# RTO West Tariff 

# Definitions

# 

**Ancillary Services:** Those services that are necessary to support the
transmission of energy from resources to loads while maintaining
reliable operation of the Transmission System in accordance with Good
Utility Practice. *\[NOTE: from SMD tariff\]*

**Company Load:** The portion of the Executing Transmission Owner's
Interconnected Load associated with (1) Load Service Obligation
(converted or non-converted) plus, (2) network contracts converted to
RTO West Transmission Services other than Non-Converted Transmission
Service, (3) Incremental Load Service beyond any Transmission Services
provided under Non-Converted Transmission Service or converted
Transmission Services for which a Transfer Charge is paid. *\[NOTE: from
TOA**\[Need to address new service within RTO West either here or***
***in a*** ***separate subsection.\]***

####### 

**Direct Assignment Facilities:** Facilities or portions of facilities
that are constructed forthe sole use/benefit of a particular Customer
requesting service under the Tariff. Direct Assignment Facilities shall
be specified in the Service Agreement that governs service to the
Customer and shall be subject to Commission approval. *\[NOTE: from SMD
tariff\]*

**Incremental Load Service:** Additional use of Transmission Services
beyond the capacity paid for by conversion of a Pre-Existing
Transmission Agreement. This is intended to include additional use
resulting from load growth to the extent such growth is not covered by
the converted agreement. If the converted agreement was for network-type
service, the Company Rate will apply to the incremental increase. If the
converted agreement was for point-to-point-type service and included a
flexible demand base which includes load growth, the Transfer Charges
will be increased to cover the load growth. **\[If the entity obtaining
Incremental Load Service is not a load, the incremental increase in
service will be subject to the applicable Company Rate.\]** New service
requests **\[or changes to firm capacity reservations** **or**
**capacity additions** **not expressly authorized** **by the
Pre-Existing Transmission Agreement for** **point-to-point service under
the OATT\]** will be subject to conversion to RTO West Transmission Use
Service by the Participating Transmission Owner or RTO West and any
service granted will be subject to applicable rates and charges for that
service.

**Load Service Obligation:** Transmission service to loads with respect
to which the Executing Transmission Owner has a legal obligation to
provide such transmission service. For purposes of cataloguing
transmission rights, transmission used to satisfy obligations under a
General Transfer Agreement or similar contractual obligation of
Bonneville's shall be considered a Load Service Obligation of the party
delivering energy to load and returning energy to its counterparty. For
purposes of contract conversion, loads served by General Transfer
Agreements are Company Loads of Bonneville, and general transfer
agreements under which Bonneville contracts with a Participating
Transmission Owner to provide delivered energy on behalf of the
Participating Transmission Owner are Company Loads of the Participating
Transmission Owner. *\[NOTE: from TOA\]* \[**STILL UNDER
CONSIDERATION** - Need to consider in light of jurisdictional shift of
transmission to FERC. If transmission service obligation is a state law
obligation for IOUs, does this definition work with federal assumption
of jurisdiction over transmission assets? Some think this is not an
issue because the state obligation is an obligation to do whatever is
necessary to serve end use load and whether a service such as
transmission is jurisdictional to the state is not the issue. Could
definition be more precise?\] \[Does this definition include DSIs with
only PTP contracts and should it, given the special provision for fixed
demand type contracts?\]

\[**CLARIFICATION NEEDED**? Need to make sure that a customer doesn't
get stuck paying both 1.2.1 and 1.2.2 charges by virtue of the foregoing
definition because this definition currently puts certain PTPs in both
categories. The problem crops up when a PTP contract is held by the
load\]. **RESPONSE** -- With regard to PTP contracts, under some
circumstances the customer may be required to pay charges under both
categories. See the draft chart of allocations attached.

**Pre-Existing Transmission Agreements And Obligations:** Those
Transmission

Agreements and Load Service Obligations, including those with the
Merchant Function of the Executing Transmission Owner, in effect
immediately before the Transmission Service Commencement Date. *\[NOTE:
from TOA\]*

**Transfer Charges: T**hose charges to be paid to or received from other
entities in connection with the suspension and conversion of
Pre-Existing Transmission Agreements And Obligations for
point-to-point-type service. The Transfer Charge shall equal the amount
of money (or the internal credit) that the Executing Transmission Owner
received for services provided under the Pre-Existing Transmission
Agreements And Obligations during the ReferencePeriod, adjusted, if
applicable, for unit costs as set forth in Exhibit H (Schedule 2) to
this Tariff. As Transfer Charges are established by other Participating
Transmission Owners, RTO West shall set forth such Transfer Charges in
Exhibit H (Schedule 2) and provide the Executing Transmission Owner with
a revised copy of such Exhibit H (Schedule 2). Transfer Charges for a
Participating Transmission Owner may include amounts receivable from the
Participating Transmission Owner's Merchant Function. *\[NOTE: from
TOA.*

