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[Federal Register Volume 62, Number 186 (Thursday, September 25, 1997)]
[Notices]
[Pages 50307-50335]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-25333]

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DEPARTMENT OF ENERGY

Southwestern Power Administration

Open Access Transmission Service Tariff

AGENCY: Southwestern Power Administration, DOE.

ACTION: Notice of proposed tariff.

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SUMMARY: The Southwestern Power Administration (Southwestern) is 
proposing to adopt this Open Access Transmission Service Tariff 
(Tariff) in order to be consistent with the Federal Energy Regulatory 
Commission (FERC) Orders 888 and 888-A, to the extent practicable and 
consistent with laws and regulations applicable to Southwestern's 
activities.

DATES: The comment period on the proposed Tariff will begin with the 
publication of this notice in the Federal Register and will end 
November 10, 1997. To be assured of consideration, all written comments 
must be received by the end of the comment period. Southwestern has 
scheduled a public meeting to discuss the proposed Tariff on October 9, 
1997, at 1:30 p.m., CDT, in Tulsa, Oklahoma. An opportunity for 
interested parties to make oral comments on the proposed Tariff is 
scheduled for October 20, 1997, at 1:30 p.m. CDT, also in Tulsa, 
Oklahoma.

ADDRESSES: Southwestern will hold its public meetings at Southwestern's 
offices, Room 1402, Williams Center Tower I, One West Third Street, 
Tulsa, Oklahoma 74103. All copies of written comments should be 
submitted to the Assistant Administrator, Corporate Operations, 
Southwestern Power Administration, P.O. Box 1619, Tulsa, Oklahoma, 
74101.

FOR FURTHER INFORMATION CONTACT: Mr. Forrest E. Reeves, Assistant 
Administrator, Office of Corporate Operations, Southwestern Power 
Administration, U.S. Department of Energy, P.O. Box 1619, Tulsa, OK 
74101, (918) 595-6696. Electronic Mail: R[email protected]; Facsimile: 
(918) 595-6656.

SUPPLEMENTARY INFORMATION:

Table of Contents

I. Procedures
II. Background
III. Summary of Changes from the FERC Pro Forma Tariff
IV. Coordination with Adoption of Open Access Transmission Rates

I. Procedures

    After all public comments have been considered, Southwestern will 
prepare a final Tariff and publish it in the Federal Register. 
Southwestern will submit this final Tariff to FERC under a non-
jurisdictional docket, and will request a declaratory order that the 
Tariff meets FERC comparability standards as set forth in FERC Orders 
888 and 888-A. Interested parties will have an opportunity to comment 
on the Tariff by following appropriate procedures to intervene with 
FERC. Southwestern will make any necessary changes required by the FERC 
declaratory order, and will publish the final approved Tariff in the 
Federal Register.
    There will be a public meeting on October 9, 1997, to discuss the 
proposed tariff. In addition, persons interested in attending the 
public meeting tentatively scheduled for October 20, 1997, should 
indicate in writing, by letter or facsimile transmission (918-595-
6656), on or before October 15, 1997, of their intent to appear. No 
meeting will be held if no one indicates an intent to attend.

II. Background

    Southwestern Power Administration (Southwestern) was created by 
Secretarial Order No. 1865, dated August 31, 1943, as an agency of the 
Department of the Interior, to carry out the power marketing 
responsibilities assigned to the Secretary of Interior by

[[Page 50308]]

Executive Order 9366, dated July 30, 1943, and Order 9373, dated August 
30, 1943. Section 5 of the Flood Control Act of December 22, 1944 (58 
Stat. 887, 890; 16 U.S.C. 825s) broadened the power marketing 
responsibilities of the Secretary of the Interior by placing in him the 
responsibility for marketing the electric power and energy generated at 
reservoir projects built by and under the control of the Department of 
the Army. The U.S. Department of Energy was created by an Act of the 
U.S. Congress under the Department of Energy Organization Act, Public 
Law 95-91, dated August 4, 1977. Pursuant to Sections 302(a) and 301(b) 
of such Act, the functions of the Secretary of the Interior and the 
Federal Power Commission under Section 5 of the Flood Control Act of 
1944 which relate to Southwestern were transferred to and vested in the 
Secretary of Energy effective October 1, 1977.
    Under the said Section 5, Southwestern is enjoined to market power 
and energy generated at U.S. Army Corps of Engineers dams to public 
bodies and cooperatives, in such manner as to encourage the most 
widespread use of the resource, at the lowest possible rates to 
consumers consistent with sound business principles. The dams from 
which Southwestern currently markets power and energy are located in 
the States of Arkansas, Missouri, Oklahoma, and Texas. By the nature of 
its hydroelectric power resource, Southwestern is a partial 
requirements supplier to 93 municipal, cooperative, and military 
electric systems in the States of Arkansas, Kansas, Louisiana, 
Missouri, Oklahoma, and Texas. Southwestern markets Federal power and 
energy and owns and operates a transmission system to integrate its 
hydroelectric resources in order to reliably deliver such power and 
energy. Southwestern markets Transmission Services for the transmission 
of non-Federal power and energy across Southwestern's transmission 
system only to the extent that capacity is available over and above the 
capacity required to fulfill Southwestern's mission. Nothing in the 
proposed Tariff is intended to alter, amend, or abridge Southwestern's 
statutory obligation to market Federal power and to repay the Federal 
investment in the hydroelectric generation projects from which it 
markets power as well as the investment in its associated transmission 
system.
    The Federal Energy Regulatory Commission (FERC) issued a Notice of 
Proposed Rulemaking (NOPR) for Open Access Transmission Service, 
published at 60 FR 17662, on April 7, 1995. On October 4, 1995, the 
Secretary, Department of Energy (DOE), adopted a ``Power Marketing 
Administration Open Transmission Access Policy'' in which the Secretary 
states that DOE supports the spirit and intent of the NOPR and directs 
the Power Marketing Administrations to prepare tariffs which conform to 
the principles set forth in the FERC's final rule. FERC issued its 
final rule, Order 888, published at 61 FR 21540, on May 10, 1996, and 
followed with supplementary Order 888-A, published at 62 FR 12273, on 
March 14, 1997. Southwestern's Tariff includes an Attachment J which is 
specific to Southwestern and is not found in the Pro Forma Tariff (Pro 
Forma) published as Appendix B to FERC Order 888-A.

III. Summary of Changes from the FERC Pro Forma Tariff

    Southwestern has adopted the Pro Forma as the basis for its open 
access Tariff. However, Southwestern has made a number of changes that 
it deems necessary to reflect Southwestern's unique status as a Federal 
agency. Southwestern describes this unique status in an added 
Attachment J, ``Authorities and Obligations,'' to its Tariff.
    Southwestern has identified three general areas of difference from 
the Pro Forma in its Tariff that it believes are necessary to adapt the 
Pro Forma to the requirements of its unique status. These differences 
are:

(1) FERC Jurisdictional Issues

    Since Southwestern is not a jurisdictional utility under the FERC, 
provisions which are based on such jurisdiction are deleted from the 
Pro Forma. This general approach necessitated deletions in Sections 
1.10, 2.2, 9, 12.1, 13.3, 14.3, 20.3, 26, 29.5, 34, and 34.5 of the Pro 
Forma. Since Southwestern is not required to file its service 
agreements with the FERC, deletions and other changes were made in 
Sections 1.45, 7.3, 13.4, 14.4, 15.3, 17.6, 19.3, 19.4, 29.1, 29.5, 
32.3, and 32.4 of the Pro Forma.

(2) Impact of Federal Law and Regulations.

    Southwestern, as a Federal agency, is subject to Federal laws, 
regulations, and policies which supersede certain provisions in the Pro 
Forma. This fact accounts for most differences between the Pro Forma 
and Southwestern's Tariff, which changes fall into three general 
categories:
    (a) General statements of Southwestern's requirements to conform to 
Federal laws and regulations, or references to specific Federal laws 
and regulations, account for additions and other changes to Sections 
1.2, 10.2, 12.2, 18.2, 26, 34.5, Schedules 1 through 8 of the Pro 
Forma, and the submission of a new Attachment J.
    (b) Under the Anti-Deficiency Act and appropriations laws, 
Southwestern cannot normally use appropriated funds to do work for 
others. Likewise, Southwestern is prohibited from entering into 
contracts that obligate expenditure of funds it does not have. Finally, 
some kinds of work, such as construction changes to facilities, are 
specifically contingent on the availability of funds to Southwestern, 
or on its reimbursable authority to use funds provided by customers, 
both of which are provided in the Congressional appropriations process. 
These limitations caused additions and other changes in Sections 13.5, 
15.4, 19.1, 19.2, 19.4, 19.8, 20.3, 23.2, 28.2, 31.5, 32.1, 32.2, and 
32.4 of the Pro Forma.
    (c) Southwestern's current financial system and procedures make 
collecting deposits for refund and providing for the payment of 
interest on deposited funds unduly burdensome. Consequently, 
Southwestern has deleted all references to deposits and their return 
with interest. Southwestern has substituted provisions for payment of a 
processing fee to cover its costs in evaluating applications for firm 
transmission service arrangements of one year or longer, or, in the 
event that Southwestern is able to provide Network Integration 
Transmission Service, for applications for such service. The sections 
of the original Pro Forma which are affected by these changes are: 
Sections 1.5, 17.3, 17.4, 20.3, 22.2, 29.2, 31.5, 32.1, and 32.4.

(3) Operational Considerations

    Southwestern has certain operational considerations that require 
changes to the Pro Forma.
    (a) The development and filing of Southwestern's rates are dictated 
by Federal law and regulations separate and apart from the Tariff. Rate 
Schedules, as required by such laws and regulations, will be attached 
to Service Agreements in place of or in addition to Schedules 1 through 
8. Thus, changes in the language of Pro Forma Section 2.2, and in 
Schedules 1 through 8 were required.
    (b) Southwestern's primary mission is to market Federal power. The 
nature of this resource--hydroelectric power generation--may, under 
certain hydrological conditions, restrict Southwestern's ability to 
provide some Ancillary Services which support the transmission of non-
Federal power and energy. This limitation is recognized in

[[Page 50309]]

changes to Section 3 and Schedules 3 through 6 of the Pro Forma.
    (c) Southwestern added language to Section 10.1 to provide for 
notice between the Parties where Force Majeure renders either Party 
unable to fulfill obligations under the Service Agreement.
    (d) Sections 15.7 and 28.5 cover Real Power Losses, which 
Southwestern normally addresses in Service Agreements. Changes were 
made to these Sections to acknowledge such practice.
    (e) Section 19.2(iii) of the Pro Forma is changed from an internal 
reference to Section 20 to a reference to Section 8, which is more 
pertinent to Southwestern's administrative procedures.
Attachments
    For Attachments A, B, and F, which are the form of the Service 
Agreements associated with the Tariff, Southwestern has elected to 
describe its proposed agreements, for Firm Transmission Service (2 
types, for long- and short-term arrangements); for Non-Firm 
Transmission Service; and for Network Integration Transmission Service, 
in general terms rather than to publish specific contract language. 
Southwestern's practice is to develop standard contracts and to evolve 
language, especially for new operational arrangements, over time. 
Changes, if any, become part of the new standard language as such 
provisions evolve. Also, as a Federal agency, Southwestern has a number 
of provisions which are required to be in all its contracts but which 
are not directly pertinent to offering transmission service. 
Southwestern considers maintaining flexibility to allow continuous 
improvements in its contract language to be good policy. Therefore, 
Southwestern has described the contract forms rather than prescribed 
them. Additionally, this approach avoids unnecessary burdening of the 
filing and notice processes for the Tariff by omitting from the text of 
the Tariff standard, general provisions which are not directly germane 
to the issue of open access for transmission services.
    In Attachments C and D, Southwestern acknowledges that, as a member 
of the Southwest Power Pool, Southwestern's methodology for determining 
Available Transfer Capability and performing System Impact Studies will 
follow the methodology of the Southwest Power Pool, which is readily 
and publicly available.
    Attachments G and H will permit Southwestern to provide Network 
Integration Transmission Service, if such service is requested, and if 
Southwestern's Transmission System is determined to be capable of 
providing such service. Southwestern has no present arrangements 
equivalent to Network Service. In the absence of any particular request 
for Network Integration Transmission Service, Southwestern has not yet 
determined whether Network Service is practicable on its system. Until 
such determination is made, Southwestern deemed it advisable to prepare 
these attachments with very general language.
    Attachment J was developed by Southwestern to describe its 
authorities and obligations as a Federal Power Marketing 
Administration. Such authorities and obligations are significantly 
different from the authorities and obligations of the public utilities 
for which the Pro Forma was developed, and this Attachment sets forth 
such differences. Attachments E and I, which are indexes of firm and 
network contracts, have been left blank.

IV. Coordination With Adoption of Open Access Transmission Rates

    Southwestern's rate process is distinct from the rate process used 
by public utilities. This process, which includes mandatory public 
participation procedures, is described in 10 CFR 903. Additionally, 
Southwestern's rates are reviewed by the FERC under different 
parameters than those used for review of public utility rates. 
Southwestern is presently in the process of preparing new rate 
schedules for a FERC filing, and expects such new rates to be 
implemented January 1, 1998. The proposed rate schedules for 
Transmission Service will be structured in general accordance with the 
Pro Forma and Southwestern's Tariff. The new rate schedules will be 
attached to Service Agreements executed under the Tariff.

Review Under Executive Order 12866

    Southwestern has an exemption from centralized regulatory review 
under Executive Order 12866; accordingly, no clearance of this notice 
by the Office of Management and Budget (OMB) is required.

Review Under the Regulatory Flexibility Act

    The Regulatory Flexibility Act, 5 U.S.C. 601 et seq., requires 
Federal agencies to perform a regulatory flexibility analysis if a 
proposed regulation is likely to have a significant economic impact on 
a substantial number of small entities. By the execution of this 
Federal Register notice, the Administrator, Southwestern, certifies 
that no significant economic impact on a substantial number of small 
entities will occur.
    A redline/strikeout comparison of Southwestern's proposed Tariff to 
the FERC Pro Forma is available on the Internet at http://www.swpa.gov.

    Dated: September 15, 1997.
Michael A. Deihl,
Administrator.

Southwestern Power Administration

Open Access Transmission Service Tariff

Table of Contents

Part I. Common Service Provisions

1  Definitions
    1.1  Ancillary Services
    1.2  Annual Transmission Costs
    1.3  Application
    1.4  Commission
    1.5  Completed Application
    1.6  Control Area
    1.7  Curtailment
    1.8  Delivering Party
    1.9  Designated Agent
    1.10  Direct Assignment Facilities
    1.11  Eligible Customer
    1.12  Facilities Study
    1.13  Firm Point-To-Point Transmission Service
    1.14  Good Utility Practice
    1.15  Interruption
    1.16  Load Ratio Share
    1.17  Load Shedding
    1.18  Long-Term Firm Point-To-Point Transmission Service
    1.19  Native Load Customers
    1.20  Network Customer
    1.21  Network Integration Transmission Service
    1.22  Network Load
    1.23  Network Operating Agreement
    1.24  Network Operating Committee
    1.25  Network Resource
    1.26  Network Upgrades
    1.27  Non-Firm Point-To-Point Transmission Service
    1.28  Open Access Same-Time Information System
    1.29  Part I
    1.30  Part II
    1.31  Part III
    1.32  Parties
    1.33  Point(s) of Delivery
    1.34  Point(s) of Receipt
    1.35  Point-To-Point Transmission Service
    1.36  Power Purchaser
    1.37  Receiving Party
    1.38  Regional Transmission Group
    1.39  Reserved Capacity
    1.40  Service Agreement
    1.41  Service Commencement Date
    1.42  Short-Term Firm Point-To-Point Transmission Service
    1.43  System Impact Study
    1.44  Third-Party Sale
    1.45  Transmission Customer
    1.46  Transmission Provider

[[Page 50310]]

    1.47  Transmission Provider's Monthly Transmission System Peak
    1.48  Transmission Service
    1.49  Transmission System
2  Initial Allocation and Renewal Procedures
    2.1  Initial Allocation of Available Transmission Capability
    2.2  Reservation Priority For Existing Firm Service Customers
3  Ancillary Services
    3.1  Scheduling, System Control and Dispatch Service
    3.2  Reactive Supply and Voltage Control from Generation Sources 
Service
    3.3  Regulation and Frequency Response Service
    3.4  Energy Imbalance Service
    3.5  Operating Reserve--Spinning Reserve Service
    3.6  Operating Reserve--Supplemental Reserve Service
4  Open Access Same-Time Information System (OASIS)
5  Local Furnishing Bonds
    5.1  Transmission Providers That Own Facilities Financed by 
Local Furnishing Bonds
    5.2  Alternative Procedures for Requesting Transmission Service
6  Reciprocity
7  Billing and Payment
    7.1  Billing Procedures
    7.2  Interest on Unpaid Balances
    7.3  Customer Default
8  Accounting for the Transmission Provider's Use of the Tariff
    8.1  Transmission Revenues
    8.2  Study Costs and Revenues
9  Regulatory Filings
10  Force Majeure and Indemnification
    10.1  Force Majeure
    10.2  Indemnification
11  Creditworthiness
12  Dispute Resolution Procedures
    12.1  Internal Dispute Resolution Procedures
    12.2  Disputes
    12.3  Rights Under The Federal Power Act

Part II. Point-to-Point Transmission Service

Preamble

13  Nature of Firm Point-To-Point Transmission Service
    13.1  Term
    13.2  Reservation Priority
    13.3  Use of Firm Transmission Service by the Transmission 
Provider
    13.4  Service Agreements
    13.5  Transmission Customer Obligations for Facility Additions 
or Redispatch Costs
    13.6  Curtailment of Firm Transmission Service
    13.7  Classification of Firm Transmission Service
    13.8  Scheduling of Firm Point-To-Point Transmission Service
14  Nature of Non-Firm Point-To-Point Transmission Service
    14.1  Term
    14.2  Reservation Priority
    14.3  Use of Non-Firm Point-To-Point Transmission Service by the 
Transmission Provider
    14.4  Service Agreements
    14.5  Classification of Non-Firm Point-To-Point Transmission 
Service
    14.6  Scheduling of Non-Firm Point-To-Point Transmission Service
    14.7  Curtailment or Interruption of Service
15  Service Availability
    15.1  General Conditions
    15.2  Determination of Available Transmission Capability
    15.3  Initiating Service in the Absence of an Executed Service 
Agreement
    15.4  Obligation to Provide Transmission Service that Requires 
Expansion or Modification of the Transmission System
    15.5  Deferral of Service
    15.6  Other Transmission Service Schedules
    15.7  Real Power Losses
16  Transmission Customer Responsibilities
    16.1  Conditions Required of Transmission Customers
    16.2  Transmission Customer Responsibility for Third-Party 
Arrangements
17  Procedures for Arranging Firm Point-To-Point Transmission 
Service
    17.1  Application
    17.2  Completed Application
    17.3  Processing Fee
    17.4  Notice of Deficient Application
    17.5  Response to a Completed Application
    17.6  Execution of a Service Agreement
    17.7  Extensions for Commencement of Service
18  Procedures for Arranging Non-Firm Point-To-Point Transmission 
Service
    18.1  Application
    18.2  Completed Application
    18.3  Reservation of Non-Firm Point-To-Point Transmission 
Service
    18.4  Determination of Available Transmission Capability
19  Additional Study Procedures For Firm Point-To-Point Transmission 
Service Requests
    19.1  Notice of Need for System Impact Study
    19.2  System Impact Study Agreement and Compensation
    19.3  System Impact Study Procedures
    19.4  Facilities Study Procedures
    19.5  Facilities Study Modifications
    19.6  Due Diligence in Completing New Facilities
    19.7  Partial Interim Service
    19.8  Expedited Procedures for New Facilities
20  Procedures If The Transmission Provider Is Unable to Complete 
New Transmission Facilities for Firm Point-To-Point Transmission 
Service
    20.1  Delays in Construction of New Facilities
    20.2  Alternatives to the Original Facility Additions
    20.3  Refund Obligation for Unfinished Facility Additions
21  Provisions Relating to Transmission Construction and Services on 
the Systems of Other Utilities
    21.1  Responsibility for Third-Party System Additions
    21.2  Coordination of Third-Party System Additions
22  Changes in Service Specifications
    22.1  Modifications On a Non-Firm Basis
    22.2  Modifications On a Firm Basis
23  Sale or Assignment of Transmission Service
    23.1  Procedures for Assignment or Transfer of Service
    23.2  Limitations on Assignment or Transfer of Service
    23.3  Information on Assignment or Transfer of Service
24  Metering and Power Factor Correction at Receipt and Delivery 
Point(s)
    24.1  Transmission Customer Obligation
    24.2  Transmission Provider Access to Metering Data
    24.3  Power Factor
25  Compensation for Transmission Service
26  Stranded Cost Recovery
27  Compensation for New Facilities and Redispatch Costs

