Commercial Structure For Independent Transmission June 11, 2012 - - PowerPoint PPT Presentation

Bringing Energy Forw ard

Commercial Structure For Independent Transmission

June 11, 2012

Bringing Energy Forw ard

1

LS Power

• Over 25,000 MW of

development, construction,

• r operations experience
• Active development of

renewable and fossil generation resources

• Over $4 billion in private

equity capital dedicated to energy sector

• Acquired ~ 17,000 MW of

power generation

• Recent Owner of DeSoto

Generating Plant in Florida

Pow er Generation

Functional Expertise

Project Development Licensing & Environmental Regulatory & Transmission Power Marketing Project Finance Construction & Operations

Transm ission Acquisition

• 235-mile, 500 kV ON Line

Transmission Project under construction

• 235-mile, 2-345 kV Cross

Texas Transmission facilities under construction

• Advanced development of

275-mile, 500 kV Southwest Intertie Project

Bringing Energy Forw ard

2

Project Portfolio

* One-third ownership interest in Safe Harbor

Bringing Energy Forw ard

ONE NEVADA TRANSMISSION LINE PROJECT

3

Bringing Energy Forw ard

4

ON Line Project Overview

Phase 1 – One Nevada Transmission Line or ON Line (Red)

• Currently Under Construction
• 75% Ownership by affiliates of LS Power/ 25%

Ownership by affiliates of NV Energy

• 100% Capacity to NV Energy

Phase 2 – SWIP – North (Blue) and SNIP (Green)

• Not yet in construction
• 100% Ownership by affiliates of LS Power
• Once in service, capacity of entire line shared

according to formula (includes exchange of Phase 1 capacity for Phase 2 capacity)

Transmission Use and Capacity Exchange Agreement

• Complex transaction
• Addresses Joint Ownership Issues
• Addresses Capacity Exchange Issues
• Focus on Transmission Use related provisions

(some provisions arise from joint ownership)

Bringing Energy Forw ard

5

Regulatory Treatment

• Nevada is in a non-RTO region, similar to Florida
• Project was submitted as preferred plan in NV Energy

Integrated Resource Plan and approved by Public Utilities Commission of Nevada

• Transmission Use and Capacity Exchange Agreement was

filed with

• Federal Energy Regulatory Commission (Docket ER10-3317)
• Public Utilities Commission of Nevada
• Transmission line falls under Utility Open Access

Transmission Tariff

• Transmission capacity for utility customers and third parties arranged

through utility OATT

• New interconnection requests to transmission line processed under

utility OATT

Bringing Energy Forw ard

6

Rights and Obligations – Transmission Use Agreement Generally

• Project Developer Responsible For
• Development of facility
• Permits
• Rights of Way
• Design
• Procurement
• Financing of facility
• Construction of facility
• Ownership of facility
• Developer Turns Capacity Over to Utility for Incorporation Into Overall

Transmission System

• Utility has rights to all transmission capacity created by facility
• For use for native load customers
• For resale to transmission customers under utility’s OATT
• Utility pays developer payments for capacity and operating costs
• Analogous to power purchase agreement for generating capacity
• Analogous to a lease
• Responsibilities Could Vary Under Joint Ownership

Bringing Energy Forw ard

7

Operations

• Transmission line operated within utility Balancing Area
• Operated within utility control center
• Maintenance and emergency response performed by utility
• NERC Compliance

Bringing Energy Forw ard

8

Takeaways

• The ON LINE structure is a structure that facilitated the

interests of an incumbent transmission owner, a new entrant, state public utility commission, and FERC

• The ON LINE structure is a structure that leads to a

financeable project

• The ON LINE structure is a structure that resulted in needed

transmission built at a just and reasonable cost to ratepayers

• Specific FRCC applications to FRCC Order 1000 Filing and

FRCC Tariff