October 28, 2010

Honorable Kimberly D. Bose Secretary Federal Energy Regulatory Commission 888 First Street, N.E.Washington, DC 20426

Re: Southwest Power Pool, Inc., Docket No. ER11-__Submission of Filing to Update Energy Imbalance Market Offer Cap

Dear Secretary Bose:

Pursuant to section 205 of the Federal Power Act, 16 U.S.C. § 824d, and section 35.13 of the Commission’s regulations, 18 C.F.R. § 35.13, Southwest Power Pool, Inc. (“SPP”), submits this filing revising its Open Access Transmission Tariff (“OATT” or “Tariff”). Specifically, SPP is incorporating Tariff revisions in order to reflect updates of annual values used in the calculation of offer caps for all pivotal resources in SPP’s real-time energy imbalance service market (“EIS Market”). SPP requests an effective date of January 1, 2011 for the Tariff modifications submitted in this filing. In support, SPP states the following:

I. Background

On January 4, 2006, SPP filed with the Commission proposed Tariff revisions intended to implement an EIS Market and establish a market monitoring and market power mitigation plan (“January 4 Filing”). The January 4 Filing included a proposed Section 3.2.4 of Attachment AF, which detailed how SPP would calculate its offer cap during periods of transmission constraints. Specifically, SPP proposed to use a formula of Annual Fixed Costs (“AFC”) divided by Annual Hours of Constraint (“AHC”) plus variable non-fuel Operations and Maintenance (“VOM”) plus the fuel cost of a new natural gas fired combustion turbine peaking resource. Boston Pacific Company, Inc. (“Boston Pacific”), on behalf of SPP, proposed to calculate the AFC of a generic combustion turbine by extrapolating from U.S. Energy Information Administration (“EIA”) data to produce a fixed cost per megawatt-year. Boston Pacific also proposed a VOM adder per megawatt hour based on inflation-adjusted EIA data for a combustion turbine. In addition, SPP’s proposal provided that any changes to these costs, along with justification for the changes, will

Honorable Kimberly D. BoseOctober 28, 2010Page 2

be filed with the Commission for approval. The Commission accepted SPP’s proposals in an order issued on March 20, 2006.1

II. Description and Justification for Tariff Revisions

The purpose of the Tariff revisions submitted in this filing is to reflect updates of annual values used in the offer cap calculation. The variables that are being updated in this filing are the AFC and VOM components. The assumptions in the model approved in the March 20 Order were maintained for the calculations submitted in this filing, with the exception of updating the annual costs that come from the EIA’s Assumptions to the Annual Energy Outlook, the interest rate utilized in the model, and inflation. The interest rate and inflation factors were developed consistent with Boston Pacific’s testimony filed with the January 4 Filing. The EIA numbers were adjusted to reflect values in 2011 using an inflation factor of 1.83%, which was derived from data available from the Bureau of Labor Statistics, CPI-U (All Items).

The updated analysis indicates that the 2011 values for the components of the offer cap are $103,470/MW-year for the annual fixed costs and 3.86 mills/kWh or $3.86/MWh for the variable O&M costs. The sheets to SPP’s Tariff submitted in this filing have been revised to reflect this updated analysis. SPP also includes in this filing worksheets providing the relevant calculations.

The updated analysis was completed using the same methodology, as well as the same reliable data sources and reasonable assumptions, that the Commission approved in the March 20 Order.2 In addition, the Commission has previously accepted substantially similar filings by SPP to update its EIS Market offer caps.3 Thus, the revisions proposed in this filing are just and reasonable and warrant Commission approval.

III. Effective Date

SPP requests an effective date of January 1, 2011, for the Tariff modifications submitted in this filing. In addition, SPP respectfully requests that the Commission issue an order approving the Tariff revisions proposed in this filing no later than December 27, 2010, which is 60 days after this filing. In order for the calendar year 2011 offer caps to be calculated for January 1, 2011, the components of the calculation must be in place in SPP’s database production system no later than December 30, 2010 at 1500 (CDT). Commission approval by December 27, 2010 will provide SPP with sufficient time to make the necessary changes in its database so that the updated offer caps will be in place by January 1, 2011. 1 See Sw. Power Pool, Inc., 114 FERC ¶ 61,289, at PP 188-89 (“March 20 Order”), order

on reh'g, 116 FERC ¶ 61,289, at PP 17-25 (2006).

2 See March 20 Order at P 189.

3 See Sw. Power Pool, Inc., Letter Order, Docket No. ER10-126-000 (Dec. 11, 2009);, Sw. Power Pool, Inc., Letter Order, Docket No. ER09-140-000 (Dec. 11, 2008); Sw. Power Pool, Inc., Letter Order, Docket No. ER08-108-000 (Dec. 18, 2007).

Honorable Kimberly D. BoseOctober 28, 2010Page 3

IV. Additional Information

A. Information Required by Section 35.13 of the Commission’s Regulations, 18 C.F.R. § 35.13:4

1. Documents submitted with this filing:

In addition to this transmittal letter, the following material is provided with this filing: (a) a list of the parties served, as Exhibit No. 1; (b) worksheets providing the relevant calculations, as Exhibit No. 2; (c) a clean copy of the revised portions of SPP’s Tariff; and (d) a redlined copy of the revised portions of SPP’s Tariff.

2. Effective Date:

SPP requests an effective date of January 1, 2011 for the Tariff modifications submitted herein.

3. Service:

SPP has served a copy of this filing on all its Members and Customers, as well as on all affected state commissions. A complete copy of this filing will also be posted on the SPP web site, www.spp.org.

4. Description of filings:

A description of changes, along with the reasons for these changes, is provided above.

5. Requisite agreements:

None required.

6. Costs Alleged or Judged Illegal, Duplicative or Unnecessary:

None. 4 SPP requests any waivers deemed necessary to utilize the abbreviated filing procedures

set forth in section 35.13(a)(2) of the Commission’s regulations, 18 C.F.R. § 35.13(a)(2). Good cause exists for granting this waiver. As detailed in this filing, the increase in the offer cap is based on the mitigation formula approved by the Commission in the March 20 Order. The Commission has granted waiver in similar instances. See Mich. Elec. Transmission Co., LLC and Midwest Indep. Transmission Sys. Operator, Inc., 113 FERC ¶ 61,343 (2005) (conditionally accepting filing to increase rates for a Regional Transmission Organization pricing zone where a similar waiver request was made in initial filing).

Honorable Kimberly D. BoseOctober 28, 2010Page 4

7. Basis of rates:

The basis for the offer cap changes are explained above.

8. Specifically assignable facilities installed or modified:

There are none.

