[Federal Register Volume 63, Number 3 (Tuesday, January 6, 1998)]
[Notices]
[Pages 483-521]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-132]


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DEPARTMENT OF ENERGY

Southwestern Power Administration


Open Access Transmission Service Tariff

AGENCY: Southwestern Power Administration, DOE.

ACTION: Notice of final tariff.

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

DATES: The Final Tariff will become effective February 5, 1998. The 
Final Tariff will remain in effect until superseded.

SUPPLEMENTARY INFORMATION:

Table of Contents

I. Procedures
II. Background
III. Comments Raised During the Development of this Final Tariff
IV. Summary of Significant Changes from the Southwestern's Proposed 
Tariff
V. Coordination with Adoption of Open Access Transmission Rates

I. Procedures

    Southwestern will submit the Final Tariff to the FERC under a non-
jurisdictional docket and will request a declaratory order that this 
Final Tariff meets FERC comparability standards as forth in FERC Order 
Nos. 888 and 888-A. Southwestern will make necessary changes, if any, 
in response to the FERC declaratory order and will publish the revised 
Final Tariff in the Federal Register.

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 the Interior by Executive 
Order 9366, dated July 30, 1943, and Executive 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 with 
preference 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 hydroelectric projects from which Southwestern currently markets 
power and energy are located in the States of Arkansas, Missouri, 
Oklahoma, and Texas. Southwestern is a partial requirements supplier by 
the nature of its hydroelectric power resource to 93 municipal, 
cooperative, and military electric systems in the States of Arkansas, 
Kansas, Louisiana, Missouri, Oklahoma, and Texas. Southwestern is not a 
public utility under Sections 205 and 206 of the Federal Power Act. 
Southwestern is a transmitting utility subject to Section 211 of the 
Federal Power Act as amended by the Energy Policy Act of 1992.
    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'' (DOE 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 No. 888, published at 61 FR 21540, on 
May 10, 1996, and followed with supplementary Order No. 888-A, 
published at 62 FR 12273, on March 14, 1997.
    Southwestern began its formal process of developing this Final 
Tariff when it issued a Notice of Proposed Tariff published at 62 FR 
50307 on September 25, 1997 (proposed Tariff). Southwestern's Final 
Tariff is based on the suggested open access transmission tariff 
published as Appendix B to FERC Order No. 888-A (pro forma tariff). On 
October 9, 1997, Southwestern held a public information meeting at its 
Tulsa, Oklahoma offices. The formal comment period for the proposed 
Tariff lasted 45 days. Comments received during this formal period were 
considered in the development of the Final Tariff. Southwestern will 
submit the Final Tariff to FERC under a non-jurisdictional docket and 
request a declaratory order from FERC that the Final Tariff meets or 
exceeds the FERC comparability standards set forth in FERC Orders No. 
888 and 888-A.
    The transmission facilities which Southwestern owns and operates 
are committed to the delivery of Federal hydroelectric capacity and 
energy under

[[Page 484]]

the terms and conditions of electric service contracts which implement 
Southwestern's statutory obligations to market Federal power. 
Fulfillment of such obligations is complementary with the provisions of 
the Final Tariff. Transmission service provided by Southwestern under 
the Final Tariff is available for the transmission capacity in 
Southwestern's system in excess of that required by Southwestern for 
the integration of its resources for the long-term reliable delivery of 
Federal power allocated to customers under contract to Southwestern. 
Nothing in the Final Tariff alters, amends, or abridges the statutory 
or contractual obligations of Southwestern to market and deliver 
Federal power resources and to repay the Nation's investment in the 
generation and transmission facilities from which Southwestern markets 
hydropower and energy.
    Southwestern has prepared this Final Tariff and service agreements 
to provide transmission service comparable to that required of public 
utilities by FERC Orders No. 888 and 888-A, and to implement those 
Orders consistent with DOE Policy. Southwestern intends to provide Firm 
and Non-Firm Point-to-Point Transmission Service and Network 
Integration Transmission Service under the terms and conditions of the 
Final Tariff. The Final Tariff does not include any rates or charges 
for services, as Southwestern's rates are developed under a separate 
public process pursuant to applicable Federal law and regulations. 
However, Southwestern's rate schedule for non-Federal transmission 
service has been developed in coordination with the provisions of the 
pro forma Tariff and conforms in all respects to the Final Tariff. 
Service agreements which incorporate the Final Tariff will also include 
Southwestern's rate schedule for non-Federal transmission service.
    Based on a reasonable level of risk, Southwestern has historically 
marketed the maximum practical power from its resources, leaving little 
or no 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 of the hydro resource and its inherent limitations due 
to changing water conditions may limit Southwestern's ability to 
provide generation-related services such as ancillary services and 
redispatching under the Final Tariff.

III. Comments Raised During the Development of This Final Tariff

    The formal public comment period produced a number of comments 
about the proposed Tariff. The following discussion highlights the more 
significant comments and Southwestern's responses.
    Comment. Commentors expressed concern that Southwestern did not 
specify power loss factors and rates in the proposed Tariff.
    Response. Southwestern chose not to duplicate matters in the Tariff 
which are covered in its rate schedules. The rate schedules are 
developed under a separate process dictated by Federal regulations 
which includes a significant public participation process. Four percent 
losses, based on a recent loss study, are included in the proposed rate 
schedules which are expected to go into effect January 1, 1998.
    Comment. Commentors were concerned about Southwestern's statement 
in the proposed Tariff that Network Service may not be provided. A 
commentor finds Attachments F, G, and H, having to do with Network 
Service, inadequate.
    Response. Southwestern has determined that Network Integration 
Transmission Service will be provided, and is addressed in its proposed 
rate schedule for non-Federal transmission service. Southwestern is 
publishing a network service agreement in Attachment F to the Final 
Tariff. Attachment G, on the Network Operating Agreement, has not been 
changed from the proposed Tariff because Southwestern expects that, in 
the event that network service is requested, the operating agreements 
will be unique to each arrangement and will be individually negotiated. 
Attachment H does not specify Southwestern's annual revenue 
requirement, but refers to Southwestern's rate schedule for non-Federal 
transmission service which has that information. This reference is 
consistent with Southwestern's decision to place all matters related 
directly to rates in the rate schedules rather than in the Final 
Tariff.
    Comment. Commentors objected to the changes Southwestern proposes 
to make in the pro forma tariff provisions related to stranded costs 
(Sections 26 and 34.5) and related to payment for direct assignment 
facilities, ancillary services, and study costs (Section 34). The 
objection was that citing applicable Federal law and regulations as the 
guidance for such actions is more vague than the original language 
which cites FERC Order No. 888 and FERC policy, respectively, as the 
guidance for such recovery.
    Response. Southwestern originally made the changes to the proposed 
Tariff because Southwestern is not under the jurisdiction of the FERC. 
However, upon a closer reading of these sections, Southwestern has 
determined that acknowledging the guidance of the FERC in these matters 
does not impair Southwestern's non-jurisdictional status. Accordingly, 
Southwestern has returned, in part, to the pro forma tariff language in 
Sections 26 and 34.5. In Section 34, Southwestern changed the phrase 
``Federal policy'' in the proposed Tariff to ``Federal practice'' in 
the Final Tariff, which effectively makes the cited guideline more 
limited and specific.
    Comment. A commentor was concerned that Southwestern has not 
deleted language in some sections, such as 20.2 and 21.2, which may 
suggest that the FERC has jurisdiction over Southwestern greater than 
it does indeed have. The commentor requested additional deletions in 
these and other sections or recommended that references to FERC policy 
or rules be amended to refer instead to Federal laws, regulations, and 
policies.
    Response. The DOE Policy issued October 4, 1995, directs 
Southwestern to offer transmission service in a manner comparable to 
the FERC's final rule on open access transmission service ``to the 
extent not otherwise prohibited by law.'' Upon examination, 
Southwestern judges that the specific recommended changes are not 
necessary to preserve Southwestern's non-jurisdictional status, so the 
suggested changes were not incorporated into the Final Tariff.
    Comment. A commentor objects to any provisions which would permit 
Southwestern to provide service without an executed agreement.
    Response. Southwestern prefers to provide service only when an 
executed Service Agreement exists, and intends to avoid providing 
service without the protection of an executed agreement if at all 
possible. However, in the present utility environment, Southwestern 
believes it must be able to initiate transmission service without an 
executed agreement, if necessary. Accordingly, Southwestern did not 
change the provisions of its proposed Tariff which address this matter.
    Comment. A commentor made several suggestions for additions to the 
pro forma tariff language which would state, in various forms, that 
Southwestern is limited to actions which are consistent with its 
authorities granted under Federal law, regulations, or policies.
    Response. Southwestern is indeed limited in its actions due to its 
status as

[[Page 485]]

a Federal agency. However, in all but one of the cases where such 
additions were suggested, Southwestern determined that necessary 
limitations were implicit in the pro forma tariff language and did not 
require an explicit statement. While such additions could be proper, 
Southwestern has adhered to the principle of avoiding making changes, 
either of omission or addition, to the pro forma tariff language unless 
such changes are necessary to preserve Southwestern's authorities and 
obligations under Federal law, regulations, and policies. Except for an 
addition to Section 13.5, the proposed changes were not considered 
necessary for such preservation.
    Comment. Commentors found the language in Attachment J stating that 
Federal Customers are considered to be the equivalent to Native Load 
Customers insufficient to protect the rights of Federal power 
customers. One commentor recommended that Southwestern insert a 
``binding provision'' in the body of the Final Tariff to the effect 
that the Tariff applies only to transmission capacity in excess of the 
requirements of Southwestern's primary mission. Others suggested that 
the pro forma tariff definition of Native Load Customer be amended to 
reflect Southwestern's statutory obligations to market and deliver 
Federal power and energy, or recommended other changes to Attachment J.
    Response. Southwestern edited Attachment J to strengthen and 
clarify its authority and obligations and inserted the new language as 
a Preamble to the Final Tariff. Southwestern removed the language which 
stated that its Federal power customers are the equivalent of Native 
Load Customers, and did not alter the pro forma tariff definition the 
Final Tariff. Placing this language in the body of the Final Tariff 
should alleviate the concerns of the commentor.
    Comment. One commentor objects to the process in Section 7.3 for 
customers who are in default due to non-payment of bills. The commentor 
believes that Southwestern's proposed language is inferior to the pro 
forma tariff language because it does not provide the same level of 
recourse as the pro forma tariff.
    Response. Southwestern believes that its provision for handling 
customer defaults is appropriate, as referring disputes to the FERC 
(pro forma tariff provision) is not consistent with Southwestern's non-
jurisdictional status. Southwestern believes that a specific reference 
to the disputes resolution procedures of the Final Tariff is 
unnecessary in this Section.
    Comment. A commentor requests that Southwestern amend Section 9 of 
the proposed Tariff to preserve customers' rights to participate in any 
public process to amend the Tariff.
    Response. Southwestern is committed to providing a public process 
for any future changes it may make to the Final Tariff in accordance 
with the Administrative Procedures Act. However, Southwestern does not 
consider the Tariff itself as an appropriate place to state this 
commitment. In addition, FERC's normal filing processes provide for 
intervention by any interested party, which gives customers an 
additional opportunity for input into the process.
    Comment. A commentor made extensive comments on Southwestern's 
intent to require in advance any funds needed for studies or 
construction. The concerns were two-fold. First was a recommendation 
that Southwestern include language in construction contracts to 
delineate ownership rights for any facilities which use a customer's 
advance funds, including circumstances where such facilities are not 
completed. Secondly, the customer objected to Southwestern's deleting 
all references in the pro forma tariff language to the return of 
deposits with interest.
    Response. Under the pro forma tariff, all studies and construction 
are provided for under separately negotiated agreements between the 
Transmission Provider and the Transmission Customer. Southwestern has 
long had a practice of addressing ownership of facilities in its 
construction agreements, and will continue to do so. While this matter 
is not directly related to the tariff, per se, Southwestern will 
endeavor to take these comments into account during any future 
negotiations for study and construction agreements.
    It has never been Southwestern's practice to pay interest on funds 
deposited in advance for facilities studies or construction, 
principally because Southwestern has no way of accruing interest on 
such funds, which are directly deposited into the U.S. Treasury. If 
interest were to be paid on refunded amounts, the expense would 
necessarily become part of the rate base and would therefore be borne 
by all customers. Therefore, Southwestern will continue to delete 
language in the pro forma tariff which would require Southwestern to 
pay interest on refunded amounts.
    Comment. Commentors objected to Southwestern's proposal to replace 
the pro forma tariff's provisions for a deposit which could be returned 
with interest with a nonrefundable processing fee. The primary concern 
seemed to be that the fee, which was not specified in the proposed 
Tariff, might be unduly burdensome.
    Response. Southwestern specifies the amounts of such fees in its 
Final Tariff, based on estimated staff costs for evaluating a customer 
request. Southwestern believes that the specified fees are reasonable 
and should not be unduly burdensome to potential customers of these 
services.
    Comment. One commentor is concerned that Southwestern may wish to 
charge an agency fee if Southwestern has to purchase some ancillary 
services. Another commentor was concerned that Southwestern's 
hydroelectric resources might be compromised by providing generation-
related ancillary services at all, and suggests that Southwestern 
confine itself to brokering such ancillary services, rather than to 
providing them directly. Still another suggested that further 
limitations on the provision of ancillary service be inserted into the 
Final Tariff, and objects to an implication that Southwestern would set 
the level of some ancillary services unilaterally in service 
agreements.
    Response. The Final Tariff provides that, in the event that 
Southwestern purchases ancillary services on behalf of a customer, the 
costs are passed through to the customer. Southwestern has no intent to 
charge an agency fee or other markup. Southwestern believes that the 
limitations on its ability to use Federal power resources to provide 
ancillary services are sufficiently set forth in its revisions to 
Section 3. Language in Schedules 1 through 6 which previously indicated 
that the level of some ancillary services would be set in the service 
agreement has been removed. Southwestern believes that brokering 
ancillary services, except when hydropower resources are severely 
limited, is not a practical way to provide such services.
    Comment. A commentor pointed out that the provision in Section 13.8 
for submitting schedules for firm transmission service by 10:00 a.m. of 
the previous day is not consistent with regional practice.
    Response. Southwestern agrees, and has changed the references to 
10:00 a.m. to 2:00 p.m.
    Comment. A commentor was concerned about the requirement that 
Energy Imbalances be corrected within 30 days and recommended a longer 
period before the Transmission Customer is assessed a charge for such 
service.
    Response. Southwestern does not foresee this issue being a problem 
based on historical interactions with those of