Part III. Network Integation Transmission Service

Preamble

28  Nature of Network Integration Transmission Service
    28.1  Scope of Service
    28.2  Transmission Provider Responsibilities
    28.3  Network Integration Transmission Service
    28.4  Secondary Service
    28.5  Real Power Losses
    28.6  Restrictions on Use of Service
29  Initiating Service
    29.1  Condition Precedent for Receiving Service
    29.2  Application Procedures
    29.3  Technical Arrangements To Be Completed Prior to 
Commencement of Service
    29.4  Network Customer Facilities
    29.5  This section is intentionally left blank
30  Network Resources
    30.1  Designation of Network Resources
    30.2  Designation of New Network Resources
    30.3  Termination of Network Resources
    30.4  Operation of Network Resources
    30.5  Network Customer Redispatch Obligation
    30.6  Transmission Arrangements for Network Resources Not 
Physically Interconnected With The Transmission Provider
    30.7  Limitation on Designation of Network Resources
    30.8  Use of Interface Capacity by the Network Customer
    30.9  Network Customer Owned Transmission Facilities
31  Designation of Network Load
    31.1  Network Load
    31.2  New Network Loads Connected With the Transmission Provider
    31.3  Network Load Not Physically Interconnected with the 
Transmission Provider
    31.4  New Interconnection Points
    31.5  Changes in Service Requests
    31.6  Annual Load and Resource Information Updates
32  Additional Study Procedures For Network Integration Transmission 
Service Requests

[[Page 50311]]

    32.1  Notice of Need for System Impact Study
    32.2  System Impact Study Agreement and Compensation
    32.3  System Impact Study Procedures
    32.4  Facilities Study Procedures
33  Load Shedding and Curtailments
    33.1  Procedures
    33.2  Transmission Constraints
    33.3  Cost Responsibility for Relieving Transmission Constraints
    33.4  Curtailments of Scheduled Deliveries
    33.5  Allocation of Curtailments
    33.6  Load Shedding
    33.7  System Reliability
34  Rates and Charges
    34.1  Monthly Demand Charge
    34.2  Determination of Network Customer's Monthly Network Load
    34.3  Determination of Transmission Provider's Monthly 
Transmission System Load
    34.4  Redispatch Charge
    34.5  Stranded Cost Recovery
35  Operating Arrangements
    35.1  Operation under The Network Operating Agreement
    35.2  Network Operating Agreement
    35.3  Network Operating Committee
    Schedule 1--Scheduling, System Control and Dispatch Service
    Schedule 2--Reactive Supply and Voltage Control from Generation 
Sources Service
    Schedule 3--Regulation and Frequency Response Service
    Schedule 4--Energy Imbalance Service
    Schedule 5--Operating Reserve--Spinning Reserve Service
    Schedule 6--Operating Reserve--Supplemental Reserve Service
    Schedule 7--Long-Term Firm and Short-Term Firm Point-to-Point 
Transmission Service
    Schedule 8--Non-Firm Point-to-Point Transmission Service
    Attachment A--Form of Service Agreement For Firm Point-to-Point 
Transmission Service
    Attachment B--Form of Service Agreement For Non-Firm Point-to-
Point Transmission Service
    Attachment C--Methodology to Assess Available Transmission 
Capability
    Attachment D--Methodology for Completing a System Impact Study
    Attachment E--Index of Point-to-Point Transmission Service 
Customers
    Attachment F--Form of Service Agreement For Network Integration 
Transmission Service
    Attachment G--Network Operating Agreement
    Attachment H--Annual Transmission Revenue Requirement For 
Network Integration Transmission Service
    Attachment I--Index of Network Integration Transmission Service 
Customers
    Attachment J--Authorities and Obligations

Southwestern Power Administration

Open Access Transmission Service Tariff

Part I. Common Service Provisions

1  Definitions

    1.1  Ancillary Services: Those services that are necessary to 
support the transmission of capacity and energy from resources to loads 
while maintaining reliable operation of the Transmission Provider's 
Transmission System in accordance with Good Utility Practice.
    1.2  Annual Transmission Costs: The total annual cost of the 
Transmission System for purposes of Network Integration Transmission 
Service shall be the amount specified in Attachment H until amended by 
the Transmission Provider or modified by the Commission, pursuant to 
Federal law.
    1.3  Application: A request by an Eligible Customer for 
transmission service pursuant to the provisions of the Tariff.
    1.4  Commission: The Federal Energy Regulatory Commission.
    1.5  Completed Application: An Application that satisfies all of 
the information and other requirements of the Tariff, including any 
required application processing fee.
    1.6  Control Area: An electric power system or combination of 
electric power systems to which a common automatic generation control 
scheme is applied in order to:
    (1) Match, at all times, the power output of the generators within 
the electric power system(s) and capacity and energy purchased from 
entities outside the electric power system(s), with the load within the 
electric power system(s);
    (2) Maintain scheduled interchange with other Control Areas, within 
the limits of Good Utility Practice;
    (3) Maintain the frequency of the electric power system(s) within 
reasonable limits in accordance with Good Utility Practice; and
    (4) Provide sufficient generating capacity to maintain operating 
reserves in accordance with Good Utility Practice.
    1.7  Curtailment: A reduction in firm or non-firm transmission 
service in response to a transmission capacity shortage as a result of 
system reliability conditions.
    1.8  Delivering Party: The entity supplying capacity and energy to 
be transmitted at Point(s) of Receipt.
    1.9  Designated Agent: Any entity that performs actions or 
functions on behalf of the Transmission Provider, an Eligible Customer, 
or the Transmission Customer required under the Tariff.
    1.10  Direct Assignment Facilities: Facilities or portions of 
facilities that are constructed by the Transmission Provider for the 
sole use/benefit of a particular Transmission Customer requesting 
service under the Tariff. Direct Assignment Facilities shall be 
specified in the Service Agreement that governs service to the 
Transmission Customer.
    1.11  Eligible Customer: (i) Any electric utility (including the 
Transmission Provider and any power marketer), Federal power marketing 
agency, or any person generating electric energy for sale for resale is 
an Eligible Customer under the Tariff. Electric energy sold or produced 
by such entity may be electric energy produced in the United States, 
Canada or Mexico. However, with respect to transmission service that 
the Commission is prohibited from ordering by Section 212(h) of the 
Federal Power Act, such entity is eligible only if the service is 
provided pursuant to a state requirement that the Transmission Provider 
offer the unbundled transmission service, or pursuant to a voluntary 
offer of such service by the Transmission Provider. (ii) Any retail 
customer taking unbundled transmission service pursuant to a state 
requirement that the Transmission Provider offer the transmission 
service, or pursuant to a voluntary offer of such service by the 
Transmission Provider is an Eligible Customer under the Tariff.
    1.12  Facilities Study: An engineering study conducted by the 
Transmission Provider to determine the required modifications to the 
Transmission Provider's Transmission System, including the cost and 
scheduled completion date for such modifications, that will be required 
to provide the requested transmission service.
    1.13  Firm Point-To-Point Transmission Service: Transmission 
Service under this Tariff that is reserved and/or scheduled between 
specified Points of Receipt and Delivery pursuant to Part II of this 
Tariff.
    1.14  Good Utility Practice: Any of the practices, methods and acts 
engaged in or approved by a significant portion of the electric utility 
industry during the relevant time period, or any of the practices, 
methods and acts which, in the exercise of reasonable judgment in light 
of the facts known at the time the decision was made, could have been 
expected to accomplish the desired result at a reasonable cost 
consistent with good business practices, reliability, safety and 
expedition. Good Utility

[[Page 50312]]

Practice is not intended to be limited to the optimum practice, method, 
or act to the exclusion of all others, but rather to be acceptable 
practices, methods, or acts generally accepted in the region.
    1.15  Interruption: A reduction in non-firm transmission service 
due to economic reasons pursuant to Section 14.7.
    1.16  Load Ratio Share: Ratio of a Transmission Customer's Network 
Load to the Transmission Provider's total load computed in accordance 
with Sections 34.2 and 34.3 of the Network Integration Transmission 
Service under Part III of the Tariff and calculated on a rolling twelve 
month basis.
    1.17  Load Shedding: The systematic reduction of system demand by 
temporarily decreasing load in response to transmission system or area 
capacity shortages, system instability, or voltage control 
considerations under Part III of the Tariff.
    1.18  Long-Term Firm Point-To-Point Transmission Service: Firm 
Point-To-Point Transmission Service under Part II of the Tariff with a 
term of one year or more.
    1.19  Native Load Customers: The wholesale and retail power 
customers of the Transmission Provider on whose behalf the Transmission 
Provider, by statute, franchise, regulatory requirement, or contract, 
has undertaken an obligation to construct and operate the Transmission 
Provider's system to meet the reliable electric needs of such 
customers.
    1.20  Network Customer: An entity receiving transmission service 
pursuant to the terms of the Transmission Provider's Network 
Integration Transmission Service under Part III of the Tariff.
    1.21  Network Integration Transmission Service: The transmission 
service provided under Part III of the Tariff.
    1.22  Network Load: The load that a Network Customer designates for 
Network Integration Transmission Service under Part III of the Tariff. 
The Network Customer's Network Load shall include all load served by 
the output of any Network Resources designated by the Network Customer. 
A Network Customer may elect to designate less than its total load as 
Network Load but may not designate only part of the load at a discrete 
Point of Delivery. Where an Eligible Customer has elected not to 
designate a particular load at discrete points of delivery as Network 
Load, the Eligible Customer is responsible for making separate 
arrangements under Part II of the Tariff for any Point-To-Point 
Transmission Service that may be necessary for such non-designated 
load.
    1.23  Network Operating Agreement: An executed agreement that 
contains the terms and conditions under which the Network Customer 
shall operate its facilities and the technical and operational matters 
associated with the implementation of Network Integration Transmission 
Service under Part III of the Tariff.
    1.24  Network Operating Committee: A group made up of 
representatives from the Network Customer(s) and the Transmission 
Provider established to coordinate operating criteria and other 
technical considerations required for implementation of Network 
Integration Transmission Service under Part III of this Tariff.
    1.25  Network Resource: Any designated generating resource owned, 
purchased, or leased by a Network Customer under the Network 
Integration Transmission Service Tariff. Network Resources do not 
include any resource, or any portion thereof, that is committed for 
sale to third parties or otherwise cannot be called upon to meet the 
Network Customer's Network Load on a non-interruptible basis.
    1.26  Network Upgrades: Modifications or additions to transmission-
related facilities that are integrated with and support the 
Transmission Provider's overall Transmission System for the general 
benefit of all users of such Transmission System.
    1.27  Non-Firm Point-To-Point Transmission Service: Point-To-Point 
Transmission Service under the Tariff that is reserved and scheduled on 
an as-available basis and is subject to Curtailment or Interruption as 
set forth in Section 14.7 under Part II of the Tariff. Non-Firm Point-
To-Point Transmission Service is available on a stand-alone basis for 
periods ranging from one hour to one month.
    1.28  Open Access Same-Time Information System (OASIS): The 
information system and standards of conduct contained in Part 37 of the 
Commission's regulations and all additional requirements implemented by 
subsequent Commission orders dealing with OASIS.
    1.29  Part I: Tariff Definitions and Common Service Provisions 
contained in Sections 2 through 12.
    1.30  Part II: Tariff Sections 13 through 27 pertaining to Point-
To-Point Transmission Service in conjunction with the applicable Common 
Service Provisions of Part I and appropriate Schedules and Attachments.
    1.31  Part III: Tariff Sections 28 through 35 pertaining to Network 
Integration Transmission Service in conjunction with the applicable 
Common Service Provisions of Part I and appropriate Schedules and 
Attachments.
    1.32  Parties: The Transmission Provider and the Transmission 
Customer receiving service under the Tariff.
    1.33  Point(s) of Delivery: Point(s) on the Transmission Provider's 
Transmission System where capacity and energy transmitted by the 
Transmission Provider will be made available to the Receiving Party 
under Part II of the Tariff. The Point(s) of Delivery shall be 
specified in the Service Agreement for Long-Term Firm Point-to-Point 
Transmission Service.
    1.34  Point(s) of Receipt: Point(s) of interconnection on the 
Transmission Provider's Transmission System where capacity and energy 
will be made available to the Transmission Provider by the Delivering 
Party under Part II of the Tariff. The Point(s) of Receipt shall be 
specified in the Service Agreement for Long-Term Firm Point-to-Point 
Transmission Service.
    1.35  Point-To-Point Transmission Service: The reservation and 
transmission of capacity and energy on either a firm or non-firm basis 
from the Point(s) of Receipt to the Point(s) of Delivery under Part II 
of the Tariff.
    1.36  Power Purchaser: The entity that is purchasing the capacity 
and energy to be transmitted under the Tariff.
    1.37  Receiving Party: The entity receiving the capacity and energy 
transmitted by the Transmission Provider to Point(s) of Delivery.
    1.38  Regional Transmission Group (RTG): A voluntary organization 
of transmission owners, transmission users and other entities approved 
by the Commission to efficiently coordinate transmission planning (and 
expansion), operation and use on a regional (and interregional) basis.
    1.39  Reserved Capacity: The maximum amount of capacity and energy 
that the Transmission Provider agrees to transmit for the Transmission 
Customer over the Transmission Provider's Transmission System between 
the Point(s) of Receipt and the Point(s) of Delivery under Part II of 
the Tariff. Reserved Capacity shall be expressed in terms of whole 
megawatts on a sixty (60) minute interval (commencing on the clock 
hour) basis.
    1.40  Service Agreement: The initial agreement and any amendments 
or supplements thereto entered into by the Transmission Customer and 
the Transmission Provider for service under the Tariff.
    1.41  Service Commencement Date: The date the Transmission Provider

[[Page 50313]]

begins to provide service pursuant to the terms of an executed Service 
Agreement, or the date the Transmission Provider begins to provide 
service in accordance with Section 15.3 or Section 29.1 under the 
Tariff.
    1.42  Short-Term Firm Point-To-Point Transmission Service: Firm 
Point-To-Point Transmission Service under Part II of the Tariff with a 
term of less than one year.
    1.43  System Impact Study: An assessment by the Transmission 
Provider of (i) the adequacy of the Transmission System to accommodate 
a request for either Firm Point-To-Point Transmission Service or 
Network Integration Transmission Service and (ii) whether any 
additional costs may be incurred in order to provide transmission 
service.
    1.44  Third-Party Sale: Any sale for resale in interstate commerce 
to a Power Purchaser that is not designated as part of Network Load 
under the Network Integration Transmission Service.
    1.45  Transmission Customer: Any Eligible Customer (or its 
Designated Agent) that (i) executes a Service Agreement or (ii) 
requests in writing that the Transmission Provider provide transmission 
service without a Service Agreement, pursuant to Section 15.3 of the 
Tariff. This term is used in the Part I Common Service Provisions to 
include customers receiving transmission service under Part II and Part 
III of this Tariff.
    1.46  Transmission Provider: Southwestern Power Administration, 
which owns, controls, or operates the facilities used for the 
transmission of electric energy in interstate commerce and provides 
transmission service under the Tariff.
    1.47  Transmission Provider's Monthly Transmission System Peak: The 
maximum firm usage of the Transmission Provider's Transmission System 
in a calendar month.
    1.48  Transmission Service: Point-To-Point Transmission Service 
provided under Part II of the Tariff on a firm and non-firm basis.
    1.49  Transmission System: The facilities owned, controlled or 
operated by the Transmission Provider that are used to provide 
transmission service under Part II and Part III of the Tariff.

2  Initial Allocation and Renewal Procedures

2.1  Initial Allocation of Available Transmission Capability
    For purposes of determining whether existing capability on the 
Transmission Provider's Transmission System is adequate to accommodate 
a request for firm service under this Tariff, all Completed 
Applications for new firm transmission service received during the 
initial sixty (60) day period commencing with the effective date of the 
Tariff will be deemed to have been filed simultaneously. A lottery 
system conducted by an independent party shall be used to assign 
priorities for Completed Applications filed simultaneously. All 
Completed Applications for firm transmission service received after the 
initial sixty (60) day period shall be assigned a priority pursuant to 
Section 13.2.
2.2  Reservation Priority For Existing Firm Service Customers
    Existing firm service customers (wholesale requirements and 
transmission-only, with a contract term of one-year or more), have the 
right to continue to take transmission service from the Transmission 
Provider when the contract expires, rolls over or is renewed. This 
transmission reservation priority is independent of whether the 
existing customer continues to purchase capacity and energy from the 
Transmission Provider or elects to purchase capacity and energy from 
another supplier. If at the end of the contract term, the Transmission 
Provider's Transmission System cannot accommodate all of the requests 
for transmission service, the existing firm service customer must agree 
to accept a contract term at least equal to a competing request by any 
new Eligible Customer and to pay the current rate for such service. 
This transmission reservation priority for existing firm service 
customers is an ongoing right that may be exercised at the end of all 
firm contract terms of one-year or longer.

3  Ancillary Services

    Ancillary Services are needed with transmission service to maintain 
reliability within and among the Control Areas affected by the 
transmission service. The Transmission Provider is required to provide 
(or offer to arrange with the local Control Area operator as discussed 
below), and the Transmission Customer is required to purchase, the 
following Ancillary Services (i) Scheduling, System Control and 
Dispatch, and (ii) Reactive Supply and Voltage Control from Generation 
Sources.
    The Transmission Provider is required, to the extent possible, to 
offer to provide (or offer to arrange with the local Control Area 
operator as discussed below) the following Ancillary Services only to 
the Transmission Customer serving load within the Transmission 
Provider's Control Area (i) Regulation and Frequency Response, (ii) 
Energy Imbalance, (iii) Operating Reserve--Spinning, and (iv) Operating 
Reserve--Supplemental. The Transmission Customer serving load within 
the Transmission Provider's Control Area is required to acquire these 
Ancillary Services, whether from the Transmission Provider, from a 
third party, or by self-supply. The Transmission Customer may not 
decline the Transmission Provider's offer of Ancillary Services unless 
it demonstrates that it has acquired the Ancillary Services from 
another source. The Transmission Provider will offer to provide 
Ancillary Services to the Transmission Customer only to the extent that 
surplus Federal generation is available for such services. However, the 
Transmission Provider may purchase Ancillary Services from others on 
behalf of the Transmission Customer under the terms of an agreement 
separate from the Service Agreement. The costs of such purchases on 
behalf of a Transmission Customer will be passed directly through to 
that Transmission Customer. The Transmission Customer must list in its 
Application which Ancillary Services it will purchase from the 
Transmission Provider.
    If the Transmission Provider is a utility providing transmission 
service, but is not a Control Area operator, it may be unable to 
provide some or all of the Ancillary Services. In this case, the 
Transmission Provider can fulfill its obligation to provide Ancillary 
Services by acting as the Transmission Customer's agent to secure these 
Ancillary Services from the Control Area operator. The Transmission 
Customer may elect to: (i) Have the Transmission Provider act as its 
agent, (ii) secure the Ancillary Services directly from the Control 
Area operator, or (iii) secure the Ancillary Services (discussed in 
Schedules 3, 4, 5, and 6) from a third party or by self-supply when 
technically feasible.
    The Transmission Provider shall specify the rate treatment and all 
related terms and conditions in the event of an unauthorized use of 
Ancillary Services by the Transmission Customer.
    The specific Ancillary Services, prices and/or compensation methods 
for each are described on the Schedules that are attached to and made a 
part of the Tariff. Three principal requirements apply to discounts for 
Ancillary Services provided by the Transmission Provider in conjunction 
with its provision of transmission service as follows: (1) Any offer of 
a discount made by the Transmission Provider

[[Page 50314]]

must be announced to all Eligible Customers solely by posting on the 
OASIS, (2) any customer-initiated requests for discounts (including 
requests for use by one's wholesale merchant or an affiliate's use) 
must occur solely by posting on the OASIS, and (3) once a discount is 
negotiated, details must be immediately posted on the OASIS. A discount 
agreed upon for an Ancillary Service must be offered for the same 
period to all Eligible Customers on the Transmission Provider's system. 
Sections 3.1 through 3.6 below list the six Ancillary Services.

