VIA ELECTRONIC FILING
February 7, 2013VIA ELECTRONIC FILINGThe Honorable Kimberly D. BoseSecretaryFederal Energy Regulatory Commission888 First Street, N.E.Washington, D.C. 20426Re:Southwest Power Pool, Inc., Docket No. ER13-301-(errata filing)Dear Secretary Bose:On November 2, 2012, in this docket, Southwest Power Pool, Inc. (“SPP”) filed withthe Federal Energy Regulatory Commission (“Commission”) revisions to SPP’s OpenAccess Transmission Tariff (“Tariff”) to implement a cost-based transmissionformula rate (“Formula Rate”) for SPP member Mid-Kansas Electric Company, LLC(Mid-Kansas”).1 On December 10, 2012, SPP submitted an errata filing to revise theFormula Rate to correct an inadvertent error in the wage and salary allocation factor.2The revisions being proposed in this filing are to correct typographical errors found inthe Formula Rate and the Attachment T tariff sheet included in the prior filings.Specifically, the following changes are submitted in this errata filing:1) Attachment H, Addendum 19, Part 1, Mid-Kansas Electric Company, LLC(MKEC), Rate Formula Template, Actual Gross Revenue RequirementsFor the 12 months ended - December 31, 2010, Note P on Page 8 of 71:Note P revised to delete “rations” and replace with “ratios.”2) Attachment T, Mid-Kansas Electric Company, LLC (MKEC), Rate Sheetfor Point-To-Point Transmission Service: The two references toAddendum 18 are revised to replace “18” with “19.”1Submission of Tariff Revisions to Implement a Cost-Based Transmission FormulaRate for Mid-Kansas Electric Company, LLC of Southwest Power Pool, Inc., DocketNo. ER13-301-000 (Nov. 2, 2012) (“November 2 Filing”).2Errata Filing of Southwest Power Pool, Inc., Docket No. ER13-301-001 (Dec. 10,2012) (“December 10 Filing”).
The Honorable Kimberly D. BoseFebruary 7, 2013Page 2Aside from the corrections described above, this filing makes no other changes to theNovember 2 Filing, as modified by the December 10 Filing. The change to the MidKansas formula rate proposed in this errata filing has no impact on the Mid-KansasAnnual Transmission Revenue Requirement as modified by the December 10 Filing.For the reasons stated in the November 2 Filing, the December 10 Filing and thiserrata filing, SPP requests that the Commission accept the proposed Tariff revisionsfiled herein (and in the November 2 Filing and December 10 Filing) to becomeeffective on the date specified in the November 2 Filing, January 1, 2013.To the extent required, SPP respectfully requests a waiver of any Commissionregulations to permit an effective date of January 1, 2013, for the Mid-KansasFormula Rate. The Commission may grant waiver of its notice requirements upon ashowing of good cause.3 SPP proposes no substantive changes to the November 2Filing, and as the Tariff revisions submitted in this errata filing do impacttransmission customers paying Mid-Kansas’ rate under the Tariff, SPP respectfullyrequests the Commission waive the notice requirements and accept the November 2Filing and the errata filing to become effective on January 1, 2013.SPP is serving a copy of this filing on the parties to the service list for this docket andSPP members and customers.Respectfully submitted,/s/ Matthew HarwardMatthew HarwardSouthwest Power Pool, Inc.201 Worthen DriveLittle Rock, AR 72223Telephone: (501) 614-3560mharward@spp.orgAttorney forSouthwest Power Pool, Inc.318 C.F.R. § 35.11 (2012).
