
    Interconnection Facilities Study Agreement." SPP states this
    revision properly identifies the title of the agreement.

54. SPP proposes adding language to Article 5.7 requiring that if the
    Interconnection Customer determines completion of Network Upgrades
    will not be required until after the In-Service Date, it will
    provide written notification to SPP and the Transmission Owner of
    such later date. SPP submits that the parties should advise one
    another about all upgrades, not just the interconnection facilities.

55. SPP also proposes adding a new Article 5.10.4 requiring the
    Interconnection Customer to provide specific updated information no
    later than 180 calendar days prior to the Initial Synchronization
    Date. SPP states that if the updated information is materially
    different than what was originally provided, SPP will conduct
    appropriate studies to determine the impact on the Transmission
    System based on actual data. These provisions were previously
    accepted in Article 24.3.

56. In addition, SPP proposes a new Article 5.10.5 detailing additional
    information supplementation requirements so that SPP models will
    reflect actual equipment installed along with its characteristics.
    SPP states this will enable SPP to maintain accurate models of its
    Transmission System, which is essential for reliable operation and
    effective planning. These provisions were previously accepted in
    Article 24.4.

57. SPP proposing revising Article 5.11 to require the Transmission
    Owner's Network Upgrades to be designed and constructed in
    accordance with Good Utility Practice. SPP submits that all
    facilities constructed by the Transmission Owner should be done
    according to such standards.

58. Additionally, in Article 5.11, SPP proposes language providing that
    the Transmission Owner will obtain ownership of its Interconnection
    Facilities and Stand Alone Network Upgrades upon completion of such
    facilities. SPP states that the LGIA should be clear that ownership
    and control of such facilities will be conveyed to the Transmission
    Owner.

59. SPP proposes deletion of language from Article 5.14 requiring SPP or
    the Transmission Owner to provide permitting assistance to the
    Interconnection Customer comparable to that provided to the
    Transmission Owner's own generation. SPP contends that the
    stakeholders' responsibility should be limited to cooperation with
    the efforts of the Interconnection Customer to obtain permits,
    licenses and rights of way. SPP believes the Transmission Owners
    should not be required to act on behalf of the Interconnection
    Customer because Transmission Owners would need to represent
    themselves.

60. SPP proposes adding language to Article 5.16 clarifying that the
    Interconnection Customer may request more than one suspension
    provided the cumulative duration of the suspensions does not exceed
    three years. SPP contends this is consistent with Order No. 2003.

61. SPP proposes revising Article 5.19.1 requiring any Party planning to
    make modifications to its facilities that reasonably may be expected
    to affect another Party's facilities to provide relevant drawings,
    plans and specifications to the other Parties at least 180 Calendar
    Days in advance of the commencement of the work or such shorter
    period upon which the Parties agree. SPP states that the additional
    time is necessary to properly plan and review the impacts of any
    contemplated modifications.

62. SPP also proposes the deletion of Article 24 (Information
    Requirements) in its entirety. SPP states that the provisions have
    been incorporated into Article 5 of the LGIA.

    **[Protest]{.underline}**

63. AWEA objects to SPP's elimination from Article 5.1.2 of the
    Alternate Option (which provides for a contractually binding
    mutually agreed upon In-Service date and liquidated damages to
    protect the generator in the event of the Transmission Provider's
    unexcused failure to complete upgrades by the in-service date). AWEA
    argues that SPP has offered insufficient justification for this
    change and that SPP's desire to avoid any real consequences for
    unexcused delays does not justify eliminating the Alternate Option.

64. AWEA also objects to SPP's elimination of the obligation to file
    monthly reports from LGIA Article 5.7 -- Work Progress. AWEA asserts
    that this obligation is appropriate for inclusion in Section 5.7,
    which in SPP's current proposal requires only a "periodic" progress
    report without specifying the information to be included in such
    report.

65. AWEA objects to SPP's proposal to eliminate the requirement in LGIA
    Article 5.14 -- Permits to "provide permitting assistance to
    Interconnection Customer comparable to that provided to Transmission
    Provider's own, or an Affiliate's generation." AWEA argues that this
    is contrary to the core principle of reciprocity. AWEA argues that
    SPP's justification of this change (that Transmission Owners should
    not be required to "act on behalf" of the customer to the extent the
    Transmission Owner would "represent themselves") is unavailing.[^40]
    In AWEA's view, SPP's statement is disingenuous, because the deleted
    language does not refer to "representation" or "acting on behalf" of
    the customer, but rather the obligation to provide comparable
    "*permitting assistance.*" AWEA argues that, if SPP needs to add
    clarification to avoid confusion between assistance and
    representation, it can do so, but it should not be permitted to
    remove the reciprocity requirement altogether.

66. AWEA also objects to SPP's proposal to revise LGIA Article 5.19.1.
    SPP proposes to change from 90 to 180 days, the notice requirement
    by either party to the other of plans to modify its facilities. SPP
    contends without explanation that "the additional time is necessary
    to properly plan and review the impacts of any contemplated
    modifications." AWEA asserts that 180 days seems unnecessary, and
    that the existing 90 day requirement is more appropriate.

67. In addition, as to SPP's proposal to delete Article 24, its October
    29, 2007 submittal SPP reiterates that the provisions of Article 24
    have been moved and incorporated into Article 5 of the LGIA.

    **[Commission Determination]{.underline}**

68. We accept SPP's proposal to remove reference to the "Alternate
    Option" in Article 5 under the "independent entity variation"
    standard. Order No. 2003 states that the Transmission Provider may
    decline the use of the Alternate Option.[^41] Even in the absence of
    the Alternate Option, if a Transmission Owner is unable to meet the
    customer's timeline, then the customer may utilize the Option to
    Build. Under this option, the Interconnection Customers may assume
    responsibility for the construction of the Transmission Provider's
    Interconnection Facilities and Stand Alone Network Upgrades. A
    customer may also use the Negotiated Option which provides that if
    the Transmission Provider notifies the Interconnection Customer that
    it cannot meet the dates established by the Interconnection
    Customer, and the Interconnection Customer does not want to assume
    responsibility for construction, the Interconnection Customer may
    enter negotiations to revise the construction completion dates.[^42]

69. We reject SPP's proposed additional language to Article 5.1.2
    requiring Interconnection Customers to construct the Transmission
    Owner's Interconnection Facilities and Stand Alone Network Upgrades
    in accordance with the Transmission Owner's material and equipment
    specifications, its design criteria and construction practices as
    redundant. SPP has not demonstrated that the change is necessary to
    accommodate regional reliability practices. Under Article 5.2, the
    Interconnection Customer must use Good Utility Practice and the
    standards and specifications provided in advance by the Transmission
    Provider.[^43] Therefore, the Commission finds that this change is
    not required for regional flexibility and is not superior to or
    consistent with the *pro forma* LGIA.

