October 13, 2015

SPP, MISO and Joint Parties Reach Transmission Usage Agreement

Proposed settlement ensures customer benefit for all parties

CARMEL, Ind. and LITTLE ROCK, Ark. – A settlement agreement has been filed at the Federal Energy Regulatory Commission (FERC) around capacity usage and associated compensation to be paid for use of as-available, non-firm transmission capacity on neighboring transmission systems among MISO, Southwest Power Pool, Inc. (SPP), and the Joint Parties, which includes Southern Company, Tennessee Valley Authority (TVA), Associated Electric Cooperative (AECI), Louisville Gas and Electric (LG&E), Kentucky Utilities Company (KU) and PowerSouth Energy Cooperative.

Read the Offer of Settlement

Read the Joint Motion

This settlement was reached through collaboration and compromise on behalf of all parties. Resolving these issues provides greater certainty for market participants across the regions. If approved by FERC, the agreement provides the governance for continued shared use of the transmission system where it enables more economical delivery of energy, while also providing compensation for that use.

“As the SPP region grows and we continue to modernize the electric grid, cooperation with our neighboring regions has never been more important,” said Nick Brown, president and CEO of SPP. “I am pleased we were able to reach this agreement with MISO to ensure that our member companies and their customers are compensated for the use of the SPP transmission system. We also appreciate the work and support of the Joint Parties in helping us resolve this challenging and complex issue.”

“We are pleased to have reached a resolution that provides electricity savings to consumers across the MISO region and brings clarity to our members and all stakeholders,” said John R. Bear, president and CEO of MISO. “With the issue of capacity sharing behind us, we can now collectively return our full attention to the significant challenges facing the industry. Additionally, I would like to thank our stakeholders for their hard work in helping us reach a settlement.”

Today’s filing at FERC contains several key provisions of agreement:

• Specifically creates a mechanism where MISO will compensate SPP and the Joint Parties for use of their systems. The level of compensation will be determined by the application of a capacity factor for flows above MISO’s existing 1,000 megawatts (MWs) of contract path

• Generally retains the capacity usage provision between MISO and SPP under their Joint Operating Agreement (Section 5.2) and establishes new provisions for certain usage going forward

• Provides certainty for express operational transfer limits

• Establishes an Operating Committee for all parties to manage issues that arise under the agreement

• Upon the Settlement Agreement becoming effective, MISO’s hurdle rate is removed

The full filing can be found in FERC dockets EL 14-21 and ER 14-1174.

About MISO

MISO ensures reliable operation of, and equal access to, high-voltage power lines in 15 U.S. states and the Canadian province of Manitoba. MISO manages one of the world’s largest energy markets, with more than $37 billion in annual gross market energy transactions. MISO was approved as the nation’s first regional transmission organization in 2001. The not-for-profit organization is governed by an independent board of directors and is headquartered in Carmel, Indiana.

About SPP

Southwest Power Pool, Inc. manages the electric grid and wholesale energy market for the central United States. As a regional transmission organization, the nonprofit corporation is mandated by the Federal Energy Regulatory Commission to ensure reliable supplies of power, adequate transmission infrastructure and competitive wholesale electricity prices. Southwest Power Pool and its diverse group of member companies coordinate the flow of electricity across 56,000 miles of high-voltage transmission lines spanning 14 states. The company is headquartered in Little Rock, Ark. Learn more at www.spp.org.