    3.1  Scheduling, System Control and Dispatch Service: The rates 
and/or methodology are described in Schedule 1.
    3.2  Reactive Supply and Voltage Control from Generation Sources 
Service: The rates and/or methodology are described in Schedule 2.
    3.3  Regulation and Frequency Response Service: Where applicable 
the rates and/or methodology are described in Schedule 3.
    3.4  Energy Imbalance Service: Where applicable the rates and/or 
methodology are described in Schedule 4.
    3.5  Operating Reserve--Spinning Reserve Service: Where 
applicable the rates and/or methodology are described in Schedule 5.
    3.6  Operating Reserve--Supplemental Reserve Service: Where 
applicable the rates and/or methodology are described in Schedule 6.

4  Open Access Same-Time Information System (OASIS)

    Terms and conditions regarding Open Access Same-Time Information 
System and standards of conduct are set forth in 18 CFR Sec. 37 of the 
Commission's regulations (Open Access Same-Time Information System and 
Standards of Conduct for Public Utilities). In the event available 
transmission capability as posted on the OASIS is insufficient to 
accommodate a request for firm transmission service, additional studies 
may be required as provided by this Tariff pursuant to Sections 19 and 
32.

5  Local Furnishing Bonds

5.1  Transmission Providers That Own Facilities Financed by Local 
Furnishing Bonds
    This provision is applicable only to Transmission Providers that 
have financed facilities for the local furnishing of electric energy 
with tax-exempt bonds, as described in Section 142(f) of the Internal 
Revenue Code (``local furnishing bonds''). Notwithstanding any other 
provision of this Tariff, the Transmission Provider shall not be 
required to provide transmission service to any Eligible Customer 
pursuant to this Tariff if the provision of such transmission service 
would jeopardize the tax-exempt status of any local furnishing bond(s) 
used to finance the Transmission Provider's facilities that would be 
used in providing such transmission service.
5.2  Alternative Procedures for Requesting Transmission Service
    (i) If the Transmission Provider determines that the provision of 
transmission service requested by an Eligible Customer would jeopardize 
the tax-exempt status of any local furnishing bond(s) used to finance 
its facilities that would be used in providing such transmission 
service, it shall advise the Eligible Customer within thirty (30) days 
of receipt of the Completed Application.
    (ii) If the Eligible Customer thereafter renews its request for the 
same transmission service referred to in (i) by tendering an 
application under Section 211 of the Federal Power Act, the 
Transmission Provider, within ten (10) days of receiving a copy of the 
Section 211 application, will waive its rights to a request for service 
under Section 213(a) of the Federal Power Act and to the issuance of a 
proposed order under Section 212(c) of the Federal Power Act. The 
Commission, upon receipt of the Transmission Provider's waiver of its 
rights to a request for service under Section 213(a) of the Federal 
Power Act and to the issuance of a proposed order under Section 212(c) 
of the Federal Power Act, shall issue an order under Section 211 of the 
Federal Power Act. Upon issuance of the order under Section 211 of the 
Federal Power Act, the Transmission Provider shall be required to 
provide the requested transmission service in accordance with the terms 
and conditions of this Tariff.

6  Reciprocity

    A Transmission Customer receiving transmission service under this 
Tariff agrees to provide comparable transmission service that it is 
capable of providing to the Transmission Provider on similar terms and 
conditions over facilities used for the transmission of electric energy 
owned, controlled or operated by the Transmission Customer and over 
facilities used for the transmission of electric energy owned, 
controlled or operated by the Transmission Customer's corporate 
affiliates. A Transmission Customer that is a member of a power pool or 
Regional Transmission Group also agrees to provide comparable 
transmission service to the members of such power pool and Regional 
Transmission Group on similar terms and conditions over facilities used 
for the transmission of electric energy owned, controlled or operated 
by the Transmission Customer and over facilities used for the 
transmission of electric energy owned, controlled or operated by the 
Transmission Customer's corporate affiliates.
    This reciprocity requirement applies not only to the Transmission 
Customer that obtains transmission service under the Tariff, but also 
to all parties to a transaction that involves the use of transmission 
service under the Tariff, including the power seller, buyer and any 
intermediary, such as a power marketer. This reciprocity requirement 
also applies to any Eligible Customer that owns, controls or operates 
transmission facilities that uses an intermediary, such as a power 
marketer, to request transmission service under the Tariff. If the 
Transmission Customer does not own, control or operate transmission 
facilities, it must include in its Application a sworn statement of one 
of its duly authorized officers or other representatives that the 
purpose of its Application is not to assist an Eligible Customer to 
avoid the requirements of this provision.

7  Billing and Payment

7.1  Billing Procedure
    Within a reasonable time after the first day of each month, the 
Transmission Provider shall submit an invoice to the Transmission 
Customer for the charges for all services furnished under the Tariff 
during the preceding month. The invoice shall be paid by the 
Transmission Customer within twenty (20) days of receipt. All payments 
shall be made in immediately available funds payable to the 
Transmission Provider, or by wire transfer to a bank named by the 
Transmission Provider.
7.2  Interest on Unpaid Balances
    Interest on any unpaid amounts (including amounts placed in escrow) 
shall be calculated in accordance with the methodology specified for 
interest on refunds in the Commission's regulations at 18 CFR 
Sec. 35.19a(a)(2)(iii). Interest on delinquent amounts shall be 
calculated from the due date of the bill to the date of payment. When 
payments are made by mail, bills shall be considered as having been 
paid on the date of receipt by the Transmission Provider.
7.3  Customer Default
    In the event the Transmission Customer fails, for any reason other 
than a billing dispute as described below, to make payment to the 
Transmission Provider on or before the due date as described above, and 
such failure of payment is not corrected within thirty

[[Page 50315]]

(30) calendar days after the Transmission Provider notifies the 
Transmission Customer to cure such failure, a default by the 
Transmission Customer shall be deemed to exist. Within the same 30 
calendar days after notice of failure to make payment, the Transmission 
Customer shall have the right of appeal to the Administrator, 
Southwestern Power Administration. The Transmission Provider shall 
continue service until the Administrator makes a determination on the 
Transmission Customer's appeal. In the event of a billing dispute 
between the Transmission Provider and the Transmission Customer, the 
Transmission Provider will continue to provide service under the 
Service Agreement as long as the Transmission Customer: (i) Continues 
to make all payments not in dispute, and (ii) pays into an independent 
escrow account the portion of the invoice in dispute, pending 
resolution of such dispute. If the Transmission Customer fails to meet 
these two requirements for continuation of service, then the 
Transmission Provider may provide notice to the Transmission Customer 
of its intention to suspend service in sixty (60) days, in accordance 
with Commission policy.

8  Accounting for the Transmission Provider's Use of the Tariff

    The Transmission Provider shall record the following amounts, as 
outlined below.
8.1  Transmission Revenues
    Include in a separate operating revenue account or subaccount the 
revenues it receives from Transmission Service when making Third-Party 
Sales under Part II of the Tariff.
8.2  Study Costs and Revenues
    Include in a separate transmission operating expense account or 
subaccount, costs properly chargeable to expense that are incurred to 
perform any System Impact Studies or Facilities Studies which the 
Transmission Provider conducts to determine if it must construct new 
transmission facilities or upgrades necessary for its own uses, 
including making Third-Party Sales under the Tariff; and include in a 
separate operating revenue account or subaccount the revenues received 
for System Impact Studies or Facilities Studies performed when such 
amounts are separately stated and identified in the Transmission 
Customer's billing under the Tariff.

9  Regulatory Filings

    Nothing contained in the Tariff or any Service Agreement shall be 
construed as affecting in any way the ability of any Party receiving 
service under the Tariff to exercise its rights under the Federal Power 
Act and pursuant to the Commission's rules and regulations promulgated 
thereunder.

10  Force Majeure and Indemnification

10.1  Force Majeure
    An event of Force Majeure means any act of God, labor disturbance, 
act of the public enemy, war, insurrection, riot, fire, storm or flood, 
explosion, breakage or accident to machinery or equipment, any 
Curtailment, order, regulation or restriction imposed by governmental 
military or lawfully established civilian authorities, or any other 
cause beyond a Party's control. A Force Majeure event does not include 
an act of negligence or intentional wrongdoing. Neither the 
Transmission Provider nor the Transmission Customer will be considered 
in default as to any obligation under this Tariff if prevented from 
fulfilling the obligation due to an event of Force Majeure. However, a 
Party whose performance under this Tariff is hindered by an event of 
Force Majeure shall make all reasonable efforts to perform its 
obligations under this Tariff. Either Party rendered unable to fulfill 
any of its obligations under the Service Agreement by reason of an 
uncontrollable force shall give prompt written notice of such fact to 
the other Party and shall exercise due diligence to remove such 
inability with all reasonable dispatch.
10.2  Indemnification
    The Transmission Customer shall at all times indemnify, defend, and 
save the Transmission Provider harmless from, any and all damages, 
losses, claims, including claims and actions relating to injury to or 
death of any person or damage to property, demands, suits, recoveries, 
costs and expenses, court costs, attorney fees, and all other 
obligations by or to third parties, arising out of or resulting from 
the Transmission Provider's performance of its obligations under this 
Tariff on behalf of the Transmission Customer, except in cases of 
negligence or intentional wrongdoing by the Transmission Provider. The 
liability of the Transmission Provider shall be determined in 
accordance with the provisions of the Federal Tort Claims Act, as 
amended.

11  Creditworthiness

    For the purpose of determining the ability of the Transmission 
Customer to meet its obligations related to service hereunder, the 
Transmission Provider may require reasonable credit review procedures. 
This review shall be made in accordance with standard commercial 
practices. In addition, the Transmission Provider may require the 
Transmission Customer to provide and maintain in effect during the term 
of the Service Agreement, an unconditional and irrevocable letter of 
credit as security to meet its responsibilities and obligations under 
the Tariff, or an alternative form of security proposed by the 
Transmission Customer and acceptable to the Transmission Provider and 
consistent with commercial practices established by the Uniform 
Commercial Code that protects the Transmission Provider against the 
risk of non-payment.

12  Dispute Resolution Procedures

12.1  Internal Dispute Resolution Procedures
    Any dispute between a Transmission Customer and the Transmission 
Provider involving transmission service under the Tariff shall be 
referred to a designated senior representative of the Transmission 
Provider and a senior representative of the Transmission Customer for 
resolution on an informal basis as promptly as practicable.
12.2  Disputes
    Any dispute regarding service provided under the Service Agreement 
will be resolved in a manner consistent with the Administrative 
Disputes Resolution Act, as amended, subject to statutory and 
regulatory limits on the Transmission Provider's authority to submit 
disputes to arbitration.
12.3  Rights Under The Federal Power Act
    Nothing in this section shall restrict the rights of any party to 
file a Complaint with the Commission under relevant provisions of the 
Federal Power Act.

Part II. Point-to-Point Transmission Service

Preamble

    The Transmission Provider will provide Firm and Non-Firm Point-To-
Point Transmission Service pursuant to the applicable terms and 
conditions of this Tariff. Point-To-Point Transmission Service is for 
the receipt of capacity and energy at designated Point(s) of Receipt 
and the transmission of such capacity and energy to designated Point(s) 
of Delivery.

[[Page 50316]]

13  Nature of Firm Point-To-Point Transmission Service

13.1  Term
    The minimum term of Firm Point-To-Point Transmission Service shall 
be one day and the maximum term shall be specified in the Service 
Agreement.
13.2  Reservation Priority
    Long-Term Firm Point-To-Point Transmission Service shall be 
available on a first-come, first-served basis i.e., in the 
chronological sequence in which each Transmission Customer reserved 
service. Reservations for Short-Term Firm Point-To-Point Transmission 
Service will be conditional based upon the length of the requested 
transaction. If the Transmission System becomes oversubscribed, 
requests for longer term service may preempt requests for shorter term 
service up to the following deadlines; one day before the commencement 
of daily service, one week before the commencement of weekly service, 
and one month before the commencement of monthly service. Before the 
conditional reservation deadline, if available transmission capability 
is insufficient to satisfy all Applications, an Eligible Customer with 
a reservation for shorter term service has the right of first refusal 
to match any longer term reservation before losing its reservation 
priority. A longer term competing request for Short-Term Firm Point-To-
Point Transmission Service will be granted if the Eligible Customer 
with the right of first refusal does not agree to match the competing 
request within 24 hours (or earlier if necessary to comply with the 
scheduling deadlines provided in Sec. 13.8) from being notified by the 
Transmission Provider of a longer-term competing request for Short-Term 
Firm Point-To-Point Transmission Service. After the conditional 
reservation deadline, service will commence pursuant to the terms of 
Part II of the Tariff. Firm Point-To-Point Transmission Service will 
always have a reservation priority over Non-Firm Point-To-Point 
Transmission Service under the Tariff. All Long-Term Firm Point-To-
Point Transmission Service will have equal reservation priority with 
Native Load Customers and Network Customers. Reservation priorities for 
existing firm service customers are provided in Sec. 2.2.
13.3  Use of Firm Transmission Service by the Transmission Provider
    The Transmission Provider will be subject to the rates, terms and 
conditions of Part II of the Tariff when making Third-Party Sales under 
agreements executed on or after November 24, 1997. The Transmission 
Provider will maintain separate accounting, pursuant to Section 8, for 
any use of the Point-To-Point Transmission Service to make Third-Party 
Sales.
13.4  Service Agreements
    The Transmission Provider shall offer a standard form Firm Point-
To-Point Transmission Service Agreement (Attachment A) to an Eligible 
Customer when it submits a Completed Application for Long-Term Firm 
Point-To-Point Transmission Service. The Transmission Provider shall 
offer a standard form Firm Point-to-Point Transmission Service 
Agreement (Attachment A) to an Eligible Customer when it first submits 
a Completed Application for Short-Term Firm Point-to-Point Transmission 
Service pursuant to the Tariff.
13.5  Transmission Customer Obligations for Facility Additions or 
Redispatch Costs
    In cases where the Transmission Provider determines that the 
Transmission System is not capable of providing Firm Point-To-Point 
Transmission Service without: (1) Degrading or impairing the 
reliability of service to Native Load Customers, Network Customers, and 
other Transmission Customers taking Firm Point-To-Point Transmission 
Service, or (2) interfering with the Transmission Provider's ability to 
meet prior firm contractual commitments to others, the Transmission 
Provider will be obligated to expand or upgrade its Transmission System 
pursuant to the terms of Sec. 15.4. The Transmission Customer must 
agree to compensate the Transmission Provider in advance for any 
necessary transmission facility additions pursuant to the terms of 
Section 27. To the extent the Transmission Provider can relieve any 
system constraint more economically by redispatching the Transmission 
Provider's resources than through constructing Network Upgrades, it 
shall do so, provided that the Eligible Customer agrees to compensate 
the Transmission Provider pursuant to the terms of Section 27. Any 
redispatch, Network Upgrade or Direct Assignment Facilities costs to be 
charged to the Transmission Customer on an incremental basis under the 
Tariff will be specified in the Service Agreement or a separate 
agreement, as appropriate, prior to initiating service.
13.6  Curtailment of Firm Transmission Service
    In the event that a Curtailment on the Transmission Provider's 
Transmission System, or a portion thereof, is required to maintain 
reliable operation of such system, Curtailments will be made on a non-
discriminatory basis to the transaction(s) that effectively relieve the 
constraint. If multiple transactions require Curtailment, to the extent 
practicable and consistent with Good Utility Practice, the Transmission 
Provider will curtail service to Network Customers and Transmission 
Customers taking Firm Point-To-Point Transmission Service on a basis 
comparable to the curtailment of service to the Transmission Provider's 
Native Load Customers. All Curtailments will be made on a non-
discriminatory basis; however, Non-Firm Point-To-Point Transmission 
Service shall be subordinate to Firm Transmission Service. When the 
Transmission Provider determines that an electrical emergency exists on 
its Transmission System and implements emergency procedures to Curtail 
Firm Transmission Service, the Transmission Customer shall make the 
required reductions upon request of the Transmission Provider. However, 
the Transmission Provider reserves the right to Curtail, in whole or in 
part, any Firm Transmission Service provided under the Tariff when, in 
the Transmission Provider's sole discretion, an emergency or other 
unforeseen condition impairs or degrades the reliability of its 
Transmission System. The Transmission Provider will notify all affected 
Transmission Customers in a timely manner of any scheduled 
Curtailments.
13.7  Classification of Firm Transmission Service
    (a) The Transmission Customer taking Firm Point-To-Point 
Transmission Service may: (1) Change its Receipt and Delivery Points to 
obtain service on a non-firm basis consistent with the terms of Section 
22.1, or (2) request a modification of the Points of Receipt or 
Delivery on a firm basis pursuant to the terms of Section 22.2.
    (b) The Transmission Customer may purchase transmission service to 
make sales of capacity and energy from multiple generating units that 
are on the Transmission Provider's Transmission System. For such a 
purchase of transmission service, the resources will be designated as 
multiple Points of Receipt, unless the multiple generating units are at 
the same generating plant in which case the units would be treated as a 
single Point of Receipt.
    (c) The Transmission Provider shall provide firm deliveries of 
capacity and energy from the Point(s) of Receipt to the Point(s) of 
Delivery. Each Point of Receipt at which firm transmission

[[Page 50317]]

capacity is reserved by the Transmission Customer shall be set forth in 
the Firm Point-To-Point Service Agreement for Long-Term Firm 
Transmission Service along with a corresponding capacity reservation 
associated with each Point of Receipt. Points of Receipt and 
corresponding capacity reservations shall be as mutually agreed upon by 
the Parties for Short-Term Firm Transmission. Each Point of Delivery at 
which firm transmission capacity is reserved by the Transmission 
Customer shall be set forth in the Firm Point-To-Point Service 
Agreement for Long-Term Firm Transmission Service along with a 
corresponding capacity reservation associated with each Point of 
Delivery. Points of Delivery and corresponding capacity reservations 
shall be as mutually agreed upon by the Parties for Short-Term Firm 
Transmission. The greater of either: (1) The sum of the capacity 
reservations at the Point(s) of Receipt, or (2) the sum of the capacity 
reservations at the Point(s) of Delivery shall be the Transmission 
Customer's Reserved Capacity. The Transmission Customer will be billed 
for its Reserved Capacity under the terms of Schedule 7. The 
Transmission Customer may not exceed its firm capacity reserved at each 
Point of Receipt and each Point of Delivery except as otherwise 
specified in Section 22. The Transmission Provider shall specify the 
rate treatment and all related terms and conditions applicable in the 
event that a Transmission Customer (including Third-Party Sales by the 
Transmission Provider) exceeds its firm reserved capacity at any Point 
of Receipt or Point of Delivery.
13.8  Scheduling of Firm Point-To-Point Transmission Service
    Schedules for the Transmission Customer's Firm Point-To-Point 
Transmission Service must be submitted to the Transmission Provider no 
later than 10:00 a.m. of the day prior to commencement of such service. 
Schedules submitted after 10:00 a.m. will be accommodated, if 
practicable. Hour-to-hour schedules of any capacity and energy that is 
to be delivered must be stated in increments of 1,000 kW per hour. 
Transmission Customers within the Transmission Provider's service area 
with multiple requests for Transmission Service at a Point of Receipt, 
each of which is under 1,000 kW per hour, may consolidate their service 
requests at a common point of receipt into units of 1,000 kW per hour 
for scheduling and billing purposes. Scheduling changes will be 
permitted up to twenty (20) minutes before the start of the next clock 
hour provided that the Delivering Party and Receiving Party also agree 
to the schedule modification. The Transmission Provider will furnish to 
the Delivering Party's system operator, hour-to-hour schedules equal to 
those furnished by the Receiving Party (unless reduced for losses) and 
shall deliver the capacity and energy provided by such schedules. 
Should the Transmission Customer, Delivering Party or Receiving Party 
revise or terminate any schedule, such party shall immediately notify 
the Transmission Provider, and the Transmission Provider shall have the 
right to adjust accordingly the schedule for capacity and energy to be 
received and to be delivered.