[[Page 486]]

its customers which are located within Southwestern's Control Area, 
which are the only customers to whom this ancillary service would 
apply. Again, Southwestern desires to avoid making changes to the pro 
forma tariff where possible.
    Comment. A commentor requests that Southwestern state for the 
record that it ``intends to abide by its existing contracts, including 
rates set forth in those contracts.''
    Response. Southwestern will indeed abide by its existing contracts. 
However, all such contracts provide that rates may be changed, as 
needed, in conformity with Southwestern's rate process, which is 
subject to Federal regulations and which is driven by Southwestern's 
legal requirement to recover its costs and to repay the Nation for its 
investment in the generation and transmission facilities from which 
Southwestern markets Federal power and energy. Existing contracts 
provide for terms and conditions of service, but specify that rates for 
services under such contracts change when Southwestern's rates change. 
Such customers have the right to terminate these contracts if they find 
changed rates unsatisfactory.
    Comment. A commentor expressed concern that Southwestern's decision 
to not publish its standard contracts as part of the proposed Tariff 
could lead to inequity for future transmission customers.
    Response. Southwestern is publishing its standard Service 
Agreements in the Final Tariff.
    Comment. Commentors found Attachments C and D to the Tariff, on 
Southwestern's methodology for assessing Available Transfer Capability 
(ATC) or for doing System Impact Studies, respectively, inadequate.
    Response. Southwestern changed its Attachment C to cite the 
specific Southwest Power Pool (SPP) methodology for assessing ATC. 
Southwestern's ATC is computed as part of the SPP, from data supplied 
by Southwestern, and is not an independent Southwestern process. As 
this methodology is lengthy and is publicly available, Southwestern 
sees no reason to include it in greater detail in the Final Tariff. 
Southwestern amends Attachment D to indicate that Southwestern is in 
the process of developing and standardizing its criteria for evaluating 
facilities. The new standards, when available, may be requested by any 
current or potential customer.
    Comment. Commentors expressed a concern about the rate calculation 
process, and expressed a desire for Southwestern to develop an 
``adjustment method'' for correcting over- or under-collection of 
revenues for transmission services.
    Response The process of rate design and calculation is not 
pertinent to the Tariff. All rates for non-Federal transmission 
service, and the process of their development, are handled under a 
separate regulatory process. Southwestern's annual Power Repayment 
Study automatically factors in any over- or under-collection of 
revenues and makes necessary adjustments to the rates as warranted.

IV. Summary of Significant Changes from the Southwestern's Proposed 
Tariff

    Attachment J, ``Authorities and Obligations,'' of the proposed 
Tariff was deleted in the Final Tariff, and an edited portion of the 
original text was inserted as the Preamble to the Final Tariff.
    The language added by Southwestern to the pro forma tariff in 
Section 3, ``Ancillary Services'' was edited for clarity.
    Southwestern amended Section 7, ``Billing and Payment,'' of the 
proposed Tariff by changing the due date for invoices (7.1), by 
clarifying the section (7.3) on customer default, and by adding two new 
sections (7.4 and 7.5) on billing to the body of the Final Tariff, from 
these provisions' previous position in the proposed service agreements. 
These changes place all language on billing in one section and change 
the due date provision to conform to Southwestern's invoicing practice.
    Southwestern restored Section 10.1, ``Force Majeure,'' to the 
language of the pro forma tariff.
    Southwestern amended Section 12, ``Dispute Resolution Procedures, 
by restoring most of the last sentence in 12.1 of the pro forma tariff 
language, adding a new subsection, ``External Dispute Resolution 
Procedures,'' and renumbering the old Section 12.2 to 12.3.
    Southwestern added the phrase, ``and subject to the Transmission 
Provider's authority under Federal law to complete the expansion or 
upgrade'' to the end of the first sentence in Section 13.5, 
``Transmission Customer Obligations for Facility Additions or 
Redispatch Costs.''
    Southwestern changed the scheduling deadline in Section 13.8, 
``Scheduling of Firm Point-to-Point Transmission Service,'' from 10:00 
a.m. to 2:00 p.m.
    Southwestern changed the language in Sections 15.7 and 28.5, ``Real 
Power Losses,'' from referring to service agreements for loss factors 
and rates, to referring to Southwestern's rate schedules.
    Southwestern changed the mailing address given in Section 17.1, 
``Application,'' from Southwestern's post office box address to its 
street address, to reflect a decision to phase out the post office box 
address in the future.
    Sections 17.3, ``Processing Fee,'' and 29.2, ``Application 
Procedures,'' were amended to insert specific application processing 
fees.
    Sections 19.4 and 32.4, ``Facilities Study Procedures,'' were 
edited to correct minor inconsistencies in language related to payment 
of funds.
    Section 24.3, ``Power Factor,'' was edited to reflect the fact that 
Southwestern's power factor requirements are stated in its rate 
schedules rather than in service agreements.
    Section 25, ``Compensation for Transmission Service,'' was edited 
to reflect the fact that the rates for service under the Final Tariff 
are in Southwestern's rate schedule rather than in the Schedules 7 and 
8 attached to the Final Tariff.
    Sections 26 and 34.5, ``Stranded Cost Recovery,'' were changed by 
restoring part of the original pro forma tariff language.
    Section 34, ``Rates and Charges,'' was edited to change the phrase 
``Federal policy'' to ``Federal practice.''
    Schedules 1 through 8 were simplified and restored more nearly to 
the pro forma tariff.
    Southwestern deleted its Attachments A, B, and F of the proposed 
Tariff, and replaced them with standard service agreements for long-
term firm transmission service, for short-term firm and non-firm 
transmission service, and for network integration transmission service, 
respectively.
    Minor editing in Attachments C and D provide additional clarity and 
specificity.
    A list of transmission customers was added to Attachment E.
    Attachment H was edited to remove language in the proposed Tariff 
and to refer to Southwestern's rate schedule for transmission service 
as the source for Southwestern's annual revenue requirement in regard 
to network integration transmission service.

V. Coordination With Adoption of Open Access Transmission Rates

    Southwestern's rate process, which is distinct from the rate 
process used by public utilities, includes mandatory public 
participation procedures, as described in 10 CFR 903. Additionally, 
Southwestern's rates are reviewed by the FERC under different 
parameters

[[Page 487]]

than those used for review of public utility rates.
    Southwestern is presently in the process of filing new rates and 
rate schedules, and expects to implement such new rates on January 1, 
1998. The proposed rates for transmission service are structured in 
accordance with the Final 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. Pursuant to 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 Final Tariff to 
the FERC pro forma tariff is available on the Internet at http://
www.swpa.gov.

    Dated: December 18, 1997.
Michael A. Deihl,
Administrator.

Open Access Transmission Service Tariff

Table of Contents

Preamble: Authorities and Obligations

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 (OASIS).
    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 (RTG).
    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.
    1.47  Transmission Provider's Monthly Transmission System Peak.
    1.48  Transmission Service.
    1.49  Transmission System:
2  26Initial 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.
    7.4  Payment Processes.
    7.5  Net Billing
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  External Dispute Resolution Procedures.
    12.3  Administrative Disputes Resolution Act.
    12.4  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

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    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 Obligations.
    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 
TransmissionService Requests
    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

Open Access Transmission Service Tariff

Preamble: Authorities and Obligations

    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 the Interior by Executive 
Orders 9366, dated July 30, 1943, and 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. Under 
Public Law 95-456 (92 Stat. 1230; 16 U.S.C. 825s-3), Southwestern 
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.
    Pursuant to the Flood Control Act of 1944, Southwestern markets

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hydroelectric power and energy which is generated at U.S. Army Corps of 
Engineers (Corps) 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 Corps 
hydroelectric generation projects in the States of Arkansas, Missouri, 
Oklahoma, and Texas, primarily to customers which have received formal 
allocations of specified quantities of Federal power and associated 
energy (Federal Power Customers) in those states as well as in 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 Power customers. Southwestern sells 
transmission service from federally owned or controlled facilities only 
to the extent that transmission capacity is available in excess of that 
necessary to reliably deliver Federal power.
    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) 
Final Orders Nos. 888 and 888-A. However, 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 Order Nos. 888 and 888-A. 
Additionally, 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 No. 888. Southwestern submits this 
version of the FERC's Open Access Transmission Tariff (Tariff) as 
comparable to the pro forma tariff published in FERC Order No. 888-A 
with the proviso that nothing in this Tariff alters, amends, or 
abridges the statutory or contractual obligations of Southwestern to 
market and deliver Federal power resources and to repay the Federal 
investment in the facilities from which Southwestern markets such 
resources.

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 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.