70. We also reject the revisions proposed for Article 5.2(8) which
    requires transfer of ownership by the In-Service Date. Order No.
    2003 does not require that the Interconnection Customer transfer
    ownership of the Transmission Provider's Interconnection Facilities
    and Stand-Alone Network Upgrades to the Transmission Provider upon
    completion. The Commission requires only the transfer of control of
    such facilities. The Commission states that reliability does not
    require ownership, but does require control by the Transmission
    Provider.[^44] We further reject SPP's proposed revisions to Article
    5.2(11). SPP has provided no justification that reliability will be
    enhanced by requiring the Interconnection Customer to provide
    as-built drawings and other assurances that the facilities are built
    to specifications within a certain time frame.

71. We accept SPP's proposed revision to Article 5.5.1 changing the
    title of the "Interconnection Facilities Study Agreement" and SPP's
    proposal regarding Article 5.7 requiring written notification by the
    Interconnection Customer if completion of facilities will not be
    necessary by the In-Service Date under the "independent entity
    variation" standard. The revisions are consistent with SPP's OATT
    and the proposed Article 5.7 tracks the language of Order No.
    2003.[^45]

72. We accept SPP's unprotested revisions to Article 5.10.4 requiring
    the Interconnection Customer to provide specific updated information
    no later than 180 calendar days prior to the Initial Synchronization
    Date under the "independent entity variation" standard.

73. We accept SPP's new Article 5.10.5 detailing additional information
    requirements under the "independent entity variation" standard.
    These revisions enable SPP models to reflect actual equipment
    installed and the actual installed equipment characteristics which
    are essential for reliable operation and effective planning.
    Likewise, we accept SPP's revision of Article 5.11 requiring
    "Network Upgrades" as well as Interconnection Facilities to be
    designed and constructed in accordance with Good Utility Practice
    under the "independent entity variation" standard. The proposal
    clarifies the need to follow Good Utility Practices as stated in
    Order No. 2003.[^46] We reject SPP's further revision of Article
    5.11 concerning transfer of ownership of facilities to the
    Transmission Owner. As explained above, Order No. 2003 states that
    control, not ownership is required to insure reliability.[^47]

74. We reject SPP's proposed revisions to Article 5.14 concerning the
    Transmission Owner's assistance in the permitting process. In Order
    No. 2003-A, the Commission denied a request for rehearing that
    basically made this same argument and instead reaffirmed that the
    Transmission Owner and Transmission Provider must cooperate with the
    Interconnection Customer, in good faith, to obtain any necessary
    permits, licenses and authorizations.[^48] We also find that Order
    No. 2003-A does not require "representation" or "acting on behalf"
    of the customer, but rather the obligation to provide comparable
    "*permitting assistance.*"

75. We accept SPP's proposed revisions of Article 5.16, clarifying that
    the Interconnection Customer may request more than one suspension
    provided that the cumulative duration of the suspensions does not
    exceed three years. The Commission approved the right to ask for
    several suspensions of work up to a cumulative period of three years
    for each Interconnection Request in Order No. 2003-A.[^49]

76. We reject SPP's proposed revisions to Article 5.19.1, which would
    require any Party planning modifications to provide relevant
    drawings, plans and specifications at least 180 Calendar Days in
    advance of commencement of work or such shorter period upon which
    the Parties agree. SPP has provided insufficient justification for
    extending the period from 90 days as prescribed in Order No. 2003 to
    180 days.[^50]

77. We accept SPP's proposal to delete Articles 24.3 and 24.4, but
    reject SPP's proposal to delete Articles 24.1 and 24.2. While it is
    clear that SPP has included Articles 24.3 and 24.4 as Articles
    5.10.4 and 5.10.5, respectively, it is not clear that the provisions
    in Articles 24.1 and 24.2 have been incorporated in Article 5.
    Furthermore, SPP has provided no justification supporting the
    deletion of these provisions, particularly the monthly status report
    that the Transmission Provider is required to provide to the
    Interconnection Customer under Article 24.2. We note, however, that
    in Articles 24.1 and 24.2 the term "Transmission Provider" may need
    to be modified to "Transmission Owner" or the relevant constructing
    party.

    **8. [Article 7 (Metering)]{.underline}**

78. SPP proposes revising Article 7.1 to require the Transmission Owner
    to provide metering quantities in analog and/or digital form to the
    Transmission Provider as well as the Interconnection Customer on a
    same-time basis. Presently, the Transmission Owner is only required
    to provide metering quantities in analog and/or digital form to the
    Interconnection Customer.

    **[Commission Determination]{.underline}**

79. We accept the proposal to provide metering quantities to the
    Transmission Provider as well as the Interconnection Customer under
    the "independent entity variation" standard. This proposal will
    provide data in real time to SPP as well as to the Interconnection
    Customer thus enhancing reliability in data communications.

    **9. [Article 9 (Wind Power Factor Design Criteria)]{.underline}**

80. SPP proposes removing language from Article 9.6.1 that exempts wind
    generators from power factor design criteria. SPP states that
    reactive capability is needed from wind power due to the
    concentration of wind facilities in SPP's region.

81. SPP also proposes revising Article 9.6.2.1 to prohibit the
    Interconnection Customer from causing its generator to disconnect
    automatically or instantaneously from SPP's Transmission System for
    an under or over frequency condition consistent with Good Utility
    Practices and Applicable Reliability Standards.

    **[Protest]{.underline}**

82. AWEA argues that, as the reactive power requirement for wind
    generators is covered by Appendix G, there is no need or purpose
    justifying SPP's proposal to remove the exemption from section 9.6.1
    of SPP's OATT. Therefore, Article 9.6.1 should not be modified.[^51]
    AWEA adds that SPP's proposed amendment to its OATT will make
    reactive capability a requirement in all cases, without the support
    of a study showing that the investment is needed. It argues that
    these requirements make little sense when applied to induction
    machines that are non-synchronous, and that are often interconnected
    at the end of a radial line remote from load. AWEA argues that these
    technical differences warrant different treatment for wind
    generators. To force wind generators to perform like a fundamentally
    different technology does not promote reliability and would impose
    significant costs on the generators.[^52]

83. AWEA further argues that the Commission's need-based approach makes
    sense and should not be changed in SPP's tariff. Order No. 661-A
    requires that the power system be studied to determine if reactive
    support is needed from each wind facility. If studies show there is
    a need at the location of the wind farm for reactive power support
    at the time of the requested interconnection, then, argues AWEA, the
    wind plant is required to be capable of a reactive power range of
    0.95 leading to 0.95 lagging. AWEA argues that SPP's proposal to
    make reactive capability a requirement in all cases, without
    conducting a study to show the investment needed is inferior to the
    current tariff, which provides a wind generator exemption. In AWEA's
    view, Order No. 661-A already contains a requirement that the
    necessary reactive power capability be installed with a
    facility-specific assessment at the time of interconnection.