**STILL UNDER CONSIDERATION -** \[**CONCEPTUAL QUESTION**: Confirm
whether market design contemplates that transfers will be permitted to
move power around within RTO West from a generator to a market hub (not
directly to a load). Assuming the answer is yes, did Stage 2 deal assume
generator or marketer moving power is not responsible for embedded costs
but only congestion losses and ancillary services and GMC. Concern: Is
this a disincentive for a load within the region that has only a PTP
contract(s) to convert that PTP contract(s) and avoid paying a Company
Rate because the generators or marketers can send to Mid C without
charge and he can move the power from Mid C under his non-converted
PTP.\]

**STILL UNDER CONSIDERATION -** \[NEED TO ADDRESS ISLANDS within RTO
West\]

# Rates and Charges

\[[NOTE: This draft does not include planning and expansion charges. We
do not know how they fit at this time.\]]{.mark}

All sums payable pursuant to this tariff shall be paid to and collected
by the Paying Agent on behalf of the Transmission Owner or other
appropriate party entitled to the benefit of such payment, all in
accordance with the Paying Agent Agreement.

1.  **Rates and Charges Applicable to Each Transmission Service.**

    1.  **Non-Converted Transmission Service** **to a Participation
        Transmission Owner.** Participating Transmission Owners that are
        Transmission Customers shall pay RTO West the following charges:

        1.  **Real Power Losses** Charges will continue to be collected
            by the Participating Transmission Owner pursuant to the
            applicable Non-Converted Transmission Agreement. The
            Participating Transmission Owner will provide all energy or
            money collected to RTO West for use in the overall
            loss-recovery mechanism.

        2.  **Congestion** **Charges** only to the extent that a PTO has
            agreed to pay Congestion Charges as part of its obligation
            to provide Congestion Management Assets in order to cover
            some or all redispatch needed in connection with the PTOs
            catalogued transmission rights*.* **STILL UNDER
            CONSIDERATION -**\[Question confirm Stage 2 deal that RTO's
            remedy in the event of real time inadequacy of CM Assets is
            limited to rerunning the adequacy test on time schedule
            agreed upon, uplifting any past congestion costs and
            prospectively changing the CM Asset requirement. If uplift
            was anticipated is uplift to total amount to GMC or does the
            amount reflect any offset of funds in the Replacement
            Revenue Pool?\]

        3.  **Ancillary** **Services** **Charges** pursuant to Section 3
            if a Participation Transmission Owner does not elect
            Self-Provision;

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        1.  

        2.  **Grid Management Charge** pursuant to Section 2.6

This Tariff does not address rates and charges for services under
Non-Converted Transmission Agreements paid by customers (including,
without limitation, other Participating Transmission Owners)of
Participating Transmission Owners .

> \[**NOTE** -- Regarding the foregoing point, see revised definition of
> Incremental Load Service.\]

2.  **Transmission Use Service.** The charges applicable to Transmission
    Use Service varies depending upon (1) the type of Pre-Existing
    Transmission Agreement (PTP-type or network) for converted service
    or (2), for new service, whether the load served is located within
    or without the RTO West Control Area **,** as set forth below:

> **STILL UNDER CONSIDERATION -** \[Question: Does "Loads Pay" literally
> mean that they are the financially responsible party or is it merely a
> means of measuring the appropriate amount to be paid?\]\[Also, can
> there be more than one contract holder responsible to pay the rates
> for the same load? (not intended to impact parties ability to do "side
> deals")\]
>
> **STILL UNDER REVIEW -** \[Check tariffs with License Plate pricing
> and determine whether they have a developed a construct similar to the
> one that was suggested by some who desire that any eligible customer
> be able to hold the contract for some or all service to a Company
> Load.\]

1.  **New** **Transmission Use Service to** **Loads Within the RTO West
    Control Area**. New Transmission Use Service to loads within the RTO
    West Control Area shall pay RTO West the following rates and
    charges:

    1.  **Company Rate** pursuant to Section 2.1.