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    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 
begins to provide service pursuant to the terms of an executed Service 
Agreement, or the date the Transmission Provider begins to provide 
service in

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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 or 29.1 
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 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. However, when sufficient 
Federal generation is not available to provide the required Ancillary 
Services, the Transmission Provider will offer to make every effort to 
purchase Ancillary Services from others, as available. 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 
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 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

[[Page 492]]

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 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 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 (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

[[Page 493]]

continue service until the Administrator makes a determination on the 
Transmission Customer's appeal. Service may be terminated without 
further notice if Transmission Customer's appeal is denied. 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.
    7.4  Payment Process: Payment of amounts due to the Transmission 
Provider may be made through electronic funds transfer (EFT) or may be 
submitted as checks and mailed to:

Southwestern Power Administration
P.O. Box 845994
Dallas, Texas 75284-5994

    EFT payments shall conform to the Transmission Provider's protocols 
for electronic transfer of funds in effect at the time of the payment. 
The designation of the address where payment is to be submitted may be 
changed by the Transmission Provider upon 30 days' written notice to 
the Transmission Customer. The Parties shall exchange such reports and 
information as either Party requires for billing purposes.
    7.5  Net Billing: By agreement of the Parties, payments due the 
Transmission Provider by the Transmission Customer may be offset 
against payments due the Transmission Customer by the Transmission 
Provider for the sale or exchange of electric power, energy, and other 
services. For services included in net billing procedures, payments due 
the Transmission Customer in any month shall be offset against payments 
due the Transmission Provider in such month, and the resulting net 
balance shall be paid by the Transmission Customer when the balance 
exists in favor of the Transmission Provider, and shall be applied 
against future payments due the Transmission Provider when the balance 
exists in favor of the Transmission Customer. Net billing procedures 
shall not be used for any amounts which the Transmission Provider 
determines, in its sole judgment, to be in dispute.

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.
    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. In the event the designated 
representatives are unable to resolve the dispute within thirty (30) 
days (or such other period as the Parties may agree upon) by mutual 
agreement, such dispute may be resolved in accordance with the 
procedures set forth below.
    12.2  External Dispute Resolution Procedures: Any complaint arising 
concerning implementation of this Tariff shall be resolved as follows:

[[Page 494]]

    (A) Through a dispute resolution process, pursuant to the terms of 
a regional transmission association governing agreement of which both 
Parties are members; or
    (B) If both Parties are not members of the same regional 
transmission association, through a dispute resolution process agreed 
to by the Parties, or through a transmission complaint filed with the 
Commission, to the extent the Commission has jurisdiction over such 
dispute.
    12.3  Alternative Disputes Resolution Act: 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.
    12.4  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.

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 Section 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 Section 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 March 9, 1998. 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 B) 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 Section 15.4, and subject to the Transmission 
Provider's authority under Federal law to complete the expansion or 
upgrade. 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

[[Page 495]]

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 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 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 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 March 9, 1998. 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

[[Page 496]]

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 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, regulations, and policies, 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

[[Page 497]]

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 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 Transmission Provider's rate schedule for 
transmission service, and may be adjusted, from time to time, in 
accordance with the results of periodic studies.

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, One 
West Third Street, Suite 1400, Tulsa, Oklahoma 74103, 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.
    17.2Completed Application: A Completed Application shall provide 
all of the information included in 18 CFR 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 Federal 
law, 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; and
    (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 nonrefundable 
processing fee of $300 for all requests for Firm Transmission Service 
of one year or longer. 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

[[Page 498]]

(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.
    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 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, 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.
    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

[[Page 499]]

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.
    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 pay the Transmission Customer's 
share of the costs, or the request will no longer be a Completed 
Application and shall be deemed terminated and withdrawn. Any advance 
payment made by the Transmission Customer which is in excess of the 
costs incurred by the Transmission Provider shall be refunded.
    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

[[Page 500]]

facilities and through redispatch. 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 
12 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 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.

[[Page 501]]

    (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 Transmission Provider's 
rate schedule for transmission service.

25  Compensation for Transmission Service

    Rates for Firm and Non-Firm Point-To-Point Transmission Service are 
provided in the Transmission Provider's rate schedule for transmission 
service which is promulgated, and may be modified, pursuant to 
applicable Federal law, regulations, and policies. 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 
rates.

26  Stranded Cost Recovery

    The Transmission Provider may seek to recover stranded costs from 
the Transmission Customer pursuant to this Tariff in accordance with 
the terms, conditions, and procedures set forth in FERC Order No. 888, 
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 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

[[Page 502]]

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 transmission 
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 Transmission Provider's rate schedule for 
transmission service, and may be adjusted, from time to time, in 
accordance with the results of periodic studies.
    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, regulations, and policies, 
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 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

[[Page 503]]

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 a non-refundable application 
processing fee of $1,200. 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 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; and
    (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.
    29.4  Network Customer Facilities: The provision of Network 
Integration Transmission Service shall be conditioned upon the Network 
Customer's 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.

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 
noninterruptible basis. Any owned or purchased resources that were 
serving the Network Customer's loads under firm agreements entered into 
on or before the Service

[[Page 504]]

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, nondiscriminatory 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 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

[[Page 505]]

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.
    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

[[Page 506]]

without an executed Service Agreement pursuant to Section 29.1, and pay 
the Transmission Customer's share of the costs, or the request no 
longer will be a Completed Application and shall be deemed terminated 
and withdrawn. Any advance payment made by the Transmission Customer 
which is in excess of the costs incurred by the Transmission Provider 
shall be refunded.

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 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 practice, 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

[[Page 507]]

Customer pursuant to this Tariff in accordance with the terms, 
conditions and procedures set forth in FERC Order No. 888, 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 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 
is to 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

[[Page 508]]

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 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

[[Page 509]]

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 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

    Note: The form of the agreement for short-term firm transmission 
service is Attachment B, which is an enabling agreement for short-
term arrangements, both firm and non-firm.

Part A: Service Agreement for Long-Term, Firm Point-To-Point 
Transmission Service

    1  This Service Agreement (Agreement), dated as of __________, 
is entered into, by and between Southwestern Power Administration 
(Transmission Provider or Southwestern), and __________ 
(Transmission Customer).
    1.1  The Transmission Provider may revise rates for Firm Point-
to-Point Transmission Service provided under this Service Agreement 
pursuant to applicable Federal laws, regulations, and policies upon 
written notice to the Transmission Customer.
    1.2  The Transmission Provider may change the General Provisions 
of this Agreement (Part C) upon written notice to the Transmission 
Customer.
    1.3  The Transmission Provider may recall all or part of the 
capacity reserved under this Service Agreement, with no less than 36

[[Page 510]]

months' notice, if such capacity is required to fulfill the 
Transmission Provider's obligations under Section 5 of the Flood 
Control Act of 1944.
    2  The Transmission Customer has been determined by the 
Transmission Provider to have a Completed Application for Long-Term, 
Firm Point-To-Point Transmission Service under the Transmission 
Provider's Open Access Transmission Tariff (Tariff).
    3  The Transmission Customer has provided to the Transmission 
Provider a processing fee in accordance with Section 17.3 of the 
Tariff.
    4  The Tariff as presently constituted or as it may be revised 
or superseded is incorporated herein and made a part hereof.
    5  Southwestern's rate schedule applicable to Firm Point-to-
Point Transmission Service (Rate Schedule) as presently constituted 
or as it may be revised or superseded is incorporated herein and 
made a part hereof.
    6  Service under this Agreement shall commence on the latest of:
    (1) __________, (2) the date on which construction of any Direct 
Assignment Facilities and/or Network Upgrades are completed, or (3) 
on the first day of the month following execution by both Parties. 
Service under this Agreement shall terminate on __________.
    7  The Transmission Provider agrees to provide, and the 
Transmission Customer agrees to take and pay for, Firm Point-To-
Point Transmission Service in accordance with the provisions of Part 
II of the Tariff and this Agreement.
    8  All schedules for service under this Agreement which cross 
Control Area boundaries between the Transmission Provider and 
interconnected utilities shall conform to the standards for 
scheduled interchange of the North American Electric Reliability 
Council and the applicable regional reliability council.
    9  The Transmission Provider is not obligated under this 
Agreement to satisfy any deficiencies that may occur for the 
Transmission Customer as a result of suspension or reduction of 
schedules by a Third Party, nor is the Transmission Provider obliged 
to notify any party if such schedules are suspended or reduced due 
to the action of a Third Party.
    10  Any notice or request made to or by either Party regarding 
this Agreement shall be made to the representative of the other 
Party as indicated below.
    Transmission Provider: Administrator, Southwestern Power 
Administration, One West Third Street, Suite 1400, Tulsa, OK 74103.
    Transmission Customer:
----------------------------------------------------------------------
----------------------------------------------------------------------
----------------------------------------------------------------------
----------------------------------------------------------------------
    IN WITNESS WHEREOF, the Parties have caused this Agreement to be 
executed by their respective authorized officials.

SOUTHWESTERN POWER ADMINISTRATION

By:--------------------------------------------------------------------

ADMINISTRATOR

P.O. Box 1619
Tulsa, Oklahoma, 74101-1619

Date:------------------------------------------------------------------

Reviewed by Southwestern's General Counsel:

By:--------------------------------------------------------------------

(TRANSMISSION CUSTOMER)

By:--------------------------------------------------------------------
Title:-----------------------------------------------------------------
Address:---------------------------------------------------------------
----------------------------------------------------------------------
Date:------------------------------------------------------------------

Part B: Specifications for Long-Term Firm Point-To-Point Transmission 
Service

1  Term of Transaction:------------------------------------------------
Start Date:------------------------------------------------------------
Termination Date:------------------------------------------------------
2  Description of capacity to be transmitted by Transmission 
Provider, including the electric Control Area in which the 
transaction originates.
----------------------------------------------------------------------
3  Point(s) of Receipt:------------------------------------------------
Delivering Party: __________-------------------------------------------
4  Point(s) of Delivery: __________------------------------------------
5  Receiving Party: __________-----------------------------------------

Maximum amount of capacity to be transmitted (Reserved Capacity):
----------------------------------------------------------------------
    6  Designation of party(ies) subject to reciprocal service 
obligation:
----------------------------------------------------------------------
----------------------------------------------------------------------
----------------------------------------------------------------------
----------------------------------------------------------------------
    7  Name of the Control Area from which capacity and energy will 
be delivered to the Transmission Provider for Transmission Service:
----------------------------------------------------------------------
Name of the Control Area to which capacity and energy will be 
delivered by the Transmission Provider:
----------------------------------------------------------------------
Name(s) of any Intervening Systems providing Transmission Service:
----------------------------------------------------------------------
----------------------------------------------------------------------
    8  Service under this Agreement may be subject to some 
combination of the charges detailed below. The appropriate charges 
for individual transactions will be determined in accordance with 
the terms and conditions of the Tariff and the Rate Schedule.
    8.1  Transmission Charges are set forth in the Rate Schedule.
    8.2  Real Power Losses will be applied and charged in accordance 
with the Rate Schedule.
    8.3  Ancillary Services Charges are set forth in the Rate 
Schedule. The specific Ancillary Services to be charged initially 
under this Agreement are listed below. Changes in Ancillary 
Services, if applicable, are made in accordance with the Rate 
Schedule.
----------------------------------------------------------------------
----------------------------------------------------------------------
----------------------------------------------------------------------
----------------------------------------------------------------------
    8.4  System Impact and/or Facilities Study Charge(s): (to be 
filled in if applicable)
----------------------------------------------------------------------
----------------------------------------------------------------------
    8.5  Direct Assignment Facilities Charge: (to be filled in if 
applicable)
----------------------------------------------------------------------
    8.5  Other Charges, including transformation services and 
penalties, if applicable, will be determined by the Rate Schedule or 
set forth below:

Part C: General Provisions Applicable to Transmission Service

    1  Propriety of Rates. The Transmission Provider shall bill the 
Transmission Customer for the Transmission Customer's purchases of 
power, energy, and other services in accordance with the Rate 
Schedule, which is placed in effect pursuant to statute.
    1.1  The Transmission Customer hereby agrees to promptly pay the 
Transmission Provider under such Rate Schedule, whether or not the 
Transmission Customer agrees with the propriety or the levels of the 
rates placed into effect pursuant to law, regulation, or the order 
of an appropriate authority, subject to the Transmission Customer's 
rights to terminate service.
    1.2  In the event that the U.S. Congress amends the manner in 
which the Transmission Provider calculates or charges for its 
products and services, the Transmission Customer hereby agrees to 
promptly pay in such an amended manner, subject to the Transmission 
Customer's right to terminate.
    2  Changes in Rates: The rates and/or terms and conditions set 
forth in the Rate Schedule may change upon confirmation and/or 
approval by the appropriate authority having responsibility to so 
confirm and/or approve rate schedules, and, whether on an interim 
basis or as finally confirmed and/or approved, such rates may be 
increased, decreased, modified, or superseded at any time and from 
time to time.
    2.1  If such rates are so increased, decreased, modified, or 
superseded, the rates and terms and conditions shall thereupon 
become effective and applicable to the Transmission Service 
furnished by the Transmission Provider under this Agreement, in 
accordance with and on the effective date specified in the order of 
the appropriate authority.
    2.2  The Transmission Provider shall promptly notify the 
Transmission Customer in writing of the redetermination and/or 
changes and modifications made in the then-effective Transmission 
Provider's rate schedules for Transmission Service.
    2.3  If such notice advises that the rates to be paid by the 
Transmission Customer for the Transmission Service furnished by the 
Transmission Provider under this Agreement are greater than the 
then-effective rate for such service, The Transmission Customer may, 
by written notice to the Transmission Provider at any time within 90 
days following the date of receipt of such notice from the 
Transmission Provider, terminate this Agreement in its entirety, 
such termination to become effective as of the last day of any month 
following no less than 6 months after the date of receipt by the 
Transmission Provider of such notice of termination from the 
Transmission Customer.
    2.4  In the event that the Transmission Customer elects to 
terminate this Agreement pursuant to this Section 2, the 
Transmission

[[Page 511]]

Customer shall pay for services under this Agreement at the then-
effective rates during the interim between the date of such notice 
and the effective termination date specified in such notice.
    3  Availability of Funds to the Transmission Provider: This 
Agreement and all rights and obligations hereunder, and the 
expenditure of funds by the Transmission Provider under its 
provisions, are expressly conditioned and contingent upon the U.S. 
Congress's making available (through direct appropriation, 
authorization of a revolving fund, the authority to borrow funds, or 
through such other means as it may provide) the necessary funds to 
enable the Transmission Provider to carry out the provisions of this 
Agreement, and if such funds are not available, this Agreement shall 
terminate and have no further force or effect as of the last day for 
which funds were available, and the Transmission Customer hereby 
releases the Transmission Provider from any and all liability for 
failure to perform and fulfill its obligations under this Agreement 
for that reason.
    3.1  No obligation contained herein for the future payment of 
money by the Transmission Provider, or liability on the part of the 
Transmission Provider for breach of any of the provisions contained 
herein, shall be binding upon or enforceable against the 
Transmission Provider unless and until funds, as provided in this 
Section 3, are available out of which such obligations or liability 
can be legally paid.
    3.2  Nothing in this Agreement may be considered as implying 
that the U.S. Congress will, at a later date, appropriate funds 
sufficient to meet any deficiencies or obligations incurred under 
this Agreement.
    4  Covenant Against Contingent Fees: The Transmission Customer 
warrants that no person or selling agency has been employed or 
retained to solicit or secure this Agreement upon an agreement or 
understanding for a commission, percentage, brokerage, or contingent 
fee, except bona fide employees or bona fide established commercial 
or selling agencies maintained by the Transmission Customer for the 
purpose of securing business. For breach or violation of this 
warranty, the Transmission Provider shall have the right to annul 
this Agreement without liability, or, at its discretion, to add to 
the Agreement price or consideration the full amount of such 
commission, percentage, brokerage, or contingent fee.
    5  Termination for Breach: If either Party breaches a material 
provision of this Agreement, the other Party, at its option, may 
terminate this Agreement upon 30 days' prior written notice of its 
intention to do so, and this Agreement ipso facto shall terminate at 
the end of such 30-day period unless such violation is corrected 
within that period. Neither Party shall be considered to be in 
default or breach with respect to any obligation under this 
Agreement if prevented from fulfilling such obligation by reason of 
an Uncontrollable Force.
    6  Convict Labor: In connection with the performance of work 
under this Agreement, the Transmission Customer agrees not to employ 
any person under going sentence of imprisonment except as provided 
by Pub. L. 89-176, September 10, 1965 (18 U.S.C. 4062 (c)(2)), and 
Executive Order 11755, December 29, 1973.
    7  Equal Employment Opportunity: During the performance of this 
Agreement, the Transmission Customer agrees to abide by and to 
fulfill the nondiscrimination requirements of the ``equal 
opportunity clause'' contained in Section 202 of Executive Order 
11246 dated September 24, 1965 (30 FR 12319), any Executive Order 
amending such order, and any other Executive Order superseding such 
order.
    8  Affirmative Action for Disabled Veterans and Veterans of the 
Vietnam Era: During the performance of this Agreement, the 
Transmission Customer agrees to comply with Section 402 of the 
Vietnam Era Veterans Readjustment Assistance Act of 1974, Pub. L. 
93-508 as it amends Pub. L. 92-540, to take affirmative action to 
employ and advance in employment qualified disabled veterans and 
veterans of the Vietnam era, and to fulfill the requirements of the 
``affirmative action clause,'' 38 USCA Sections 2011 and 2012 
(1979); 41 CFR 60-250 et seq.
    9  Affirmative Action for Handicapped Workers: During the 
performance of this Agreement, the Transmission Customer agrees to 
comply with Section 503 of the Rehabilitation Act of 1973, Pub. L. 
93-516, to take affirmative action to employ and advance in 
employment qualified handicapped individuals, and to otherwise 
fulfill the requirements of the ``affirmative action clause,'' 29 
USCA Section 793 (1979); 41 CFR 60-741 et seq.
    10  Contract Work Hours and Safety Standards: This Agreement, to 
the extent that it is of a character specified in Section 103 of the 
Contract Work Hours and Safety Standards Act, 40 U.S.C. 327-333 
(1986), is subject to the provisions of the said Act and to 
regulations promulgated by the Secretary of Labor pursuant to the 
said Act.
    The following provisions are applicable only to Transmission 
Customers which receive service through facilities which are (1) 
jointly used by the Transmission Provider and the Transmission 
Customer, (2) where the Transmission Customer would have occasion to 
enter the facilities of the Transmission Provider, (3) where the 
Transmission Customer owns facilities installed on the property of 
the Transmission Provider, and/or (4) when the Transmission Customer 
takes service directly from facilities owned and maintained by the 
Transmission Provider.
    11  Meter Tests and Adjustments: Any metering equipment which 
may be used in power accounting for Transmission Service under this 
Agreement shall be inspected and tested at least once each year by 
the Party responsible, and at any reasonable time upon request by 
either Party. Metering equipment found to be defective or inaccurate 
shall be repaired and readjusted or replaced by the owner.
    11.1  A meter shall be considered inaccurate if it is found to 
deviate from an accurate standard meter in excess of 0.5 percent 
when tested at 100 percent of load or 1.0 percent when tested at 10 
percent of load.
    11.2  If any meter inspection or test discloses an error 
exceeding 2 percent, a correction based upon the inaccuracy found 
shall be made on the records of electric service furnished since the 
beginning of the monthly billing period immediately preceding the 
billing period during which the test was made, and such correction, 
when made, shall constitute full adjustment of any claim between the 
parties hereto arising out of such inaccuracy of metering equipment.
    12  Reliability, Safety, Health, and Environmental Requirements 
in Regard to Construction, Operation, and Maintenance on U.S. 
Government Property: The provisions of this Section 12 shall apply 
only if the Transmission Customer, its agents or contractors, or its 
member entities perform maintenance, operations, or construction on 
the property of the U.S. Government (Government), or on easements 
shared by the Government and the Transmission Customer.
    12.1  Such construction, maintenance, and operation shall be 
performed in accordance with standards at least equal to those 
provided by the National Electrical Safety Code and shall conform to 
safety, environmental, and security procedures identified by 
Transmission Provider as appropriate to each facility in which such 
work is performed. The Transmission Provider provides such written 
procedures in each of the facilities it maintains and to affected 
Transmission Customers.
    12.2  The Transmission Customer and/or its member entities shall 
take all reasonable precautions in the performance of such work to 
protect the public and the environment. The Transmission Customer 
and/or its member entities shall comply with all applicable local, 
state, and Federal regulations and requirements in the performance 
of such work, including, but not limited to, the National 
Environmental Policy Act, the Clean Air Act; the Clean Water Act; 
the Comprehensive Environmental Responsibility, Compensation, and 
Liability Act; the Toxic Substances Control Act; the Resource 
Conservation and Recovery Act; the Superfund Amendments and 
Reauthorization Act (SARA); SARA Title III (Emergency Planning and 
Community Right-to-Know Act of 1986); and the Occupational Safety 
and Health Act.
    12.3  In the event that the Transmission Provider, at its sole 
option and in its sole judgment, determines that construction, 
maintenance, or operation of facilities which are performed under 
this Agreement by the Transmission Customer, and/or one of its 
member entities, do not meet the standards and/or regulations and 
requirements specified in this Section 12, or if the Transmission 
Provider determines, in its sole judgment, that a condition exists 
which provides a potentially adverse impact (1) on the reliability 
of services provided by Transmission Provider to its customers, (2) 
on the safety and/or health of the public or employees and agents of 
the parties hereto, and/or (3) on the environment, then Transmission 
Provider may provide written notice to the Transmission Customer 
and/or its member entity of the deficient condition; Provided, That, 
if such condition, in Transmission Provider's sole judgment and at 
Transmission Provider's sole option, requires immediate attention 
and does not allow time

[[Page 512]]

for such notice, Transmission Provider will remedy the condition 
and, where appropriate, bill the Transmission Customer.
    12.4  Where, in the Transmission Provider's sole judgment, 
remedy of the said deficient condition is not time critical, the 
Transmission Customer and/or its member entity shall provide a 
written plan and schedule to Transmission Provider within 30 days of 
receipt of the said written notice. Such plan and schedule shall 
provide for correction of the said deficiency at the earliest 
possible time available to the Transmission Customer and/or its 
member entity; Provided, That, the maximum time allowed for the 
Transmission Customer and/or its member entity to correct any such 
deficiency shall not exceed 18 months from receipt of the said 
written notice. The Transmission Customer shall coordinate or, if 
applicable, cause its member entity to coordinate, any work and 
outages which may involve Transmission Provider's facilities with 
Transmission Provider's Dispatch Center (Dispatch Center) in 
Springfield, Missouri.
    12.5  Unless otherwise agreed in writing, correction of 
deficiencies pursuant to this Section 12 shall be at the expense of 
the Transmission Customer.
    12.6  If the Transmission Customer and/or its member entity 
fails to correct the deficiency within the time provided pursuant to 
this Section 12, the Transmission Provider shall have the right, at 
its sole option and in its sole discretion, to terminate service 
through the affected facilities until such deficiencies are 
corrected to the satisfaction of Transmission Provider.
    12.7  If, within the time period provided pursuant to this 
Section 12, an emergency condition occurs which, in the sole 
judgment of Transmission Provider, may cause an adverse impact on 
the reliability of the Transmission System of Transmission Provider 
and/or on the environment, or which poses a hazard to the safety 
and/or health of the public or employees and agents of the parties 
hereto, then Transmission Provider may, at its sole option, remedy 
or repair such condition or equipment and bill the Transmission 
Customer, and the Transmission Customer agrees to render the 
Transmission Provider reimbursement.