B. Communications:

Correspondence and communications with respect to this filing should be sent to, andSPP requests the Secretary to include on the official service list, the following:

Heather Starnes Wendy N. ReedManager – Regulatory Policy Matthew K. SegersSouthwest Power Pool, Inc. Wright & Talisman, P.C.415 North McKinley, Suite 140, Plaza West 1200 G Street, NWLittle Rock, AR 72205 Suite 600Telephone: (501) 614-3380 Washington, D.C.Fax: (501) 664-9553 Telephone: (202) 393-1200hstarnes@spp.org Fax: (202) 393-1240

reed@wrightlaw.comsegers@wrightlaw.com

V. Conclusion

For all of the foregoing reasons, SPP respectfully requests that the Commission accept the Tariff revisions submitted in this filing with an effective date of January 1, 2011. SPP also reiterates its request that the Commission issue its order accepting the proposed Tariff revisions no later than December 27, 2010. SPP further requests waiver of any additional Commission regulations that the Commission may deem applicable.

Respectfully submitted,

/s/ Matthew K. SegersWendy ReedMatthew K. Segers

Attorneys forSouthwest Power Pool, Inc.

K:\SPP\1001-1206-258 (2010 offer cap update letter 2011).doc

Exhibit No. 1

SPP Member List

Frank BristolAcciona Wind Energy USA LLC333 West Wacker DriveSuite 1500Chicago, IL 60606

Gary BraunAcciona Wind Energy USA LLC333 West Wacker DriveSuite 1500Chicago, IL 60606

Mr. Kip Fox, Manager RTO PolicyAmerican Electric PowerAEP Oklahoma Transmission Company, Inc.AEP Southwestern Transmission Company, Inc.1201 Elm Street, Suite 800Dallas, TX 75250

Gary VoigtArkansas Electric Cooperative Corporation8000 Scott Hamilton DrivePost Office Box 194208Little Rock, AR 72209

Christopher CoulterCalpine Energy Services L.P.717 Texas Avenue, Suite 1000Houston, TX 77002

Gene BeckerCargill Power Markets, LLC12700 Whitewater DriveMS 151Minnetonka, MN 55343

Robert PriestCity of Clarksdale MississippiP.O. Box 70Clarksdale, MS 38614

E. Leon DaggettCity of Independence, MOP.O. Box 1019Independence, MO 64051

Jeff KnottekCity Utilities (Springfield, MO)301 E. CentralP.O. Box 551Springfield, MO 65801-0551

Mark MacDonald, Director FERC Regulatory AffairsCleco Corporation2030 Donahue Ferry RoadPineville, LA 71360-5000

Carl CosciaConstellation Energy Commodities Group, Inc.111 Market PlaceSuite 600Baltimore, MD 21202

Walter YeagerDuke Energy139 East Fourth StreetMail Code EA600Cincinnati, OH 45202

Kevin Carter, Market and RTO Services ManagerDuke Energy139 East Fourth StreetMail Code EA600Cincinnati, OH 45202

Jason Cox, Sr. Director, MW Asset ManagementDynegy Power Marketing1000 Louisiana AvenueSuite 5800Houston, TX 77002

SPP Member List

Tambra OffieldEast Texas Electric Cooperative, Inc.P.O. Box 631623Nacogdoches, TX 75963-1623

Letitia Davis, VP, Chief Ethics and Compliance Ofr.Edison Mission Marketing & Trading Inc.160 Federal StreetBoston, MA 02110-1776

Christopher Bernard, Trading & Regulatory ComplianceEdison Mission Marketing & Trading Inc.160 Federal StreetBoston, MA 02110-1776

Ellen Oswald, Director of NERC ComplianceEdison Mission Marketing & Trading Inc.160 Federal StreetBoston, MA 02110-1776

Dennis PriceEl Paso Marketing, L.P.1001 Louisiana StreetHouston, TX 77002

Mr. Mike PalmerVice President – Commercial OperationsEmpire District Electric CompanyP.O. Box 127Joplin, MO 64802

Andrea Weinstein, Assistant General CounselEntergy Power Ventures, LP101 Constitution Ave., N.W.Suite 200-EastWashington, D.C. 20001

Tom Reagan, PresidentCompetitive OperationsEntergy Power Ventures, LP1661 Gravier StreetNew Orleans, LA 70112

Randall HelmickVice President of TransmissionEntergy Services Inc.P.O. Box 61000M-ELEC-8GNew Orleans, LA 70161

Noel TraskLead Counsel, Exelon Power TeamExelon Business Services Company300 Exelon WayKennett Square, PA 19348

Mark W. Schwirtz President and General ManagerGolden Spread Electric Coop., Inc.P.O. Box 9898Amarillo, TX 79105

Michael Kiefner, Chief Operating OfficerGrand River Dam AuthorityP.O. Box 409Vinita, OK 74301-0409

Bill BojorquezVice President, PlanningHunt Transmission Services, LLCSutherland Asbill & Brennan701 Brazos Street, Suite 970Austin, TX 78701-2559

Susan BraunKansas City Power & Light CompanyP.O. Box 418679Kansas City, MO 64141-9679

SPP Member List

Todd FridleyKansas City Power & Light CompanyP.O. Box 418679Kansas City, MO 64106-9679

Robert D. BowserKansas Electric Power CooperativeP.O. Box 4877Topeka, KS 66604-0877

Frank LedouxLafayette Utilities SystemP.O. Box 4017-CLafayette, LA 70502

Dennis FloromLincoln Electric System1040 O StreetLincoln, NE 68501

Doug CurryLincoln Electric System1040 O StreetLincoln, NE 68501

Eric RuskampLincoln Electric System1040 O StreetLincoln, NE 68501

Cordell GrandLouisiana Energy & Power Authority210 Venture WayLafayette, LA 70507-5319

Andrea KraftManager of Wholesale PowerLuminant Energy Company, LLCEnergy Plaza1601 Bryan Street, Suite 11005BDallas, TX 75201

William DowlingMidwest Energy Inc.1330 CanturburyP.O. Box 898Hays, KS 67601-0898

Paul J. MaloneNebraska Public Power District907 West 25th StreetP.O. Box 608York, NE 68467-0608

Harold L. HadlandNebraska Public Power District1414 15th StreetP.O. Box 499Columbus, NE 68602-4099

Ronald F. Thompson, Jr.Nebraska Public Power District2060 W. Platte River Dr.P.O. Box 1000Doniphan, NE 68832-1000

Richard M. TylerNortheast Texas Electric Cooperative1127 Judson RoadSuite 249Longview, TX 75601

The Assistant General Counsel, Regulatory AffairsNRG Power Marketing Inc.211 Carnegie CenterPrinceton, NJ 08540