        1.  If a Participating Transmission Owner acting on behalf of
            Company Loads is wheeling on another Participating
            Transmission Owner's system, the resulting Transfer Charge
            for such use will be included, if applicable, as part of the
            paying Participating Transmission Owner's Company Rate
            calculation.

        2.  A Transmission Customer, other than a Participating
            Transmission Owner, purchasing new Transmission Use Service
            for a load within the RTO West Control Area may also be
            receiving service through conversion of a Pre-Existing
            Transmission Agreement for point-to-point-type service. In
            that case, the Transmission Customer will pay both a Company
            Rate for the new incremental Transmission Use Service and a
            Transfer Charge for the pre-existing converted
            point-to-point-type service contract.*\[**NOTE:*** *Confirm
            that transfer charges that provide access to an external
            access point are included in the company rate calculation
            and when paid exempt the company load from paying the
            external access fee to the extent it has CTR or FTO to that
            point. See Pricing White Paper page 13.\]**FOREGOING NOTE
            STILL UNDER REVIEW***

    2.  **Real Power Losses** **Charge** pursuant to Section 2.3.

    3.  **Congestion** **Charges** pursuant to Section 2.5, to the
        extent not covered by Catalogued Transmission Rights or
        Financial Transmission Options.

    4.  **Ancillary** **Services** **Charges** pursuant to Section 3.

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    1.  

    2.  **Backstop Cost Recovery Fee** (if one is adopted by RTO West
        and to the extent applicable) pursuant to Section 2.4.3.

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    5.  **Grid Management Charge** pursuant to Section 2.6.

2.  **New Transmission Use Service to Loads Outside the RTO West Control
    Area.** New Transmission Use Service to loads outside the RTO West
    Control Area shall pay RTO West the following rates and charges:

    1.  **Real Power Losses Charge** pursuant to Section 2.3.

    2.  **Congestion Charges** pursuant to Section 2.5, to the extent
        not covered by Catalogued Transmission Rights or Financial
        Transmission Options.

    3.  **Ancillary Services Charges** pursuant to Section 3.

    4.  **External Interface Access Fee** pursuant to Section 2.4.1.

    5.  **Backstop Cost Recovery Fee** (if one is adopted by RTO West
        and to the extent applicable) pursuant to Section 2.4.3.

    6.  **Grid Management Charge** pursuant to Section 2.6.

3.  **Transmission Use Service Derived** **From Conversion of**
    **Point-To-Point-type Contracts**.\[**STILL UNDER REVIEW -** Are
    there any pre-existing contracts that are network type but fixed
    demand, that is provide for no load growth?\] Transmission Use
    Service derived from conversion of point-to-point-type contracts
    shall pay RTO West the following rates and charges:.

    1.  **Company Rate** pursuant to Section 2.1, only if the
        Transmission Customer is not a Participating Transmission Owner
        and is purchasing new service that is in addition to rights held
        by the Transmission Customer as the result of conversion of a
        Pre-Existing Transmission Agreement. In such case, the
        Transmission Customer will pay both a Company Rate for the
        incremental Transmission Use Service and a Transfer Charge for
        the converted point-to-point-type service contract.

    2.  **Transfer Charge** pursuant to Section 2.2. The Transfer Charge
        will not include charges for losses because the Transmission
        Customer will be paying the RTO separately for Real Power
        Losses, pursuant to Section 1.2.3.3 below.

    3.  **Real Power Losses** **Charge** pursuant to Section 2.3.

    4.  **Congestion** **Charges** pursuant to Section 2.5, to the
        extent not covered by Cataloged Transmission Rights or Financial
        Transmission Options.

    5.  **Ancillary** **Services** **Charges** pursuant to Section 3.

    6.  **External Interface Access Fee** (to the extent applicable)
        pursuant to Section 2.2, or in the alternative a Transfer Charge
        (to the extent applicable) pursuant to Section 2.4.**STILL UNDER
        REVIEW -** \[**Question**: Pricing Paper suggests that a
        customer who converts a 100MW PTP between any points within RTO
        West to FTO's must pay the EIAF when the customer transmits up
        to 100MW to an external point --if the underlying contract did
        not name an external point. Does this customer contribute twice
        to the embedded costs of the system? Is this appropriate. (We
        assume this rule put in to avoid cost shifting.)\]

    7.  **Backstop Cost Recovery Fee** (if one is adopted and to the
        extent applicable) pursuant to Section 2.4.3.

    8.  **Grid Management Charge** pursuant to Section 2.6.