13  Right of Installation and Access

    Each Party grants to the other permission, or will obtain such 
permission for the other Party, to install, maintain, and operate, 
or cause to be installed, maintained, and operated, on the System of 
Transmission Provider and on the System of the Transmission 
Customer, at the Point(s) of Delivery between the System of 
Transmission Provider and the System of the Transmission Customer 
utilized under this Agreement, any and all terminal equipment and 
associated electrical apparatus and devices necessary in the 
performance of this Agreement.
    13.1  Each party shall permit, or shall obtain permission for, 
duly authorized representatives and employees of the other Party to 
enter upon the System of the Transmission Provider and the System of 
the Transmission Customer at the said Point(s) of Delivery for the 
purpose of reading or checking meters; for inspecting, testing, 
repairing, renewing, or exchanging any or all of the equipment owned 
by the other party located on such premises; or for the purpose of 
performing any other work necessary in the performance of this 
Agreement.
    13.2  Access for any work performed by one party under this 
Section 13 which may affect the other Party's equipment shall 
normally be preceded by at least one day's notice to the affected 
Party, except in the event of an emergency, in which case such 
notice shall be made as soon as possible after such emergency 
occurrence. Notice to Transmission Provider pursuant to this Section 
13 shall be made to the Dispatch Center.
    13.3  Any access to property controlled by the Transmission 
Provider shall include notification to Transmission Provider at the 
time of entry. Any employee or agent of the Transmission Customer, 
or of its member entities, who enters a Transmission Provider 
facility is expected to call the Dispatch Center from a telephone 
located in the control building in that facility and to identify 
himself or herself. Security devices located in the control 
buildings at Transmission Provider facilities sound an alarm in the 
Dispatch Center when the building is entered. Local law enforcement 
officers may be asked to investigate any unidentified entry.
    13.4  Any equipment, apparatus, or devices installed on the 
System of the Transmission Provider by the Transmission Customer, as 
provided under this Section 13, shall be clearly and permanently 
marked to indicate ownership, and, in addition, a detailed 
description of each item so installed (including, if applicable, 
manufacturer's name, serial number, model number, etc.) shall be 
communicated to Transmission Provider to aid in maintenance of plant 
accounts.
    13.5  In the event the equipment, apparatus, or devices are not 
marked in accordance with Section 13.4, ownership of said equipment, 
apparatus, or devices shall be presumed to be vested in Transmission 
Provider.
    13.6  The Transmission Customer agrees that, if requested by 
Transmission Provider, the description required under Section 13.4 
shall include a detailed analysis of all dielectrical oil, 
including, but not limited to, tests for polychlorinated biphenyls 
(PCBs). If such analysis indicates the presence of a known hazardous 
substance, which, in the Transmission Provider's sole judgment, 
presents a significant hazard to the environment or to the health 
and safety of employees of the parties hereto, the Transmission 
Provider may require, at its sole option, by written request, 
removal of any equipment containing such substance, and the 
Transmission Customer agrees to comply with such request for removal 
at no cost to Transmission Provider.

14  Right of Removal

    Any and all equipment, apparatus, or devices placed or installed 
or caused to be placed or installed by the Parties on or in the 
System of the Transmission Provider or the System of the 
Transmission Customer shall be and shall remain the property of the 
Party owning and installing such equipment, apparatus, devices, or 
facilities, regardless of the mode or manner of annexation or 
attachment to real property, and, upon the termination of this 
Agreement, the owner thereof shall have the right to enter upon the 
premises or system of the other and shall, within a reasonable time, 
remove such equipment, apparatus, devices, or facilities, subject to 
the provisions of Section 13.5.

15  Right to Upgrade Facilities

    The Transmission Provider reserves the right to modify or 
upgrade its Transmission System and any of the elements which 
support such Transmission System, including, but not limited to, 
changes in: (1) The Transmission Provider's transmission voltages, 
(2) The Transmission Provider's transmission system components, (3) 
The Transmission Provider's communications system, (4) The 
Transmission Provider's Supervisory Control and Data Acquisition 
(SCADA) System, and (5) other modifications necessary to comply with 
the standards and/or regulations and requirements mentioned in 
Section 16.
    15.1  If, during the term of this Agreement, the Transmission 
Provider determines, in its sole judgment and at its sole option, 
that modifications or upgrades to its Transmission System and 
associated facilities are required, then, in that event, the 
Transmission Customer shall be responsible for any and all costs and 
expenses incurred by the Transmission Customer in order to continue 
to receive services provided under this Agreement.
    15.2  If the Transmission Customer elects not to make changes in 
its facilities which, in The Transmission Provider's judgment, are 
required for the Transmission Customer to continue to receive 
reliable service from the Transmission Provider's modified or 
upgraded facilities, then the Transmission Customer will discontinue 
receipt of the services provided under this Agreement which are 
dependent on such modified or upgraded facilities, and the 
provisions of this Agreement which describe such services shall be 
terminated or, at the Transmission Provider's sole option, 
suspended, until the Transmission Customer completes the changes in 
its facilities which the Transmission Provider, in its sole 
judgment, deems necessary for safe and reliable service to the 
Transmission Customer.
    15.3  The Transmission Provider shall notify the Transmission 
Customer of the specific sections or articles of the Agreement which 
are to be terminated or suspended pursuant to this Section 15.
    15.4  Any provisions of this Agreement which are not 
specifically terminated or suspended pursuant to Section 15.3 shall 
not in any way be affected and shall remain in full force and effect 
except insofar as the services provided pursuant to the terminated 
or suspended provisions which are reflected in other provisions of 
this Agreement will also be terminated or suspended.
    15.5  Termination or suspension of specific provisions of this 
Agreement pursuant to this Section 17 shall be without penalty to 
either of the Parties, except that

[[Page 513]]

the rights of the Parties, if any, which accrued prior to the date 
of such termination or suspension shall be and hereby are preserved.
    16  Limitation on Rights of Entry: The Transmission Provider 
reserves the right, upon notice to the Transmission Customer, to 
revoke or cancel the rights of entry granted under this Agreement 
with regard to any particular representative of the Transmission 
Customer, if, in the sole judgment of the Transmission Provider, 
such revocation or cancellation is required in the interest of 
national security.
    17  Assistance by Contracting Parties: If assistance in 
maintenance and utilization of their respective systems is rendered 
by the Transmission Provider and/or the Transmission Customer, the 
following terms and conditions shall apply:
    17.1  If, in the maintenance or utilization of their respective 
transmission systems and related facilities for the purpose of this 
Agreement, it becomes necessary by reason of any emergency or 
extraordinary condition for the Transmission Provider or the 
Transmission Customer to request the other to furnish personnel, 
materials, tools, and equipment for the maintenance or modification 
of, or other work on, such transmission systems and related 
facilities to insure continuity of power and energy deliveries, the 
Party requested shall cooperate with the other and render such 
assistance as the Party requested may determine to be available.
    17.2  The Party making such request, upon receipt of properly 
itemized bills, shall reimburse the Party rendering such assistance, 
including overhead and administrative and general expenses. The 
Transmission Customer and the Transmission Provider agree to account 
for any incurred costs under a Work Order accounting procedure and 
in accordance with the Uniform System of Accounts prescribed for 
public utilities by the Commission.
    17.3  Billing statements rendered by the Transmission Customer 
and the Transmission Provider for such reimbursement shall be due 20 
days from the date thereof.

Attachment B

Form of Service Agreement for Firm and Non-Firm Point-To-Point 
Transmission Service

    Note: The form of this agreement incorporates short-term firm 
transmission service with non-firm transmission service, and is an 
enabling agreement for all Southwestern short-term transmission 
arrangements, both firm and non-firm.

Part A: Service Agreement for Enabling Short-Term Point-To-Point 
Transmission Service

    1  This Service Agreement (Agreement), dated as of __________, 
is entered into, by, and between the Southwestern Power 
Administration (Transmission Provider or Southwestern), and 
__________ (Transmission Customer).
    1.1  The Transmission Provider may revise rates for Firm Point-
to-Point Transmission Service provided under this Service Agreement 
pursuant to applicable Federal laws, regulations, and policies upon 
written notice to the Transmission Customer.
    1.2  The Transmission Provider may change the General Provisions 
of this Agreement (Part C) upon written notice to the Transmission 
Customer.
    2  The Transmission Customer has been determined by the 
Transmission Provider to have a Completed Application for receiving 
Short-Term Point-To-Point Transmission Service under the 
Transmission Provider's Open Access Transmission Tariff (Tariff).
    3  The Tariff as presently constituted or as it may be revised 
or superseded is incorporated herein and made a part hereof.
    4  Southwestern's rate schedule applicable to Point-to-Point 
Transmission Service (Rate Schedule) as presently constituted or as 
it may be revised or superseded is incorporated herein and made a 
part hereof.
    5  Service under this agreement shall commence on the latest of: 
(1) __________, (2) the date on which construction of any Direct 
Assignment Facilities and/or Network Upgrades are completed, or (3) 
on the first day of the month following execution by both parties. 
Service under this Agreement shall terminate on __________.
    6  The Transmission Provider agrees to provide, and the 
Transmission Customer agrees to take and pay for, Short-Term Point-
To-Point Transmission Service in accordance with the provisions of 
Part II of the Tariff and this Agreement.
    7  All schedules for service under this Agreement which cross 
Control Area boundaries between the Transmission Provider and 
interconnected utilities shall conform to the standards for 
scheduled interchange of the North American Electric Reliability 
Council and the applicable regional reliability council.
    8  The Transmission Provider is not obligated under this 
Agreement to satisfy any deficiencies that may occur for the 
Transmission Customer as a result of suspension or reduction of 
schedules by a Third Party, nor is the Transmission Provider obliged 
to notify any party if such schedules are suspended or reduced due 
to the action of a Third Party.
    9  Any notice or request made to or by either Party regarding 
this Agreement shall be made to the representative of the other 
Party as indicated below.
    Transmission Provider: Administrator, Southwestern Power 
Administration, One West Third Street, Suite 1400, Tulsa, OK 74103.
    Transmission Customer:
----------------------------------------------------------------------
----------------------------------------------------------------------
----------------------------------------------------------------------
----------------------------------------------------------------------

    IN WITNESS WHEREOF, the Parties have caused this Agreement to be 
executed by their respective authorized officials.

SOUTHWESTERN POWER ADMINISTRATION

By:--------------------------------------------------------------------

ADMINISTRATOR

P.O. Box 1619
Tulsa, Oklahoma, 74101-1619

Date:------------------------------------------------------------------

Reviewed by Southwestern's General Counsel:

By:--------------------------------------------------------------------

(TRANSMISSION CUSTOMER)

By:--------------------------------------------------------------------
Title:-----------------------------------------------------------------
Address:---------------------------------------------------------------
----------------------------------------------------------------------
Date:------------------------------------------------------------------

Part B: General Terms and Conditions for Short-Term Firm and Non-Firm 
Point-To-Point Transmission Service

    1  This Agreement is intended to enable a variety of individual 
Short-Term Firm and Non-Firm Transmission Service Transactions 
(Transactions). For the purposes of this Agreement, the Transmission 
Customer has designated the following information in its Completed 
Application as ``various:''
    (I) Points of Receipt and Delivery, including supply and 
delivery characteristics and voltages;
    (ii) the Reserved Transmission Capacity desired;
    (iii) the type of service (firm or non-firm, hourly, daily, 
weekly, monthly) desired;
    (iv) the date(s) and, if applicable, hour(s) for the service 
which is desired,
    (v) the identities of the Delivering and Receiving Parties; and
    (vi) the location(s) of the resource from which power and energy 
are to be supplied and the location of the load or Control Area(s) 
to which it is to be transmitted.
    2  Individual Transactions for Short-Term, Firm or Non-Firm, 
Transmission Service under this Agreement may be requested by the 
Transmission Customer in increments of a day, a week, or a month for 
Firm Transmission Service, or in increments of an hour, a day, a 
week, or a month for Non-Firm Transmission Service, and the 
Transmission Provider will grant such requests on an as-available 
basis.
    2.1  For each specific Transaction requested, the Transmission 
Customer shall supply to the Transmission Provider the specific 
information listed in Section 1 pertinent to such Transaction, via 
Southwestern's OASIS and/or by telephone or facsimile, in accordance 
with the Tariff and with specific procedures which are mutually 
agreeable to the Parties.
    2.2  The Transmission Customer shall request a separate 
Transaction for each type of service (firm or non-firm, and by rate 
types related to increments of hourly, daily, weekly, or monthly 
reservations).
    2.3  The Transmission Provider shall review each Transaction 
request and determine whether a reservation for such Transaction is 
available. The Transmission Provider shall communicate, also via 
OASIS and/or other means as agreed, the results of such 
determination.
    2.4  In the event that a capacity reservation is recorded for 
such Transaction, the Transmission Customer will submit actual 
schedules under such reservation in accordance with established 
procedures, subject to the priority provisions of the Tariff and of 
Section 7 of Part A of this Agreement.