14  Nature of Non-Firm Point-To-Point Transmission Service

14.1  Term
    Non-Firm Point-To-Point Transmission Service will be available for 
periods ranging from one (1) hour to one (1) month. However, a 
Purchaser of Non-Firm Point-To-Point Transmission Service will be 
entitled to reserve a sequential term of service (such as a sequential 
monthly term without having to wait for the initial term to expire 
before requesting another monthly term) so that the total time period 
for which the reservation applies is greater than one month, subject to 
the requirements of Section 18.3.
14.2  Reservation Priority
    Non-Firm Point-To-Point Transmission Service shall be available 
from transmission capability in excess of that needed for reliable 
service to Native Load Customers, Network Customers, and other 
Transmission Customers taking Long-Term and Short-Term Firm Point-To-
Point Transmission Service. A higher priority will be assigned to 
reservations with a longer duration of service. In the event the 
Transmission System is constrained, competing requests of equal 
duration will be prioritized based on the highest price offered by the 
Eligible Customer for the Transmission Service. Eligible Customers that 
have already reserved shorter term service have the right of first 
refusal to match any longer term reservation before being preempted. A 
longer term competing request for Non-Firm Point-To-Point Transmission 
Service will be granted if the Eligible Customer with the right of 
first refusal does not agree to match the competing request: (a) 
Immediately for hourly Non-Firm Point-To-Point Transmission Service 
after notification by the Transmission Provider; and, (b) within 24 
hours (or earlier if necessary to comply with the scheduling deadlines 
provided in Section 14.6) for Non-Firm Point-To-Point Transmission 
Service other than hourly transactions after notification by the 
Transmission Provider. Transmission service for Network Customers from 
resources other than designated Network Resources will have a higher 
priority than any Non-Firm Point-To-Point Transmission Service. Non-
Firm Point-To-Point Transmission Service over secondary Point(s) of 
Receipt and Point(s) of Delivery will have the lowest reservation 
priority under the Tariff.
14.3  Use of Non-Firm Point-To-Point Transmission Service by the 
Transmission Provider
    The Transmission Provider will be subject to the rates, terms and 
conditions of Part II of the Tariff when making Third-Party Sales under 
agreements executed on or after November 24, 1997. The Transmission 
Provider will maintain separate accounting, pursuant to Section 8, for 
any use of Non-Firm Point-To-Point Transmission Service to make Third-
Party Sales.
14.4  Service Agreements
    The Transmission Provider shall offer a standard form Non-Firm 
Point-To-Point Transmission Service Agreement (Attachment B) to an 
Eligible Customer when it first submits a Completed Application for 
Non-Firm Point-To-Point Transmission Service pursuant to the Tariff.
14.5  Classification of Non-Firm Point-To-Point Transmission Service
    Non-Firm Point-To-Point Transmission Service shall be offered under 
terms and conditions contained in Part II of the Tariff. The 
Transmission Provider undertakes no obligation under the Tariff to plan 
its Transmission System in order to have sufficient capacity for Non-
Firm Point-To-Point Transmission Service. Parties requesting Non-Firm 
Point-To-Point Transmission Service for the transmission of firm power 
do so with the full realization that such service is subject to 
availability and to Curtailment or Interruption under the terms of the 
Tariff. The Transmission Provider shall specify the rate treatment and 
all related terms and conditions applicable in the event that a 
Transmission Customer (including Third-Party Sales by the Transmission 
Provider) exceeds its non-firm capacity reservation. Non-Firm Point-To-
Point Transmission Service shall include transmission of energy on an 
hourly basis and transmission of scheduled short-term capacity and 
energy on a daily, weekly or monthly

[[Page 50318]]

basis, but not to exceed one month's reservation for any one 
Application under Schedule 8.
14.6  Scheduling of Non-Firm Point-To-Point Transmission Service
    Schedules for Non-Firm Point-To-Point Transmission Service must be 
submitted to the Transmission Provider no later than 2:00 p.m. of the 
day prior to commencement of such service. Schedules submitted after 
2:00 p.m. will be accommodated, if practicable. Hour-to-hour schedules 
of energy that are to be delivered must be stated in increments of 
1,000 kW per hour. Transmission Customers within the Transmission 
Provider's service area with multiple requests for Transmission Service 
at a Point of Receipt, each of which is under 1,000 kW per hour, may 
consolidate their schedules at a common Point of Receipt into units of 
1,000 kW per hour. Scheduling changes will be permitted up to twenty 
(20) minutes before the start of the next clock hour provided that the 
Delivering Party and Receiving Party also agree to the schedule 
modification. The Transmission Provider will furnish to the Delivering 
Party's system operator, hour-to-hour schedules equal to those 
furnished by the Receiving Party (unless reduced for losses) and shall 
deliver the capacity and energy provided by such schedules. Should the 
Transmission Customer, Delivering Party or Receiving Party revise or 
terminate any schedule, such party shall immediately notify the 
Transmission Provider, and the Transmission Provider shall have the 
right to adjust accordingly the schedule for capacity and energy to be 
received and to be delivered.
14.7  Curtailment or Interruption of Service
    The Transmission Provider reserves the right to Curtail, in whole 
or in part, Non-Firm Point-To-Point Transmission Service provided under 
the Tariff for reliability reasons when, an emergency or other 
unforeseen condition threatens to impair or degrade the reliability of 
its Transmission System. The Transmission Provider reserves the right 
to Interrupt, in whole or in part, Non-Firm Point-To-Point Transmission 
Service provided under the Tariff for economic reasons in order to 
accommodate (1) A request for Firm Transmission Service, (2) a request 
for Non-Firm Point-To-Point Transmission Service of greater duration, 
(3) a request for Non-Firm Point-To-Point Transmission Service of equal 
duration with a higher price, or (4) transmission service for Network 
Customers from non-designated resources. The Transmission Provider also 
will discontinue or reduce service to the Transmission Customer to the 
extent that deliveries for transmission are discontinued or reduced at 
the Point(s) of Receipt. Where required, Curtailments or Interruptions 
will be made on a non-discriminatory basis to the transaction(s) that 
effectively relieve the constraint, however, Non-Firm Point-To-Point 
Transmission Service shall be subordinate to Firm Transmission Service. 
If multiple transactions require Curtailment or Interruption, to the 
extent practicable and consistent with Good Utility Practice, 
Curtailments or Interruptions will be made to transactions of the 
shortest term (e.g., hourly non-firm transactions will be Curtailed or 
Interrupted before daily non-firm transactions and daily non-firm 
transactions will be Curtailed or Interrupted before weekly non-firm 
transactions). Transmission service for Network Customers from 
resources other than designated Network Resources will have a higher 
priority than any Non-Firm Point-To-Point Transmission Service under 
the Tariff. Non-Firm Point-To-Point Transmission Service over secondary 
Point(s) of Receipt and Point(s) of Delivery will have a lower priority 
than any Non-Firm Point-To-Point Transmission Service under the Tariff. 
The Transmission Provider will provide advance notice of Curtailment or 
Interruption where such notice can be provided consistent with Good 
Utility Practice.

15  Service Availability

15.1  General Conditions
    The Transmission Provider will provide Firm and Non-Firm Point-To-
Point Transmission Service over, on or across its Transmission System 
to any Transmission Customer that has met the requirements of Section 
16.
15.2  Determination of Available Transmission Capability
    A description of the Transmission Provider's specific methodology 
for assessing available transmission capability posted on the 
Transmission Provider's OASIS (Section 4) is contained in Attachment C 
of the Tariff. In the event sufficient transmission capability may not 
exist to accommodate a service request, the Transmission Provider will 
respond by performing a System Impact Study.
15.3  Initiating Service in the Absence of an Executed Service 
Agreement
    If the Transmission Provider and the Transmission Customer 
requesting Firm or Non-Firm Point-To-Point Transmission Service cannot 
agree on all the terms and conditions of the Point-To-Point Service 
Agreement, the Transmission Provider shall commence providing 
Transmission Service subject to the Transmission Customer agreeing to: 
(i) Compensate the Transmission Provider at the existing rate placed in 
effect pursuant to Federal law and regulations, and (ii) comply with 
the terms and conditions of the Tariff including paying the appropriate 
processing fees in accordance with the terms of Section 17.3. If the 
Transmission Customer cannot accept all of the terms and conditions of 
the offered Service Agreement, the Transmission Customer may request 
resolution of the unacceptable terms and conditions under Section 12, 
Dispute Resolution Procedures, of the Tariff. Any changes resulting 
from the dispute resolution procedures will be effective upon the date 
of initial service.
15.4  Obligation to Provide Transmission Service that Requires 
Expansion or Modification of the Transmission System
    If the Transmission Provider determines that it cannot accommodate 
a Completed Application for Firm Point-To-Point Transmission Service 
because of insufficient capability on its Transmission System, the 
Transmission Provider will use due diligence to expand or modify its 
Transmission System to provide the requested Firm Transmission Service, 
provided the Transmission Customer agrees to compensate the 
Transmission Provider in advance for such costs pursuant to the terms 
of Section 27. The Transmission Provider will conform to Good Utility 
Practice in determining the need for new facilities and in the design 
and construction of such facilities. The obligation applies only to 
those facilities that the Transmission Provider has the right to expand 
or modify.
15.5  Deferral of Service
    The Transmission Provider may defer providing service until it 
completes construction of new transmission facilities or upgrades 
needed to provide Firm Point-To-Point Transmission Service whenever the 
Transmission Provider determines that providing the requested service 
would, without such new facilities or upgrades, impair or degrade 
reliability to any existing firm services.
15.6  Other Transmission Service Schedules
    Eligible Customers receiving transmission service under other 
agreements on file with the Commission

[[Page 50319]]

may continue to receive transmission service under those agreements 
until such time as those agreements may be modified by the Commission.
15.7  Real Power Losses
    Real Power Losses are associated with all transmission service. The 
Transmission Provider is not obligated to provide Real Power Losses. 
The Transmission Customer is responsible for replacing losses 
associated with all transmission service as calculated by the 
Transmission Provider. The applicable Real Power Loss factors are 
specified in the Service Agreements.

16  Transmission Customer Responsibilities

16.1  Conditions Required of Transmission Customers
    Point-To-Point Transmission Service shall be provided by the 
Transmission Provider only if the following conditions are satisfied by 
the Transmission Customer:
    a. The Transmission Customer has pending a Completed Application 
for service;
    b. The Transmission Customer meets the creditworthiness criteria 
set forth in Section 11;
    c. The Transmission Customer will have arrangements in place for 
any other transmission service necessary to effect the delivery from 
the generating source to the Transmission Provider prior to the time 
service under Part II of the Tariff commences;
    d. The Transmission Customer agrees to pay for any facilities 
constructed and chargeable to such Transmission Customer under Part II 
of the Tariff, whether or not the Transmission Customer takes service 
for the full term of its reservation; and
    e. The Transmission Customer has executed a Point-To-Point Service 
Agreement or has agreed to receive service pursuant to Section 15.3.
16.2  Transmission Customer Responsibility for Third-Party Arrangements
    Any scheduling arrangements that may be required by other electric 
systems shall be the responsibility of the Transmission Customer 
requesting service. The Transmission Customer shall provide, unless 
waived by the Transmission Provider, notification to the Transmission 
Provider identifying such systems and authorizing them to schedule the 
capacity and energy to be transmitted by the Transmission Provider 
pursuant to Part II of the Tariff on behalf of the Receiving Party at 
the Point of Delivery or the Delivering Party at the Point of Receipt. 
However, the Transmission Provider will undertake reasonable efforts to 
assist the Transmission Customer in making such arrangements, 
including, without limitation, providing any information or data 
required by such other electric system pursuant to Good Utility 
Practice.

17  Procedures for Arranging Firm Point-To-Point Transmission Service

17.1  Application
    A request for Firm Point-To-Point Transmission Service for periods 
of one year or longer must contain a written Application to 
Administrator, Southwestern Power Administration, P.O. Box 1619, Tulsa, 
Oklahoma 74101-1619, at least sixty (60) days in advance of the 
calendar month in which service is to commence. The Transmission 
Provider will consider requests for such firm service on shorter notice 
when feasible. Requests for firm service for periods of less than one 
year shall be subject to expedited procedures that shall be negotiated 
between the Parties within the time constraints provided in Section 
17.5. All Firm Point-To-Point Transmission Service requests should be 
submitted by entering the information listed below on the Transmission 
Provider's OASIS. Prior to implementation of the Transmission 
Provider's OASIS, a Completed Application may be submitted by (i) 
transmitting the required information to the Transmission Provider by 
telefax, or (ii) providing the information by telephone over the 
Transmission Provider's time-recorded telephone line. Each of these 
methods will provide a time-stamped record for establishing the 
priority of the Application.
17.2  Completed Application
    A Completed Application shall provide all of the information 
included in 18 CFR Sec. 2.20 including but not limited to the 
following:
    (i) The identity, address, telephone number and facsimile number of 
the entity requesting service
    (ii) A statement that the entity requesting service is, or will be 
upon commencement of service, an Eligible Customer under the Tariff
    (iii) The location of the Point(s) of Receipt and Point(s) of 
Delivery and the identities of the Delivering Parties and the Receiving 
Parties
    (iv) The location of the generating facility(ies) supplying the 
capacity and energy and the location of the load ultimately served by 
the capacity and energy transmitted. The Transmission Provider will 
treat this information as confidential except to the extent that 
disclosure of this information is required by the Tariff, by regulatory 
or judicial order, for reliability purposes pursuant to Good Utility 
Practice or pursuant to RTG transmission information sharing 
agreements. The Transmission Provider shall treat this information 
consistent with the standards of conduct contained in Part 37 of the 
Commission's regulations
    (v) A description of the supply characteristics of the capacity and 
energy to be delivered
    (vi) An estimate of the capacity and energy expected to be 
delivered to the Receiving Party
    (vii) The Service Commencement Date and the term of the requested 
Transmission Service
    (viii) The transmission capacity requested for each Point of 
Receipt and each Point of Delivery on the Transmission Provider's 
Transmission System; customers may combine their requests for service 
in order to satisfy the minimum transmission capacity requirement
    The Transmission Provider shall treat this information consistent 
with the standards of conduct contained in part 37 of the Commission's 
regulations.
17.3  Processing Fee
    A Completed Application for Firm Point-To-Point Transmission 
Service also shall include a processing fee for all requests for Firm 
Transmission Service of one year or longer. The processing fee shall be 
calculated using the estimated average number of hours required to 
process an application. The fee will be posted on the Transmission 
Provider's OASIS and may change as average costs/per/hour for the 
Transmission Provider change. This fee does not apply to costs to 
complete System Impact Studies or Facility Studies or to add new 
facilities.
17.4  Notice of Deficient Application
    If an Application fails to meet the requirements of the Tariff, the 
Transmission Provider shall notify the entity requesting service within 
fifteen (15) days of receipt of the reasons for such failure. The 
Transmission Provider will attempt to remedy minor deficiencies in the 
Application through informal communications with the Eligible Customer. 
If such efforts are unsuccessful, the Transmission Provider shall 
return the Application. Upon receipt of a new or revised Application 
that fully complies with the requirements of Part II of the Tariff, the 
Eligible Customer shall be assigned a new priority consistent with the 
date of the new or revised Application.

[[Page 50320]]

17.5  Response to a Completed Application
    Following receipt of a Completed Application for Firm Point-To-
Point Transmission Service, the Transmission Provider shall make a 
determination of available transmission capability as required in 
Section 15.2. The Transmission Provider shall notify the Eligible 
Customer as soon as practicable, but not later than thirty (30) days 
after the date of receipt of a Completed Application either (i) If it 
will be able to provide service without performing a System Impact 
Study or (ii) if such a study is needed to evaluate the impact of the 
Application pursuant to Section 19.1. Responses by the Transmission 
Provider must be made as soon as practicable to all completed 
applications (including applications by its own merchant function) and 
the timing of such responses must be made on a non-discriminatory 
basis.
17.6  Execution of a Service Agreement
    Whenever the Transmission Provider determines that a System Impact 
Study is not required and that the service can be provided, it shall 
notify the Eligible Customer as soon as practicable but no later than 
thirty (30) days after receipt of the Completed Application. Where a 
System Impact Study is required, the provisions of Section 19 will 
govern the execution of a Service Agreement. Failure of an Eligible 
Customer to execute and return the Service Agreement or request service 
without an executed service agreement pursuant to Section 15.3 within 
fifteen (15) days after it is tendered by the Transmission Provider 
will be deemed a withdrawal and termination of the Application. Nothing 
herein limits the right of an Eligible Customer to file another 
Application after such withdrawal and termination.
17.7  Extensions for Commencement of Service
    The Transmission Customer can obtain up to five (5) one-year 
extensions for the commencement of service. The Transmission Customer 
may postpone service by paying a non-refundable annual reservation fee 
equal to one-month's charge for Firm Transmission Service for each year 
or fraction thereof. If during any extension for the commencement of 
service an Eligible Customer submits a Completed Application for Firm 
Transmission Service, and such request can be satisfied only by 
releasing all or part of the Transmission Customer's Reserved Capacity, 
the original Reserved Capacity will be released unless the following 
condition is satisfied. Within thirty (30) days, the original 
Transmission Customer agrees to pay the Firm Point-To-Point 
transmission rate for its Reserved Capacity concurrent with the new 
Service Commencement Date. In the event the Transmission Customer 
elects to release the Reserved Capacity, the reservation fees or 
portions thereof previously paid will be forfeited.

18  Procedures for Arranging Non-Firm Point-To-Point Transmission 
Service

18.1  Application
    Eligible Customers seeking Non-Firm Point-To-Point Transmission 
Service must submit a Completed Application to the Transmission 
Provider. Applications should be submitted by entering the information 
listed below on the Transmission Provider's OASIS. Prior to 
implementation of the Transmission Provider's OASIS, a Completed 
Application may be submitted by: (i) Transmitting the required 
information to the Transmission Provider by telefax, or (ii) providing 
the information by telephone over the Transmission Provider's time-
recorded telephone line. Each of these methods will provide a time-
stamped record for establishing the service priority of the 
Application.
18.2  Completed Application
    A Completed Application shall provide all of the information 
included in 18 CFR Sec. 2.20 including but not limited to the 
following:
    (i) The identity, address, telephone number and facsimile number of 
the entity requesting service.
    (ii) A statement that the entity requesting service is, or will be 
upon commencement of service, an Eligible Customer under the Tariff.
    (iii) The Point(s) of Receipt and the Point(s) of Delivery.
    (iv) The maximum amount of capacity requested at each Point of 
Receipt and Point of Delivery; and
    (v) The proposed dates and hours for initiating and terminating 
transmission service hereunder.
    In addition to the information specified above, when required to 
properly evaluate system conditions, the Transmission Provider also may 
ask the Transmission Customer to provide the following:
    (vi) The electrical location of the initial source of the power to 
be transmitted pursuant to the Transmission Customer's request for 
service.
    (vii) The electrical location of the ultimate load.
    The Transmission Provider will treat this information in (vi) and 
(vii) as confidential at the request of the Transmission Customer 
except to the extent that disclosure of this information is required by 
this Tariff, by Federal law or regulatory or judicial order, for 
reliability purposes pursuant to Good Utility Practice, or pursuant to 
RTG transmission information sharing agreements. The Transmission 
Provider shall treat this information consistent with the standards of 
conduct contained in Part 37 of the Commission's regulations.
18.3  Reservation of Non-Firm Point-To-Point Transmission Service
    Requests for monthly service shall be submitted no earlier than 
sixty (60) days before service is to commence; requests for weekly 
service shall be submitted no earlier than fourteen (14) days before 
service is to commence, requests for daily service shall be submitted 
no earlier than two (2) days before service is to commence, and 
requests for hourly service shall be submitted no earlier than noon the 
day before service is to commence. Requests for service received later 
than 2:00 p.m. prior to the day service is scheduled to commence will 
be accommodated if practicable.
18.4  Determination of Available Transmission Capability
    Following receipt of a tendered schedule the Transmission Provider 
will make a determination on a non-discriminatory basis of available 
transmission capability pursuant to Section 15.2. Such determination 
shall be made as soon as reasonably practicable after receipt, but not 
later than the following time periods for the following terms of 
service: (i) Thirty (30) minutes for hourly service, (ii) thirty (30) 
minutes for daily service, (iii) four (4) hours for weekly service, and 
(iv) two (2) days for monthly service.