4.  **Transmission Use Service Derived from Conversion of Network-type
    Contracts.** Transmission Use Service derived from conversion of
    network-type contracts shall pay RTO West the following rates and
    charges:

    1.  **Company Rates** pursuant to Section 2.1

    2.  **Real Power Losses** **Charge** pursuant to Section 2.3.

    3.  **Congestion** **Charges** pursuant to Section 2.5, to the
        extent not covered by Cataloged Transmission Rights or Financial
        Transmission Options.

    4.  **Ancillary** **Services** **Charges** pursuant to Section 3.

    5.  **External Interface Access Fee** pursuant to Section 2.2.

    6.  **Backstop Recovery Fee** (if one is adopted and to the extent
        applicable) pursuant to Section 2.4.3.

    7.  **Grid Management Charge** pursuant to Section 2.6.

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2.  **Description of Rates and Charges**

    1.  **Company Rate.** A charge to access the RTO West Transmission
        System \[Islands?\] calculated pursuant to Exhibit G of the RTO
        West Transmission Operating Agreement which is restated herein
        as Schedule 1. \[*NOTE: We need to define which Company Rate
        applies to each load.\]*

    2.  **Transfer Charge.** A payment for service under a converted
        Pre-Existing Transmission Agreement that is based on the
        transmission service charges paid by a PTO's transmission
        service customer under the Pre-Existing Transmission Agreement
        and calculated pursuant to Exhibit H of the RTO West
        Transmission Operating Agreement which is restated herein as
        Schedule 2.

    3.  **Real Power Losses Charge.** Real Power Losses are associated
        with all Transmission Services. RTO West is not obligated to
        provide Real Power Losses. \[*NOTE: The work of the Market
        Design workgroup may require this section to be revised.\]*

    4.  **External Interface Access Fee, Replacement Revenue Pool, and
        Backstop Recovery Mechanism.** *\[NOTE: Consider consolidating
        and streamlining Sections 2.4.1 and 2.4.3, and placing Section
        2.4.2 in a separate portion of the Tariff.\]*

        1.  **External Interface Access Fee.** Transmission Customers
            scheduling energy from a point within or through RTO West
            for delivery at an External Interface Point must have
            External Interface Access, which may be obtained by: (1)
            taking Non-Converted Transmission Service to serve
            Non-Converted Transmission Agreements that provided access
            to an External Interface Point; (2) conversion of a
            Pre-Existing Transmission Agreement And Obligation that
            provided access to an External Interface Point; or (3)
            payment of the External Interface Access Fee to RTO West,
            pursuant to Exhibit I of the RTO West Transmission Operating
            Agreement which is restated herein as Schedule 3

        2.  **Replacement Revenue Pool.** Revenues from External
            Interface Access Fees and surplus revenues from the
            congestion management system shall be allocated to the
            Executing Transmission Owners pursuant to Exhibit I of the
            RTO West Transmission Operating Agreement which is restated
            herein as Schedule 3.

        3.  **Backstop Cost Recovery Fee.** When a sustained under- or
            over- collection of the Revenue Recovery Target occurs, RTO
            West shall develop an appropriate charge, the Backstop Cost
            Recovery Fee, or adjustment pursuant to Exhibit I of the RTO
            West Transmission Operating Agreement which is restated
            herein as Schedule 3.

    5.  **Congestion Charges**. [\<Need details from Market Design
        Workgroup\>]{.mark}

    6.  **Grid Management Charge.** RTO West shall recover its
        administrative and operating costs, including the costs
        associated with the development and formation of RTO West, from
        all schedules submitted to RTO West through a
        dollar-per-megawatt-hour ("\$/MWh") charge pursuant to Exhibit J
        of the RTO West Transmission Operating Agreement which is
        restated herein as Schedule 4.

    7.  **Planning and Expansion Charges:** [\<Need proposal from RTO
        West \>]{.mark}

        1.  Direct Assignment Facilities

        2.  Study Costs

        3.  Etc.

3.  **Ancillary Services Charges**: [\<Need details from Market Design
    Workgroup\>]{.mark}

SCHEDULE 1

EXHIBIT G

RTO WEST TRANSMISSION OPERATING AGREEMENT

\(2002\)

COMPANY RATES

The Company Rate to be included in RTO West's charges to the Executing
Transmission Owner's Company Loads **\[Company Loads Issue Flag\]**
during the Company Rate Period shall be calculated pursuant to the
following formula:

**Company Rate = \[(Company Costs +** **Revenues fromTransfer Charges**
**- Costs incurred for** **Transfer Charges ‑ Revenues from
Non-converted Transmission Agreements + Costs of Non-converted
Transmission Agreements) \]/ (Company Billing Determinants)**

> **+ \[(Transmission Facility Cost Sharing Payments - Allocated
> Merchant Function External Interface Access Fee Revenue - Replacement
> Revenue Pool Allocation (if applicable) + TOA Costs Allocation)\] /
> (ETO Interconnected Load Billing Determinants)**
>
> **STILL UNDER CONSIDERATION -** **\[Do we need to clarify what a PTO
> files prior to setting the Company Rate by RTO West\]\[See Section
> 16** **of TOA** **for discussion of this issue\]**

The terms in the formula that are not Transmission Operating Agreement
defined terms are defined as follows:

[Allocated Merchant Function External Interface Access Fee
Revenue]{.underline} means revenues from an Executing Transmission
Owner's affiliated merchant for use of External Interface Points located
on the facilities owned by an Executing Transmission Owner. These
revenues are not included in the Replacement Revenue Pool, but are
credited directly to the Executing Transmission Owner to lower revenue
requirements.

[Revenue from Non-Converted Transmission Agreements]{.underline} means
the payments from Pre-Existing Transmission Agreements that do not
convert to RTO West Transmission Use Service that are made to the
Executing Transmission Owner provider as provided by those agreements.

[Cost of Non-converted Transmission Agreements]{.underline} are payments
made by an Executing Transmission Owner for transmission purchased from
other transmission providers, which are included in Company Rates as
part of the elimination of pancaking.

[Replacement Revenue Pool Allocation]{.underline} means the allocated
share of revenues collected from External Interface Access Fees, surplus
revenues from Congestion Management, and revenues from the Backstop
Recovery Mechanism, if triggered as described in Exhibit I.

[TOA Costs Allocation]{.underline} means an Executing Transmission
Owner's allocated share of TOA Costs.

SCHEDULE 2

EXHIBIT H

RTO WEST TRANSMISSION OPERATING AGREEMENT

\(2002\)

ANNUAL TRANSFER CHARGE AMOUNTS

The Executing Transmission Owner agrees that for purposes of calculating
Company Rates, the Transfer Charges set forth herein and applicable to
the Executing Transmission Owner shall be applied by RTO West for the
associated agreements that are converted to RTO West Transmission
Service, other than Non-Converted Transmission Service, for the term of
the Pre-Existing Transmission Agreements. This Exhibit H will be revised
any time additional Pre-Existing Transmission Agreements with a term of
one (1) year or longer are converted to Transmission Service other than
Non-Converted Transmission Service. Transfer Charges for such agreements
will be based on the \[amount of money the Participating Transmission
Owner received for services under the Pre-Existing Transmission
Agreement and Obligation during the Reference Period, adjusted, if
applicable, for unit costs as set forth in this Schedule\]**\[NOTE: The
foregoing text is taken from the definition of Transfer Charge in the
TOA\]** most recent contract information, including the current
Executing Transmission Owner transmission rate applicable to that
agreement.\[Need to conform the preceding sentence with definition of
Transfer Charge\]\[**SEE ABOVE**\] Conversion of a network agreement
serving an Executing Transmission Owner's Interconnected Load will not
result in a Transfer Charge, because the Interconnected Load will pay
the Executing Transmission Owner's Company Rate after conversion.

[Transfer Payments Between Participating]{.underline}
[Transmission]{.underline} [Owners]{.underline}

If the Executing Transmission Owner has a Pre-Existing Transmission
Agreement with another Participating Transmission Owner that

\(1\) is necessary to meet its own load service obligations within RTO
West,

\(2\) expires during the Company Rate period and

(3) provides for rollover rights, pursuant to the agreement or the
    Participating Transmission Owner's Open Access Transmission Tariff,

then upon expiration of the agreement, the agreement shall be
automatically extended through the remaining term of the Company Rate
Period, and the Executing Transmission Owner shall

\(i\) continue to receive service pursuant to the agreement, and

\(ii\) pay the Participating Transmission Owner's applicable contract
charge for non-converted pre-existing open access transmission tariff
agreements. This provision will not apply if and when the Executing
Transmission Owner no longer needs the service under the agreement to
meet its own load service obligations within RTO West. **STILL UNDER
REVIEW -** \[**Assumption** -- That if a PTO experiences partial load
reduction, the extended contract will reflect the new reduced load and
payment will be adjusted appropriately\] \[Is this also true if new
resources are acquired to serve load?\]