    **[SPP Answer]{.underline}**

84. In its answer, SPP agrees that its proposal to remove the wind
    generator exemption in Article 9.6.1 should be modified. SPP states
    that it will replace Article 9.6.1 in a compliance filing to state
    "a wind generator plant shall maintain a power factor within the
    range of 0.95 leading and 0.95 lagging, measured at the Point of
    Interconnection as defined in this LGIA, if the Transmission
    Provider's System Impact Study shows that such a requirement is
    necessary to ensure safety or reliability."

    **[Commission Determination]{.underline}**

85. In Order No. 661, the Commission required a wind plant to maintain
    the required power factor range only if the Transmission Provider
    shows, through the System Impact Study, that such capability is
    required of that plant to ensure safety or reliability.[^53] As
    explained in Order No. 661, SPP can require a wind plant to maintain
    the required power factor on a case-by-case basis to ensure safety
    or reliability as determined in the System Impact Study.
    Accordingly, we will reject SPP's proposed change (as outlined in
    its August 2007 submittal), without prejudice to SPP making a
    revised filing as it has committed to do in its answer.

86. We also accept SPP's proposal prohibiting the Interconnection
    Customer from causing its generator to disconnect automatically or
    instantaneously from SPP's Transmission System as proposed in
    Article 9.6.2.1. This proposal is in accordance with Good Utility
    Practice and Applicable Reliability Standards and enhances the
    reliability of SPP's system. The units must be able to respond to
    under/over-frequency protection systems. This change is also
    consistent with the "independent entity variation" standard of Order
    No. 2003.

    **10. [Article 11 (Letter of Credit)]{.underline}**

87. SPP proposes revising Article 11.5 to require an Interconnection
    Customer to provide and maintain an unconditional and irrevocable
    letter of credit as security to meet its responsibilities and
    obligations or an alternative form of security acceptable to SPP
    until the Interconnection Customer has completed all applicable
    payments to the Transmission Owner. SPP states that it removed
    language (Articles 11.5.1 and 11.5.3) related to guarantees and
    surety bonds because they are not acceptable forms of security to
    SPP.

    **[Protest]{.underline}**

88. AWEA argues that SPP's proposal deletes important customer options
    for the provision of security in Article 11.5 of the LGIA.[^54] AWEA
    argues that the *pro forma* LGIA provides the customer with the
    option of providing a guarantee, surety bond, letter of credit or
    other form of security. AWEA maintains that SPP's only justification
    for this important restriction on customer rights is that a letter
    of credit is the only security acceptable to SPP. Further, AWEA
    asserts that SPP provides no explanation for why SPP does not
    consider a guarantee or surety bond an acceptable security. Given
    that the *pro forma* LGIA allows these options consistent with the
    requirements of the applicable Uniform Commercial Code, AWEA states
    that there should be a strong presumption that the surety bond and
    the guarantee are acceptable security. AWEA argues that SPP's
    unsupported statement that it does not find these options acceptable
    is an insufficient justification for this important variation from
    the Commission's standard rule.

    **[SPP Answer]{.underline}**

89. In its Answer, SPP reiterates that its proposal is consistent with
    Attachment X (Southwest Power Pool, Inc. Credit Policy) of its OATT.
    SPP states that the Commission has stated that limiting the types of
    financial security avoids the potential that different terms will be
    applied to different types of credit customers and would diminish
    SPP's administrative burden. SPP further states that Article 11.5 of
    SPP's proposed LGIA specifically allows for "an alternative form of
    security proposed by the Interconnection Customer and acceptable to
    the Transmission Provider and consistent with commercial practices
    established by the Uniform Commercial Code of jurisdiction
    identified in Article 14.2.1"[^55]

    **[Commission Determination]{.underline}**

90. We reject SPP's proposal to delete the reference in Article 11.5 to
    surety bonds and guarantees. SPP argues that it should be allowed to
    delete the reference in Article 11.5 to surety bonds and guarantees
    as acceptable forms of security, because it does not find these
    kinds of security acceptable.[^56] In addition, SPP's answer notes
    that the *pro forma* language permits security "reasonably
    acceptable to the Transmission Provider."

91. In Order No. 2003, the Commission stated that the Interconnection
    Customer has the right to select a form of security that is
    acceptable to the Transmission Provider and that the Transmission
    Provider cannot unreasonably refuse to accept a particular
    form.[^57] We find SPP's argument unpersuasive because it is
    unsupported and overlooks that, under Order No. 2003, a Transmission
    Provider may not unreasonably refuse to accept a particular form of
    security. SPP's unilateral blanket assertion that surety bonds and
    guarantees are unacceptable is contrary to Order No. 2003 and is
    thus rejected.\
    \
    **11. [Article 13 (Safe and Reliable Operation)]{.underline}**

92. SPP states that it is deleting Article 13.1 because a definition for
    Emergency Condition is set out in the Definitions section. SPP
    further proposes adding language to Article 13.5 providing that an
    Interconnection Customer will not be obligated to follow SPP's
    and/or the Transmission Owner's instruction to the extent the
    instruction would have a material adverse impact on the
    Interconnection Customer's safe and reliable operation. SPP states
    that this revision is necessary to reduce the potential consequences
    of ordering inappropriate actions.

93. SPP also proposes the addition of language to renumbered Article
    13.6 that references Article 18 referring to indemnity and damages.
    SPP states that it is useful to reference the indemnity and damages
    section in Article 13.\
    \
    **[Commission Determination]{.underline}**

94. We reject SPP's proposal to delete Article 13.1 referencing
    Emergency Conditions as well as SPP's language added to renumbered
    Article 13.5 as unnecessary modifications of the *pro forma* LGIA.
    We find that an Interconnection Customer may avoid following
    inappropriate directives under the existing provisions in Article
    13.5, because an Interconnection Customer "...may take actions or
    inactions..." to preserve public health and safety and limit or
    prevent damages.