SPP Member List

Kimber ShoopOklahoma Gas and Electric CompanyPost Office box 321, Mail Code 1208Oklahoma City, OK 73101-0321

David L. KaysOklahoma Gas and Electric CompanyPost Office Box 321Oklahoma City , OK 73101-0321

Cindy HolmanOklahoma Municipal Power AuthorityP.O. Box 1960Edmond, OK 73083-1960

Margaret SailorsOmaha Public Power District444 S. 16th Street, Mall, 10E/EP1Omaha, NE 68102

Jimmy WeverPublic Service comm. Of Yazoo City MS210 South Mound StreetP.O. box 660Yazoo City, MS 39194

Robert JanssenRedbud Energy, LP6700 Alexander Bell DriveSuite 360Columbia, MD 21046

Trent CarlsonRRI Energy Services, Inc.1000 Main StreetHouston, TX 77002

Jeff Brown, Regulatory AffairsShell Energy North America (US), L.P.909 Fannin, Plaza Level OneHouston, TX 77010

Nick BrownSouthwest Power Pool415 N. McKinleySuite 140Little Rock, AR 72205-3020

AdministratorSouthwestern Power AdministrationAttn: 1000-AdministratorOne West 3rd StreetTulsa, OK 74103

L. Earl WatkinsSunflower Electric Power CorporationP.O. Box 980Hayes, KS 67601

Trudy HarperTenaska Power Services Co.1701 E. Lamar Blvd.Suite 100Arlington, TX 76006

Mr. Edd Hargett, General ManagerTex-La Electric Cooperative of Texas, Inc.P.O. Box 631623Nacogdoches, TX 75963

Darrell DorseyThe Board of Public Utilities (Kansas City KS)312 N. 65th StreetKansas City, KS 66102

SPP Member List

Dennis ReedWestar Energy, Inc.818 S. Kansas AvenueTopeka, KS 66612

Grant WilkersonWestar Energy, Inc.818 S. Kansas AvenueTopeka, KS 66612

Gary RouletWestern Farmers Electric CooperativeP.O. Box 429Anadarko, OK 73005-0429

Tim Woolley, Senior Manager, RTO PolicyXcel Energy550 15th Street, Suite 700Denver, CO 80202

SPP Customer List

Lundy KigerDirector of Gov't & Community RelationsAES Shady Point, LLCP.O. Box 1740Panama, OK 74951

Don MosierAmeren Energy Marketing Company1901 Choteau AvenueMail Code AME-902St. Louis, MO 63103

Shawn SchukarAmeren Services Company1901 Choteau AvenueMail Code AME-900St. Louis, MO 63103

Monique Rowtham-Kennedy, Senior CounselAmerican Electric Power 801 Pennsylvania Avenue, N.W.Suite 320Washington, D.C. 20004-2684

C. Richard Ross, Director Market DevelopmentAmerican Electric Power6705 E. 81st StreetSuite 160Tulsa, OK 74133

Ricky BittleArkansas Electric Cooperative Corp.P.O. Box 194208Little Rock, AR 72219-4208

Chris BolickAssociated Electric Cooperative, Inc.2814 S. GoldenP.O. Box 754Springfield, MO 65801-0754

Ms. Michelle HileyBarclays Bank PLC200 Park AvenueNew York, NY 10166

Mr. David CharlesBasin Electric Power Company1717 East Interstate AvenueBismarck, ND 58504

Larry WilliamsonFERC Tariff and Compliance ManagerBlack Hills Power, Inc.P.O. Box 1400Rapid City, SD 57709

Andy ButcherManager Generation Dispatch and Power MarketingBlack Hills Power, Inc.P.O. Box 1400Rapid City, SD 57709

Vanessa KelloggBlue Canyon Windpower, LLC808 Travis StreetSuite 700Houston, TX 77002

Matt DanielAsset Management AssociateBlue Canyon Windpower, LLC808 Travis Street, suite 700Houston, TX 77002

Greg BruceBP Energy Co.501 Westlake Park Blvd.Houston, TX 77079

SPP Customer List

David Van HoogstratenDirector of Wind Energy PolicyBP Wind Energy North America, Inc.1101 New York Avenue, N.W.Suite 700Washington, DC 20005

Carla HarrymanRegulatory Compliance SpecialistBP Wind Energy North America, Inc.700 Louisiana Street33rd FloorHouston, TX 77002

Fred MitroWind Development ManagerBP Wind Energy North America, Inc.700 Louisiana Street33rd FloorHouston, TX 77002

Clifton KarneiBrazos Electric Power CooperativeP.O. Box 2585Waco, TX 76702-2585

Daniel WhyteBrookfield Power Corporation480 Boulevard de-la-CITEGatineau, Quebec J8T8R3

Christopher CoulterCalpine Energy Services L.P.717 Texas Avenue, Suite 1000Houston, TX 77002

Gene BeckerCargill Power Markets, LLC12700 Whitewater DriveMS 151Minnetonka, MN 55343

Robert Williams, General ManagerCarthage Water & Electric Plant149 E. 3rd StreetP.O. Box 611Carthage, MO 64836

Walter HornadayCielo Power Marketing, LP823 Congress AvenueSuite 500Austin, TX 78701

Kolby P. Kettler, DirectorCitigroup Energy Inc.2800 Post Oak Blvd.Suite 500Houston, TX 77056-6156

Jim SuttonCity of AugustaP.O. Box 489Augusta, KS 67010

Gerald BritschgePower Plant SuperintendentCity of Burlingame101 E. Santa Fe AvenueBurlingame, KS 66413

Larry GatesCity of ChanuteP.O. Box 907Chanute, KS 66720

Steve McGieManager of Interconnected OperationsCity of Coffeyville KSP.O. Box 1629Coffeyville, KS 67337

SPP Customer List

Jeff MorrisCity ManagerCity of Coffeyville KSP.O. Box 1629Coffeyville, KS 67337

Michael D. ShookSuperintendent of Electric OperationsCity of Coffeyville KSP.O. Box 1629Coffeyville, KS 67337

E. Leon DaggettCity of IndependenceP.O. Box 1019Independence, MO 64051

Gregory DuMarsCity AdministratorCity of LindsborgP.O. Box 70Lindsborg, KS 67456

Tim DunnPublic Works DirectorCity of LindsborgP.O. Box 70Lindsborg, KS 67456

Mr. Galen CumminsUtility Production DirectorCity of Mulvane211 N. Second StreetMulvane, KS 67110

Ms. Patty GerwickCity ClerkCity of Mulvane211 N. Second StreetMulvane, KS 67110

Mike Gilliland, Director of UtilitiesCity of Osage City201 S. 5th StreetP.O. Box 250Osage City, KS 66523