[[Page 514]]

    3  Capacity reservations for any particular Transaction for 
Short-Term Firm Transmission Service will conform to the following 
minimum and maximum periods for making such reservation prior to 
actual service under such Transaction:
    (a) For reservations in increments of one day (daily): No later 
than 2 days, no earlier than 60 days prior to service
    (b) For reservations in increments of one week (weekly): No 
later than 2 days, no earlier than 60 days prior to service
    (c) For reservations in increments of one month: No later than 
14 days, no earlier than 120 days prior to service
    4  Capacity reservations for any particular Transaction for Non-
Firm Transmission Service will conform to the following minimum and 
maximum periods for making such reservation prior to actual service 
under such Transaction:
    (a) For reservations in increments of one hour (hourly): No 
later than 20 minutes prior to the first hour requested, no earlier 
than 2:00 p.m. the day before
    (b) For reservations in increments of one day (daily): No later 
than 10:00 a.m. the day before, no earlier than 30 days prior to 
service
    (c) For reservations of one week to one month (weekly): No later 
than 2:00 p.m. the day before, no earlier than 60 days prior to 
service
    (d) For reservations of one month: No later than 2:00 p.m. the 
day before, no earlier than 120 days prior to service
    5  Reservations for any given one-week increment shall not cross 
the end of a calendar month, and reservations for any month shall be 
requested from the first day to the last day of a particular 
calendar month.
    6  Service under this Agreement may be subject to some 
combination of the charges detailed below. The appropriate charges 
for individual transactions will be determined in accordance with 
the terms and conditions of the Tariff and the Rate Schedule.
    6.1  Transmission Charges are set forth in the Rate Schedule.
    6.2  Real Power Losses will be applied and charged in accordance 
with the Rate Schedule.
    6.3  Ancillary Services Charges are set forth in the Rate 
Schedule. The specific Ancillary Services to be charged for any 
particular Transaction will be determined in accordance with the 
Rate Schedule.
    6.4  Other Charges, including transformation services and 
penalties, if applicable, will be determined by the Rate Schedule or 
set forth below:

Part C: General Provisions Applicable to Transmission Service

    1  Propriety of Rates: The Transmission Provider shall bill the 
Transmission Customer for the Transmission Customer's purchases of 
power, energy, and other services in accordance with the Rate 
Schedule, which is placed in effect pursuant to statute.
    1.1  The Transmission Customer hereby agrees to promptly pay the 
Transmission Provider under such Rate Schedule, whether or not the 
Transmission Customer agrees with the propriety or the levels of the 
rates placed into effect pursuant to law, regulation, or the order 
of an appropriate authority, subject to the Transmission Customer's 
rights to terminate service.
    1.2  In the event that the U.S. Congress amends the manner in 
which the Transmission Provider calculates or charges for its 
products and services, the Transmission Customer hereby agrees to 
promptly pay in such an amended manner, subject to the Transmission 
Customer's right to terminate.
    2  Changes in Rates: The rates and/or terms and conditions set 
forth in the Rate Schedule may change upon confirmation and/or 
approval by the appropriate authority having responsibility to so 
confirm and/or approve rate schedules, and, whether on an interim 
basis or as finally confirmed and/or approved, such rates may be 
increased, decreased, modified, or superseded at any time and from 
time to time.
    2.1  If such rates are so increased, decreased, modified, or 
superseded, the rates and terms and conditions shall thereupon 
become effective and applicable to the Transmission Service 
furnished by the Transmission Provider under this Agreement, in 
accordance with and on the effective date specified in the order of 
the appropriate authority.
    2.2  The Transmission Provider shall promptly notify the 
Transmission Customer in writing of the redetermination and/or 
changes and modifications made in the then-effective Transmission 
Provider's rate schedules for Transmission Service.
    2.3  If such notice advises that the rates to be paid by the 
Transmission Customer for the Transmission Service furnished by the 
Transmission Provider under this Agreement are greater than the 
then-effective rate for such service, The Transmission Customer may, 
by written notice to the Transmission Provider at any time within 90 
days following the date of receipt of such notice from the 
Transmission Provider, terminate this Agreement in its entirety, 
such termination to become effective as of the last day of any month 
following no less than 6 months after the date of receipt by the 
Transmission Provider of such notice of termination from the 
Transmission Customer.
    2.4  In the event that the Transmission Customer elects to 
terminate this Agreement pursuant to this Section 2, the 
Transmission Customer shall pay for services under this Agreement at 
the then-effective rates during the interim between the date of such 
notice and the effective termination date specified in such notice.

3  Availability of Funds to the Transmission Provider: This 
Agreement and all rights and obligations hereunder, and the 
expenditure of funds by the Transmission Provider under its 
provisions, are expressly conditioned and contingent upon the U.S. 
Congress's making available (through direct appropriation, 
authorization of a revolving fund, the authority to borrow funds, 
or through such other means as it may provide) the necessary funds 
to enable the Transmission Provider to carry out the provisions of 
this Agreement, and if such funds are not available, this Agreement 
shall terminate and have no further force or effect as of the last 
day for which funds were available, and the Transmission Customer 
hereby releases the Transmission Provider from any and all 
liability for failure to perform and fulfill its obligations under 
this Agreement for that reason.

    3.1  No obligation contained herein for the future payment of 
money by the Transmission Provider, or liability on the part of the 
Transmission Provider for breach of any of the provisions contained 
herein, shall be binding upon or enforceable against the 
Transmission Provider unless and until funds, as provided in this 
Section 3, are available out of which such obligations or liability 
can be legally paid.
    3.2  Nothing in this Agreement may be considered as implying 
that the U.S. Congress will, at a later date, appropriate funds 
sufficient to meet any deficiencies or obligations incurred under 
this Agreement.
    4  Covenant Against Contingent Fees: The Transmission Customer 
warrants that no person or selling agency has been employed or 
retained to solicit or secure this Agreement upon an agreement or 
understanding for a commission, percentage, brokerage, or contingent 
fee, except bona fide employees or bona fide established commercial 
or selling agencies maintained by the Transmission Customer for the 
purpose of securing business. For breach or violation of this 
warranty, the Transmission Provider shall have the right to annul 
this Agreement without liability, or, at its discretion, to add to 
the Agreement price or consideration the full amount of such 
commission, percentage, brokerage, or contingent fee.
    5  Termination for Breach: If either Party breaches a material 
provision of this Agreement, the other Party, at its option, may 
terminate this Agreement upon 30 days' prior written notice of its 
intention to do so, and this Agreement ipso facto shall terminate at 
the end of such 30-day period unless such violation is corrected 
within that period. Neither Party shall be considered to be in 
default or breach with respect to any obligation under this 
Agreement if prevented from fulfilling such obligation by reason of 
an Uncontrollable Force.
    6  Convict Labor: In connection with the performance of work 
under this Agreement, the Transmission Customer agrees not to employ 
any person undergoing sentence of imprisonment except as provided by 
Public Law 89-176, September 10, 1965 (18 U.S.C. 4062(c)(2)), and 
Executive Order 11755, December 29, 1973.
    7  Equal Employment Opportunity: During the performance of this 
Agreement, the

[[Page 515]]