If the Executing Transmission Owner voluntary converts a Pre-Existing
Transmission Agreement with another Participating Transmission Owner (so
that is subject to a Transfer Charge for at least the remaining duration
of the Company Rate Period), the provisions that apply generally to
conversion of Pre-Existing Transmission Agreements shall apply to such
conversion.**STILL UNDER REVIEW -** \[Compared to treatment of
non-converted contracts, is this a disincentive to convert? Should we
adjust?\]

If (1) a pre-Order 888 contract has pricing provisions different from
the Open Access Transmission Tariff, (2) the Executing Transmission
Owner customer extended the service beyond the expiration date in the
contract pursuant to a Rollover Right and (3) the Rollover Right did not
include a right to continuation of the non-Open Access Transmission
Tariff pricing provisions, then the Executing Transmission Owner shall
adjust the contract charges or Transfer Charges for service after the
original expiration date to be consistent with its Open Access
Transmission Tariff.

**[Executing Transmission Owner --- Bonneville]{.underline}**

A.  Transfer Charges receivable from:

\(1\) Transmission Customer A

> \(a\) Long-Term Wheeling Revenues: (list agreement, duration and
> amount) **\[Note: Amounts listed will include the total of all such
> long-term wheeling revenues received from the Transmission Customer
> and from its affiliates.\]**

(2) Transmission Customer B, etc.

B. Bonneville does/does not elect for the Transfer Charge adjustment
provisions of this Exhibit H to apply to all Transfer Charges set forth
above (other than those Transfer Charges identified above as
nonadjustable under applicable Pre-Existing Transmission Agreements).

**\[Repeat the same listings for every potential Executing Transmission
Owner with Transfer Charge rights or obligations, including Canadian
entities and Electric Utilities served under Company Rates of Executing
Transmission Owners.\]**

**[Transfer Charge Adjustment]{.underline}**

If an Executing Transmission Owner has elected not to apply the Transfer
Charge Adjustment, its Transfer Charge entitlements as shown above
throughout the Company Rate Period shall be the amounts as stated in
this Exhibit H. If an Executing Transmission Owner has elected to apply
the Transfer Charge Adjustment, upon any filing of a Company Cost change
(after the initial Company Cost filing), RTO West shall determine,
consistent with the Executing Transmission Owner's statutory ratemaking
process**STILL UNDER CONSIDERATION -** \[**Assumption** -- RTO West
initiates this determination with a filing at FERC? (Michael E)\] and
using a prospective, two-year test period, the increase or decrease in
such Executing Transmission Owner's unit transmission costs based upon
the filed (i) Company Costs, (ii) adjustments and (iii) load data used
to calculate its Company Rate pursuant to the formula in Exhibit G to
the Transmission Operating Agreement. Such unit-cost percentage increase
or decrease shall be filed with FERC for acceptance or approval if
applicable and applied to adjust all Transfer Charges specified in this
Exhibit H as owed to such Executing Transmission Owner, other than those
Transfer Charges identified above as non-adjustable under applicable
Pre-Existing Transmission Agreements.

##### SCHEDULE 3

##### EXHIBIT I

##### RTO WEST TRANSMISSION OPERATING AGREEMENT

\(2002\)

EXTERNAL INTERFACE ACCESS FEE,

REPLACEMENT REVENUE POOL AND

BACKSTOP RECOVERY MECHANISM

An RTO West Transmission Customer scheduling from a point within or
through the RTO West Transmission System to an External Interface Point
must have External Interface Access that it can obtain in one of three
ways: (1) purchase from RTO West by payment of the External Interface
Access Fee, (2) receive upon conversion of a Pre-Existing Transmission
Agreement that provided access to an External Interface Point or (3) be
a Executing Transmission Owner taking Non-Converted Transmission Service
from Pre-Existing Transmission Agreements And Obligations that provided
access to an External Interface Point. The External Interface Points are
listed in this Exhibit I.

Revenues from External Interface Access Fees and surplus revenue
produced by the congestion management system will be combined to form
the Replacement Revenue Pool, which shall be allocated to the Executing
Transmission Owners to replace (1) historical revenues generated from
short-term and nonfirm transmission service and (2) revenues lost after
RTO West start-up as a result of expiring long‑term contracts. If there
is a sustained under‑ or over‑collection of the Revenue Recovery Target,
the Backstop Recovery Mechanism will be triggered to adjust revenues
flowing into the Replacement Revenue Pool as described below.