95. We will also reject SPP's proposal to modify Article 13.6. Article
    13.6 of the *pro forma* LGIA provides that, except as noted in
    Article 11.6.1, neither party will be liable to the other for good
    faith actions it takes in response to an Emergency Condition if it
    actions are consistent with Good Utility Practices. SPP proposes to
    add a reference to Article 18, thus changing the scope of Article
    13.6.\
    \
    **12. [Article 14 (Federal Laws)]{.underline}**

96. SPP has proposed revisions to the federal laws referenced in Article
    14.1 of the LGIA. In addition, SPP proposes to revise Article 14.2.1
    to provide that the LGIA shall be governed by the laws "of the
    United States of America except to the extent that the laws of the
    state where the Point of Interconnection is located may apply."[^58]

97. Article 14.2.1 of the *pro forma* LGIA provides that the provisions
    of the LGIA shall be governed by the laws "of the state where the
    Point of Interconnection is located without regard to its conflicts
    of law principles." SPP proposes to revise this language to add a
    reference to the laws of the United States and to drop the reference
    to conflicts of laws. SPP argues that these changes are needed to
    reflect the fact that SPP, as an RTO, is subject to the Commission's
    jurisdiction.[^59]\
    \
    **[Commission Determination]{.underline}**

98. We will accept SPP's proposed revision to Article 14.1 to reference
    recently enacted legislation, because this revision does not
    conflict with Order No. 2003.

99. However, we will deny SPP's request to revise Article 14.2.1 because
    SPP's proposed revision would substitute language that raises
    questions of federalism rather than providing clarity. In Article
    14.2.1 of the *pro forma* LGIA, the applicable governing law is
    clearly stated, (*i.e.* the law to apply is the law of the state
    where the Point of Interconnection is located without regard to its
    conflicts of law principles). In SPP's proposed revision, this
    clarity is replaced with the "except to the extent" language that
    makes the determination of what law is to apply a case-by-case
    issue. We also reject SPP's argument that revisions are needed to
    the language of Article 14.2.1 of the *pro forma* LGIA based on
    SPP's status as an RTO. Nothing in the existing section is
    inconsistent with the Commission's jurisdiction over SPP.

    **13. [Article 17 (Breach and Default)]{.underline}**

100. SPP proposes to revise Article 17 and its subsections to govern
     both a "breach" and a "default." Specifically, SPP states that
     Article 17.1.1 pertains to notification of a "breach" and
     opportunity cure; whereas, Article 17.1.2 concerns the right to
     terminate when a "breach" has not been cured, which constitutes a
     "default."\
     \
     **[Commission Determination]{.underline}**

101. We are not persuaded that any revision is needed to Articles 17.1.1
     and 17.1.2. These sections already clearly provide notification of
     a breach and an opportunity to cure. Moreover, both "breach" and
     "default" are defined in Article 1 and the use of those terms in
     Article 17 is consistent with those definitions. Thus, we will
     reject SPP's proposed revisions to Articles 17.1.1 and 17.1.2.\
     \
     **14. [Article 18 (Liability and Insurance)]{.underline}**

102. SPP proposes a number of revisions to Article 18. Specifically, SPP
     proposes revising Article 18 so that "indemnifying party" and
     "indemnified person" are not defined terms.

103. SPP also proposes adding language to Article 18 providing that the
     minimum limits for the Employers' Liability insurance will be
     \$1,000,000 for each accident bodily injury by accident,
     \$1,000,000 for each employee bodily injury by disease and a
     \$1,000,000 policy limit for bodily injury by disease.

104. SPP also proposes revising Article 18.3.2 to require
     Interconnection Customers and Transmission Owners to maintain
     commercial general liability insurance with minimum limits of
     \$1,000,000 for each occurrence/\$2,000,000 in general aggregate,
     and \$2,000,000 products and completed operations aggregate
     combined single limit for personal injury, bodily injury, including
     death and property damage.

105. In addition, SPP proposes to add a new Article 18.3.3 providing
     that excess liability insurance maybe procured and maintained in
     lieu of commercial general liability insurance not to exceed
     \$1,000,000 for each occurrence.

106. SPP proposes revising Article 18.3.4 (as renumbered by SPP) to
     require comprehensive automobile liability insurance to cover
     licensed vehicles, owned, non-owned and hired. SPP explains it is
     removing coverage for vehicles which remain at the construction
     site. Article 18.3.4 currently requires insurance coverage for
     vehicles "designed for travel on public roads." SPP would change
     this to "licensed for travel on public roads."

107. Further, SPP proposes revising Article 18.3.6 to require 30
     calendar days written notice prior to any cancellation, non-renewal
     or change in coverage.

108. SPP proposes changing Article 18.3.7 to require that insurance
     policies must contain provisions that specify that the policies are
     primary and non-contributing with respect to any other insurance
     policies separately carried by other parties.

109. SPP proposes clarifying that the insurer's liability will not be
     increased beyond the amount by the insurer would have been liable
     had only one insured been covered, and that the Interconnection
     Customer and Transmission Owner would be responsible for their
     respective deductibles or retentions.

110. SPP proposes revising Article 18.3.8 to require insurance policies
     to be maintained for a minimum of two years after termination of
     the LGIA.

111. SPP proposes a new Article 18.3.11 requiring all insurance to be
     written with an insurance company carrying an AM Best rating no
     lower than class A- and a financial category of IX and
     authorization to do business in the state in which the Point of
     Interconnection is located.

112. SPP further proposes that renumbered Article 18.3.12 be modified to
     require the senior secured debt of any party seeking to self-insure
     to be rated at investment grade or better by Standard & Poor's.
     Self-insured companies are not required to comply with the
     insurance requirements of Articles 18.3.1 through 18.3.11.

     **[Protest]{.underline}**

113. AWEA asserts that SPP has not explained or justified its proposal
     to modify LGIA Article 18.3.12 to delete the requirement that
     self-insurers meet the otherwise applicable coverage requirements
     applicable to self-insurance. According to AWEA, the modification
     would leave parties free to self-insure without complying with the
     minimum coverage requirements spelled out in Article 18.3.2 through
     18.3.8. AWEA objects that this revision could eviscerate the
     protection provided by such requirements. Thus, it argues, the
     Commission should reject the proposed change.[^60]\
     \
     **[Commission Determination]{.underline}**

114. SPP's proposes to revise Article 18 so that the terms "indemnifying
     party" and "indemnified person" are not capitalized (because those
     terms are not defined terms under Article 1 of the LGIA. We do not
     view this distinction as substantive and will allow this revision.