Transmission Customer agrees to abide by and to fulfill the 
nondiscrimination requirements of the ``equal opportunity clause'' 
contained in Section 202 of Executive Order 11246 dated September 
24, 1965 (30 FR 12319), any Executive Order amending such order, and 
any other Executive Order superseding such order.
    8  Affirmative Action for Disabled Veterans and Veterans of the 
Vietnam Era: During the performance of this Agreement, the 
Transmission Customer agrees to comply with Section 402 of the 
Vietnam Era Veterans Readjustment Assistance Act of 1974, Public Law 
93-508 as it amends Public Law 92-540, to take affirmative action to 
employ and advance in employment qualified disabled veterans and 
veterans of the Vietnam era, and to fulfill the requirements of the 
``affirmative action clause,'' 38 USCA Sections 2011 and 2012 
(1979); 41 CFR 60-250 et seq.
    9  Affirmative Action for Handicapped Workers: During the 
performance of this Agreement, the Transmission Customer agrees to 
comply with Section 503 of the Rehabilitation Act of 1973, Public 
Law 93-516, to take affirmative action to employ and advance in 
employment qualified handicapped individuals, and to otherwise 
fulfill the requirements of the ``affirmative action clause,'' 29 
USCA Section 793 (1979); 41 CFR 60-741 et seq.
    10  Contract Work Hours and Safety Standards: This Agreement, to 
the extent that it is of a character specified in Section 103 of the 
Contract Work Hours and Safety Standards Act, 40 U.S.C. 327-333 
(1986), is subject to the provisions of the said Act and to 
regulations promulgated by the Secretary of Labor pursuant to the 
said Act.
    The following provisions are applicable only to Transmission 
Customers which receive service through facilities which are (1) 
jointly used by the Transmission Provider and the Transmission 
Customer, (2) where the Transmission Customer would have occasion to 
enter the facilities of the Transmission Provider, (3) where the 
Transmission Customer owns facilities installed on the property of 
the Transmission Provider, and/or (4) when the Transmission Customer 
takes service directly from facilities owned and maintained by the 
Transmission Provider.
    11  Meter Tests and Adjustments: Any metering equipment which 
may be used in power accounting for Transmission Service under this 
Agreement shall be inspected and tested at least once each year by 
the Party responsible, and at any reasonable time upon request by 
either Party. Metering equipment found to be defective or inaccurate 
shall be repaired and readjusted or replaced by the owner.
    11.1  A meter shall be considered inaccurate if it is found to 
deviate from an accurate standard meter in excess of 0.5 percent 
when tested at 100 percent of load or 1.0 percent when tested at 10 
percent of load.
    11.2   If any meter inspection or test discloses an error 
exceeding 2 percent, a correction based upon the inaccuracy found 
shall be made on the records of electric service furnished since the 
beginning of the monthly billing period immediately preceding the 
billing period during which the test was made, and such correction, 
when made, shall constitute full adjustment of any claim between the 
parties hereto arising out of such inaccuracy of metering equipment.
    12  Reliability, Safety, Health, and Environmental Requirements 
in Regard to Construction, Operation, and Maintenance on U.S. 
Government Property: The provisions of this Section 12 shall apply 
only if the Transmission Customer, its agents or contractors, or its 
member entities perform maintenance, operations, or construction on 
the property of the U.S. Government (Government), or on easements 
shared by the Government and the Transmission Customer.
    12.1  Such construction, maintenance, and operation shall be 
performed in accordance with standards at least equal to those 
provided by the National Electrical Safety Code and shall conform to 
safety, environmental, and security procedures identified by 
Transmission Provider as appropriate to each facility in which such 
work is performed. The Transmission Provider provides such written 
procedures in each of the facilities it maintains and to affected 
Transmission Customers.
    12.2  The Transmission Customer and/or its member entities shall 
take all reasonable precautions in the performance of such work to 
protect the public and the environment. The Transmission Customer 
and/or its member entities shall comply with all applicable local, 
state, and Federal regulations and requirements in the performance 
of such work, including, but not limited to, the National 
Environmental Policy Act, the Clean Air Act; the Clean Water Act; 
the Comprehensive Environmental Responsibility, Compensation, and 
Liability Act; the Toxic Substances Control Act; the Resource 
Conservation and Recovery Act; the Superfund Amendments and 
Reauthorization Act (SARA); SARA Title III (Emergency Planning and 
Community Right-to-Know Act of 1986); and the Occupational Safety 
and Health Act.
    12.3  In the event that the Transmission Provider, at its sole 
option and in its sole judgment, determines that construction, 
maintenance, or operation of facilities which are performed under 
this Agreement by the Transmission Customer, and/or one of its 
member entities, do not meet the standards and/or regulations and 
requirements specified in this Section 12, or if the Transmission 
Provider determines, in its sole judgment, that a condition exists 
which provides a potentially adverse impact (1) on the reliability 
of services provided by Transmission Provider to its customers, (2) 
on the safety and/or health of the public or employees and agents of 
the parties hereto, and/or (3) on the environment, then Transmission 
Provider may provide written notice to the Transmission Customer 
and/or its member entity of the deficient condition; Provided, That, 
if such condition, in Transmission Provider's sole judgment and at 
Transmission Provider's sole option, requires immediate attention 
and does not allow time for such notice, Transmission Provider will 
remedy the condition and, where appropriate, bill the Transmission 
Customer.
    12.4  Where, in the Transmission Provider's sole judgment, 
remedy of the said deficient condition is not time critical, the 
Transmission Customer and/or its member entity shall provide a 
written plan and schedule to Transmission Provider within 30 days of 
receipt of the said written notice. Such plan and schedule shall 
provide for correction of the said deficiency at the earliest 
possible time available to the Transmission Customer and/or its 
member entity; Provided, That, the maximum time allowed for the 
Transmission Customer and/or its member entity to correct any such 
deficiency shall not exceed 18 months from receipt of the said 
written notice. The Transmission Customer shall coordinate or, if 
applicable, cause its member entity to coordinate, any work and 
outages which may involve Transmission Provider's facilities with 
Transmission Provider's Dispatch Center (Dispatch Center) in 
Springfield, Missouri.
    12.5  Unless otherwise agreed in writing, correction of 
deficiencies pursuant to this Section 12 shall be at the expense of 
the Transmission Customer.
    12.6  If the Transmission Customer and/or its member entity 
fails to correct the deficiency within the time provided pursuant to 
this Section 12, the Transmission Provider shall have the right, at 
its sole option and in its sole discretion, to terminate service 
through the affected facilities until such deficiencies are 
corrected to the satisfaction of Transmission Provider.
    12.7  If, within the time period provided pursuant to this 
Section 12, an emergency condition occurs which, in the sole 
judgment of Transmission Provider, may cause an adverse impact on 
the reliability of the Transmission System of Transmission Provider 
and/or on the environment, or which poses a hazard to the safety 
and/or health of the public or employees and agents of the parties 
hereto, then Transmission Provider may, at its sole option, remedy 
or repair such condition or equipment and bill the Transmission 
Customer, and the Transmission Customer agrees to render the 
Transmission Provider reimbursement.
    13  Right of Installation and Access: Each Party grants to the 
other permission, or will obtain such permission for the other 
Party, to install, maintain, and operate, or cause to be installed, 
maintained, and operated, on the System of Transmission Provider and 
on the System of the Transmission Customer, at the Point(s) of 
Delivery between the System of Transmission Provider and the System 
of the Transmission Customer utilized under this Agreement, any and 
all terminal equipment and associated electrical apparatus and 
devices necessary in the performance of this Agreement.
    13.1  Each party shall permit, or shall obtain permission for, 
duly authorized representatives and employees of the other Party to 
enter upon the System of the Transmission Provider and the System of 
the Transmission Customer at the said Point(s) of Delivery for the 
purpose of reading or checking meters; for inspecting, testing, 
repairing, renewing, or exchanging any or all of the equipment owned 
by the other party located on such premises; or for the purpose of 
performing any other work necessary in the performance of this 
Agreement.

[[Page 516]]

    13.2  Access for any work performed by one party under this 
Section 13 which may affect the other Party's equipment shall 
normally be preceded by at least one day's notice to the affected 
Party, except in the event of an emergency, in which case such 
notice shall be made as soon as possible after such emergency 
occurrence. Notice to Transmission Provider pursuant to this Section 
13 shall be made to the Dispatch Center.
    13.3  Any access to property controlled by the Transmission 
Provider shall include notification to Transmission Provider at the 
time of entry. Any employee or agent of the Transmission Customer, 
or of its member entities, who enters a Transmission Provider 
facility is expected to call the Dispatch Center from a telephone 
located in the control building in that facility and to identify 
himself or herself. Security devices located in the control 
buildings at Transmission Provider facilities sound an alarm in the 
Dispatch Center when the building is entered. Local law enforcement 
officers may be asked to investigate any unidentified entry.
    13.4  Any equipment, apparatus, or devices installed on the 
System of the Transmission Provider by the Transmission Customer, as 
provided under this Section 13, shall be clearly and permanently 
marked to indicate ownership, and, in addition, a detailed 
description of each item so installed (including, if applicable, 
manufacturer's name, serial number, model number, etc.) shall be 
communicated to Transmission Provider to aid in maintenance of plant 
accounts.
    13.5  In the event the equipment, apparatus, or devices are not 
marked in accordance with Section 13.4, ownership of said equipment, 
apparatus, or devices shall be presumed to be vested in Transmission 
Provider.
    13.6  The Transmission Customer agrees that, if requested by 
Transmission Provider, the description required under Section 13.4 
shall include a detailed analysis of all dielectrical oil, 
including, but not limited to, tests for polychlorinated biphenyls 
(PCBs). If such analysis indicates the presence of a known hazardous 
substance, which, in the Transmission Provider's sole judgment, 
presents a significant hazard to the environment or to the health 
and safety of employees of the parties hereto, the Transmission 
Provider may require, at its sole option, by written request, 
removal of any equipment containing such substance, and the 
Transmission Customer agrees to comply with such request for removal 
at no cost to Transmission Provider.
    14  Right of Removal: Any and all equipment, apparatus, or 
devices placed or installed or caused to be placed or installed by 
the Parties on or in the System of the Transmission Provider or the 
System of the Transmission Customer shall be and shall remain the 
property of the Party owning and installing such equipment, 
apparatus, devices, or facilities, regardless of the mode or manner 
of annexation or attachment to real property, and, upon the 
termination of this Agreement, the owner thereof shall have the 
right to enter upon the premises or system of the other and shall, 
within a reasonable time, remove such equipment, apparatus, devices, 
or facilities, subject to the provisions of Section 13.5.
    15  Right to Upgrade Facilities: The Transmission Provider 
reserves the right to modify or upgrade its Transmission System and 
any of the elements which support such Transmission System, 
including, but not limited to, changes in: (1) The Transmission 
Provider's transmission voltages, (2) The Transmission Provider's 
transmission system components, (3) The Transmission Provider's 
communications system, (4) The Transmission Provider's Supervisory 
Control and Data Acquisition (SCADA) System, and (5) other 
modifications necessary to comply with the standards and/or 
regulations and requirements mentioned in Section 16.
    15.1  If, during the term of this Agreement, the Transmission 
Provider determines, in its sole judgment and at its sole option, 
that modifications or upgrades to its Transmission System and 
associated facilities are required, then, in that event, the 
Transmission Customer shall be responsible for any and all costs and 
expenses incurred by the Transmission Customer in order to continue 
to receive services provided under this Agreement.
    15.2  If the Transmission Customer elects not to make changes in 
its facilities which, in The Transmission Provider's judgment, are 
required for the Transmission Customer to continue to receive 
reliable service from the Transmission Provider's modified or 
upgraded facilities, then the Transmission Customer will discontinue 
receipt of the services provided under this Agreement which are 
dependent on such modified or upgraded facilities, and the 
provisions of this Agreement which describe such services shall be 
terminated or, at the Transmission Provider's sole option, 
suspended, until the Transmission Customer completes the changes in 
its facilities which the Transmission Provider, in its sole 
judgment, deems necessary for safe and reliable service to the 
Transmission Customer.
    15.3  The Transmission Provider shall notify the Transmission 
Customer of the specific sections or articles of the Agreement which 
are to be terminated or suspended pursuant to this Section 15.
    15.4  Any provisions of this Agreement which are not 
specifically terminated or suspended pursuant to Section 15.3 shall 
not in any way be affected and shall remain in full force and effect 
except insofar as the services provided pursuant to the terminated 
or suspended provisions which are reflected in other provisions of 
this Agreement will also be terminated or suspended.
    15.5  Termination or suspension of specific provisions of this 
Agreement pursuant to this Section 17 shall be without penalty to 
either of the Parties, except that the rights of the Parties, if 
any, which accrued prior to the date of such termination or 
suspension shall be and hereby are preserved.
    16  Limitation on Rights of Entry: The Transmission Provider 
reserves the right, upon notice to the Transmission Customer, to 
revoke or cancel the rights of entry granted under this Agreement 
with regard to any particular representative of the Transmission 
Customer, if, in the sole judgment of the Transmission Provider, 
such revocation or cancellation is required in the interest of 
national security.
    17  Assistance by Contracting Parties: If assistance in 
maintenance and utilization of their respective systems is rendered 
by the Transmission Provider and/or the Transmission Customer, the 
following terms and conditions shall apply:
    17.1  If, in the maintenance or utilization of their respective 
transmission systems and related facilities for the purpose of this 
Agreement, it becomes necessary by reason of any emergency or 
extraordinary condition for the Transmission Provider or the 
Transmission Customer to request the other to furnish personnel, 
materials, tools, and equipment for the maintenance or modification 
of, or other work on, such transmission systems and related 
facilities to insure continuity of power and energy deliveries, the 
Party requested shall cooperate with the other and render such 
assistance as the Party requested may determine to be available.
    17.2  The Party making such request, upon receipt of properly 
itemized bills, shall reimburse the Party rendering such assistance, 
including overhead and administrative and general expenses. The 
Transmission Customer and the Transmission Provider agree to account 
for any incurred costs under a Work Order accounting procedure and 
in accordance with the Uniform System of Accounts prescribed for 
public utilities by the Commission.
    17.3  Billing statements rendered by the Transmission Customer 
and the Transmission Provider for such reimbursement shall be due 20 
days from the date thereof.

Attachment C

Methodology To Assess Available Transmission Capability

    The Transmission Provider is a member of the Southwest Power 
Pool (SPP), and participates in the SPP's process for 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 specifics for this methodology 
are available in Section 4 of SPP's publication titled ``Criteria.''
    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.