19  Additional Study Procedures For Firm Point-To-Point Transmission 
Service Requests

19.1  Notice of Need for System Impact Study
    After receiving a request for service, the Transmission Provider 
shall determine on a non-discriminatory basis whether a System Impact 
Study is needed. A description of the Transmission Provider's 
methodology for completing a System Impact Study is provided in 
Attachment D. If the Transmission Provider determines that a System 
Impact Study is necessary to accommodate the requested service, it 
shall so inform the Eligible Customer, as soon as practicable. In such 
cases, the Transmission Provider shall within

[[Page 50321]]

thirty (30) days of receipt of a Completed Application, tender a System 
Impact Study Agreement pursuant to which the Eligible Customer shall 
agree to advance funds to the Transmission Provider for performing the 
required System Impact Study. For a service request to remain a 
Completed Application, the Eligible Customer shall execute the System 
Impact Study Agreement and return it to the Transmission Provider 
within fifteen (15) days. If the Eligible Customer elects not to 
execute the System Impact Study Agreement, its application shall be 
deemed withdrawn.
19.2  System Impact Study Agreement and Compensation
    (i) The System Impact Study Agreement will clearly specify the 
Transmission Provider's estimate of the actual cost, and time for 
completion of the System Impact Study. The charge will not exceed the 
actual cost of the study. In performing the System Impact Study, the 
Transmission Provider shall rely, to the extent reasonably practicable, 
on existing transmission planning studies. The Eligible Customer will 
not be assessed a charge for such existing studies; however, the 
Eligible Customer will be responsible for charges associated with any 
modifications to existing planning studies that are reasonably 
necessary to evaluate the impact of the Eligible Customer's request for 
service on the Transmission System.
    (ii) If, in response to multiple Eligible Customers requesting 
service in relation to the same competitive solicitation, a single 
System Impact Study is sufficient for the Transmission Provider to 
accommodate the requests for service, the costs of that study shall be 
pro-rated among the Eligible Customers.
    (iii) For System Impact Studies that the Transmission Provider 
conducts on its own behalf, the Transmission Provider shall record the 
cost of the System Impact Studies pursuant to Section 8.
19.3  System Impact Study Procedures
    Upon receipt of an executed System Impact Study Agreement, the 
Transmission Provider will use due diligence to complete the required 
System Impact Study within a sixty (60) day period. The System Impact 
Study shall identify any system constraints and redispatch options, 
additional Direct Assignment Facilities or Network Upgrades required to 
provide the requested service. In the event that the Transmission 
Provider is unable to complete the required System Impact Study within 
such time period, it shall so notify the Eligible Customer and provide 
an estimated completion date along with an explanation of the reasons 
why additional time is required to complete the required studies. A 
copy of the completed System Impact Study and related work papers shall 
be made available to the Eligible Customer. The Transmission Provider 
will use the same due diligence in completing the System Impact Study 
for an Eligible Customer as it uses when completing studies for itself. 
The Transmission Provider shall notify the Eligible Customer 
immediately upon completion of the System Impact Study if the 
Transmission System will be adequate to accommodate all or part of a 
request for service or that no costs are likely to be incurred for new 
transmission facilities or upgrades. In order for a request to remain a 
Completed Application, within fifteen (15) days of completion of the 
System Impact Study the Eligible Customer must execute a Service 
Agreement or request service without an executed Service Agreement 
pursuant to Section 15.3, or the Application shall be deemed terminated 
and withdrawn.
19.4  Facilities Study Procedures
    If a System Impact Study indicates that additions or upgrades to 
the Transmission System are needed to supply the Eligible Customer's 
service request, the Transmission Provider, within thirty (30) days of 
the completion of the System Impact Study, shall tender to the Eligible 
Customer a Facilities Study Agreement pursuant to which the Eligible 
Customer shall agree to advance funds to the Transmission Provider for 
performing the required Facilities Study. For a service request to 
remain a Completed Application, the Eligible Customer shall execute the 
Facilities Study Agreement and return it to the Transmission Provider 
within fifteen (15) days. If the Eligible Customer elects not to 
execute the Facilities Study Agreement, its application shall be deemed 
withdrawn. Upon receipt of an executed Facilities Study Agreement, the 
Transmission Provider will use due diligence to complete the required 
Facilities Study within a sixty (60) day period. If the Transmission 
Provider is unable to complete the Facilities Study in the allotted 
time period, the Transmission Provider shall notify the Transmission 
Customer and provide an estimate of the time needed to reach a final 
determination along with an explanation of the reasons that additional 
time is required to complete the study. When completed, the Facilities 
Study will include a good faith estimate of: (i) The cost of Direct 
Assignment Facilities to be charged to the Transmission Customer, (ii) 
the Transmission Customer's appropriate share of the cost of any 
required Network Upgrades as determined pursuant to the provisions of 
Part II of the Tariff, and (iii) the time required to complete such 
construction and initiate the requested service. The Transmission 
Customer shall pay the Transmission Provider, in advance, the 
Transmission Customer's share of the costs of new facilities or 
upgrades. The Transmission Customer shall have thirty (30) days to 
execute a construction agreement and a Service Agreement and to provide 
the advance payment or request service without an executed Service 
Agreement pursuant to Section 15.3, and provide the required letter of 
credit or other form of security, or the request will no longer be a 
Completed Application and shall be deemed terminated and withdrawn.
19.5  Facilities Study Modifications
    Any change in design arising from inability to site or construct 
facilities as proposed will require development of a revised good faith 
estimate. New good faith estimates also will be required in the event 
of new statutory or regulatory requirements that are effective before 
the completion of construction or other circumstances beyond the 
control of the Transmission Provider that significantly affect the 
final cost of new facilities or upgrades to be charged to the 
Transmission Customer pursuant to the provisions of Part II of the 
Tariff.
19.6  Due Diligence in Completing New Facilities
    The Transmission Provider shall use due diligence to add necessary 
facilities or upgrade its Transmission System within a reasonable time. 
The Transmission Provider will not upgrade its existing or planned 
Transmission System in order to provide the requested Firm Point-To-
Point Transmission Service if doing so would impair system reliability 
or otherwise impair or degrade existing firm service.
19.7  Partial Interim Service
    If the Transmission Provider determines that it will not have 
adequate transmission capability to satisfy the full amount of a 
Completed Application for Firm Point-To-Point Transmission Service, the 
Transmission Provider nonetheless shall be obligated to offer and 
provide the portion of the requested Firm Point-To-Point Transmission 
Service that can be accommodated without addition of any facilities and 
through redispatch.

[[Page 50322]]

However, the Transmission Provider shall not be obligated to provide 
the incremental amount of requested Firm Point-To-Point Transmission 
Service that requires the addition of facilities or upgrades to the 
Transmission System until such facilities or upgrades have been placed 
in service.
19.8  Expedited Procedures for New Facilities
    In lieu of the procedures set forth above, the Eligible Customer 
shall have the option to expedite the process by requesting the 
Transmission Provider to tender at one time, together with the results 
of required studies, an ``Expedited Service Agreement'' pursuant to 
which the Eligible Customer would agree to compensate the Transmission 
Provider in advance for all costs incurred pursuant to the terms of the 
Tariff. In order to exercise this option, the Eligible Customer shall 
request in writing an expedited Service Agreement covering all of the 
above-specified items within thirty (30) days of receiving the results 
of the System Impact Study identifying needed facility additions or 
upgrades or costs incurred in providing the requested service. While 
the Transmission Provider agrees to provide the Eligible Customer with 
its best estimate of the new facility costs and other charges that may 
be incurred, such estimate shall not be binding and the Eligible 
Customer must agree in writing to compensate the Transmission Provider 
in advance for all costs incurred pursuant to the provisions of the 
Tariff. The Eligible Customer shall execute and return such an 
Expedited Service Agreement within fifteen (15) days of its receipt or 
the Eligible Customer's request for service will cease to be a 
Completed Application and will be deemed terminated and withdrawn.

20  Procedures if the Transmission Provider is Unable to Complete New 
Transmission Facilities for Firm Point-To-Point Transmission Service

20.1  Delays in Construction of New Facilities
    If any event occurs that will materially affect the time for 
completion of new facilities, or the ability to complete them, the 
Transmission Provider shall promptly notify the Transmission Customer. 
In such circumstances, the Transmission Provider shall, within thirty 
(30) days of notifying the Transmission Customer of such delays, 
convene a technical meeting with the Transmission Customer to evaluate 
the alternatives available to the Transmission Customer. The 
Transmission Provider also shall make available to the Transmission 
Customer studies and work papers related to the delay, including all 
information that is in the possession of the Transmission Provider that 
is reasonably needed by the Transmission Customer to evaluate any 
alternatives.
20.2  Alternatives to the Original Facility Additions
    When the review process of Section 20.1 determines that one or more 
alternatives exist to the originally planned construction project, the 
Transmission Provider shall present such alternatives for consideration 
by the Transmission Customer. If, upon review of any alternatives, the 
Transmission Customer desires to maintain its Completed Application 
subject to construction of the alternative facilities, it may request 
the Transmission Provider to submit a revised Service Agreement for 
Firm Point-To-Point Transmission Service. If the alternative approach 
solely involves Non-Firm Point-To-Point Transmission Service, the 
Transmission Provider shall promptly tender a Service Agreement for 
Non-Firm Point-To-Point Transmission Service providing for the service. 
In the event the Transmission Provider concludes that no reasonable 
alternative exists and the Transmission Customer disagrees, the 
Transmission Customer may seek relief under the dispute resolution 
procedures pursuant to Section 12 or it may refer the dispute to the 
Commission for resolution.
20.3  Refund Obligation for Unfinished Facility Additions
    If the Transmission Provider and the Transmission Customer mutually 
agree that no other reasonable alternatives exist and the requested 
service cannot be provided out of existing capability under the 
conditions of Part II of the Tariff, the obligation to provide the 
requested Firm Point-To-Point Transmission Service shall terminate and 
any advance payment made by the Transmission Customer that is in excess 
of the costs incurred by the Transmission Provider through the time 
construction was suspended shall be returned. However, the Transmission 
Customer shall be responsible for all prudently incurred costs by the 
Transmission Provider through the time construction was suspended.

21  Provisions Relating to Transmission Construction and Services on 
the Systems of Other Utilities

21.1  Responsibility for Third-Party System Additions
    The Transmission Provider shall not be responsible for making 
arrangements for any necessary engineering, permitting, and 
construction of transmission or distribution facilities on the 
system(s) of any other entity or for obtaining any regulatory approval 
for such facilities. The Transmission Provider will undertake 
reasonable efforts to assist the Transmission Customer in obtaining 
such arrangements, including, without limitation, providing any 
information or data required by such other electric system pursuant to 
Good Utility Practice.
21.2  Coordination of Third-Party System Additions
    In circumstances where the need for transmission facilities or 
upgrades is identified pursuant to the provisions of Part II of the 
Tariff, and if such upgrades further require the addition of 
transmission facilities on other systems, the Transmission Provider 
shall have the right to coordinate construction on its own system with 
the construction required by others. The Transmission Provider, after 
consultation with the Transmission Customer and representatives of such 
other systems, may defer construction of its new transmission 
facilities if the new transmission facilities on another system cannot 
be completed in a timely manner. The Transmission Provider shall notify 
the Transmission Customer in writing of the basis for any decision to 
defer construction and the specific problems which must be resolved 
before it will initiate or resume construction of new facilities. 
Within sixty (60) days of receiving written notification by the 
Transmission Provider of its intent to defer construction pursuant to 
this section, the Transmission Customer may challenge the decision in 
accordance with the dispute resolution procedures pursuant to Section 
or it may refer the dispute to the Commission for resolution.

22  Changes in Service Specifications

22.1  Modifications on a Non-Firm Basis
    The Transmission Customer taking Firm Point-To-Point Transmission 
Service may request the Transmission Provider to provide transmission 
service on a non-firm basis over Receipt and Delivery Points other than 
those

[[Page 50323]]

specified in the Service Agreement (``Secondary Receipt and Delivery 
Points''), in amounts not to exceed its firm capacity reservation, 
without incurring an additional Non-Firm Point-To-Point Transmission 
Service charge or executing a new Service Agreement, subject to the 
following conditions.
    (a) Service provided over Secondary Receipt and Delivery Points 
will be non-firm only, on an as-available basis, and will not displace 
any firm or non-firm service reserved or scheduled by third-parties 
under the Tariff or by the Transmission Provider on behalf of its 
Native Load Customers.
    (b) The sum of all Firm and non-firm Point-To-Point Transmission 
Service provided to the Transmission Customer at any time pursuant to 
this section shall not exceed the Reserved Capacity in the relevant 
Service Agreement under which such services are provided.
    (c) The Transmission Customer shall retain its right to schedule 
Firm Point-To-Point Transmission Service at the Receipt and Delivery 
Points specified in the relevant Service Agreement in the amount of its 
original capacity reservation.
    (d) Service over Secondary Receipt and Delivery Points on a non-
firm basis shall not require the filing of an Application for Non-Firm 
Point-To-Point Transmission Service under the Tariff. However, all 
other requirements of Part II of the Tariff (except as to transmission 
rates) shall apply to transmission service on a non-firm basis over 
Secondary Receipt and Delivery Points.
22.2  Modifications on a Firm Basis
    Any request by a Transmission Customer to modify Receipt and 
Delivery Points on a firm basis shall be treated as a new request for 
service in accordance with Section 17 hereof except that such 
Transmission Customer shall not be obligated to pay any additional 
application processing fee if the capacity reservation does not exceed 
the amount reserved in the existing Service Agreement. While such new 
request is pending, the Transmission Customer shall retain its priority 
for service at the existing firm Receipt and Delivery Points specified 
in its Service Agreement.

23  Sale or Assignment of Transmission Service

23.1  Procedures for Assignment or Transfer of Service
    Subject to Commission approval of any necessary filings, a 
Transmission Customer may sell, assign, or transfer all or a portion of 
its rights under its Service Agreement, but only to another Eligible 
Customer (the Assignee). The Transmission Customer that sells, assigns 
or transfers its rights under its Service Agreement is hereafter 
referred to as the Reseller. Compensation to the Reseller shall not 
exceed the higher of (i) the original rate paid by the Reseller, (ii) 
the Transmission Provider's maximum rate on file at the time of the 
assignment, or (iii) the Reseller's opportunity cost capped at the 
Transmission Provider's cost of expansion. If the Assignee does not 
request any change in the Point(s) of Receipt or the Point(s) of 
Delivery, or a change in any other term or condition set forth in the 
original Service Agreement, the Assignee will receive the same services 
as did the Reseller and the priority of service for the Assignee will 
be the same as that of the Reseller. A Reseller should notify the 
Transmission Provider as soon as possible after any assignment or 
transfer of service occurs but in any event, notification must be 
provided prior to any provision of service to the Assignee. The 
Assignee will be subject to all terms and conditions of the Tariff. If 
the Assignee requests a change in service, the reservation priority of 
service will be determined by the Transmission Provider pursuant to 
Section 13.2.
23.2  Limitations on Assignment or Transfer of Service
    If the Assignee requests a change in the Point(s) of Receipt or 
Point(s) of Delivery, or a change in any other specifications set forth 
in the original Service Agreement, the Transmission Provider will 
consent to such change subject to the provisions of the Tariff, 
provided that the change will not impair the operation and reliability 
of the Transmission Provider's generation, transmission, or 
distribution systems. The Assignee shall compensate the Transmission 
Provider in advance for performing any System Impact Study needed to 
evaluate the capability of the Transmission System to accommodate the 
proposed change and any additional costs resulting from such change. 
The Reseller shall remain liable for the performance of all obligations 
under the Service Agreement, except as specifically agreed to by the 
Parties through an amendment to the Service Agreement.
23.3  Information on Assignment or Transfer of Service
    In accordance with Section 4, Resellers may use the Transmission 
Provider's OASIS to post transmission capacity available for resale.

24  Metering and Power Factor Correction at Receipt and Delivery 
Point(s)

24.1  Transmission Customer Obligations
    Unless otherwise agreed, the Transmission Customer shall be 
responsible for installing and maintaining compatible metering and 
communications equipment to accurately account for the capacity and 
energy being transmitted under Part II of the Tariff and to communicate 
the information to the Transmission Provider. Such equipment shall 
remain the property of the Transmission Customer.
24.2  Transmission Provider Access to Metering Data
    The Transmission Provider shall have access to metering data, which 
may reasonably be required to facilitate measurements and billing under 
the Service Agreement.
24.3  Power Factor
    Unless otherwise agreed, the Transmission Customer is required to 
maintain a power factor within the same range as the Transmission 
Provider pursuant to Good Utility Practices. The power factor 
requirements are specified in the Service Agreement where applicable.

25  Compensation for Transmission Service

    Rates for Firm and Non-Firm Point-To-Point Transmission Service are 
provided in the Schedules appended to the Tariff: Firm Point-To-Point 
Transmission Service (Schedule 7); and Non-Firm Point-To-Point 
Transmission Service (Schedule 8). The Transmission Provider shall use 
Part II of the Tariff to make its Third-Party Sales. The Transmission 
Provider shall account for such use at the applicable Tariff rates, 
pursuant to Section 8.

26  Stranded Cost Recovery

    The Transmission Provider may seek to recover stranded costs from 
the Transmission Customer in a manner consistent with applicable 
Federal law and regulations.

27  Compensation for New Facilities and Redispatch Costs

    Whenever a System Impact Study performed by the Transmission 
Provider in connection with the provision of Firm Point-To-Point 
Transmission Service identifies the need for new facilities, the 
Transmission Customer shall be responsible for such costs to the extent 
consistent with Commission

[[Page 50324]]

policy. Whenever a System Impact Study performed by the Transmission 
Provider identifies capacity constraints that may be relieved more 
economically by redispatching the Transmission Provider's resources 
than by building new facilities or upgrading existing facilities to 
eliminate such constraints, the Transmission Customer shall be 
responsible for the redispatch costs to the extent consistent with 
Commission policy.

Part III. Network Integration Transmission Service

Preamble

    The Transmission Provider will provide Network Integration 
Transmission Service pursuant to the applicable terms and conditions 
contained in the Tariff and Service Agreement. Network Integration 
Transmission Service allows the Network Customer to integrate, 
economically dispatch and regulate its current and planned Network 
Resources to serve its Network Load in a manner comparable to that in 
which the Transmission Provider utilizes its Transmission System to 
serve its Native Load Customers. Network Integration Transmission 
Service also may be used by the Network Customer to deliver economy 
energy purchases to its Network Load from non-designated resources on 
an as-available basis without additional charge. Transmission service 
for sales to non-designated loads will be provided pursuant to the 
applicable terms and conditions of Part II of the Tariff.