Billy HouseOffice ManagerCity of PrescottP.O. Box 676Prescott, AR 71857

John StephensCity Utilities of Springfield301 E. Central StreetP.O. Box 551Springfield, MO 65801

Mark MacDonald, Director FERC Regulatory AffairsCleco Power LLC2030 Donahue Ferry RoadPineville, LA 71360-5000

Mark MacDonald, Director FERC Regulatory AffairsCleco Support Group LLC2030 Donahue Ferry RoadPineville, LA 71360-5000

Wanda LeeCobb Electric Membership Corporation1000 EMC ParkwayMarietta, GA 30061

Tad JohnsenColumbia Water and Light DepartmentP.O. Box 6015Columbia, MO 65205

SPP Customer List

Russell MartinsonConAgra Trade Group, Inc.Eleven ConAgra Drive, STE 11-160Omaha, NE 68102

Gary J. Morsches, President and CEOConectiv Energy Supply, Inc.500 N. Wakefield DriveNewark, DE 19702

Maria HendrixConoco Inc.600 North Dairy Ashford (CH1081)Houston, TX 77079

Randall OsteenConstellation Energy Commodities Group, Inc.111 Market PlaceSuite 500Baltimore, MD 21202

Rob JanssenDogwood Energy LLC6700 Alexander Bell DriveSuite 360Columbia, MD 21046

Marcia HissongDTE Energy Trading414 South Main StreetSuite 200Ann Arbor, MI 48104

Chris ArmitageEagle Energy Partners, L.L.P.4700 West Sam Houston Parkway N.Suite 250Houston, TX 77041

Seth BrownEast Texas Electric Cooperative, Inc.P.O. Box 631623Nacogdoches, TX 75623-1623

Eastex Cogeneration LTD Partner

Kelly WaltersEmpire District Electric CompanyP.O. Box 127Joplin, MO 64802

Bary WarrenDirector of Transmission Policy & ComplianceEmpire District Electric CompanyP.O. Box 127Joplin, MO 64802

Chris DubayEnergetix, Inc.31 Lewis Street, Suite 401Binghamton, NY 13901

Brooke SeimsEnergy Transfer Group3738 Oaklawn AvenueDallas, TX 75219

Andrea Weinstein, Assistant General CounselEntergy Power Ventures, LP101 Constitution Ave., N.W.Suite 200-EastWashington, D.C. 20001

SPP Customer List

Tom Reagan, President, Competitive OperationsEntergy Power Ventures, LP1661 Gravier StreetNew Orleans, LA 70112

Matt WolfEntergy Services, Inc.Parkwood Two Bldg., Suite 30010055 Grogan’s Mill Rd.The Woodlands, TX 77380

Kristy AshleyExelon Generation Company, LLC1005 Congress AvenueAustin, TX 78701

Fortis Energy Marketing & Trading1100 Louisiana, Suite 4900Houston, TX 77002

Ms. Carrie ClarkStaff AttorneyGolden Spread Electric Coop., Inc.P.O. Box 9898Amarillo, TX 79105

Mark W. Schwirtz President and General ManagerGolden Spread Electric Coop., Inc.P.O. Box 9898Amarillo, TX 79105

Mike WiseVice President, Transmission & OperationsGolden Spread Electric Coop., Inc.P.O. Box 9898Amarillo, TX 79105

Michael Kiefner, Chief Operating OfficerGrand River Dam AuthorityP.O. Box 409Vinita, OK 74301-0409

Mr. Jim DeTourHastings Utilities1228 N. Denver AvenueP.O. Box 289Hastings, NE 68902

Mr. Jim BerryPower Plant SupervisorHigginsville Municipal UtilitiesP.O. Box 110Higginsville, MO 64037

David L. FincherDirector, Electric System PlanningHoper Water & LightP.O. Box 2020Hope, AR 70802-2020

Brent Hebert, Director of Regulatory AffairsHorizon Wind Energy, LLC808 Travis StreetSuite 700Houston, TX 77002

Toan Nguyen, Legal DepartmentIberdrola Renewables, Inc.1125 NW Couch StreetSuite 700Portland, OR 97209

Ms. Thresa AllenIberdrola Renewables, Inc.1125 Couch StreetSuite 700Portland, OR 97209

SPP Customer List

Kathy BeniniJ. Aron & Company85 Broad Street26th FloorNew York, NY 10004

Daniel FeitJ. Aron & Company1 New York Plaza38th FloorNew York, NY 10004

Ronald BowenJonesboro City Water & LightP.O. Box 1289Jonesboro, AR 72403

Ms. Bridget PattiJW Prairie Wind Power645 MassachusettsSuite 300Lawrence, KS 66044

Patricia DennyKansas City Power & Light CompanyP.O. Box 418679Kansas City, MO 64141-9679

Mr. Charles LockeKansas City Power & Light CompanyP.O. Box 418679Kansas City, MO 64141-9679

Doug HewittKansas City Power & Light CompanyP.O. Box 418679Kansas City, MO 64141-9679

Robert D. BowserKansas Electric Power CooperativeP.O. Box 4877Topeka, KS 66604-0877

Amanda KenlyDirector, Credit & ContractsKansas Energy LLC17795 W. 106th StreetSuite 204Olathe, KS 66061

Rusty SmithVice President, PowerKansas Energy LLC17795 W. 106th StreetSuite 204Olathe, KS 66061

Neil RowlandKansas Municipal Energy Agency6300 West 95th StreetOverland Park, KS 66212-1431

Mr. Colin WhitleyKansas Power Pool200 W. DouglasSuite 601Wichita, KS 67202

Dan O’BrienGeneral ManagerKaw Valley Electric1100 SW Auburn RoadTopeka, KS 66615

Jerry ManningAssistant ManagerKaw Valley Electric1100 SW Auburn RoadTopeka, KS 66615

SPP Customer List

Bob AdamKC Board of Public Utilities312 N. 65th StreetKansas City, KS 66102

Patricia DennyKCP&L Greater Missouri Operations CompanyP.O. Box 418679Kansas City, MO 64141-9679

Mr. Charles LockeKCP&L Greater Missouri Operations CompanyP.O. Box 418679Kansas City, MO 64141-9679

Doug HewittKCP&L Greater Missouri Operations CompanyP.O. Box 418679Kansas City, MO 64141-9679

Frank LedouxLafayette Utilities Systems1314 Walker RoadP.O. Box 4017-CLafayette, LA 70502

Liberty Power Holdings LLC800 W. Cypress Creek RoadFort Lauderdale, FL 33309

Ben LaneySystems AdministratorLighthouse Energy Trading Co., Inc.7077 Northland CircleSuite 200Brooklyn Park, MN 55428