ADDENDUM 19 TO ATTACHMENT H – Part 1Page 1 of 71Rate Year2012Historic Year2010Total Pages71Mid-Kansas Electric Company, LLC (MKEC)Rate Formula TemplateTable of ContentsOverviewThe formula is calculated in two steps. The first step is to fill out Tabs A-1 thru A-11, and the Actual Gross Rev Req tab with data from the previous year's KCCAnnual Report. This data input results in the calculation of the actual annual transmission revenue requirement (Actual ATRR) for the previous year, as shown inthe Actual Net Rev Req tab. The results of this calculation are presented to the customers for review no later than June 1 each year.The TU (True-up) tab uses the Actual ATRR from the Actual Net Rev Req tab and compares it to the Projected ATRR (without the True-up for a prior year) thatcustomers were billed for the same period. Interest is added to the difference and the adjusted true-up then is included in the Projected Net Rev Req tab.The projected O&M and plant balances are calculated in Tabs P-1 thru P-5. These sheets feed into the Projected Gross Rev Req tab and ultimately into theProjected Net Rev Req tab. The RTO Projects Smry tab retrieves project specific data from other tabs to calculate the amount of revenue requirements associatedwith those projects which are contained in the total Projected Gross Revenue Requirement amount. The Spon Projects Smry tab does the same process forSponsored projects. The total revenue requirements for these two groups of upgrades and revenue credits are subtracted from the MKEC total revenuerequirement to obtain the Zonal ATRR (line 20, before true-up). This calculation is shown on the Projected Net Rev Req tab. This tab also calculates the pointto-point zonal rates. SPP rates are set on the trued up Base Plan Net Revenue Requirements, Balanced Portfolio Net Revenue Requirements, and ITP/PriorityProjects Net Revenue Requirements as well as the trued up Zonal Net Revenue Requirements. The specific charges are defined under the SPP Open AccessTransmission Tariff.The FBR is set up initially to address the revenue requirements for six separate special categories: 1) Base Plan, 2) Balanced Portfolio, 3) Integrated TransmissionPlan Priority 1, 4) Integrated Transmission Plan Priority 2, 5) Sponsored, and 6) Third Party Projects. From time-to-time it may become necessary to add othercategories of special projects.Cells highlighted in light blue are data input cells. Some cells may reference the results from other calculations in the formula. Such cell references may changefrom year to year, requiring manual adjustment of the reference or the direct entry of the proper value.PageTabDescription2SummarySummary of projected revenue requirements, point to point rates, and Schedule 1 rates.
3Actual Net Rev ReqActual net revenue requirements for most recent calendar year4-8Actual Gross Rev ReqActual gross revenue requirements for most recent calendar year9Actual Sch 1 Rev ReqActual revenue requirements for Schedule 110-11A-1 (Act. Rev. Credits)Actual revenue credits12A-2 (Act. Divisor)Actual transmission system load13A-3 (Act ADIT)Actual Accumulated Deferred Income Taxes (ADIT)14-15A-4 (Act. Excluded Assets)Assets excluded from transmission rate base16A-5 (Act. Depreciation Rate)Depreciation rates for each account16A-BA-5 Rev ( 2011 Depr Rates)Depreciation rates