115. We will accept SPP's proposals to provide minimum insurance limits
     in Article 18 because Article 18.3.1 of the *pro forma* LGIA does
     not currently prescribe minimum dollar limits on required
     insurance, and instead merely requires employers' liability and
     workers' compensation insurance in accordance with state law at the
     point of interconnection. These provisions do not conflict with the
     current provision of the *pro forma* LGIA, which neither requires
     nor precludes the specification of minimum coverage amounts for
     such insurance.

116. As with SPP's proposed revisions to Article 18.3.1, we will approve
     SPP's proposed addition of minimum coverage amounts for commercial
     general liability insurance. The Commission finds that these
     provisions do not conflict with the current requirements of the
     LGIA, which neither require nor preclude the specification of
     minimum coverage amounts for such insurance.

117. The Commission rejects Article 18.3.3. This provision departs from
     the LGIA requirement to maintain commercial general liability
     insurance without justification for this revision.

118. We will reject SPP's change to Article 18.3.4 (as renumbered by
     SPP), finding that this proposed revision is unnecessary. The
     Commission interprets the existing provision to not require
     coverage for vehicles that remain at the construction site and do
     not travel on public roads. Moreover, SPP has provided no
     justification for this revision.

119. We will reject SPP's proposed revision of renumbered Article 18.3.6
     as unnecessary and unsupported. We reach this conclusion because,
     under the tariff, cancellation, non-renewal, or a change in
     coverage are all material changes and already require thirty days'
     advance written notice. In addition, we believe it is important to
     maintain the requirement to provide advance written notice thirty
     days prior to the anniversary date.

120. SPP has proposed two revisions to Article 18.3.7. We will reject
     both as unnecessary. First, we reject SPP's proposal to specify
     that the policies are primary policies as unnecessary because
     Article 18.3.7 already provides that insurance policies are primary
     and shall apply without consideration for other separately carried
     policies. Second, we reject SPP's proposal to clarify coverages
     because the current provision already provides that each insured is
     provided coverage as though a separate policy had been issued to
     each and that each party shall be responsible for its respective
     deductibles or retentions. Moreover, SPP has provided no
     justification for either of these revisions.

121. We will reject SPP's proposed revisions to renumbered Article
     18.3.8 and new Article 18.3.11 because SPP has not yet justified
     this departure from the current LGIA requirements. We will also
     reject SPP's proposed revisions to renumbered Article 18.3.12 to
     require self-insured parties to meet minimum insurance
     requirements. As AWEA correctly notes, these revisions depart from
     current LGIA requirements, and SPP has provided no justification
     for these revisions.

     **15. [Articles 19 and 22 (Governmental Authority)]{.underline}**

122. SPP proposes adding language to Article 19.1 prohibiting any
     assignment of the LGIA that violates applicable laws and
     regulations. SPP states this revision is consistent with Article
     14.2.2 which provides that the LGIA is subject to all applicable
     laws and regulations.

123. SPP states that it is revising Article 22.1.7 to change "Government
     Authority" to read "Governmental Authority." SPP asserts the change
     adds clarification to the Article.

124. SPP also proposes adding language to Article 22.1.9 providing that
     it does not apply to Transmission Owners that are Federal Power
     Agencies. SPP explains that Federal Power Agencies would not be
     responsible for compensating a Party for Breach of obligations
     under Article 22.\
     \
     **[Commission Determination]{.underline}**

125. We reject SPP's proposal to include language in Article 19.1 that
     already is adequately stated in Article 14.2.2. We accept SPP's
     proposed changes to Articles 22.1.7 and 22.1.9 under the
     "independent entity variation" standard as a clarification of the
     respective Articles.

     **16. [Appendices]{.underline}**

126. SPP proposes revision of Appendix 5 (Optional Interconnection
     Re-Study Agreement) of the LGIP and the Definitions of the LGIA to
     remove "Optional Interconnection Study Agreement." SPP states that
     it is concerned about the additional burden associated with
     performing optional studies. SPP also proposes the deletion of
     Appendix 7 (Interconnection Procedures for a Wind Generation
     Plant).

127. SPP further proposes revisions to Appendices A, B, C and D to the
     LGIA to specify the particular information to be submitted as part
     of an interconnection request. SPP states that its revisions
     provide additional clarity.

128. SPP also proposes revising Appendix G to the LGIA to include
     interconnection provisions for wind generation. SPP states these
     are the same revisions previously approved by the Commission.[^61]

129. SPP proposes modifying Appendix 1 of the LGIP to replace the prior
     requirement of a "general description of the equipment
     configuration" with "a preliminary one-line diagram of the Large
     Generating Facility." SPP also proposes to modify Appendix 1 to
     require as part of the initial interconnection request a
     "Geographical map showing the approximate location of the proposed
     Point of Interconnection and the location of the Large Generating
     Facility." This proposal replaces existing language referring to
     the option of identifying the approximate location of the point of
     interconnection.

130. SPP further proposes language be added to Appendix 2 of the
     Interconnection Feasibility Study Agreement to clarify "standard
     miscellaneous terms." SPP also proposes the addition to Attachment
     A to Appendix 3 language to provide for additional data
     requirements.

     **[Protests]{.underline}**

131. AWEA protests SPP's proposed changes to Appendix 1 of the LGIP,
     Appendix 2 and Attachment A to Appendix 3. Specifically, AWEA
     contends that a one-line drawing is premature and unnecessary at
     the time of the initial interconnection request and should be
     required at the time of request for System Impact Study. AWEA
     further asserts that the requirement of a geographical map is not
     appropriate because at the point of the initial request for
     interconnection, the point of interconnection may be unknown or
     there may be multiple location options.[^62]

132. AWEA states that SPP has provided no explanation or justification
     for adding unnecessary requirements to the feasibility study
     agreement found in Appendix 2 to the LGIP. Similarly, AWEA asserts
     that SPP has not adequately explained how the data being required
     in Attachment A to Appendix 3 would be used in its studies. AWEA
     contends the requested data is burdensome to assemble and may
     unfairly discriminate against wind.[^63]

133. AWEA argues that SPP has not explained or justified eliminating
     Appendix 7. AWEA would not object to the substance of Appendix 7
     being incorporated into Appendix G but, otherwise, it objects to
     its deletion without justification.