I. [External Interface Access Fee]{.underline}

The External Interface Access Fee will be calculated based on the
average cost of the RTO West Transmission System, i.e., a system-wide
"Postage Stamp" rate. The External Interface Access Fee will be
discountable by RTO West only to maximize collections of the Replacement
Revenue Pool, with all sales at a given External Interface Point for a
given time receiving the same discount. Discounting at one External
Interface Point does not require discounting at another External
Interface Point, and discounting for a given time period does not
require discounting for a different time period. External Interface
Access may be resold to other RTO West Transmission Customers and, if
purchased at full price from RTO West, may be used at any External
Interface Point. If purchased at a discount, use will be limited to the
External Interface Point to which the discount applied. If External
Interface Access is derived from a Pre-Existing Transmission Agreement,
its use will be limited to the External Interface Point named in the
agreement. Rates for the External Interface Access Fee will be published
for Annual, Monthly, Weekly, Daily and Hourly periods (or strips) and
shall be calculated as follows:

A.  Annual Service---The rate for Annual Service shall not exceed the
    sum of all the Executing Transmission Owners Company Costs divided
    by the 12 CP demand of the RTO West Transmission System, including
    both internal loads and exports.

B.  Monthly Service---The rate for Monthly Service shall not exceed the
    rate for Annual Service divided by 12 months.

C.  Weekly Service---The rate for Weekly Service shall not exceed the
    rate for Annual Service divided by 52 weeks.

D.  Daily Service---The rate for Daily Service shall not exceed the rate
    for Weekly Service divided by 6 days.

E.  Hourly Service---The rate for Hourly Service shall not exceed the
    rate for Daily Service divided by 16 peak hours.

II\. [Replacement Revenue Pool]{.underline}

The Replacement Revenue Pool is made up of revenues from External
Interface Access Fees and from the surplus revenues produced by the
Congestion Management System, i.e., revenues from FTO Auctions and the
net revenues from over and under collection of congestion clearing
activities. External Interface Access Fee revenues from a Executing
Transmission Owner's merchant function for use of External Interface
Points located on the transmission facilities owned by that Executing
Transmission Owner are credited directly to the Executing Transmission
Owner to revenue requirements, as specified in Exhibit G. These revenues
are not included in the Replacement Revenue Pool.

If the Backstop Recovery Mechanism is triggered by under‑collection, as
described below, the revenues from additional charges instituted to
correct a shortfall will become part of the Replacement Revenue Pool.

A. Revenue Recovery Target---The Revenue Recovery Target is a fixed
dollar amount equal to the average of the sum of non-firm and short-term
revenues collected by each Executing Transmission Owner from entities
other than that Executing Transmission Owner's affiliates for a set of
calendar years beginning with 1999 and running until the last full
calendar year that immediately precedes RTO West's commencement of
operations (the Reference Period). The Revenue Recovery Target will be
adjusted for lost revenues resulting from long-term contracts that
expire during the Company Rate Period by an amount equal to the revenue
from the expiring contract during the last year of the Reference Period.
A complete year of revenue from an agreement will be included as the
last full calendar year revenue if the agreement had a service
commencement date after January 1 in the last year of the Reference
Period or in any year following the last year of the Reference Period.

B. Annual Recovery Differential---The Annual Recovery Differential will
be equal to the annual collections by the Replacement Revenue Pool minus
the Revenue Recovery Target.

C. Replacement Revenue Pool Allocation---Each year, RTO West will
allocate the annual collections flowing into the Replacement Recovery
Pool, with over‑ and under‑collections flowing through to Executing
Transmission Owners. Each Executing Transmission Owner shall receive a
share of the Replacement Revenue Pool equal to the annual balance in
Replacement Revenue Pool times an allocator equal to the Executing
Transmission Owner's revenues included in the Revenue Recovery Target
divided by total Revenue Recovery Target.

III\. [Backstop Recovery Mechanism]{.underline}

A. Backstop Recovery Mechanism Triggers---When a sustained under or over
collection of the Revenue Recovery Target occurs, the Backstop Recovery
Mechanism will be triggered. The Backstop Recovery Mechanism will be
triggered by an under‑recovery, if the cumulative sum of the Annual
Recovery Differentials is negative and the absolute value of the
cumulative sum exceeds the absolute value of the difference between the
lowest annual short-term and nonfirm revenue in the Reference Period and
the average annual short-term and nonfirm revenue in the Reference
Period. The Backstop Recovery Mechanism will be triggered by an
over‑recovery, if the cumulative sum of the Annual Recovery
Differentials is positive and the cumulative sum exceeds the difference
between the highest annual short‑term and nonfirm revenue in the
Reference Period and the average annual short-term and nonfirm revenue
in the Reference Period.