for each account as approved by the KCC in Docket No. 12-MKEE-191-DRS17A-6 (Act. Taxes Other)Actual taxes other than income taxes18-23A-7 (Act. RTO Directed Projects)Actual RTO-directed projects: Base Plan, Balanced Portfolio, and ITP/Priority Projects24A-8 (Act. Sponsored Projects)Actual sponsor-funded projects25-32A-9 (Act. Incentive Plant)Actual incentive returns33A-10 (Act. Third Party Proj)Actual projects constructed by MKEC for Third Parties34A-11 (Act. A&G)Actual Administrative and General Expenses35-36A-12 (Act. 13-Mo & BOY and EOY Aver.)Actual 13-Month averages and BOY-EOY averages for rate base items37-38TU (True-up)True-up adjustment and interest calculation
39-47RTO Project SmryActual and projected RTO-directed projects48-49Spon Project SmryActual and projected Sponsor-funded projects50-51Third Party Project SmryActual and projected Third Party projects52Projected Net Rev ReqProjected net revenue requirements for next calendar year53-57Projected Gross Rev ReqProjected gross revenue requirements for next calendar year58Projected Schedule 1 Rev ReqProjected revenue requirements for Schedule 159-62P-1 (Proj Trans Plant)Projected transmission plant for next calendar year and incentive returns63P-2 (Proj. Exp. & Rev. Credits)Projected expenses and revenue credits for next calendar year64P-3 (Proj. Trans. Network Load)Projected transmission system load65-69P-4 (Proj. RTO Projects)Projected RTO-directed projects: Base Plan, Balanced Portfolio, ITP/Priority Projects70P-5 (Proj. Sponsored. Projects)Projected sponsor-funded projects71P-6 (Proj. Third Party Projects)Projected projects constructed by MKEC for Third PartiesPage 2 of 71SummaryPage 1 of 1Mid-Kansas Electric Company, LLC (MKEC)Rate Formula TemplateProjected Revenue RequirementsFor the 12 months ended - December 31, 2012(1)(2)(3)(4)
LineNo.DescriptionSourceAmountA. Net Revenue Requirement Including True-Up1Base Plan Net Revenue RequirementsProjected Net Rev Req, L41#DIV/0!2Balanced Portfolio Net Revenue RequirementProjected Net Rev Req, L42#DIV/0!3ITP/Priority Projects-1 Net Revenue RequirementProjected Net Rev Req, L43#DIV/0!4ITP/Priority Projects-2 Net Revenue RequirementProjected Net Rev Req, L44#DIV/0!5Sponsored Projects Net Revenue RequirementsProjected Net Rev Req, L45#DIV/0!6Third Party Projects Net Revenue RequirementsProjected Net Rev Req, L46#DIV/0!7TotalSum (L1:L6)#DIV/0!Zonal Net Revenue RequirementProjected Net Rev Req, L49#DIV/0!891011B. Point-to-Point Service12MKEC 12-CP. Peak DemandWP P-3, L15#DIV/0!14Annual Point-to-Point Rate in /MW - YearL9 / L12#DIV/0!15Monthly Point-to-Point Rate in /MW - MonthL14 / 12 months#DIV/0!16Weekly Point-to-Point Rate in /MW - WeeklyL14 / 52 weeks#DIV/0!17Daily On-Peak Point-to-Point Rate in /MW - DayL14 / 260 days#DIV/0!18Daily Off-Peak Point-to-Point Rate in /MW - DayL14 / 365 days#DIV/0!19Hourly On-Peak Point-to-Point Rate in /MW - HourL17 / 16 hours#DIV/0!20Hourly Off-Peak Point-to-Point Rate in /MW - HourL18 / 24 hours#DIV/0!Projected Sch 1 Rev Req, L12#DIV/0!WP P-3, L15#DIV/0!MW132122C. Schedule 1 ARR23Net Schedule 1 Revenue Requirement for Zone2425D. Schedule 1 Rate Calculations26MKEC 12-CP. Peak DemandMW
2728Annual Point-to-Point Rate in /MW - YearL23 / L26#DIV/0!29Monthly Point-to-Point Rate in /MW - MonthL28 / 12#DIV/0!30Weekly Point-to-Point Rate in /MW - WeekL28 / 52#DIV/0!31Daily Point-to-Point Rate in /MW - DayL28 / 365#DIV/0!32Hourly Point-to-Point Rate in /MW - HourL28 / 8760#DIV/0!