Dennis FloromLincoln Electric System1040 O StreetLincoln, NE 68501

Doug CurryLincoln Electric System1040 O StreetLincoln, NE 68501

Eric RuskampLincoln Electric System1040 O StreetLincoln, NE 68501

Andrea Kraft, Manager of Wholesale PowerLuminant Energy Company, LLCEnergy Plaza1601 Bryan Street, Suite 11005BDallas, TX 75201

Martin Gauthier, PresidentMAG Energy Solutions, Inc.1010 Sherbrooke WestSuite 800Montreal, Quebec H3A 2R7

Anchalee DoMerrill Lynch Commodities, Inc.20 E. Greenway Plaza – 8th FloorHouston, TX 77046

Ms. Cheryl CannonMerrill Lynch Commodities, Inc.20 E. Greenway Plaza – 8th FloorHouston, TX 77046

SPP Customer List

Gregory C. SchaeferRegulatory Manager, Wholesale TradingMid-American Energy Company4299 Northwest Urbandale DriveUrbandale, IA 50322

William DowlingMidwest Energy1330 Canterbury RoadP.O. Box 898Hays, KS 67601-0898

Deborah HartMorgan Stanley Capital Group, Inc.Commodities2000 Westchester AvenuePurchase, NY 10577

Tom HestermannManager, Transmission PolicyMid-Kansas Electric Company, LLCP.O. Box 980Hays, Kansas 67601

Noman WilliamsV.P. Transmission Services & EngineeringMid-Kansas Electric Company, LLCP.O. Box 980Hays, Kansas 67601

Doug HealyGeneral CounselMissouri Joint Municipal EUC939 N. Booneville, Suite ASpringfield, MO 65802

Eve LissikAssistant General ManagerMissouri Joint Municipal EUC1808 I-70 Drive SWColumbia, MO 65203

Rebecca AtkinsEnergy EconomistMissouri Joint Municipal EUC1808 I-70 Drive SWColumbia, MO 65203

Robert PickManager of Electric MarketsMunicipal Energy Agency of NebraskaP.O. Box 951241111 O Street, Suite 200Lincoln, NE 68509-5124

Benjamin MaherManager of Electric OperationsMunicipal Energy Agency of NebraskaP.O. Box 951241111 O Street, Suite 200Lincoln, NE 68509-5124

Paul J. MaloneNebraska Public Power District907 West 25th StreetP.O. Box 608York, NE 68467-0608

Harold L. HadlandNebraska Public Power District1414 15th StreetP.O. Box 499Columbus, NE 68602-4099

Ronald F. Thompson, Jr.Nebraska Public Power District2060 W. Platte River Dr.P.O. Box 1000Doniphan, NE 68832-1000

Kathleen BrinkerGeneral ManagerNemaha-Marshall Electric Cooperative Assoc. Inc.402 PrairieP.O. Box OAxtell, KS 66403

SPP Customer List

Charles SchultzNextera Energy Power Marketing, LLC700 Universe Blvd.Juno Beach, FL 33408

Rachel PanzicaSenior ParalegalNoble Great Plains Windpark, LLC8 Railroad Avenue, Suite 8Essex, CT 06426

Rick Tyler, General ManagerNortheast Texas Electric Cooperative1127 Judson RoadSuite 249Longview, TX 75601

Bernie LiuSenior Transmission Tariff ConsultantNorthern States Power Company414 Nicollet MallMinneapolis, MN 55401

Lain LovelaceDirector of Energy & RiskNorthPoint Energy Solutions2025 Victoria AvenueRegina, SK S4P0S1

Keith ComeauxDirector of Regulatory ComplianceNRG Power Marketing, Inc.112 Telly StreetNew Roads, LA 70760

Alice JacksonOccidental Power Marketing, L.P.P.O. Box 275705 Greenway Plaza, Suite 110Houston, TX 77227-7570

Jean HallOccidental Power Services, Inc.P.O. Box 275705 Greenway Plaza, Suite 110Houston, TX 77227-7570

Gary D. ClearOklahoma Gas & Electric CompanyPost Office box 321, Mail Code GB58Oklahoma City, OK 73101-0321

Cindy HolmanOklahoma Municipal Power AuthorityP.O. Box 1960Edmund, OK 73083-1960

Kimber L. Shoop, Senior AttorneyOklahoma Gas & Electric CompanyPost Office Box 321, Mail Code 1208Oklahoma City, OK 73101-0321

Pat McDonieONEOK Power Marketing100 W. Fifth StreetSuite 1600Tulsa, OK 74103

Margaret SailorsOmaha Public Power District444 S. 16th Street, Mall, 10E/EP1Omaha, NE 68102

Bruce GlorvigenOtter Tail Power Company215 S. CascadeFergus Falls, MN 56537

SPP Customer List

John HudsonPeople’s Electric CooperativeP.O. Box 429Ada, OK 74820

Anne LovettPPL EnergyPlus, LLC2 North Ninth Street PL7Allentown, PA 18101

David EubankPublic Service Company of New MexicoAlvarado Square MS-0604Albuquerque, NM 87158

Cynthia HenryRegulatory Administration ManagerPublic Service Company of Colorado550 15th Street, Suite 1000Denver, CO 80202

Joe WolfeRainbow Energy Marketing Corp.Kirkwood Office Tower919 S. 7th Street, Suite 405Bismarck, ND 58504

Mike RustumRedbud Energy, LP1825 Eye Street, N.W.Washington, D.C. 20006

Robert JanssenRedbud Energy, LP6700 Alexander Bell DriveSuite 360Columbia, MD 21046

John RitchRRI Energy Services, Inc.1000 Main StreetHouston, TX 77002

Grace TomczakSempra Energy Trading83 Commerce RoadStamford, CT 06902

Diane Davis, Commercial AdvisorShell Energy North America (US), L.P.909 Fannin, Plaza Level OneHouston, TX 77010

Rick LandersSikeston Board of Municipal UtilitiesP.O. Box 370Sikeston, MO 63801

Jessica CollinsMarket Operations ManagerSouthwestern Public Service Company550 15th Street, Suite 1000Denver, CO 80202

Tracey StewartSouthwestern Power AdministrationU.S. Department of EnergyOne West Third StreetTulsa, OK 74103

Teri BrownTenaska Power Services Co.1701 E. Lamar Blvd.Suite 100Arlington, TX 76006

SPP Customer List

Michael KnauffTennessee Power Company4612 Maria StreetChattanooga, TN 37411-1209

Steve WatsonTennessee Valley Authority1101 Market Street, MR 2DChattanooga, TN 37402-2801

Edd Hargett, General ManagerTex-La Electric Cooperative of Texas, Inc.P.O. Box 631623Nacogdoches, TX 75963