28  Nature of Network Integration Transmission Service

28.1  Scope of Service
    Network Integration Transmission Service is a transmission service 
that allows Network Customers to efficiently and economically utilize 
their Network Resources (as well as other non-designated generation 
resources) to serve their Network Load located in the Transmission 
Provider's Control Area and any additional load that may be designated 
pursuant to Section 31.3 of the Tariff. The Network Customer taking 
Network Integration Transmission Service must obtain or provide 
Ancillary Services pursuant to Section 3.
28.2  Transmission Provider Responsibilities
    The Transmission Provider will plan, construct, operate and 
maintain its Transmission System in accordance with Good Utility 
Practice in order to provide the Network Customer with Network 
Integration Transmission Service over the Transmission Provider's 
Transmission System. The Transmission Provider, on behalf of its Native 
Load Customers, shall be required to designate resources and loads in 
the same manner as any Network Customer under Part III of the Tariff. 
This information must be consistent with the information used by the 
Transmission Provider to calculate available transmission capability. 
The Transmission Provider shall include the Network Customer's Network 
Load in its Transmission System planning and shall, consistent with 
Good Utility Practice, endeavor to construct and place into service 
sufficient transmission capacity to deliver the Network Customer's 
Network Resources to serve its Network Load on a basis comparable to 
the Transmission Provider's delivery of its own generating and 
purchased resources to its Native Load Customers. This obligation to 
construct and place into service sufficient capacity to deliver the 
Network Customer's Network Resources to serve its Network Load is 
contingent upon the availability to the Transmission Provider of 
sufficient appropriations, when needed, and the Transmission Customer's 
advanced funds.
28.3  Network Integration Transmission Service
    The Transmission Provider will provide firm transmission service 
over its Transmission System to the Network Customer for the delivery 
of capacity and energy from its designated Network Resources to service 
its Network Loads on a basis that is comparable to the Transmission 
Provider's use of the Transmission System to reliably serve its Native 
Load Customers.
28.4  Secondary Service
    The Network Customer may use the Transmission Provider's 
Transmission System to deliver energy to its Network Loads from 
resources that have not been designated as Network Resources. Such 
energy shall be transmitted, on an as-available basis, at no additional 
charge. Deliveries from resources other than Network Resources will 
have a higher priority than any Non-Firm Point-To-Point Transmission 
Service under Part II of the Tariff.
28.5  Real Power Losses
    Real Power Losses are associated with all transmission service. The 
Transmission Provider is not obligated to provide Real Power Losses. 
The Network Customer is responsible for replacing losses associated 
with all transmission service as calculated by the Transmission 
Provider. The applicable Real Power Loss factors are specified in the 
Service Agreements.
28.6  Restrictions on Use of Service
    The Network Customer shall not use Network Integration Transmission 
Service for (i) sales of capacity and energy to non-designated loads, 
or (ii) direct or indirect provision of transmission service by the 
Network Customer to third parties. All Network Customers taking Network 
Integration Transmission Service shall use Point-To-Point Transmission 
Service under Part II of the Tariff for any Third-Party Sale which 
requires use of the Transmission Provider's Transmission System.

29  Initiating Service

29.1  Condition Precedent for Receiving Service
    Subject to the terms and conditions of Part III of the Tariff, the 
Transmission Provider will provide Network Integration Transmission 
Service to any Eligible Customer provided that: (i) The Eligible 
Customer completes an Application for service as provided under Part 
III of the Tariff, (ii) the Eligible Customer and the Transmission 
Provider complete the technical arrangements set forth in Sections 29.3 
and 29.4, (iii) the Eligible Customer executes a Service Agreement 
pursuant to Attachment F for service under Part III of the Tariff or 
requests in writing that the Transmission Provider provide service 
without an executed Service Agreement, and (iv) the Eligible Customer 
executes a Network Operating Agreement with the Transmission Provider 
pursuant to Attachment G. If the Transmission Provider and the Network 
Customer cannot agree on all the terms and conditions of the Network 
Service Agreement, the Transmission Provider shall commence providing 
Network Integration Transmission Service subject to the Network 
Customer's agreeing to: (i) Compensate the Transmission Provider at the 
existing rate placed in effect pursuant to applicable Federal law and 
regulations, and (ii) comply with the terms and conditions of the 
Tariff, including paying the appropriate processing fees in accordance 
with the terms of Section 29.2. If the Network Customer cannot accept 
all of the terms and conditions of the offered Service Agreement, the 
Network Customer may request resolution of the unacceptable terms and 
conditions under Section 12, Dispute Resolution Procedures, of the 
Tariff. Any changes resulting from the

[[Page 50325]]

dispute resolution procedures will be effective upon the date of 
initial service.
29.2  Application Procedures
    An Eligible Customer requesting service under Part III of the 
Tariff must submit an Application to the Transmission Provider as far 
as possible in advance of the month in which service is to commence. 
Unless subject to the procedures in Section 2, Completed Applications 
for Network Integration Transmission Service will be assigned a 
priority according to the date and time the Application is received, 
with the earliest Application receiving the highest priority. 
Applications should be submitted by entering the information listed 
below on the Transmission Provider's OASIS. Prior to implementation of 
the Transmission Provider's OASIS, a Completed Application may be 
submitted by: (i) Transmitting the required information to the 
Transmission Provider by telefax, or (ii) providing the information by 
telephone over the Transmission Provider's time-recorded telephone 
line. Each of these methods will provide a time-stamped record for 
establishing the service priority of the Application. A Completed 
Application for Network Integration Transmission Service shall include 
an application processing fee. The processing fee shall be calculated 
using the estimated average number of hours required to process an 
application. The fee will be posted on the Transmission Provider's 
OASIS and may change as average costs/per/hour for the Transmission 
Provider change. This fee does not apply to costs to complete System 
Impact Studies or Facility Studies or to add new facilities. A 
Completed Application shall provide all of the information included in 
18 CFR Sec. 2.20 including but not limited to the following:
    (i) The identity, address, telephone number and facsimile number of 
the party requesting service;
    (ii) A statement that the party requesting service is, or will be 
upon commencement of service, an Eligible Customer under the Tariff;
    (iii) A description of the Network Load at each delivery point. 
This description should separately identify and provide the Eligible 
Customer's best estimate of the total loads to be served at each 
transmission voltage level, and the loads to be served from each 
Transmission Provider substation at the same transmission voltage 
level. The description should include a ten (10) year forecast of 
summer and winter load and resource requirements beginning with the 
first year after the service is scheduled to commence;
    (iv) The amount and location of any interruptible loads included in 
the Network Load. This shall include the summer and winter capacity 
requirements for each interruptible load (had such load not been 
interruptible), that portion of the load subject to interruption, the 
conditions under which an interruption can be implemented and any 
limitations on the amount and frequency of interruptions. An Eligible 
Customer should identify the amount of interruptible customer load (if 
any), included in the 10 year load forecast provided in response to 
(iii) above;
    (v) A description of Network Resources (current and 10-year 
projection), which shall include, for each Network Resource:

--Unit size and amount of capacity from that unit to be designated as 
Network Resource
--VAR capability (both leading and lagging), of all generators
--Operating restrictions
--Any periods of restricted operations throughout the year
--Maintenance schedules
--Minimum loading level of unit
--Normal operating level of unit
--Any must-run unit designations required for system reliability or 
contract reasons
--Approximate variable generating cost ($/MWH) for redispatch 
computations
--Arrangements governing sale and delivery of power to third parties 
from generating facilities located in the Transmission Provider Control 
Area, where only a portion of unit output is designated as a Network 
Resource
--Description of purchased power designated as a Network Resource 
including source of supply, Control Area location, transmission 
arrangements and delivery point(s) to the Transmission Provider's 
Transmission System;

    (vi) Description of Eligible Customer's transmission system:

--Load flow and stability data, such as real and reactive parts of the 
load, lines, transformers, reactive devices and load type, including 
normal and emergency ratings of all transmission equipment in a load 
flow format compatible with that used by the Transmission Provider
--Operating restrictions needed for reliability
--Operating guides employed by system operators
--Contractual restrictions or committed uses of the Eligible Customer's 
transmission system, other than the Eligible Customer's Network Loads 
and Resources
--Location of Network Resources described in subsection (v) above
--10 year projection of system expansions or upgrades
--Transmission System maps that include any proposed expansions or 
upgrades
--Thermal ratings of Eligible Customer's Control Area ties with other 
Control Areas;

    (vii) Service Commencement Date and the term of the requested 
Network Integration Transmission Service. The minimum term for Network 
Integration Transmission Service is one year.
    Unless the Parties agree to a different time frame, the 
Transmission Provider must acknowledge the request within ten (10) days 
of receipt. The acknowledgment must include a date by which a response, 
including a Service Agreement, will be sent to the Eligible Customer. 
If an Application fails to meet the requirements of this section, the 
Transmission Provider shall notify the Eligible Customer requesting 
service within fifteen (15) days of receipt and specify the reasons for 
such failure. Wherever possible, the Transmission Provider will attempt 
to remedy deficiencies in the Application through informal 
communications with the Eligible Customer. If such efforts are 
unsuccessful, the Transmission Provider shall return the Application 
without prejudice to the Eligible Customer filing a new or revised 
Application that fully complies with the requirements of this section. 
The Eligible Customer will be assigned a new priority consistent with 
the date of the new or revised Application. The Transmission Provider 
shall treat this information consistent with the standards of conduct 
contained in Part 37 of the Commission's regulations.
29.3  Technical Arrangements to be Completed Prior to Commencement of 
Service
    Network Integration Transmission Service shall not commence until 
the Transmission Provider and the Network Customer or a third party, 
have completed installation of all equipment specified under the 
Network Operating Agreement consistent with Good Utility Practice and 
any additional requirements reasonably and consistently imposed to 
ensure the reliable operation of the Transmission System. The 
Transmission Provider shall exercise reasonable efforts, in 
coordination with the Network Customer to complete such arrangements as 
soon as practicable taking into consideration the Service Commencement 
Date.

[[Page 50326]]

29.4  Network Customer Facilities
    The provision of Network Integration Transmission Service shall be 
conditioned upon the Network Customer constructing, maintaining and 
operating the facilities on its side of each delivery point or 
interconnection necessary to reliably deliver capacity and energy from 
the Transmission Provider's Transmission System to the Network 
Customer. The Network Customer shall be solely responsible for 
constructing or installing all facilities on the Network Customer's 
side of each such delivery point or interconnection.
29.5  This Section is Intentionally Left Blank

30  Network Resources

30.1  Designation of Network Resources
    Network Resources shall include all generation owned, purchased, or 
leased by the Network Customer designated to serve Network Load under 
the Tariff. Network Resources may not include resources, or any portion 
thereof, that are committed for sale to non-designated third party load 
or otherwise cannot be called upon to meet the Network Customer's 
Network Load on a non-interruptible basis. Any owned or purchased 
resources that were serving the Network Customer's loads under firm 
agreements entered into on or before the Service Commencement Date 
shall initially be designated as Network Resources until the Network 
Customer terminates the designation of such resources.
30.2  Designation of New Network Resources
    The Network Customer may designate a new Network Resource by 
providing the Transmission Provider with as much advance notice as 
practicable. A designation of a new Network Resource must be made by a 
request for modification of service pursuant to an Application under 
Section 29.
30.3  Termination of Network Resources
    The Network Customer may terminate the designation of all or part 
of a generating resource as a Network Resource at any time but should 
provide notification to the Transmission Provider as soon as reasonably 
practicable.
30.4  Operation of Network Resources
    The Network Customer shall not operate its designated Network 
Resources located in the Network Customer's or Transmission Provider's 
Control Area such that the output of those facilities exceeds its 
designated Network Load, plus non-firm sales delivered pursuant to Part 
II of the Tariff, plus losses. This limitation shall not apply to 
changes in the operation of a Transmission Customer's Network Resources 
at the request of the Transmission Provider to respond to an emergency 
or other unforeseen condition which may impair or degrade the 
reliability of the Transmission System.
30.5  Network Customer Redispatch Obligation
    As a condition to receiving Network Integration Transmission 
Service, the Network Customer agrees to redispatch its Network 
Resources as requested by the Transmission Provider pursuant to Section 
33.2. To the extent practical, the redispatch of resources pursuant to 
this section shall be on a least cost, non-discriminatory basis between 
all Network Customers, and the Transmission Provider.
30.6  Transmission Arrangements for Network Resources Not Physically 
Interconnected With the Transmission Provider
    The Network Customer shall be responsible for any arrangements 
necessary to deliver capacity and energy from a Network Resource not 
physically interconnected with the Transmission Provider's Transmission 
System. The Transmission Provider will undertake reasonable efforts to 
assist the Network Customer in obtaining such arrangements, including 
without limitation, providing any information or data required by such 
other entity pursuant to Good Utility Practice.
30.7  Limitation on Designation of Network Resources
    The Network Customer must demonstrate that it owns or has committed 
to purchase generation pursuant to an executed contract in order to 
designate a generating resource as a Network Resource. Alternatively, 
the Network Customer may establish that execution of a contract is 
contingent upon the availability of transmission service under Part III 
of the Tariff.
30.8  Use of Interface Capacity by the Network Customer
    There is no limitation upon a Network Customer's use of the 
Transmission Provider's Transmission System at any particular interface 
to integrate the Network Customer's Network Resources (or substitute 
economy purchases) with its Network Loads. However, a Network 
Customer's use of the Transmission Provider's total interface capacity 
with other transmission systems may not exceed the Network Customer's 
Load.
30.9  Network Customer Owned Transmission Facilities
    The Network Customer that owns existing transmission facilities 
that are integrated with the Transmission Provider's Transmission 
System may be eligible to receive consideration either through a 
billing credit or some other mechanism. In order to receive such 
consideration the Network Customer must demonstrate that its 
transmission facilities are integrated into the plans or operations of 
the Transmission Provider to serve its power and transmission 
customers. For facilities constructed by the Network Customer 
subsequent to the Service Commencement Date under Part III of the 
Tariff, the Network Customer shall receive credit where such facilities 
are jointly planned and installed in coordination with the Transmission 
Provider. Calculation of the credit shall be addressed in either the 
Network Customer's Service Agreement or any other agreement between the 
Parties.

31  Designation of Network Load

31.1  Network Load
    The Network Customer must designate the individual Network Loads on 
whose behalf the Transmission Provider will provide Network Integration 
Transmission Service. The Network Loads shall be specified in the 
Service Agreement.
31.2  New Network Loads Connected With the Transmission Provider
    The Network Customer shall provide the Transmission Provider with 
as much advance notice as reasonably practicable of the designation of 
new Network Load that will be added to its Transmission System. A 
designation of new Network Load must be made through a modification of 
service pursuant to a new Application. The Transmission Provider will 
use due diligence to install any transmission facilities required to 
interconnect a new Network Load designated by the Network Customer. The 
costs of new facilities required to interconnect a new Network Load 
shall be determined in accordance with the procedures provided in 
Section 32.4 and shall be charged to the Network Customer in accordance 
with Commission policies.
31.3  Network Load Not Physically Interconnected With the Transmission 
Provider
    This section applies to both initial designation pursuant to 
Section 31.1 and the subsequent addition of new Network Load not 
physically

[[Page 50327]]

interconnected with the Transmission Provider. To the extent that the 
Network Customer desires to obtain transmission service for a load 
outside the Transmission Provider's Transmission System, the Network 
Customer shall have the option of: (1) Electing to include the entire 
load as Network Load for all purposes under Part III of the Tariff and 
designating Network Resources in connection with such additional 
Network Load, or (2) excluding that entire load from its Network Load 
and purchasing Point-To-Point Transmission Service under Part II of the 
Tariff. To the extent that the Network Customer gives notice of its 
intent to add a new Network Load as part of its Network Load pursuant 
to this section the request must be made through a modification of 
service pursuant to a new Application.
31.4  New Interconnection Points
    To the extent the Network Customer desires to add a new Delivery 
Point or interconnection point between the Transmission Provider's 
Transmission System and a Network Load, the Network Customer shall 
provide the Transmission Provider with as much advance notice as 
reasonably practicable.
31.5  Changes in Service Requests
    Under no circumstances shall the Network Customer's decision to 
cancel or delay a requested change in Network Integration Transmission 
Service (e.g., the addition of a new Network Resource or designation of 
a new Network Load) in any way relieve the Network Customer of its 
obligation to pay the costs of transmission facilities constructed by 
the Transmission Provider and charged to the Network Customer as 
reflected in the Service Agreement. However, the Transmission Provider 
must treat any requested change in Network Integration Transmission 
Service in a non-discriminatory manner. The Transmission Provider will 
have no obligation to refund any advance of funds expended for purposes 
of providing facilities for a Network Customer. However, upon receipt 
of a Network Customer's written notice of such a cancellation or delay, 
the Transmission Provider will use the same reasonable efforts to 
mitigate the costs and charges owed to the Transmission Provider as it 
would to reduce its own costs and charges.
31.6  Annual Load and Resource Information Updates
    The Network Customer shall provide the Transmission Provider with 
annual updates of Network Load and Network Resource forecasts 
consistent with those included in its Application for Network 
Integration Transmission Service under Part III of the Tariff. The 
Network Customer also shall provide the Transmission Provider with 
timely written notice of material changes in any other information 
provided in its Application relating to the Network Customer's Network 
Load, Network Resources, its transmission system or other aspects of 
its facilities or operations affecting the Transmission Provider's 
ability to provide reliable service.

32  Additional Study Procedures for Network Integration Transmission 
Service Requests

32.1  Notice of Need for System Impact Study
    After receiving a request for service, the Transmission Provider 
shall determine on a non-discriminatory basis whether a System Impact 
Study is needed. A description of the Transmission Provider's 
methodology for completing a System Impact Study is provided in 
Attachment D. If the Transmission Provider determines that a System 
Impact Study is necessary to accommodate the requested service, it 
shall so inform the Eligible Customer, as soon as practicable. In such 
cases, the Transmission Provider shall within thirty (30) days of 
receipt of a Completed Application, tender a System Impact Study 
Agreement pursuant to which the Eligible Customer shall agree to 
advance funds to the Transmission Provider for performing the required 
System Impact Study. For a service request to remain a Completed 
Application, the Eligible Customer shall execute the System Impact 
Study Agreement and return it to the Transmission Provider within 
fifteen (15) days. If the Eligible Customer elects not to execute the 
System Impact Study Agreement, its Application shall be deemed 
withdrawn.
32.2  System Impact Study Agreement and Compensation
    (i) The System Impact Study Agreement will clearly specify the 
Transmission Provider's estimate of the actual cost, and time for 
completion of the System Impact Study. The charge shall not exceed the 
actual cost of the study. In performing the System Impact Study, the 
Transmission Provider shall rely, to the extent reasonably practicable, 
on existing transmission planning studies. The Eligible Customer will 
not be assessed a charge for such existing studies; however, the 
Eligible Customer will be responsible for charges associated with any 
modifications to existing planning studies that are reasonably 
necessary to evaluate the impact of the Eligible Customer's request for 
service on the Transmission System.
    (ii) If in response to multiple Eligible Customers requesting 
service in relation to the same competitive solicitation, a single 
System Impact Study is sufficient for the Transmission Provider to 
accommodate the service requests, the costs of that study shall be pro-
rated among the Eligible Customers.
    (iii) For System Impact Studies that the Transmission Provider 
conducts on its own behalf, the Transmission Provider shall record the 
cost of the System Impact Studies pursuant to Section 8.
32.3  System Impact Study Procedures
    Upon receipt of an executed System Impact Study Agreement, the 
Transmission Provider will use due diligence to complete the required 
System Impact Study within a sixty (60) day period. The System Impact 
Study shall identify any system constraints and redispatch options, 
additional Direct Assignment Facilities or Network Upgrades required to 
provide the requested service. In the event that the Transmission 
Provider is unable to complete the required System Impact Study within 
such time period, it shall so notify the Eligible Customer and provide 
an estimated completion date along with an explanation of the reasons 
why additional time is required to complete the required studies. A 
copy of the completed System Impact Study and related work papers shall 
be made available to the Eligible Customer. The Transmission Provider 
will use the same due diligence in completing the System Impact Study 
for an Eligible Customer as it uses when completing studies for itself. 
The Transmission Provider shall notify the Eligible Customer 
immediately upon completion of the System Impact Study if the 
Transmission System will be adequate to accommodate all or part of a 
request for service or that no costs are likely to be incurred for new 
transmission facilities or upgrades. In order for a request to remain a 
Completed Application, within fifteen (15) days of completion of the 
System Impact Study the Eligible Customer must execute a Service 
Agreement or request service without an executed Service Agreement 
pursuant to Section 29.1, or the Application shall be deemed terminated 
and withdrawn.