Page 3 of 71Actual Net Rev ReqPage 1 of 1Mid-Kansas Electric Company, LLC (MKEC)Rate Formula TemplateActual Net Revenue RequirementsFor the 12 months ended - December 31, ntREVENUE REQUIREMENTS (including approved incentives, if any)1Total Transmission FacilitiesAct Gross Rev, Pg. 2, L100, col. 6#DIV/0!3Base Plan Gross Revenue RequirementsWP A-7, L21, Col. m#DIV/0!4Balanced Portfolio Gross Revenue RequirementWP A-7, L25, Col. m#DIV/0!5ITP/Priority Projects-1 Gross Revenue RequirementWP A-7, L29, Col m#DIV/0!6ITP/Priority Projects-2 Gross Revenue RequirementWP A-7, L33, Col. m#DIV/0!7Sponsored Gross Revenue RequirementsWP A-8, L4, Col. m#DIV/0!8Third Party Projects Gross Revenue RequirementsWP-10, L4, Col. m#DIV/0!9TotalSum (L3:L8)Zonal Gross Revenue RequirementL1 - L9#DIV/0!WP A-1, Pg.1 L45#DIV/0!2#DIV/0!#DIV/0!10111213REVENUE CREDITS1415Zonal Gross Revenue Credit1617NET REVENUE REQUIREMENT
18Base Plan Net Revenue RequirementsL3#DIV/0!19Balanced Portfolio Net Revenue RequirementL4#DIV/0!20ITP/Priority Projects-1 Net Revenue RequirementL5#DIV/0!21ITP/Priority Projects-2 Net Revenue RequirementL6#DIV/0!22Sponsored Project Net Revenue RequirementsL7#DIV/0!23Third Party Projects Net Revenue RequirementsL8#DIV/0!24TotalSum (L18:L23)Zonal Net Revenue RequirementL11 - L15#DIV/0!2526#DIV/0!Page 4 of 71Mid-Kansas Electric Company, LLC (MKEC)Rate Formula TemplateActual Gross Revenue RequirementsFor the 12 months ended - December 31, 2010Line12(1)(2)(3)DescriptionKCC Annual Report/WorkpaperTotal CompanyRATE BASE:PLANT IN SERVICE3ProductionWP A-12, Pg. 1, L1 & L2 4TransmissionWP A-12, Pg. 1, L3-WP A-4, Pg. 1, L13 Note J & K-5Less: Excluded Plant6DistributionWP A-12, Pg. 1, L4-7GeneralWP A-12, Pg. 1, L5-Intangible & Other89(4) WP A-12, Pg. 1, L6-TOTAL GROSS PLANTSum (L3:L8) - L5 -ACCUMULATED DEPRECIATIONNote Q -101112ProductionWP A-12, Pg. 1, L9 & L10-
1314TransmissionLess: Excluded PlantWP A-12, Pg. 1, L11-WP A-4, Pg. 1, L13 Note J & K15DistributionWP A-12, Pg. 1, L12-16GeneralWP A-12, Pg. 1, L13-17Intangible & OtherWP A-12, Pg. 1, L14-Sum (L12:L17) - L14 --18TOTAL ACCUM. DEPRECIATION - -1920NET PLANT IN SERVICE21ProductionL3- L12 22TransmissionL4- L13-L5- L14-23Less: Excluded Plant24DistributionL6- L15-25GeneralL7- L16-26Intangible & OtherL8- L17-27TOTAL NET PLANTSum (L21:L26) - L23 --2829CONTRUCTION WORK IN PROGRESS30ProductionWP A-12, Pg. 1, L23 31TransmissionWP A-12, Pg. 1, L24-32Less: CWIP Assoc. with Third Party and Sponsored Projects(Only for Column 6. T33DistributionWP A-12, Pg. 1, L2534General PlantWP A-12, Pg. 1, L2635Total-L30 L31 - L32 L33 L34 --3637ADJUSTMENTS TO RATE BASE38Accumulated Deferred Income TaxesWP A-3 39Reserve Funds (Non-Escrowed)WP A-12, Pg. 2, L36#DIV/0!Unamortized Abandoned Transmission PlantWP A-12, Pg. 2, L38, Note S404142TOTAL ADJUSTMENTSSum (L38:L40)#DIV/0!