     **[SPP Answer]{.underline}**

134. In its Answer, SPP states that a one-line diagram is traditionally
     used to simply and effectively describe the equipment configuration
     of an electrical facility and points out that it is requiring a
     "preliminary one-line diagram." SPP further asserts that a simple
     geographic map showing the location of the proposed generation
     facility and proposed points of interconnection would provide SPP
     with necessary information without imposing an undue burden.[^64]

135. In its Answer, SPP states that the language being proposed in
     Appendix 2 is consistent with language included in the LGIA. SPP
     also responds to AWEA's protest of the language addition to
     Attachment A to Appendix 3 that the requested data is required
     because of the geographic scope of many wind farms. SPP explains
     that the data requirement is necessary to assess the stability and
     reactive performance of each generator from the viewpoint of fault
     ride and reactive requirements of wind generation.[^65]

136. In its October 29, 2007 submittal, SPP reiterates that the proposed
     revisions to Appendices A, B, C and D provide clarity, specificity,
     and are superior to the more general provisions of the *pro forma*
     appendices because they are indicative of the probable content of
     an actual agreement. In addition, SPP states that there is no
     Appendix 7 to the *pro forma* LGIP or in SPP's proposed LGIP, and
     instead discusses the proposed deletion of Appendix 5.[^66] AWEA
     suggests that SPP is confused as SPP *did* have an Appendix 7 to
     its LGIP, but now proposes to delete it.[^67] AWEA states that
     SPP's response on Appendix 5 was not requested by the Commission
     and does not explain why it has deleted Appendix 7.[^68]

     **[Commission Determination]{.underline}**

137. We accept SPP's proposed revision of Appendix 5 under the
     "independent entity variation" standard. This is consistent with
     accepting SPP's revisions to Article 5 removing any reference to
     the Alternate Option for interconnection facilities, procurement
     and construction. However, we reject SPP's proposal to clarify
     Appendices A, B, C and D as SPP has not justified its proposal in
     either its transmittal letter or its response to the deficiency
     letter.

138. We accept SPP's revisions to Appendix G to the LGIA to include
     interconnection provisions for wind generation. However, we reject
     SPP's proposed removal of Appendix 7 as unsupported. Further, it is
     unclear whether those provisions have been incorporated in Appendix
     G.

139. We accept SPP's proposed revisions to Appendix 1 and Appendix 2 of
     the LGIP because the proposed revisions are minimally burdensome
     and would enable SPP to define its Interconnection Feasibility
     Study Agreement more precisely. We will accept in part and reject
     in part SPP's proposed amendments to Attachment A to Appendix 3. We
     accept SPP's Data Requirements moved from Appendix 1 (Original
     Sheet Nos. 439A-439E). We reject without prejudice SPP's Original
     Sheet Nos. 439F-439G (Wind Generators Impact Study Data
     Requirements). We agree with AWEA that SPP did not support the
     requirement for additional data for wind Interconnection Customers.

     **17. [Definition of Base Case]{.underline}**

140. SPP proposes revising the definition of Base Case in Article 1 of
     both the LGIA and LGIP to provide that only SPP may conduct
     interconnection studies. SPP asserts that this revision is
     justified because it is the expert on its transmission system and
     has been performing studies for years. This revision is unopposed.

     **[Commission Determination]{.underline}**

141. We accept SPP's proposed revision of the definition of Base Case as
     an independent entity variation.

     **18. [Definition of Clustering]{.underline}**

142. SPP proposes to revise the definition of "Clustering" in the LGIA
     and LGIP to encompass all interconnection studies. SPP states that
     this would be an improvement because it would facilitate the
     clustering of Facility Studies as well as System Impact Studies.
     SPP also seeks approval of changes throughout the LGIP to enable
     clustering of interconnection requests within a 180-day window.

143. SPP proposes various other changes to Clustering provisions found
     in the LGIP including language to section 13.3 of the LGIP to
     provide that in the event SPP uses clustering, the Interconnection
     Customer would pay its proportionate share of the actual cost of
     the Interconnection Studies, and that costs associated with the
     study of each individual interconnection, made part of a cluster,
     would be directly assigned to the related Interconnection Customer.
     SPP states that costs incurred to study the interconnection
     cluster, as a whole, would be allocated to the Interconnection
     Customers proportionately.

     **[Protest]{.underline}**

144. AWEA supports the concept of clustering generally and also believes
     that a 180-day window is appropriate. It points out that both this
     concept and this window are permitted under the *pro forma* LGIP.
     However, AWEA finds the details of SPP's clustering proposals
     troublesome.[^69] It notes that, in some instances, SPP provides
     insufficient details regarding basic issues (such as how
     interconnection costs will be allocated among clustered customers).
     In other cases, AWEA argues that the proposed required details
     would unduly restrict customers compared with the *pro forma* LGIP
     (such as by imposing such shorter turn-around times on customers
     for document reviews or submission of deposits). AWEA urges the
     Commission not to approve SPP's proposed deviations from the *pro
     forma* LGIP regarding clustering without a substantial and detailed
     explanation from SPP regarding how it proposes to implement the
     concept, particularly as regarding the allocation of upgrade costs
     among clustered projects. Further, AWEA argues that the Commission
     should not approve SPP's proposed limitations on customer review
     and deposit times, absent a compelling showing by SPP that specific
     regional needs require such amendments to enable clustering.

145. Although AWEA does not object in principle to the "proportionate
     share" concept, it finds the proposed new statement in the LGIP
     section 13.3 -- Obligation for Study Costs that "\[i\]f the
     Transmission Provider uses Clustering the Interconnection Customer
     shall pay its proportionate share of the actual cost of the
     Interconnection Studies" vague and troublesome. AWEA argues that,
     without further explanation, adding this language will invite
     disputes.

     **[SPP Answer]{.underline}**

146. In its Answer, SPP states that it has determined that its
     clustering proposal was premature. SPP, therefore, states that it
     will withdraw its clustering proposal and remove the relevant
     revisions from its OATT in a compliance filing. SPP asserts that it
     will continue to include the language of the *pro forma* tariff on
     the clustering issue.[^70]

     **[Commission Determination]{.underline}**

147. We accept SPP's commitment to withdraw its clustering proposal as
     premature. We anticipate that a well-defined clustering approach to
     interconnection studies will provide benefits to customers as well
     as efficiencies for SPP and we encourage SPP's efforts to improve
     its proposal. Given that SPP is withdrawing its Clustering
     proposal, we will take no action on SPP's proposal to modify the
     definition of Clustering to include all interconnection studies at
     this time.\
     \
     **19. [Revisions to LGIP Section 11 ]{.underline}**

148. SPP proposes revision of section 11.1 of the LGIP to provide for
     the drafting and distribution of only one copy of the LGIA to be
     prepared by SPP and negotiated between SPP, the Transmission Owner
     and the Transmission Customer to provide for efficiency. SPP also
     proposes additional language providing for a sixty day period of
     negotiation among the Transmission Provider, Transmission Owner and
     the Interconnection Customer concerning provisions of the
     appendices to the draft LGIA.