Rene DumstorfThe Energy Authority301 West Bay StreetSuite 2600Jacksonville, FL 32202

Mr. Chris MelleyThird Planet Windpower4239 SW High Meadow AvenuePalm City, FL 34990

Sterling KochTransAlta Energy Marketing (US) Inc.110 12 th Avenue S.W.Box 1900, Station “M”Calgary, Alberta T2P 2M1

Suzanne Calcagno, Regulatory ComplianceUBS AG, London Branch677 Washington Blvd.C/O UBSW Energy – 6th FloorStamford, CT 06901

Frederick KunkelWabash Valley Power Association, Inc.722 N. High School RoadIndianapolis, IN 46214

Dennis ReedWestar Energy, Inc.818 S. Kansas AvenueTopeka, KS 66612

Grant WilkersonWestar Energy, Inc.818 S. Kansas AvenueTopeka, KS 66612

Mr. John StonebargerWestern Area Power Administration (WAPA)P.O. Box 790Watertown, SD 57201

Mr. Pete KinneyWestern Area Power Administration (WAPA)P.O. Box 790Watertown, SD 57201

Gary RouletWestern Farmers Electric CooperativeP.O. Box 429Anadarko, OK 73005-0429

Brenda HollandXcel Energy/Southwestern Public Service Company600 South Tyler, Suite 2400Amarillo, Texas 79101

SPP Customer List

John EichelmannXcel Energy/Southwestern Public Service Company600 South Tyler, Suite 2400Amarillo, Texas 79101

Allison Heaton, Legal/Compliance ManagerMacquarie Energy LLC500 Dallas St. Suite 3100Houston, TX 77002

Eric Barreveld, Energy Market SupervisorSmoky Hills Wind Project II, LLCOne Tech Drive, Suite 220Andover, MA 01810

SPP State Commissions List

New Mexico Public Regulation CommissionDirector, Utility DivisionP.O. Box 1269Santa Fe, New Mexico 87504-1269

Arkansas Public Service CommissionDirector Electric UtilitiesP.O. Box 400, 1000 Center StreetLittle Rock, Arkansas 72203-0400

Kansas Corporation CommissionExecutive Director1500 SW Arrowhead RoadTopeka, Kansas 66604

Louisiana Public Service CommissionAttn: SecretaryP.O. Box 91154Baton Rouge, Louisiana 70821-9154

Missouri Public Service CommissionUtility Regulatory ManagerGovernor Office Bldg.200 Madison StreetJefferson City, MO 65101

Oklahoma Corporation CommissionStrategic Liaison2101 Lincoln Blvd., Room 311BOklahoma City, OK 73152

Texas Public Utility CommissionDirector of General Law1701 N. Congress, 7th FloorAustin, TX 78701

Exhibit No. 2

3. Economic Withholding – Energy Market Power

3.1 Principles

There are two principles for mitigating Economic Withholding in the EIS Market

operated by SPP.

3.1.1 Mitigate Only During Transmission Constraints

Mitigation will be applied only at the time of, and in places with,

transmission constraints.

3.1.2 Do Not Mitigate Below Long Run Marginal Cost of New Investment

Mitigation should not create or exacerbate a supply shortage by capping

prices below the level needed to attract investment that would relieve the

shortage. This level shall be based on the long run marginal cost of the

least-cost generation supply that could be developed within the shortest

period of time, which is currently a new, natural gas-fired combustion

turbine, peaking generation facility.

3.2 Mitigation Measure

When any transmission constraint is binding in the EIS Market, the Offer Curve

prices associated with Resources with Generator-to-Load Distribution Factors that

are greater than or equal to 5% that are located on the importing side of each

constraint shall be no higher than the Offer Cap for each Resource.

3.2.1 Location and Determination of Binding Constraints

Binding transmission constraints in the EIS Market will be located on

groups of transmission elements designated as flowgates. The

determination of whether a transmission constraint is binding in the EIS

Market will be based on the SPP Congestion Management process and the

EIS Market security constrained dispatch process for such determination.

3.2.2 Determination of Offer Capped Resources

An Offer Cap, as calculated in accordance with Section 3.2.4, shall apply

to certain Resources, regardless of ownership, that are on the same side of

a constrained flowgate as the constrained load and within electrical

proximity to the constrained flowgate. Such Resources subject to the

Offer Cap will be determined for each flowgate through the use of

Generator-to-Load Distribution Factors. All Resources that are located on

the importing side (side with the constrained load) of a constrained

flowgate that have Generator-to-Load Distribution Factors greater than or

equal to 5% (i.e., for each 100 MW increase in Resource output, the

imports across the flowgate are reduced by 5 MWs or greater) shall be

subject to an Offer Cap. If any of a Market Participant’s Resources are

subject to the Offer Cap based on the Generator-to-Load Distribution

Factors, all Resources owned by that Market Participant that are located

on the importing side of the same constrained flowgate shall also be

subject to an Offer Cap. A list of all Resources subject to an Offer Cap

and the Offer Caps associated with such Resources shall be posted

electronically on a daily basis by the Transmission Provider for each

flowgate.

3.2.3 Reassessment of Affected Status

The Transmission Provider will reassess the status of Resources subject to

Offer Caps when transmission and generation facility additions, outages,

changes, or changes in ownership occur that may reasonably cause the

Offer Capped status to change. In any event, the Transmission Provider

will reassess the status of Offer Capped Resources on an annual basis.

3.2.4 Calculation of Offer Caps

The Offer Cap for each Resource subject to an Offer Cap will be

calculated at least daily and will be effective until replaced by a new Offer

Cap. Specifically, Offer Caps will be equal to the sum of (a) the estimated

annual fixed cost of a new, natural gas-fired, combustion turbine peaking

generation facility in $/megawatt-year divided by the annual hours of

constraint, (b) an adder equal to the estimated non-fuel variable operation

and maintenance costs of a new, natural gas-fired, combustion turbine

peaking generation facility in $/megawatt-hour, and (c) the fuel cost of the

peaking facility in $/megawatt-hour calculated as the heat rate multiplied

by a natural gas price index. The formula for the calculation is as follows:

Offer Cap = (AFC / AHC) + VOM + FC

wherein the variables are defined as:

AFC = Annual Fixed Cost (Annual Investment Recovery

Requirement ($/megawatt-year) + Annual Fixed Operations and

Maintenance Adder ($/megawatt-year))

AHC = Annual Hours of Constraint

VOM = Variable Non-Fuel Operations and Maintenance Adder

($/megawatt-hour)

FC = Fuel Cost (Heat Rate * Natural Gas Price Index)

($/megawatt-hour)

Offer Caps do not function as price caps on the EIS Market. Resources other than

Resource identified under Section 3.2.2 are not subject to an Offer Cap. These

Resources may bid higher than, and set a price in the EIS Market that is above

any Offer Cap.