43LAND HELD FOR FUTURE USEWP A-12, Pg. 2, L44 Note B - 41,509,669444546WORKING CAPITALCWC47O&M Expense less FuelKCC Pg. 36-1, L40d - Pg. 34, L2b -L8b-L35b48O&M Expense Allocated to TransmissionPg. 2, L73, Col (6)49Calculated Note C 5,188,70950Materials & Supplies--TransmissionWP A-12, Pg. 1, L48-51Materials & Supplies--OtherWP A-12, Pg. 1, L46, L47 & L49-52Stores ExpenseWP A-12, Pg. 2, L55-53Prepayments (JEC Prepayment)WP A-12, Pg. 2, L57 (Note D)-Prepayments (Account 165)WP A-12, Pg. 2, L58 (Note D)5455-TOTAL WORKING CAPITALSum (L49:L54) 5,188,709Rate BaseSum(L27, L35, L41, L43, L55)#DIV/0!5657Page 5 of 71Mid-Kansas Electric Company, LLC (MKEC)Rate Formula TemplateActual Gross Revenue RequirementsFor the 12 months ended - December 31, 2010(1)(2)(3)LineDescriptionKCC Annual Report/WorkpaperTotal Company58O&M:59Transmission(4)AllocatorKCC Report Pg. 35, L17, Col. b60Less: Transmission by Others Acct. 565KCC Report Pg. 35, L6, Col. b (Note E)61Less: Transmission Leases & Facility ChargesMKEC Records (Note F)(5)-
626364Less Acct. 561 Expense Recovered Through Sch. 1Total Transmission O&MA&G -AdjustedActual Sch 1 Rev Req, L10-L59 - Sum(L60:L62) (Note H) WP A-11, L8 -TP#DIV/0!W/S#DIV/0!65Plus: Safety AdvertisingWP A-11, L9-W/S#DIV/0!66Plus Association Dues Directly Related to TransmissionWP A-11, L10-DA1.0000067Plus: Advertising -TransmissionWP A-11, L15-DA1.0000068Plus: Research -TransmissionWP A-11, L20-DA1.0000069Plus: Regulatory Exp -TransmissionWP A-11, L25-W/S#DIV/0!70Plus: Corporate Visibility -TransmissionWP A-11, L31-W/S#DIV/0!-DA1.00000717273Subtotal A>ransmission Lease Payments & Facility ChargesL64 Sum(L65:L70) -Note FTOTAL O&ML63 L71 L72DEPRECIATION EXPENSENote Q -747576ProductionKCC Report Pg. 38, L2, Col. cNA0.0000077TransmissionKCC Report Pg. 38, L2, Col. dTP#DIV/0!78DistributionKCC Report Pg. 38, L2, Col. eNA0.0000079GeneralKCC Report Pg. 38, L2, Col. fW/S#DIV/0!80Intangible & OtherMKEC RecordsW/S#DIV/0!81Amortization of Abandoned Transmission PlantAcct. 407 (Note S)DA1.0000082TOTAL DEPRECIATIONSum(L76:L81)TAXES OTHER THAN INCOME TAXES(Note I)-W/S#DIV/0!-W/S#DIV/0!GP#DIV/0! -838485LABOR RELATED86PayrollWP A-6, L987Highway and vehicleWP A-6, L988 PLANT RELATED89PropertyWP A-6, L9, (Note M)90Gross ReceiptsWP A-6, L9-NA91OtherWP A-6, L9-GP#DIV/0!
9293TOTAL OTHER TAXESSum(L86:L91) - -9495RETURN96Return before incentivesL17197Incentive returnL18098Total ReturnL96 L9799100GROSS REV. REQUIREMENT WITH INCENTIVESL73 L82 L93 L98101LESS: Gross Revenue Requirements for IncentivesL97GROSS REV. REQUIREMENT WITHOUT INCENTIVESL100 - L101102103RB#DIV/0!
Page 6 of 71Mid-Kansas Electric Company, LLC (MKEC)Rate Formula TemplateActual Gross Revenue RequirementsFor the 12 months ended - December 31, 2010(1)(2)(3)LineDescriptionKCC Annual Report/WorkpaperTotal CompanyAllocator104TRANSMISSION PLANT INCLUDED IN FORMULA105Total transmission plantPg. 3, L114 DA1.00000106Less: Substation, 34kV, & Radial Lines to Distr. Plt.WP A-4, L11 (Note J)-107Less: Total GSU in Transmission PlantWP A-4, L4 (Note K)-108Transmission plant included in ratesL105 - L106 - L 107109Percentage of transmission plant included in ratesL108 / L105TP #DIV/0! (4)-(5)-110111GROSS AND NET PLANT ALLOCATORS112GROSS PLANT IN SERVICE (ACTUAL HISTORICAL COST)113ProductionPg 1, L3-NA114TransmissionPg. 1, L4-DA1.00000Pg 1, L5-DA1.00000115Less: Excluded Plant 116DistributionPg 1, L6-NA117General & IntangiblePg 1, L7 L8-W/S#DIV/0! -GP #DIV/0! 118TOTAL GROSS PLANTL113 L114 - L 115 L 116 L117119120ACCUMULATED DEPRECIATION (ACTUAL HISTORICAL COST)(Note Q)121ProductionPg 1, L12-NA122TransmissionPg 1, L13-DA1.00000Pg 1, L14-DA1.00000Pg 1, L15-123124Less: Excluded PlantDistribution