[[Page 50328]]

32.4  Facilities Study Procedures
    If a System Impact Study indicates that additions or upgrades to 
the Transmission System are needed to supply the Eligible Customer's 
service request, the Transmission Provider, within thirty (30) days of 
the completion of the System Impact Study, shall tender to the Eligible 
Customer a Facilities Study Agreement pursuant to which the Eligible 
Customer shall agree to advance funds to the Transmission Provider for 
performing the required Facilities Study. For a service request to 
remain a Completed Application, the Eligible Customer shall execute the 
Facilities Study Agreement and return it to the Transmission Provider 
within fifteen (15) days. If the Eligible Customer elects not to 
execute the Facilities Study Agreement, its Application shall be deemed 
withdrawn and its deposit shall be returned. Upon receipt of an 
executed Facilities Study Agreement, the Transmission Provider will use 
due diligence to complete the required Facilities Study within a sixty 
(60) day period. If the Transmission Provider is unable to complete the 
Facilities Study in the allotted time period, the Transmission Provider 
shall notify the Eligible Customer and provide an estimate of the time 
needed to reach a final determination along with an explanation of the 
reasons that additional time is required to complete the study. When 
completed, the Facilities Study will include a good faith estimate of: 
(i) The cost of Direct Assignment Facilities to be charged to the 
Eligible Customer, (ii) the Eligible Customer's appropriate share of 
the cost of any required Network Upgrades, and (iii) the time required 
to complete such construction and initiate the requested service. The 
Eligible Customer shall advance funds to the Transmission Provider for 
the construction of new facilities, and such advance and construction 
shall be provided for in a separate agreement. If the construction of 
new facilities requires the expenditure of Transmission Provider funds, 
such construction shall be contingent upon the availability of 
appropriated funds. The Eligible Customer shall have thirty (30) days 
to execute a construction agreement and a Service Agreement or request 
service without an executed Service Agreement pursuant to Section 29.1, 
and provide the required letter of credit or other form of security, or 
the request no longer will be a Completed Application and shall be 
deemed terminated and withdrawn.

33  Load Shedding and Curtailments

33.1  Procedures
    Prior to the Service Commencement Date, the Transmission Provider 
and the Network Customer shall establish Load Shedding and Curtailment 
procedures pursuant to the Network Operating Agreement with the 
objective of responding to contingencies on the Transmission System. 
The Parties will implement such programs during any period when the 
Transmission Provider determines that a system contingency exists and 
such procedures are necessary to alleviate such contingency. The 
Transmission Provider will notify all affected Network Customers in a 
timely manner of any scheduled Curtailment.
33.2  Transmission Constraints
    During any period when the Transmission Provider determines that a 
transmission constraint exists on the Transmission System, and such 
constraint may impair the reliability of the Transmission Provider's 
system, the Transmission Provider will take whatever actions, 
consistent with Good Utility Practice, that are reasonably necessary to 
maintain the reliability of the Transmission Provider's system. To the 
extent the Transmission Provider determines that the reliability of the 
Transmission System can be maintained by redispatching resources, the 
Transmission Provider will initiate procedures pursuant to the Network 
Operating Agreement to redispatch all Network Resources and the 
Transmission Provider's own resources on a least-cost basis without 
regard to the ownership of such resources. Any redispatch under this 
section may not unduly discriminate between the Transmission Provider's 
use of the Transmission System on behalf of its Native Load Customers 
and any Network Customer's use of the Transmission System to serve its 
designated Network Load.
33.3  Cost Responsibility for Relieving Transmission Constraints
    Whenever the Transmission Provider implements least-cost redispatch 
procedures in response to a transmission constraint, the Transmission 
Provider and Network Customers will each bear a proportionate share of 
the total redispatch cost based on their respective Load Ratio Shares.
33.4  Curtailments of Scheduled Deliveries
    If a transmission constraint on the Transmission Provider's 
Transmission System cannot be relieved through the implementation of 
least-cost redispatch procedures and the Transmission Provider 
determines that it is necessary to Curtail scheduled deliveries, the 
Parties shall Curtail such schedules in accordance with the Network 
Operating Agreement.
33.5  Allocation of Curtailments
    The Transmission Provider shall, on a non-discriminatory basis, 
Curtail the transaction(s) that effectively relieve the constraint. 
However, to the extent practicable and consistent with Good Utility 
Practice, any Curtailment will be shared by the Transmission Provider 
and Network Customer in proportion to their respective Load Ratio 
Shares. The Transmission Provider shall not direct the Network Customer 
to Curtail schedules to an extent greater than the Transmission 
Provider would Curtail the Transmission Provider's schedules under 
similar circumstances.
33.6  Load Shedding
    To the extent that a system contingency exists on the Transmission 
Provider's Transmission System and the Transmission Provider determines 
that it is necessary for the Transmission Provider and the Network 
Customer to shed load, the Parties shall shed load in accordance with 
previously established procedures under the Network Operating 
Agreement.
33.7  System Reliability
    Notwithstanding any other provisions of this Tariff, the 
Transmission Provider reserves the right, consistent with Good Utility 
Practice and on a not unduly discriminatory basis, to Curtail Network 
Integration Transmission Service without liability on the Transmission 
Provider's part for the purpose of making necessary adjustments to, 
changes in, or repairs on its lines, substations and facilities, and in 
cases where the continuance of Network Integration Transmission Service 
would endanger persons or property. In the event of any adverse 
condition(s) or disturbance(s) on the Transmission Provider's 
Transmission System or on any other system(s) directly or indirectly 
interconnected with the Transmission Provider's Transmission System, 
the Transmission Provider, consistent with Good Utility Practice, also 
may Curtail Network Integration Transmission Service in order to: (i) 
Limit the extent or damage of the adverse condition(s) or 
disturbance(s), (ii) prevent damage to generating or transmission 
facilities, or (iii) expedite restoration of service. The Transmission 
Provider will give the Network

[[Page 50329]]

Customer as much advance notice as is practicable in the event of such 
Curtailment. Any Curtailment of Network Integration Transmission 
Service will be not unduly discriminatory relative to the Transmission 
Provider's use of the Transmission System on behalf of its Native Load 
Customers. The Transmission Provider shall specify the rate treatment 
and all related terms and conditions applicable in the event that the 
Network Customer fails to respond to established Load Shedding and 
Curtailment procedures.

34  Rates and Charges

    The Network Customer shall pay the Transmission Provider for any 
Direct Assignment Facilities, Ancillary Services, and applicable study 
costs, consistent with Federal policy, along with the following:
34.1  Monthly Demand Charge
    The Network Customer shall pay a monthly Demand Charge, which shall 
be determined by multiplying its Load Ratio Share times one twelfth 
(\1/12\) of the Transmission Provider's Annual Transmission Revenue 
Requirement specified in Schedule H.
34.2  Determination of Network Customer's Monthly Network Load
    The Network Customer's monthly Network Load is its hourly load 
(including its designated Network Load not physically interconnected 
with the Transmission Provider under Section 31.3) coincident with the 
Transmission Provider's Monthly Transmission System Peak.
34.3  Determination of Transmission Provider's Monthly Transmission 
System Load
    The Transmission Provider's monthly Transmission System load is the 
Transmission Provider's Monthly Transmission System Peak minus the 
coincident peak usage of all Firm Point-To-Point Transmission Service 
customers pursuant to Part II of this Tariff plus the Reserved Capacity 
of all Firm Point-To-Point Transmission Service customers.
34.4  Redispatch Charge
    The Network Customer shall pay a Load Ratio Share of any redispatch 
costs allocated between the Network Customer and the Transmission 
Provider pursuant to Section 33. To the extent that the Transmission 
Provider incurs an obligation to the Network Customer for redispatch 
costs in accordance with Section 33, such amounts shall be credited 
against the Network Customer's bill for the applicable month.
34.5  Stranded Cost Recovery
    The Transmission Provider may seek to recover stranded costs from 
the Network Customer in a manner consistent with applicable Federal law 
and regulations.

35  Operating Arrangements

35.1  Operation Under the Network Operating Agreement
    The Network Customer shall plan, construct, operate and maintain 
its facilities in accordance with Good Utility Practice and in 
conformance with the Network Operating Agreement.
35.2  Network Operating Agreement
    The terms and conditions under which the Network Customer shall 
operate its facilities and the technical and operational matters 
associated with the implementation of Part III of the Tariff shall be 
specified in the Network Operating Agreement. The Network Operating 
Agreement shall provide for the Parties to (i) Operate and maintain 
equipment necessary for integrating the Network Customer within the 
Transmission Provider's Transmission System (including, but not limited 
to, remote terminal units, metering, communications equipment and 
relaying equipment), (ii) transfer data between the Transmission 
Provider and the Network Customer (including, but not limited to, heat 
rates and operational characteristics of Network Resources, generation 
schedules for units outside the Transmission Provider's Transmission 
System, interchange schedules, unit outputs for redispatch required 
under Section 33, voltage schedules, loss factors and other real time 
data), (iii) use software programs required for data links and 
constraint dispatching, (iv) exchange data on forecasted loads and 
resources necessary for long-term planning, and (v) address any other 
technical and operational considerations required for implementation of 
Part III of the Tariff, including scheduling protocols. The Network 
Operating Agreement will recognize that the Network Customer shall 
either: (i) Operate as a Control Area under applicable guidelines of 
the North American Electric Reliability Council (NERC) and the 
applicable regional reliability council, (ii) satisfy its Control Area 
requirements, including all necessary Ancillary Services, by 
contracting with the Transmission Provider, or (iii) satisfy its 
Control Area requirements, including all necessary Ancillary Services, 
by contracting with another entity, consistent with Good Utility 
Practice, which satisfies NERC and the applicable regional reliability 
council requirements. The Transmission Provider shall not unreasonably 
refuse to accept contractual arrangements with another entity for 
Ancillary Services. The Network Operating Agreement is included in 
Attachment G.
35.3  Network Operating Committee
    A Network Operating Committee (Committee) shall be established to 
coordinate operating criteria for the Parties' respective 
responsibilities under the Network Operating Agreement. Each Network 
Customer shall be entitled to have at least one representative on the 
Committee. The Committee shall meet from time to time as need requires, 
but no less than once each calendar year.

Schedule 1

Scheduling, System Control and Dispatch Service

    This service is required to schedule the movement of power through, 
out of, within, or into a Control Area. This service can be provided 
only by the operator of the Control Area in which the transmission 
facilities used for transmission service are located. Scheduling, 
System Control and Dispatch Service is provided directly by the 
Transmission Provider if the Transmission Provider is the Control Area 
Operator or indirectly by the Transmission Provider making arrangements 
with the Control Area operator that performs this service for the 
Transmission Provider's Transmission System. The Transmission Customer 
must purchase this service from the Transmission Provider or the 
Control Area operator. The charges for Scheduling, System Control and 
Dispatch Service are to be based on the rates referred to below. To the 
extent the Control Area operator performs this service for the 
Transmission Provider, charges to the Transmission Customer are to 
reflect only a pass-through of the costs charged to the Transmission 
Provider by that Control Area operator.
    The charges for Scheduling, System Control and Dispatch Service are 
set forth in the appropriate rate schedule attached to and made part of 
the applicable Service Agreement. The rates or rate methodology used to 
calculate the charges for service under this schedule were promulgated 
and may be modified pursuant to applicable Federal laws, regulations, 
and policies.
    The Transmission Provider may modify the charges for Scheduling, 
System Control and Dispatch Service upon written notice to the 
Transmission

[[Page 50330]]

Customer. Any change to the charges to the Transmission Customer for 
Scheduling, System Control and Dispatch Service shall be as set forth 
in a subsequent rate schedule promulgated pursuant to applicable 
Federal laws, regulations, and policies, and attached to and made part 
of the applicable Service Agreement. The Transmission Provider shall 
charge the Transmission Customer in accordance with the rate then in 
effect.

Schedule 2

Reactive Supply and Voltage Control From Generation Sources Service

    In order to maintain transmission voltages on the Transmission 
Provider's transmission facilities within acceptable limits, generation 
facilities under the control of the Control Area operator are operated 
to produce or absorb reactive power. Thus, Reactive Supply and Voltage 
Control from Generation Sources Service must be provided for each 
transaction on the Transmission Provider's transmission facilities. The 
amount of Reactive Supply and Voltage Control from Generation Sources 
Service that must be supplied with respect to the Transmission 
Customer's transaction will be determined based on the reactive power 
support necessary to maintain transmission voltages within limits that 
are generally accepted in the region and consistently adhered to by the 
Transmission Provider.
    Reactive Supply and Voltage Control from Generation Sources Service 
can be provided directly by the Transmission Provider if the 
Transmission Provider is the Control Area operator or indirectly by the 
Transmission Provider making arrangements with the Control Area 
operator that performs this service for the Transmission Provider's 
Transmission System. The Transmission Customer must purchase this 
service from the Transmission Provider or the Control Area operator. 
The charges for such service will be based upon the rates referred to 
below. To the extent the Control Area operator performs this service 
for the Transmission Provider, charges to the Transmission Customer are 
to reflect only a pass-through of the costs charged to the Transmission 
Provider by the Control Area Operator.
    The charges for Reactive Supply and Voltage Control from Generation 
Sources Service are set forth in the appropriate rate schedule attached 
to and made part of the applicable Service Agreement. The rates or rate 
methodology used to calculate the charges for service under this 
schedule were promulgated and may be modified pursuant to applicable 
Federal laws, regulations, and policies.
    The Transmission Provider may modify the charges for Reactive 
Supply and Voltage Control from Generation Sources Service upon written 
notice to the Transmission Customer. Any change to the charges to the 
Transmission Customer for Reactive Supply and Voltage Control from 
Generation Sources Service shall be as set forth in a subsequent rate 
schedule promulgated pursuant to the above procedures and attached to 
and made part of the applicable Service Agreement. The Transmission 
Provider shall charge the Transmission Customer in accordance with the 
rate then in effect.

Schedule 3

Regulation and Frequency Response Service

    Regulation and Frequency Response Service is necessary to provide 
for the continuous balancing of resources, generation and interchange, 
with load and for maintaining scheduled interconnection frequency at 
sixty cycles per second (60 Hz). Regulation and Frequency Response 
Service is accomplished by committing on-line generation whose output 
is raised or lowered, predominantly through the use of automatic 
generating control equipment, as necessary to follow the moment-by-
moment changes in load. The obligation to maintain this balance between 
resources and load lies with the Transmission Provider (or the Control 
Area operator that performs this function for the Transmission 
Provider). The Transmission Provider must offer this service when the 
transmission service is used to serve load within its Control Area. The 
Transmission Customer must either purchase this service from the 
Transmission Provider or make alternative comparable arrangements to 
satisfy its Regulation and Frequency Response Service obligation. The 
charges for Regulation and Frequency Response Service are referred to 
below. The amount of Regulation and Frequency Response Service may be 
set forth in the Service Agreement. To the extent the Control Area 
operator performs this service for the Transmission Provider, charges 
to the Transmission Customer are to reflect only a pass-through of the 
costs charged to the Transmission Provider by that Control Area 
operator.
    The charges for Regulation and Frequency Response Service are set 
forth in the appropriate rate schedule attached to and made part of the 
applicable Service Agreement. The rates or rate methodology used to 
calculate the charges for service under this schedule were promulgated 
and may be modified pursuant to applicable Federal laws, regulations, 
and policies.
    The Transmission Provider may modify the charges for Regulation and 
Frequency Response Service upon written notice to the Transmission 
Customer. Any change to the charges to the Transmission Customer for 
Regulation and Frequency Response Service shall be as set forth in a 
subsequent rate schedule promulgated pursuant to the above procedures 
and attached to and made part of the applicable Service Agreement. The 
Transmission Provider shall charge the Transmission Customer in 
accordance with the rate then in effect.

Schedule 4

Energy Imbalance Service

    Energy Imbalance Service is provided when a difference occurs 
between the scheduled and the actual delivery of energy to a load 
located within a Control Area over a single hour. The Transmission 
Provider must offer this service when the transmission service is used 
to serve load within its Control Area. The Transmission Customer must 
either obtain this service from the Transmission Provider or make 
alternative comparable arrangements to satisfy its Energy Imbalance 
Service obligation. To the extent the Control Area operator performs 
this service for the Transmission Provider, charges to the Transmission 
Customer are to reflect only a pass-through of the costs charged to the 
Transmission Provider by that Control Area operator.
    The Transmission Provider shall establish a deviation band of +/
-1.5 percent (with a minimum of 2 MW) of the scheduled transaction to 
be applied hourly to any energy imbalance that occurs as a result of 
the Transmission Customer's scheduled transaction(s). Parties should 
attempt to eliminate energy imbalances within the limits of the 
deviation band within thirty (30) days or within such other reasonable 
period of time as is generally accepted in the region and consistently 
adhered to by the Transmission Provider. If an energy imbalance is not 
corrected within thirty (30) days or a reasonable period of time that 
is generally accepted in the region and consistently adhered to by the 
Transmission Provider, the Transmission Customer will compensate the 
Transmission Provider for such service. Energy imbalances outside the 
deviation band will be subject to charges to be specified by the 
Transmission Provider. Compensation

[[Page 50331]]

for Energy Imbalance Service will be as set forth below.
    The compensation for Energy Imbalance Service is set forth in the 
appropriate rate schedule attached to and made part of the applicable 
Service Agreement. The rates or rate methodology used to calculate the 
charges for service under this schedule were promulgated and may be 
modified pursuant to applicable Federal laws, regulations, and 
policies.
    The Transmission Provider may modify the compensation for Energy 
Imbalance Service upon written notice to the Transmission Customer. Any 
change to the compensation to the Transmission Customer for Energy 
Imbalance Service shall be as set forth in a subsequent rate schedule 
promulgated pursuant to the above procedures and attached to and made 
part of the applicable Service Agreement. The Transmission Provider 
shall charge the Transmission Customer in accordance with the rate then 
in effect.

Schedule 5

Operating Reserve--Spinning Reserve Service

    Spinning Reserve Service is needed to serve load immediately in the 
event of a system contingency. Spinning Reserve Service may be provided 
by generating units that are on-line and loaded at less than maximum 
output. The Transmission Provider must offer this service when the 
transmission service is used to serve load within its Control Area. The 
Transmission Customer must either purchase this service from the 
Transmission Provider or make alternative comparable arrangements to 
satisfy its Spinning Reserve Service obligation. The charges for 
Spinning Reserve Service are referred to below. The amount of Spinning 
Reserve Service may be set forth in the Service Agreement. To the 
extent the Control Area operator performs this service for the 
Transmission Provider, charges to the Transmission Customer are to 
reflect only a pass-through of the costs charged to the Transmission 
Provider by that Control Area operator.
    The charges for Operating Reserve--Spinning Reserve Service are set 
forth in the appropriate rate schedule attached to and made part of the 
applicable Service Agreement. The rates or rate methodology used to 
calculate the charges for service under this schedule were promulgated 
and may be modified pursuant to applicable Federal laws, regulations, 
and policies.
    The Transmission Provider may modify the charges for Operating 
Reserve--Spinning Reserve Service upon written notice to the 
Transmission Customer. Any change to the charges to the Transmission 
Customer for Operating Reserve--Spinning Reserve Service shall be as 
set forth in a subsequent rate schedule promulgated pursuant to the 
above procedures and attached to and made part of the applicable 
Service Agreement. The Transmission Provider shall charge the 
Transmission Customer in accordance with the rate then in effect.

Schedule 6

Operating Reserve--Supplemental Reserve Service

    Supplemental Reserve Service is needed to serve load in the event 
of a system contingency; however, it is not available immediately to 
serve load but rather within a short period of time. Supplemental 
Reserve Service may be provided by generating units that are on-line 
but unloaded, by quick-start generation or by interruptible load. The 
Transmission Provider must offer this service when the transmission 
service is used to serve load within its Control Area. The Transmission 
Customer must either purchase this service from the Transmission 
Provider or make alternative comparable arrangements to satisfy its 
Supplemental Reserve Service obligation. The charges for Supplemental 
Reserve Service are referred to below. The amount of Supplemental 
Reserve Service may be set forth in the Service Agreement. To the 
extent the Control Area operator performs this service for the 
Transmission Provider, charges to the Transmission Customer are to 
reflect only a pass-through of the costs charged to the Transmission 
Provider by that Control Area operator.
    The charges for Operating Reserve--Supplemental Reserve Service are 
set forth in the appropriate rate schedule attached to and made part of 
the applicable Service Agreement. The rates or rate methodology used to 
calculate the charges for service under this schedule were promulgated 
and may be modified pursuant to applicable Federal laws, regulations, 
and policies.
    The Transmission Provider may modify the charges for Operating 
Reserve--Supplemental Reserve Service upon written notice to the 
Transmission Customer. Any change to the charges to the Transmission 
Customer for Operating Reserve--Supplemental Reserve Service shall be 
as set forth in a subsequent rate schedule promulgated pursuant to the 
above procedures and attached to and made part of the applicable 
Service Agreement. The Transmission Provider shall charge the 
Transmission Customer in accordance with the rate then in effect.