During periods of constraint on flowgates, Market Participants with Resources

subject to Offer Caps as identified under Section 3.2.2 are restricted to submitting

Offer Curve prices at or below their respective Offer Caps. All Resources,

including those Resources identified under Section 3.2.2, will be

charged/compensated based upon the Locational Imbalance Price associated with

each Resource.

(a) Annual Fixed Cost

The annual fixed cost of a new, natural gas-fired, combustion

turbine peaking generation facility shall be based upon the

calculated value of the annual carrying cost associated with the

recovery of the total fixed costs to develop, build and finance such

a facility plus the fixed operation and maintenance costs. Such

costs shall be reviewed annually by the Transmission Provider

with input from Market Participants. Any changes to such costs,

along with justification for the changes, shall be filed with the

Commission for approval after such review. Such costs, along

with any studies justifying the costs, shall be posted electronically

by the Transmission Provider. For calendar year 2011, the Annual

Fixed Cost shall be equal to $103,470/Megawatt-year.

(b) Variable Non-Fuel O&M Adder

The adder equal to the estimated non-fuel variable operation and

maintenance costs of a new, natural gas-fired, combustion turbine

peaking generation facility shall be based on the non-fuel operating

and maintenance costs of such a facility not included in the

calculation of annual fixed costs as described above. Such cost

shall be reviewed annually by the Transmission Provider with

input from Market Participants. Any changes to such costs, along

with justification for the changes, shall be filed with the

Commission for approval after such review. Such costs, along

with any studies justifying the costs, shall be posted electronically

by the Transmission Provider. For calendar year 2011, the

Variable Non-Fuel O&M Adder shall be equal to $3.86/Megawatt-

hour.

(c) Annual Hours of Constraint

The annual hours of constraint will be calculated individually for

each affected Resource under Section 3.2.2 of a Market Participant

and will be based on the most recent 365 days (366 days for a leap

year) of total hours of constraint in the EIS Market for constrained

flowgates affecting each Resource. In the event that multiple

constraints simultaneously affect a Resource, overlapping hours of

constraint will be eliminated from the Offer Cap calculation for

such a Resource.

During the first year of operation of the EIS Market, the hours of

duration for TLR Level 3 and above events for each flowgate shall

be used as a proxy for hours of constraint in the EIS Market that

are included in the calculation of annual hours of constraint. The

annual hours of constraint will be updated daily for inclusion in the

daily calculation of the Offer Cap on each affected resource and

will be posted electronically by the Transmission Provider for each

Resource.

(i) New Flowgates

When a new flowgate is established, the annual hours of

constraint used in the calculation of the Offer Cap for each

Resource that is pivotal to the new flowgate will be 32

hours until the actual number of hours of constraint on the

flowgate has exceeded 32 hours. After 32 hours has been

reached, the actual hours of constraint will be used. After

the flowgate has been active for 12 months, the Offer Cap

calculation will only use the actual constrained hours for

the 365 day (366 for leap year) rolling sum. If a Resource

is pivotal to more than one flowgate, the minimum applies

to the sum of all the flowgates for the first year of the new

flowgate.

(d) Fuel Cost

The fuel cost of a new, natural gas-fired, combustion turbine

peaking generation facility shall be based on the estimated full-

load heat rate of the facility multiplied by a fuel price index. The

fuel price index for each Resource will be based on an industry

accepted natural gas pricing index for the natural gas pricing point

nearest to the Offer Capped Resource(s) of each Market

Participant. The fuel price shall be further modified based on an

estimate of the distribution cost for moving natural gas to the

affected resource(s). Alternative pricing points and fuel price

modifiers shall be evaluated annually by the Transmission Provider

with input from Market Participants. The fuel price portion of

each Offer Cap shall be recalculated daily for inclusion in each

Offer Cap. As of the date that this Plan is accepted for filing by

the Commission, the heat rate used in the Fuel Cost calculation

shall be equal to 10,450 Btu/kWh.

3.3 Imposition of Mitigation

Offer Caps will be imposed when any transmission constraint is binding in the

EIS Market as determined by SPP’s Market Operators through the SPP

Congestion Management process and the EIS Market security constrained

dispatch process. Offer Caps will only be applied to the Resources identified

under Section 3.2.2.

3.3.1 Exceptions

Market Participants with Offer Capped Resources may request an

exception to an Offer Cap for a Resource. If the Transmission Provider

after consultation with the Market Monitor determines that an exception is

reasonable, the Transmission Provider shall submit a filing with the

Commission. Market Participants also may submit a filing with the

Commission seeking an exception.

3. Economic Withholding – Energy Market Power

3.1 Principles

There are two principles for mitigating Economic Withholding in the EIS Market

operated by SPP.

3.1.1 Mitigate Only During Transmission Constraints

Mitigation will be applied only at the time of, and in places with,

transmission constraints.

3.1.2 Do Not Mitigate Below Long Run Marginal Cost of New Investment

Mitigation should not create or exacerbate a supply shortage by capping

prices below the level needed to attract investment that would relieve the

shortage. This level shall be based on the long run marginal cost of the

least-cost generation supply that could be developed within the shortest

period of time, which is currently a new, natural gas-fired combustion

turbine, peaking generation facility.

3.2 Mitigation Measure

When any transmission constraint is binding in the EIS Market, the Offer Curve

prices associated with Resources with Generator-to-Load Distribution Factors that

are greater than or equal to 5% that are located on the importing side of each

constraint shall be no higher than the Offer Cap for each Resource.

3.2.1 Location and Determination of Binding Constraints

Binding transmission constraints in the EIS Market will be located on

groups of transmission elements designated as flowgates. The

determination of whether a transmission constraint is binding in the EIS

Market will be based on the SPP Congestion Management process and the

EIS Market security constrained dispatch process for such determination.

3.2.2 Determination of Offer Capped Resources

An Offer Cap, as calculated in accordance with Section 3.2.4, shall apply

to certain Resources, regardless of ownership, that are on the same side of

a constrained flowgate as the constrained load and within electrical

proximity to the constrained flowgate. Such Resources subject to the

Offer Cap will be determined for each flowgate through the use of

Generator-to-Load Distribution Factors. All Resources that are located on

the importing side (side with the constrained load) of a constrained

flowgate that have Generator-to-Load Distribution Factors greater than or

equal to 5% (i.e., for each 100 MW increase in Resource output, the

imports across the flowgate are reduced by 5 MWs or greater) shall be

subject to an Offer Cap. If any of a Market Participant’s Resources are

subject to the Offer Cap based on the Generator-to-Load Distribution

Factors, all Resources owned by that Market Participant that are located

on the importing side of the same constrained flowgate shall also be

subject to an Offer Cap. A list of all Resources subject to an Offer Cap

and the Offer Caps associated with such Resources shall be posted

electronically on a daily basis by the Transmission Provider for each

flowgate.