B. Correction of Sustained Under‑ or Over‑Recovery---If the Backstop
Recovery Mechanism is triggered by under‑recovery, RTO West will be
develop an appropriate charge or charges to correct the cumulative
shortfall and recover the Revenue Recovery Target on a prospective
basis. If the Backstop Recovery Mechanism is triggered by over
collection, RTO West will propose an appropriate mechanism for adjusting
the cumulative over collection and recover the Revenue Recovery Target
on a prospective basis. The actual design and application of a Backstop
Cost Recovery fee will be left to RTO West if the backstop mechanism is
triggered. In establishing appropriate charges, RTO West will consider
possible causal relationships and the minimization of cost shifting and
ensure that all customers' uses contribute to the recovery of the fixed
costs of the system.

##### SCHEDULE 4

## EXHIBIT J

## GRID MANAGEMENT CHARGE

The Grid Management Charge (GMC) is a formula rate designed to recover
certain RTO West administrative and operating costs, as specified below.
The GMC will be a dollar-per-megawatt-hour (\$/MWh) charge levied on all
schedules submitted to RTO West.

### Calculation of GMC

The GMC will be calculated as follows and will be revised periodically
as needed, but no less than once every twelve (12) months. (*Note:
References to account numbers below are to those used for FERC Form 1.*)

Grid Management Charge = Revenue Requirement / (Loads + Exports)

Where:

> *Revenue Requirement = Operating Expenses + Debt Service -- Interest
> Earnings -- Reserve Transfer*
>
> Loads = the total annual energy delivered under Transmission Use
> Service + total annual energy delivered under Non-Converted
> Transmission Service
>
> Exports = the total annual energy scheduled out of RTO West under
> Transmission Use Service or Non-Converted Transmission Service

Where:

> Operating Expenses = O&M Expenses plus certain Taxes Other Than Income
> Taxes (Account 408.1); provided that any taxes subject to allocation
> under section 25.20 of the Transmission Operating Agreements between
> RTO West and Initial Participating Transmission Owners shall not be
> included in Operating Expenses for calculation of GMC.
>
> O&M Expenses = Transmission O&M Expenses (Accounts 560-574) plus
> Customer Accounting Expenses (Accounts 901-905) plus Customer Service
> and Information Expenses (Accounts 906-910) plus Sales Expenses
> (Accounts 911-917) plus Administrative & General Expenses (Accounts
> 920-935); provided that costs properly allocated to the management of
> congestion by RTO West shall not be included in O&M Expenses for
> calculation of the GMC.
>
> Debt Service = for any fiscal year, scheduled principal and interest
> payments, sinking fund payments related to balloon maturates,
> repayment of commercial paper notes, net payments required pursuant to
> a payment obligation or payments due on any RTO West notes. This
> amount includes the current year accrued principal and interest
> payments; provided that costs properly allocated to the management of
> congestion by RTO West shall not be included in Debt Service for
> calculation of the GMC.
>
> Interest Earnings = Interest earnings on Operating and Capital Reserve
> balances (Account 419). Interest on bond or note proceeds specifically
> designated for capital projects or capitalized interest is excluded;
> provided that interest costs properly allocated to the management of
> congestion by RTO West shall not be included in Interest Earnings for
> calculation of the GMC.
>
> Reserve Transfer = the projected reserve balance for year-end of the
> prior fiscal year less the Reserve Requirement as adopted by the RTO
> West Board of Directors and FERC; provided that the cost of reserves
> properly allocated to the management of congestion by RTO West shall
> not be included in the Reserve Transfer for calculation of the GMC. If
> such amount is negative, the amount may be divided by *(e.g., two
> (2))* so that the reserve is replenished within a *(e.g., two- (2-))*
> year period. (Account 128 subaccounts)

Reserve Requirement = *(e.g., fifteen percent (15%))* of Annual
Operating Expenses; provided that the cost of reserves properly
allocated to the management of congestion by RTO West shall not be
included in the Reserve Transfer for calculation of the GMC.

*Extraordinary expenses or losses that, consistent with generally
accepted accounting practices, can be booked to accounts other than the
accounts listed above shall not be included in such accounts for
calculation of the GMC. No costs other than costs specified in this
Exhibit shall be included in the calculation of the GMC.*