149. SPP also proposes a revision to section 11.3 of the LGIP, stating
     that it would not execute the final LGIA unless the Interconnection
     Customer has provided all the information described therein. SPP
     also proposes to state in section 11.3 of the LGIP that the
     Interconnection Customer would execute the LGIA, or request that it
     be filed unexecuted, within 15 business days after receipt of the
     final LGIA.

150. In addition SPP proposes to make general "technical" modifications
     to the appendices and attachments of the LGIP. In its November 28,
     2007 submittal SPP states, in regard to the proposed modifications
     to the appendices and attachments, it is requesting more detailed
     data for wind farm projects based on its interpretation of the
     Commission's requirement that the wind plant Interconnection must
     submit completed detailed electrical design specifications and
     other data to allow the Transmission Provider to complete the
     System Impact Study.

     **[Commission Determination]{.underline}**

151. We accept SPP's proposed changes to section 11 of the LGIP. SPP has
     provided sufficient justification under the independent entity
     variation that these modifications promote efficiency and expedite
     business function.[^71]

152. Finally, in regard to SPP's proposed revisions to the appendices
     and attachments to reflect technical information that it needs or
     does not need, we reject any provisions not specifically identified
     and accepted above. We also reject its revisions to the study
     agreements to reflect more detailed contractual language often
     found in contracts. SPP has provided no justification for these
     revisions.

[The Commission orders]{.underline}:

\(A\) SPP's proposed tariff revisions are hereby accepted, in part, and
rejected in part, effective November 1, 2007, as discussed in the body
of this order.

\(B\) SPP is hereby directed to submit, within 30 days of the date of
issuance of this order, a compliance filing adopting the accepted
provisions, reinstating Order No. 2003 *pro forma* provisions, and
amending Attachment Z, as discussed in the body of this order.

By the Commission. Commissioner Kelly concurring in part with a separate
statement attached.

( S E A L )

Nathaniel J. Davis, Sr.,

Deputy Secretary.

UNITED STATES OF AMERICA

FEDERAL ENERGY REGULATORY COMMISSION

+---------------------------------------+------------+-----------------+
| Southwest Power Pool, Inc.            | Docket No. | ER07-1311-000   |
|                                       |            |                 |
|                                       |            | ER07-1311-001   |
+---------------------------------------+------------+-----------------+

(Issued January 25, 2008)

KELLY, Commissioner, *concurring in part:*

This order addresses revisions to the Open Access Transmission Tariff
(OATT), *pro forma* Large Generator Interconnection Agreement (LGIA),
and the *pro forma* Large Generator Interconnection Procedures (LGIP) of
Southwest Power Pool, Inc. (SPP). In particular, the order accepts SPP's
proposal to require the interconnection customer, as part of its
interconnection request, to submit a preliminary one-line diagram of the
facility as well as a geographical map showing, among other things, the
approximate location of the proposed point of interconnection. It
appears that such requirements are consistent with Orders No. 661 and
661-A and parties to the proceeding have not argued otherwise.[^72]

Accordingly, I respectfully concur in part with this order.

\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

Suedeen G. Kelly

[^1]: *Standardization of Generator Interconnection Agreements and
    Procedures,* Order No. 2003, 68 Fed. Reg. 49,845 (August 19, 2003),
    FERC Stats. & Regs. ¶ 31,146 (2003), *order on reh'g*, Order No.
    2003-A, 69 Fed. Reg. 15,932 (March 26, 2004), FERC Stats. & Regs. ¶
    31,160 (2004), *order on reh'g*, Order No. 2003-B, 70 Fed. Reg. 265
    (January 4, 2005), FERC Stats & Regs. ¶ 31,171 (2004), *order on
    reh'g*, Order No. 2003-C, 70 Fed. Reg. 37,662 (June 30, 2005), FERC
    Stats. 7 Regs. ¶ 31,190 (2005), *aff'd sub nom.* National
    Association of Regulatory Utility Commissioners v. FERC, 475 F. 3d
    1277 (2007) (Order No. 2003). Briefly, the "independent entity
    variation" recognizes that a Regional Transmission Organization
    (RTO) or an Independent System Operator (ISO) has different
    operating characteristics depending on its size and location and is
    less likely to act in an unduly discriminatory manner than a
    Transmission Provider that is a market participant. The "independent
    entity variation" provides the RTO and ISO with greater flexibility
    to customize its interconnection procedures and agreements to fit
    regional needs. *See* Order No. 2003 at P 827.

[^2]: *See Southwest Power Pool, Inc.*, 106 FERC ¶ 61,254 (2004).

[^3]: *See Southwest Power Pool, Inc*., 107 FERC ¶ 61,286 (2004).

[^4]: *See Southwest Power Pool, Inc.*, 108 FERC ¶ 61,186 (2004).

[^5]: 72 Fed. Reg. 51,630 (2007).

[^6]: 72 Fed. Reg. 70,322 (2007).

[^7]: 18 C.F.R. § 385.214 (2007).

[^8]: 18 C.F.R. § 385.213 (a)(2) (2007).

[^9]: *See* Order No. 2003 at P 26, 28, 32, 24, 92, 698-703 and 822-24.

[^10]: *See* Order No. 2003 at P 909.

[^11]: *See* Order No. 2003 at P 694.

[^12]: *But see* *California Indep. Sys. Oper. Corp*., 119 FERC ¶ 61,061
    (2007) (granting petition for declaratory order seeking conceptual
    approval of a new mechanism to finance the construction of
    interconnection facilities to connect location-constrained resources
    to the CAISO-controlled grid).

[^13]: *See* Order No. 2003-B at P 35.

[^14]: *See Southwest Power Pool, Inc.*, 108 FERC ¶ 61,186 (2004).