3.2.3 Reassessment of Affected Status

The Transmission Provider will reassess the status of Resources subject to

Offer Caps when transmission and generation facility additions, outages,

changes, or changes in ownership occur that may reasonably cause the

Offer Capped status to change. In any event, the Transmission Provider

will reassess the status of Offer Capped Resources on an annual basis.

3.2.4 Calculation of Offer Caps

The Offer Cap for each Resource subject to an Offer Cap will be

calculated at least daily and will be effective until replaced by a new Offer

Cap. Specifically, Offer Caps will be equal to the sum of (a) the estimated

annual fixed cost of a new, natural gas-fired, combustion turbine peaking

generation facility in $/megawatt-year divided by the annual hours of

constraint, (b) an adder equal to the estimated non-fuel variable operation

and maintenance costs of a new, natural gas-fired, combustion turbine

peaking generation facility in $/megawatt-hour, and (c) the fuel cost of the

peaking facility in $/megawatt-hour calculated as the heat rate multiplied

by a natural gas price index. The formula for the calculation is as follows:

Offer Cap = (AFC / AHC) + VOM + FC

wherein the variables are defined as:

AFC = Annual Fixed Cost (Annual Investment Recovery

Requirement ($/megawatt-year) + Annual Fixed Operations and

Maintenance Adder ($/megawatt-year))

AHC = Annual Hours of Constraint

VOM = Variable Non-Fuel Operations and Maintenance Adder

($/megawatt-hour)

FC = Fuel Cost (Heat Rate * Natural Gas Price Index)

($/megawatt-hour)

Offer Caps do not function as price caps on the EIS Market. Resources other than

Resource identified under Section 3.2.2 are not subject to an Offer Cap. These

Resources may bid higher than, and set a price in the EIS Market that is above

any Offer Cap.

During periods of constraint on flowgates, Market Participants with Resources

subject to Offer Caps as identified under Section 3.2.2 are restricted to submitting

Offer Curve prices at or below their respective Offer Caps. All Resources,

including those Resources identified under Section 3.2.2, will be

charged/compensated based upon the Locational Imbalance Price associated with

each Resource.

(a) Annual Fixed Cost

The annual fixed cost of a new, natural gas-fired, combustion

turbine peaking generation facility shall be based upon the

calculated value of the annual carrying cost associated with the

recovery of the total fixed costs to develop, build and finance such

a facility plus the fixed operation and maintenance costs. Such

costs shall be reviewed annually by the Transmission Provider

with input from Market Participants. Any changes to such costs,

along with justification for the changes, shall be filed with the

Commission for approval after such review. Such costs, along

with any studies justifying the costs, shall be posted electronically

by the Transmission Provider. For calendar year 20102011, the

Annual Fixed Cost shall be equal to $100,970103,470/Megawatt-

year.

(b) Variable Non-Fuel O&M Adder

The adder equal to the estimated non-fuel variable operation and

maintenance costs of a new, natural gas-fired, combustion turbine

peaking generation facility shall be based on the non-fuel operating

and maintenance costs of such a facility not included in the

calculation of annual fixed costs as described above. Such cost

shall be reviewed annually by the Transmission Provider with

input from Market Participants. Any changes to such costs, along

with justification for the changes, shall be filed with the

Commission for approval after such review. Such costs, along

with any studies justifying the costs, shall be posted electronically

by the Transmission Provider. For calendar year 20102011, the

Variable Non-Fuel O&M Adder shall be equal to

$3.7986/Megawatt-hour.

(c) Annual Hours of Constraint

The annual hours of constraint will be calculated individually for

each affected Resource under Section 3.2.2 of a Market Participant

and will be based on the most recent 365 days (366 days for a leap

year) of total hours of constraint in the EIS Market for constrained

flowgates affecting each Resource. In the event that multiple

constraints simultaneously affect a Resource, overlapping hours of

constraint will be eliminated from the Offer Cap calculation for

such a Resource.

During the first year of operation of the EIS Market, the hours of

duration for TLR Level 3 and above events for each flowgate shall

be used as a proxy for hours of constraint in the EIS Market that

are included in the calculation of annual hours of constraint. The

annual hours of constraint will be updated daily for inclusion in the

daily calculation of the Offer Cap on each affected resource and

will be posted electronically by the Transmission Provider for each

Resource.

(i) New Flowgates

When a new flowgate is established, the annual hours of

constraint used in the calculation of the Offer Cap for each

Resource that is pivotal to the new flowgate will be 32

hours until the actual number of hours of constraint on the

flowgate has exceeded 32 hours. After 32 hours has been

reached, the actual hours of constraint will be used. After

the flowgate has been active for 12 months, the Offer Cap

calculation will only use the actual constrained hours for

the 365 day (366 for leap year) rolling sum. If a Resource

is pivotal to more than one flowgate, the minimum applies

to the sum of all the flowgates for the first year of the new

flowgate.

(d) Fuel Cost

The fuel cost of a new, natural gas-fired, combustion turbine

peaking generation facility shall be based on the estimated full-

load heat rate of the facility multiplied by a fuel price index. The

fuel price index for each Resource will be based on an industry

accepted natural gas pricing index for the natural gas pricing point

nearest to the Offer Capped Resource(s) of each Market

Participant. The fuel price shall be further modified based on an

estimate of the distribution cost for moving natural gas to the

affected resource(s). Alternative pricing points and fuel price

modifiers shall be evaluated annually by the Transmission Provider

with input from Market Participants. The fuel price portion of

each Offer Cap shall be recalculated daily for inclusion in each

Offer Cap. As of the date that this Plan is accepted for filing by

the Commission, the heat rate used in the Fuel Cost calculation

shall be equal to 10,450 Btu/kWh.

3.3 Imposition of Mitigation

Offer Caps will be imposed when any transmission constraint is binding in the

EIS Market as determined by SPP’s Market Operators through the SPP

Congestion Management process and the EIS Market security constrained

dispatch process. Offer Caps will only be applied to the Resources identified

under Section 3.2.2.

3.3.1 Exceptions

Market Participants with Offer Capped Resources may request an

exception to an Offer Cap for a Resource. If the Transmission Provider

after consultation with the Market Monitor determines that an exception is

reasonable, the Transmission Provider shall submit a filing with the

Commission. Market Participants also may submit a filing with the

Commission seeking an exception.