125126General & IntangiblePg 1, L16 L17TOTAL ACCUM. DEPRECIATION-L121 L122 - L 123 L 124 L125 - -W/S#DIV/0!NP #DIV/0!127128NET PLANT IN SERVICE (ACTUAL HISTORICAL COST)129ProductionL113 - L121130TransmissionL114 - L122-L115 - L123-131Less Excluded Plant132DistributionL116 - L124-133General & IntangibleL117 - L125-134TOTAL NET PLANTL129 L130 - L 131 L 132 L133 -135136WAGES & SALARY ALLOCATOR (W&S)137ProductionKCC Pg. 37, L1, Col. d138TransmissionKCC Pg. 37, L2, Col. d139DistributionKCC Pg. 37, L3, Col. d-140Other (excluding A&G)KCC Pg. 37, L4. L5 & L6, Col. d-141TotalSum (L137:L140)142Wage & Salary Allocator CalculationTP #DIV/0!-Col 6, L141 / Col 3, L141WPage 7 of71Actual Gross Rev ReqPage 4 of 5Mid-Kansas Electric Company, LLC (MKEC)Rate Formula TemplateActual Gross Revenue RequirementsFor the 12 months ended - December 31, perTotal Company(4)(5)Allocator(6)Transmission
143RETURN (R)144MFI TestNote N145LT Debt146LT Interest Expense (Acct. 427)KCC Pg. 5, L11, Avg. ofCol. c & Col. dKCC Pg. 8, L15, Col. c147ST Interest (Acct. 431)KCC Pg. 8, L17, Col. c148149150151152153Total Interest ExpenseTarget MFIReturn Requirements (LT Interest plusMargin)Less: Non Operating IncomePlus: Amortization of Debt Discount andDebt ExpensePlus: Amortization of Acquisition CostsTPL146 L147 -(Note P)L148 * L1491.5357 -KCC Pg. 8, L23, Col. C(Note L)KCC Pg. 8, L16, Col. cKCC Pg. 46 (Acct. 425) L80 (Note G)154155Net Operating Return Req. (accrualbasis)L150 - L151 L152 L153 L154 - - -156157158DSC TestDebt Service159LT Interest ExpenseL146160Principal PaymentKCC Pg. 22, L18, Col. e161Debt Service162163164Target DSCReturn RequirementsLess: Non Operating IncomeL159 L160(Note P)L161 * L1621.2802 -L151-165Plus: Amortization of Debt Discount andDebt ExpenseL152-Allocation(Col 3 timesCol 5)
166167168Net Operating Return Req. (cashbasis)Less: Depreciation ExpenseL163 - L164 L165Equivalent(accrual basis)ReturnRequirements -L166 - L167 -Greater of L155 or L168DSCGreater of L155 or L168 0L161 / L145#DIV/0!L171 / L57#DIV/0!L82169170171172173Critical Ratio (MFI or DSC)Return Requirements Greater of MFI orDSC TestAverage Debt Service RateAverage Return on Rate Base174175GROSS REV. REQUIREMENT FOR INCENTIVE PROJECTS176Plant Granted Incentive MFI Adder:177Total Incentive PlantWP A-9, L27 178Less: Total Accumulated DepreciationWP A-9, L27#DIV/0!#DIV/0!179Net Incentive PlantL177 - L178180Incentive ReturnWP A-9, L27-#DIV/0!181182183184185186Abandoned Plant:187Unamortized Abandoned Transmission PlantL40 of Pg 1188Return on Abandoned PlantL173 * L187189Amortization Expense for Abandoned PlantL81 of Pg. 2190Total Recovery for Abandoned PlantSum (L188:L189)191TOTAL GROSSINCENTIVE PROJ.(Note S) -#DIV/0!-REV.REQ.FORL180 L184 L190#DIV/0!#DIV/0!
Page 8 of 71Mid-Kansas Electric Company, LLC (MKEC)Rate Formula TemplateActual Gross Revenue RequirementsFor the 12 months ended - December 31, 2010General Note: References to pages in this formula rate are indicated as: (Pg. #, L(in) #, Col.#).References to data from MKEC's Annual Report
Feb 07, 2013 · (MKEC), Rate Formula Template, Actual Gross Revenue Requirements For the 12 months ended - December 31, 2010, Note P on Page 8 of 71: Note P revised to delete “rations” and replace with “ratios.” 2) Attachment T, Mid-Kansas Electric Company, LLC (MKEC), Rate Sheet for P
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