Schedule 7

Long-Term Firm and Short-Term Firm Point-to-Point Transmission Service

    The Transmission Customer shall compensate the Transmission 
Provider each month for Reserved Capacity pursuant to its rate schedule 
for Firm Point-to-Point Transmission Service attached to and made a 
part of the applicable Service Agreement. The rates or rate methodology 
used to calculate the charges for service under this schedule were 
promulgated and may be modified pursuant to applicable Federal laws, 
regulations, and policies.
    The Transmission Provider may modify the charges for Firm Point-to-
Point Transmission Service upon written notice to the Transmission 
Customer. Any change to the charges to the Transmission Customer for 
Firm Point-to-Point Transmission Service shall be as set forth in a 
subsequent rate schedule promulgated pursuant to the above procedures 
and attached to and made part of the applicable Service Agreement. The 
Transmission Provider shall charge the Transmission Customer in 
accordance with the rate then in effect.
    Discounts: Three principal requirements apply to discounts for 
transmission service as follows: (1) Any offer of a discount made by 
the Transmission Provider must be announced to all Eligible Customers 
solely by posting on the OASIS, (2) any customer-initiated requests for 
discounts (including requests for use by one's wholesale merchant or an 
affiliate's use) must occur solely by posting on the OASIS, and (3) 
once a discount is negotiated, details must be immediately posted on 
the OASIS. For any discount agreed upon for service on a path, from 
point(s) of receipt to point(s) of delivery, the Transmission Provider 
must offer the same discounted transmission service rate for the same 
time period to all Eligible Customers on all unconstrained transmission 
paths that go to the same point(s) of delivery on the Transmission 
System.

Schedule 8

Non-Firm Point-To-Point Transmission Service

    The Transmission Customer shall compensate the Transmission 
Provider for Non-Firm Point-to-Point Transmission Service pursuant to 
its rate schedule for Non-Firm Point-to-Point Transmission Service 
attached to and made a part of the applicable

[[Page 50332]]

Service Agreement. The rates or rate methodology used to calculate the 
charges for service under this schedule were promulgated and may be 
modified pursuant to applicable Federal laws, regulations, and 
policies.
    The Transmission Provider may modify the charges for Firm Point-to-
Point Transmission Service upon written notice to the Transmission 
Customer. Any change to the charges to the Transmission Customer for 
Firm Point-to-Point Transmission Service shall be as set forth in a 
subsequent rate schedule promulgated pursuant to the above procedures 
and attached to and made part of the applicable Service Agreement. The 
Transmission Provider shall charge the Transmission Customer in 
accordance with the rate then in effect.
    Discounts: Three principal requirements apply to discounts for 
transmission service as follows: (1) Any offer of a discount made by 
the Transmission Provider must be announced to all Eligible Customers 
solely by posting on the OASIS, (2) any customer-initiated requests for 
discounts (including requests for use by one's wholesale merchant or an 
affiliate's use) must occur solely by posting on the OASIS, and (3) 
once a discount is negotiated, details must be immediately posted on 
the OASIS. For any discount agreed upon for service on a path, from 
point(s) of receipt to point(s) of delivery, the Transmission Provider 
must offer the same discounted transmission service rate for the same 
time period to all Eligible Customers on all unconstrained transmission 
paths that go to the same point(s) of delivery on the Transmission 
System.

Attachment A

Form Of Service Agreement For Firm Point-To-Point Transmission Service

    Southwestern intends for future Service Agreements for Firm Point-
to-Point Transmission Service to be constituted as follows:
Type 1--Long-Term Firm
    Point-to-Point Transmission Service Agreements will be executed for 
each Point-to-Point arrangement, and will consist of the following 
components:
    a. The initial document with signatures of the Parties (Part A), 
similar to the initial document form suggested in Attachment A of the 
Pro Forma Tariff published as Appendix B of FERC Order 888-A, with 
added provisions to include, but not be limited to:
    i. Provisions reserving the right to change rates and contract 
provisions which may be affected by statutory and regulatory 
requirements imposed on the Transmission Provider, as well as changes 
in losses and other operational matters which may be affected by 
changing conditions for operation of the Transmission Provider's 
Transmission System.
    ii. Requirements for conforming to the interchange standards of the 
North American Electric Reliability Council and the Southwest Power 
Pool.
    iii. Limitations on the Transmission Provider's obligations to 
provide for deficiencies in Third-Party resources and to notify parties 
in regard to suspensions or reductions due to the actions of Third 
Parties.
    b. The Specifications for Long-Term Firm Transmission Service (Part 
B), in a form similar to that of the specification document suggested 
in Attachment A of the Pro Forma Tariff published as Appendix B of FERC 
Order 888-A, with added provisions to include, but not be limited to:
    i. Describing the service from information provided in the 
Transmission Customer's Completed Application.
    ii. Listing of charges, including information on Ancillary 
Services.
    c. The General Provisions Applicable to Transmission Service (Part 
C), including, but not limited to:
    i. Special payment terms including provision for sending payments 
to a U.S. Treasury lockbox, payment by EFT, and other applicable 
procedures relating to billing and payment in addition to those 
provided in the Tariff.
    ii. Standard provisions required by a Federal agency in its 
contracts, such as availability of funds and certain socioeconomic 
clauses.
    iii. Facilities issues including environmental and safety 
provisions for entry and use, if any, of the Transmission Provider's 
property by representatives of the Transmission Customer, and 
provisions related to upgrade of facilities and mutual assistance of 
the Parties. These provisions would not be included in any contract 
with a Transmission Customer to which they are not applicable.
Type 2--Short-Term Firm
    Point-to-Point Transmission Service Agreements will be executed as 
enabling agreements for a specified term under which the Transmission 
Customer can request various specific transactions in accordance with 
the Tariff during the term of the Agreement, and will consist of the 
following components:
    a. The initial document as described above in 1. (Part A),
    b. General Terms and Conditions for Short-Term Firm Transmission 
Service, (Part B), including, but not limited to:
    i. Provision for the Transmission Customer to fill out an 
Application which lists certain information related to proposed point-
to-point arrangements as ``various.''
    ii Procedures for requesting service and submitting schedules for 
specific transactions under the enabling agreement.
    iii Parameters for maximum and minimum periods for requesting 
Short-Term Firm capacity reservations modeled on Section 18.3 of the 
Tariff.
    iv Listing of charges, including information on Ancillary Services.
    c. General Provisions Applicable to Transmission Service (Part C), 
as described above under Contract Type 1.

Attachment B

Form Of Service Agreement For Non-Firm Point-To-Point Transmission 
Service

    Non-Firm Point-to-Point Transmission Service Agreements will be 
executed as enabling agreements for a specified term under which the 
Transmission Customer can request a variety of transactions for Non-
Firm Transmission Service in accordance with the Tariff during the term 
of the agreement, and will consist of the following components:
    1. The initial document with signatures of the Parties (Part A), 
similar to the initial document form suggested in Attachment B of the 
Pro Forma Tariff published as Appendix B of FERC Order 888-A, with 
added provisions to include, but not be limited to:
    a. Provisions reserving the right to change rates and contract 
provisions which may be affected by statutory and regulatory 
requirements imposed on the Transmission Provider, as well as changes 
in losses and other operational matters which may be affected by 
changing conditions for operation of the Transmission Provider's 
Transmission System.
    b. Requirements for conforming to the interchange standards of the 
North American Electric Reliability Council and the Southwest Power 
Pool.
    c. Limitations on the Transmission Provider's obligations to 
provide for deficiencies in Third-Party resources and to notify parties 
in regard to suspensions or reductions due to the actions of Third 
Parties.
    2. The General Terms and Conditions for Non-Firm Transmission 
Service (Part B), including, but not limited to:
    a. Provision for the Transmission Customer to fill out an 
Application

[[Page 50333]]

which lists information on proposed point-to-point arrangements as 
``various.''
    b. Procedures for requesting service and submitting schedules for 
individual transactions.
    c. Listing of charges, including information on Ancillary Services.
    3. The General Provisions Applicable to Transmission Service (Part 
C), including, but not limited to:
    a. Special payment terms including provision for sending payments 
to a U.S. Treasury lockbox, payment by EFT, and other applicable 
procedures relating to billing and payment in addition to those 
provided in the Tariff.
    b. Standard provisions required by a Federal agency in its 
contracts, such as availability of funds and socioeconomic clauses.
    c. Facilities issues including environmental and safety provisions 
for entry and use, if any, of the Transmission Provider's property by 
representatives of the Transmission Customer, and provisions related to 
upgrade of facilities and mutual assistance of the Parties. These 
provisions would not be included in any contract with a Transmission 
Customer to which they are not applicable.

Attachment C

Methodology to Assess Available Transmission Capability

    The Transmission Provider is a member of the Southwest Power Pool 
(SPP), and follows the SPP's approach in the determination of Available 
Transfer Capability (ATC) and Total Transfer Capability. The SPP does 
seasonal transfer studies to determine the inter-area transfer 
capabilities. The methodology uses standard incremental transfer 
capability techniques that recognize thermal, voltage, and stability 
limitations as well as contractual limitations. This methodology is 
based on NERC Criteria, Operating Policies, and Reference Documents 
related to interchange and transfer capability estimates.
    The Transmission Provider will post on the OASIS the values 
calculated by the SPP. When ATC approaches zero for any interface, the 
Transmission Provider may do dedicated, off-line studies in accordance 
with SPP methodology to update the seasonal values of ATC calculated by 
the SPP.

Attachment D

Methodology for Completing a System Impact Study

    The Transmission Provider may require System Impact Studies to 
determine the feasibility of providing Transmission Service under this 
Tariff. The System Impact Studies will follow the criteria and 
procedures as described below. In determining the level of capacity 
available for new Transmission Service requests, the Transmission 
Provider may exclude the capacity needed to meet current and reasonably 
forecasted load of Native Load Customers and Network Customers, 
existing Firm Point-to-Point Transmission Service customers, previously 
pending applications for Firm Point-to-Point Transmission Service, and 
the capacity needed to meet existing contractual obligations.

Point-To-Point Service

    The Transmission Provider will do a System Impact Study for a 
Point-to-Point Transmission Service request by simulating the proposed 
transaction along with all other contracted and pending uses of the 
transmission system of equal or greater priority. Criteria will be the 
same as those used to determine the ATC limits posted on the OASIS.

Network Integration Service

    The Transmission Provider will do a System Impact Study for a 
Network Integration Transmission Service request using the criteria and 
assessment practices as detailed in Parts 4 and 5 of the Transmission 
Provider's annual FERC Form 715 submittal.

Attachment E

Index of Point-To-Point Transmission Service Customers

Customer    Date of Service Agreement

    This Attachment E is intentionally left blank.

Attachment F

Form of Service Agreement For Network Integration Transmission Service

    Note: Transmission Provider will not immediately offer Network 
Integration Transmission Service due to limits in its Transmission 
System and to concerns relating to its statutory and regulatory 
requirements to set rates to recover costs and to repay the Federal 
investment in the generation and transmission system from which it 
markets Federal power and associated energy as well as point-to-point 
transmission services. If and when Network Integration Service can be 
offered, the Transmission Provider will develop a suitable service 
agreement form which will be constituted as follows:
    1. An initial document with signatures of the Parties (Part A), 
similar to the initial document form suggested in Attachment A of the 
Pro Forma Tariff published as Appendix B of FERC Order 888-A, with 
added provisions to include, but not be limited to:
    a. Provisions reserving the right to change rates and contract 
provisions which may be affected by statutory and regulatory 
requirements imposed on the Transmission Provider, as well as changes 
in losses and other operational matters which may be affected by 
changing conditions for operation of the Transmission Provider's 
Transmission System.
    b. Requirements for conforming to the interchange standards of the 
North American Electric Reliability Council and the Southwest Power 
Pool.
    c. Limitations on the Transmission Provider's obligations to 
provide for deficiencies in Third-Party resources and to provide 
redispatching services.
    d. Recognition that the Transmission Provider's obligation to 
construct new or upgraded facilities to provide capacity to meet the 
Network Customer's loads is specifically contingent on availability of 
funds from the U.S. Congress.
    2. The Specifications for Network Transmission Service (Part B), in 
a form similar to that of the specification document suggested in 
Attachment A of the Pro Forma Tariff published as Appendix B of FERC 
Order 888-A, with added provisions to include, but not be limited to:
    a. Describing the service from information provided in the Network 
Customer's Completed Application.
    b. Reading in the separately negotiated Network Operating Agreement 
(See Attachment G).
    c. Detailing the charges associated with the service, including 
applicable Ancillary Services and penalties for unauthorized use of the 
service.
    d. Methods for computing Real Power Losses and for the Transmission 
Customer to provide for such losses to the Transmission Provider.
    3. A separately negotiated and attached Network Operating 
Agreement.
    4. Transmission Provider's economic basis for determining network 
service charges.
    5. The General Provisions Applicable to Transmission Service (Part 
C), including, but not limited to:
    a. Special payment terms including provision for sending payments 
to a U.S. Treasury lockbox, payment by EFT, and other applicable 
procedures relating to billing and payment in addition to those 
provided in the Tariff.
    b. Standard provisions required by a Federal agency in its 
contracts, such as availability of funds, and socioeconomic clauses.
    c. Facilities issues including environmental and safety provisions 
for

[[Page 50334]]

entry and use, if any, of the Transmission Provider's property by 
representatives of the Transmission Customer, and provisions related to 
upgrade of facilities and mutual assistance of the Parties.

Attachment G

Network Operating Agreement

    To be provided by the Transmission Provider at such time as the 
Transmission Provider has negotiated or offered a Network Integration 
Transmission Service Agreement. The terms and conditions under which 
the Network Customer will be required to operate its facilities and the 
technical and operational matters associated with the implementation of 
Network Integration Transmission Service will be specified in a 
separate Network Operating Agreement and appended to the applicable 
Service Agreement.
    The Network Operating Agreement may include, but not be limited to, 
provisions addressing the following:

Authorized Representatives of the Parties
Network Operating Committee
Load Following
System Protection
Redispatch to Manage Transmission Constraints
Maintenance of Facilities
Load Shedding
Operation Impacts
Service Conditions
Data, Information and Reports
Metering
Communications
System Regulation and Operating Reserves
Assignment
Notices
Accounting for Transmission Losses
Ancillary Services
Penalties for Unauthorized Use of Transmission Provider's System

Attachment H

Annual Transmission Revenue Requirement For Network Integration 
Transmission Service

1.0  The Annual Transmission Revenue Requirement for purposes of the 
Network Integration Transmission Service is proposed to be 
$____________.

    In the event that the Transmission Provider is able to provide 
Network Integration Transmission Service, the amount provided above 
will be based on the annualized costs associated with operation and 
maintainance of the Transmission System and the Transmission Provider's 
obligation to repay the costs of its transmission facilities. Such 
amount may be revised annually in accordance with other standard 
procedures of the Transmission Provider.
    The pro rata share of each applicant which may be granted Network 
Integration Transmission Service will be determined by an algorithm 
which has not yet been developed.

Attachment I

Index of Network Integration Transmission Service Customers

Customer      Date of Service Agreement

    This Attachment I is intentionally left blank.

Attachment J

Authorities and Obligations

    Southwestern Power Administration (Southwestern) was established in 
1943 pursuant to Section 5 of the Flood Control Act of 1944 (58 Stat. 
887, 890; 16 U.S.C. 825s) and Pub. L. 95-456 (92 Stat. 1230; 16 U.S.C. 
825s-3). Southwestern was organized as part of the Department of the 
Interior, but became part of the Department of Energy pursuant to 
Section 302 of the Department of Energy Organization Act (91 Stat. 578; 
42 U.S.C. 7152) in 1977.
    According to the Flood Control Act, Southwestern is to market 
hydroelectric power and energy generated at U.S. Army Corps of 
Engineers Dams in excess of project needs ``to encourage the most 
widespread use thereof at the lowest possible rates to consumers 
consistent with sound business principles.* * * Preference in the sale 
of such power and energy shall be given to public bodies and 
cooperatives.'' Further, ``only such transmission lines and related 
facilities as may be necessary in order to make the power and energy 
generated at such projects available in wholesale quantities for sale * 
* *'' may be constructed or acquired to fulfill this mission.
    Southwestern markets power and associated energy from hydroelectric 
generation projects in the States of Arkansas, Missouri, Oklahoma, and 
Texas to cooperative, municipal, and military customers in those states 
as well as the States of Kansas and Louisiana. By statute, 
Southwestern's Transmission System was constructed to enable the 
integration of Southwestern's hydroelectric power resources to satisfy 
Southwestern's contractual obligations to its Federal Customers, which 
have allocations of Federal power. Southwestern sells transmission 
service using Federally owned or controlled facilities only to the 
extent that transmission capacity is available in excess of that 
necessary to reliably deliver Federal power. In order to fulfill its 
mission, Southwestern will reserve transmission capacity sufficient to 
deliver Federal power. Accordingly, the Tariff shall apply only to the 
marketing of such transmission capacity in the system of Southwestern 
as is excess to the requirements of Southwestern's primary mission.
    Southwestern's Federal Customers are somewhat analogous to, and its 
nearest equivalent of, Native Load Customers as defined in the Tariff. 
Southwestern is, by the nature of its resources and the provisions of 
its power sales contracts, a partial requirements supplier only. 
Southwestern uses its transmission system to integrate its resources to 
reliably meet contract obligations rather than to meet loads. These 
distinctions mean, among other things, that Southwestern is not obliged 
to meet customer loads or to construct facilities to meet loads, and 
thus has no ``utility responsibility.'' to its Federal Customers. 
However, for the purposes of the Tariff, Southwestern will consider its 
Federal Customers as the equivalent of Native Load Customers.
    Southwestern is not a jurisdictional public utility under Sections 
205 and 206 of the Federal Power Act and is not specifically subject to 
the requirements of the Federal Energy Regulatory Commission's (FERC or 
Commission) Final Orders 888 and 888-A. Southwestern is a transmitting 
utility subject to Section 211 of the Federal Power Act as amended by 
the Energy Policy Act of 1992. Southwestern is also subject to the 
reciprocity provisions of FERC Orders 888 and 888-A. The Department of 
Energy has issued a Power Marketing Administration Open Access 
Transmission Policy that supports the intent of the FERC Final Rule in 
Order 888 on Open Access Transmission. This Open Access Transmission 
Tariff is intended to provide for transmission of non-Federal power on 
the unused capacity of transmission facilities under the jurisdiction 
or control of Southwestern in a manner consistent with the spirit and 
intent of FERC Orders 888 and 888-A.
    Southwestern has prepared this Tariff to provide transmission 
service comparable to that required of jurisdictional public utilities 
by FERC Orders 888 and 888-A, and to implement the spirit and intent of 
those Orders consistent with the DOE Policy. An entity desiring 
Transmission Service from Southwestern must comply with the application 
procedures outlined therein. The review and approval requirements 
detailed therein will apply to all requesting parties. Southwestern

[[Page 50335]]

will perform the necessary studies or assessments for evaluating 
requests for Transmission Service as set forth in the Tariff. Any 
facility construction or interconnection necessary to provide 
transmission service will be subject to Southwestern's Requirements for 
Interconnection, which are available upon request, and will require 
that funds necessary for such construction be submitted in advance to 
Southwestern, subject to Southwestern's authority to receive such 
funds.
    Based on a reasonable level of risk, Southwestern has marketed the 
maximum practical amount of power from each of its projects, leaving 
little flexibility for provision of additional power services. Changes 
in water conditions frequently affect the ability of hydroelectric 
projects to meet obligations on a short-term basis. The unique 
characteristics and limitations of the hydroelectric resource caused by 
changing water conditions may limit Southwestern's ability to provide 
certain generation-related services, including some Ancillary Services 
and any redispatching which may require the use of Federal hydro 
resources.
    Southwestern is committed to providing comparable open-access 
transmission service to any Eligible Customer without discrimination, 
as has been its practice throughout its history. However, nothing in 
the Tariff shall alter, amend, or abridge the statutory and regulatory 
obligations of Southwestern to market Federal Power to Federal 
Customers and to repay the Federal investment in the projects and 
facilities from which Southwestern markets power and energy.
    Southwestern will provide Firm and Non-Firm Point-to-Point 
Transmission Service and, if practicable, Network Integration 
Transmission Service, consistent with the Tariff. The specific terms 
and conditions for providing transmission service to an Eligible 
Customer will be set forth in a Service Agreement.

[FR Doc. 97-25333 Filed 9-24-97; 8:45 am]
BILLING CODE 6450-01-P
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