[^15]: Attachment Z provides aggregate transmission service study
    procedures as well as certain cost allocation and cost recovery
    provisions for Network Upgrades. *See* *Southwest Power Pool, Inc*.,
    110 FERC ¶ 61,028 (order accepting and suspending subject to refund
    and further Commission orders Attachment Z cost allocation and cost
    recovery provisions); *Southwest Power Pool, Inc*., 111 FERC ¶
    61,118 at P 71-72 (order conditionally accepting cost allocation and
    cost recovery provisions of Attachment Z), *order on reh'g and
    compliance*, 112 FERC ¶ 61,319 (2005).

[^16]: Attachment Z, Section VII.

[^17]: LGIA, Section 11.4.1, Superseding Original Sheet No. 514.

[^18]: SPP Transmittal Letter at 6-8.

[^19]: WFEC Comments at 3-5.

[^20]: ITC GP Comments at 3-4.

[^21]: AWEA Protest at 5.

[^22]: *Id.* at 6.

[^23]: **^?^** *Midwest Independent Transmission System Operator, Inc*.,
    108 FERC ¶ 61,027 (2004).

[^24]: **^?^** *See American Transmission Company LLC,* 120 FERC ¶
    61,221 (ATC Order); *International Transmission Company,* 120 FERC ¶
    61,220 (2007) (ITC Order).

[^25]: *See* ATC Order, 120 FERC ¶ 61,221 at P38; ITC Order, 120 FERC ¶
    61,220 at P35.

[^26]: Sunflower Comments at 5.

[^27]: *Id.* at 6-7.

[^28]: WFEC Comments at 5.

[^29]: *See* Order No. 2003 at P 695.

[^30]: *See* SPP Deficiency Response at 3.

[^31]: We note that SPP's proposal is inconsistent with the
    interconnection pricing provisions that the Commission accepted for
    the Entergy System under the "independent entity variation"
    standard. *See* *Entergy Services, Inc.*, 115 FERC ¶ 61,095 at P
    159-168, *order on reh'g*, 116 FERC ¶ 61,275 at P 76-147 (2006).
    Entergy's pricing provisions allow for the opportunity to receive
    financial compensation for all Network Upgrades an Interconnection
    Customer funds, including facilities similar to those SPP has
    labeled Attachment Facilities.

[^32]: *See Midwest Independent Transmission System Operator, Inc.,* 108
    FERC ¶ 61,027, at P172, *order on reh'g*, 109 FERC ¶ 61,085 at P 69
    (2004) (Midwest ISO orders).

[^33]: *See* SPP Response Deficiency Letter at 4.

[^34]: *See* SPP OATT proposal, First Revised Sheet No. 19.

[^35]: While we reject this proposed revision by SPP, we accept several
    other proposed revisions by SPP (see P 39 and P 63) where SPP also
    argues that the revisions were made to achieve consistency with the
    *pro forma* tariff. Consistency with the OATT [alone]{.underline}
    will not justify a change that is protested. However, in these other
    instances, other factors were also at play. For example, in P 39 we
    note that the change is consistent with the independent entity
    variation and in P 63 we find that the revision is also consistent
    with Order No. 2003.

[^36]: *See id.* at First Revised Sheet Nos. 464 and 466.

[^37]: *See Midwest Independent Transmission System Operator, Inc.*,
    *order on compliance filing*, 117 FERC ¶ 61,363 at P 17-19 (2006).

[^38]: *See* Midwest ISO orders cited in n.21 *supra*.

[^39]: *See* Southwest Power Pool FERC Electric Tariff Fifth Revised
    Volume No. 1 Proposed First Revised Sheet Nos. 477 and 478.

[^40]: SPP Transmittal Letter at 13.

[^41]: *See* Order No. 2003 at P 352-353.

[^42]: *See* Order No. 2003 at P 353-354.

[^43]: *Id.* at P 356.

[^44]: *Id.* at P 362.

[^45]: *See* Article 5.7 of *pro forma* LGIA.

[^46]: *See* Article 5.11 of *pro forma* LGIA.

[^47]: *Id.* at P 362.

[^48]: *See* Order No. 2003-A at P 303.

[^49]: *Id.* P 319.

[^50]: *See* Article 5.19.1 of *pro forma* LGIA.

[^51]: AWEA Protest at 12.

[^52]: *Id.* at 12-13.

[^53]: *Interconnection for Wind Energy,* Order No. 661, 70 Fed. Reg.
    34,993 (June 16, 2005), FERC Stats. & Regs. ¶ 31,186 (2005), *order
    on reh'g,* Order No. 661-A, 70 Fed. Reg. 75,005 (December 19, 2005),
    FERC Stats. & Regs. ¶ 31,198 (2005); *see also* Order Granting
    Extension of Effective Date and Extending Compliance Date, 70 Fed.
    Reg. 47,093 (August 12, 2005), 112 FERC ¶ 61,173 (2005); Notice
    Extending Compliance Date, issued October 28, 2005; Notice Extending
    Compliance Date, issued December 22, 2005 (Order No. 661), at P
    50-51.

[^54]: AWEA Protest at 16-17.

[^55]: *See* SPP Answer at 4.

[^56]: SPP Transmittal Letter at 14.

[^57]: *See* Order No. 2003 at P 597.

[^58]: SPP Transmittal Letter at 15.

[^59]: *Id.*

[^60]: AWEA *Protest* at 22.

[^61]: *See Southwest Power Pool, Inc.,* Docket No. ER06-512-000, letter
    order issued under delegated authority by Director Division of
    Tariffs and Market Development-Central on March 8, 2006.

[^62]: AWEA Protest at 19-20.

[^63]: AWEA Protest at 20-21.

[^64]: SPP Answer at 5-6.

[^65]: *Id*. at 7.

[^66]: SPP Response at 5.

[^67]: AWEA Comments in Response to Deficiency Letter at 6

[^68]: *Id*. at 6-7.

[^69]: AWEA Protest at 17-18.

[^70]: SPP Answer at 5.

[^71]: In SPP's November 28, 2007 submittal it erroneously refers to
    modifications to Article 11.5 of the LGIA in regard to its revisions
    of section 11 of the LGIP. However, it is clear from the context
    that SPP is actually referring to section 11 of the LGIP.

[^72]: *Interconnection for Wind Energy*, Order No. 661, FERC Stats. &
    Regs. ¶ 31,186, *order on reh'g*, Order No. 661-A, FERC Stats. &
    Regs. ¶ 31,198 (2005). Order No. 661-A states that the Final Rule
    permits "wind plants to enter the interconnection queue with a set
    of preliminary electrical design specifications depicting the wind
    plant as a single generator, instead of providing detailed design
    specifications as required by Order No. 2003." Order No. 661-A, FERC
    Stats. & Regs. ¶ 31,198 at P 60.