[[Page 517]]

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 general 
criteria and procedures as described below. In addition, the 
Transmission Provider is in the process of developing a written 
guideline for facilities evaluations, and such standards, when they 
are complete, will be available to an interested party. 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 
------------------------------------------------------------------------
AES Power, Inc............................  5-18-94                     
Aquila Power Corporation..................  10-31-96                    
Arkansas Electric Cooperative Corp........  7-15-93 and 5-23-97         
Arkansas Power & Light Company............  6-1-88                      
Associated Electric Cooperative, Inc......  6-26-92 & 10-9-92           
Calpine Power Services Company............  8-21-96                     
Carthage, Missouri........................  10-25-60 & 10-26-92         
Clarksville, Arkansas.....................  3-25-86                     
CNG Power Services Corporation............  3-20-97                     
Coral Power, L.L.C........................  12-31-96                    
Delhi Energy Services, Inc................  11-16-95                    
Duke/Louis Dreyfus, L.L.C.................  6-19-96                     
Eastex Power Marketing, Inc...............  5-24-96                     
Electric Clearinghouse, Inc...............  9-7-95                      
Enron Power Marketing, Inc................  6-23-94                     
Entergy Power Marketing Corp..............  10-24-96                    
Entergy Services, Inc.....................  8-7-96                      
Federal Energy Sales, Inc.................  4-29-96                     
Grand River Dam Authority.................  9-9-76 & 4-27-95            
Illinois Power Company....................  2-11-97                     
Industrial Energy Applications, Inc.......  8-7-96                      
Jackson, Missouri.........................  6-19-92 & 12-8-95           
Jonesboro, Arkansas.......................  6-23-92, 5-31-94, & 2-18-97 
Kennett, Missouri.........................  5-22-92 & 3-31-95           
KN Marketing, Inc.........................  7-12-96                     
LG&E Power Marketing......................  1-27-95                     
Malden, Missouri..........................  8-31-93 & 10-14-93          
MidCon Power Services Corp................  9-18-95                     
Minnesota Power & Light Company...........  2-18-97                     
Missouri Joint Municipal Electric Utility   7-29-81                     
 Commission.                                                            
Morgan Stanley Capital Group..............  10-7-96                     
National Gas & Electric, L.P..............  11-26-96                    
New Madrid, Missouri......................  2-18-96                     
Nixa, Missouri............................  5-21-92                     
NorAm Energy Services, Inc................  11-30-94                    
Oklahoma Municipal Power Authority........  11-24-92                    
Pacificorp Power Marketing, Inc...........  5-15-97                     
PanEnergy Trading & Marketing Services,     9-13-96                     
 L.L.C.                                                                 
Paragould, Arkansas.......................  5-23-91 & 6-2-93            
People's Electric Cooperative.............  12-28-90 & 2-3-94           
Piggott, Arkansas.........................  11-19-92 & 4-12-95          
Poplar Bluff, Missouri....................  3-23-92 & 5-13-93           
Public Service Company of Oklahoma........  6-26-92                     
Rainbow Energy Marketing Corporation......  7-6-94                      
Sikeston, Missouri........................  9-15-92                     
Sonat Power Marketing, L.P................  11-29-96                    
Southern Energy Trading and Marketing, Inc  3-31-97                     
Springfield, Missouri.....................  7-29-93                     
Tennessee Power Company...................  8-25-95                     
Union Electric Company....................  6-10-94                     
UtiliCorp United, Inc.....................  6-4-96                      
Valero Power Services Company.............  4-4-96                      
Western Farmers Electric Cooperative......  11-2-92, 5-28-93, & 8-24-94 
Williams Energy Services Company..........  7-12-96                     
WPS Energy Services, Inc..................  6-4-97                      
------------------------------------------------------------------------

Attachment F

Form of Service Agreement for Network Integration Transmission 
Service

Part A: Service Agreement for Network Integration Transmission Service

    1  This Service Agreement, dated as of ________, is entered 
into, by and between Southwestern Power Administration (Transmission 
Provider or Southwestern), and ________ (Transmission Customer).
    11  The Transmission Provider may revise rates for Network 
Integration Transmission Service provided under this Service 
Agreement pursuant to applicable Federal laws, regulations, and 
policies upon written notice to the Transmission Customer.
    12  The Transmission Provider may change the General Provisions 
of this Agreement (Part C) upon written notice to the Transmission 
Customer.
    13  The Transmission Provider may recall all or part of the 
capacity reserved under this Service Agreement, with no less than 36 
months' notice, if such capacity is required to fulfill the 
Transmission Provider's obligations under Section 5 of the Flood 
Control Act of 1944.
    2  The Transmission Customer has been determined by the 
Transmission Provider to have a Completed Application for Network 
Integration Transmission Service under the Transmission Provider's 
Open Access Transmission Tariff (Tariff).
    3  The Transmission Customer has provided to the Transmission 
Provider a processing fee in accordance with Section 29.2 of the 
Tariff.
    4  A Network Operating Agreement (Operating Agreement) has been 
executed between the Parties and is incorporated herein and made a 
part hereof.
    5  The Tariff as presently constituted or as it may be revised 
or superseded is incorporated herein and made a part hereof.
    6  Southwestern's rate schedule applicable to Network 
Integration Transmission Service (Rate Schedule) as presently 
constituted or as it may be revised or superseded is incorporated 
herein and made a part hereof.
    7  Service under this Service Agreement shall commence on the 
latest of (1) ________, or (2) the date on which construction of any 
Direct Assignment Facilities and/or Network Upgrades are completed, 
or (3) on the first day of the month following execution by both 
Parties. Service under this Service Agreement shall terminate on 
________.
    8  The Transmission Provider agrees to provide, and the 
Transmission Customer agrees to take and pay for, Network 
Integration Transmission Service in accordance with the provisions 
of Part III of the Tariff and this Service Agreement.
    9  All schedules for service under this Agreement which cross 
Control Area boundaries between the Transmission

[[Page 518]]

Provider and interconnected utilities shall conform to standards for 
scheduled interchange of the North American Electric Reliability 
Council and the applicable regional reliability council.
    10  The Transmission Provider is not obligated under this 
Agreement to satisfy any deficiencies that may occur for the 
Transmission Customer as a result of suspension or reduction of 
schedules by a Third Party, nor is the Transmission Provider obliged 
to notify any party if such schedules are suspended or reduced due 
to the action of a Third Party.
    11  The Parties specifically recognize that the Transmission 
Provider's ability to construct new or upgraded facilities to meet 
the Designated Network Loads of the Transmission Customer are 
contingent upon the availability of funds by the U.S. Congress to 
the Transmission Provider for such purpose, as set forth in Section 
3 of Part C, ``General Provisions Applicable to Transmission 
Service,'' appended to this Service Agreement.
    11.1  The Transmission Provider's responsibilities to the 
Transmission Customer pursuant to Section 28.2 of the Tariff, or 
under other provisions of the Tariff which may require construction 
of additional transmission facilities in the system of the 
Transmission Provider to meet Designated Network Loads, are 
specifically limited to the extent that funds are available to the 
Transmission Provider for such purposes.
    11.2  In the event that such facilities may be needed to meet 
Designated Network Loads, the Transmission Customer may elect to 
provide, in advance, the necessary funds for such construction by 
the Transmission Provider, in accordance with a separate 
construction agreement between the Parties. The Transmission 
Provider's ability to accept such funds is subject to the authority 
granted to the Transmission Provider by the U.S. Congress.
    12  Any notice or request made to or by either Party regarding 
this Service Agreement shall be made to the representative of the 
other Party as indicated below.
    Transmission Provider: Administrator, Southwestern Power 
Administration, One West Third Street, Suite 1400, Tulsa, OK 74103.
    Transmission Customer:
----------------------------------------------------------------------
----------------------------------------------------------------------
----------------------------------------------------------------------
----------------------------------------------------------------------
    IN WITNESS WHEREOF, the Parties have caused this Service 
Agreement to be executed by their respective authorized officials.

SOUTHWESTERN POWER ADMINISTRATION

By:--------------------------------------------------------------------

ADMINISTRATOR
One West Third Street, Suite 1400
Tulsa, OK 74103

Date:------------------------------------------------------------------

Reviewed by Southwestern's General Counsel:

By:--------------------------------------------------------------------

(TRANSMISSION CUSTOMER)

By:--------------------------------------------------------------------
Title:-----------------------------------------------------------------
Address:---------------------------------------------------------------
----------------------------------------------------------------------
Date:------------------------------------------------------------------

Part B: Specifications for Network Integration Transmission Service

    1  The Transmission Provider will provide Network Integration 
Transmission Service over the Transmission Provider's Transmission 
System for the delivery of capacity and energy from the Transmission 
Customer's designated Network Resources, as set forth in Section 3 
of this Part B, to the Transmission Customer's Designated Network 
Loads which are located in the Transmission Provider's Control Area, 
as set forth in Section 4 of this Part B.
    2  The Transmission Provider will provide non-firm transmission 
service (Secondary Transmission Service) from non-designated Network 
Resources to meet Designated Network Loads, on an as-available 
basis, under the terms of this Service Agreement and in accordance 
Section 28.4 and other applicable Sections of the Tariff.
    3  Designated Network Resources to be delivered into [or from] 
the Transmission Provider's Control Area on behalf of the Network 
Customer:
    3.1  [To be specified in each Agreement, using information 
provided in the Transmission Customer's application for Network 
Integration Transmission Service.]
    3.2  Any change in Network Resources shall be effected in 
accordance with procedures set forth in the Tariff.
    4  Designated Network Loads to be served under this Service 
Agreement:
    4.1  [To be specified in each Agreement, using information 
provided in the Transmission Customer's application for Network 
Integration Transmission Service.]
    4.2  Any change in Designated Network Loads shall be effected in 
accordance with procedures set forth in the Tariff.
    5  Specific operations under this Service Agreement are set 
forth in the Operating Agreement
    6  Service under this Agreement may be subject to some 
combination of the charges detailed below.
    6.1  The Network Transmission Capacity Charge is set forth in 
the Rate Schedule. The specific capacity which the Transmission 
Customer will be invoiced for is computed in accordance with 
procedures set forth in the Tariff and updated in conformity to such 
procedures. The initial charges and the specific basis for such 
charges for Network Integration Transmission Service applicable to 
this Service Agreement are included in the Operating Agreement.
    6.2  Real Power Losses will be applied and charged in accordance 
with the Rate Schedule.
    6.3  Ancillary Services Charges are set forth in the Rate 
Schedule. The specific Ancillary Services to be charged initially 
under this Agreement are listed below. Changes in Ancillary 
Services, if applicable, are made in accordance with the Rate 
Schedule.
----------------------------------------------------------------------
----------------------------------------------------------------------
----------------------------------------------------------------------
----------------------------------------------------------------------
    6.4  System Impact and/or Facilities Study Charge(s): (to be 
filled in if applicable)
----------------------------------------------------------------------
----------------------------------------------------------------------
    6.5  Direct Assignment Facilities Charge: (to be filled in if 
applicable)
----------------------------------------------------------------------
    6.5  Penalties Associated with unauthorized use of the 
Transmission Provider's Transmission System and associated 
facilities, as provided in the Operating Agreement or the Rate 
Schedule: ________.
    6.6  Other Charges: To be filled in and defined if applicable.

Part C: General Provisions Applicable to Transmission Service

    1  Propriety of Rates: The Transmission Provider shall bill the 
Transmission Customer for the Transmission Customer's purchases of 
power, energy, and other services in accordance with the Rate 
Schedule, which is placed in effect pursuant to statute.
    1.1  The Transmission Customer hereby agrees to promptly pay the 
Transmission Provider under such Rate Schedule, whether or not the 
Transmission Customer agrees with the propriety or the levels of the 
rates placed into effect pursuant to law, regulation, or the order 
of an appropriate authority, subject to the Transmission Customer's 
rights to terminate service.
    1.2  In the event that the U.S. Congress amends the manner in 
which the Transmission Provider calculates or charges for its 
products and services, the Transmission Customer hereby agrees to 
promptly pay in such an amended manner, subject to the Transmission 
Customer's right to terminate.
    2  Changes in Rates: The rates and/or terms and conditions set 
forth in the Rate Schedule may change upon confirmation and/or 
approval by the appropriate authority having responsibility to so 
confirm and/or approve rate schedules, and, whether on an interim 
basis or as finally confirmed and/or approved, such rates may be 
increased, decreased, modified, or superseded at any time and from 
time to time.
    2.1  If such rates are so increased, decreased, modified, or 
superseded, the rates and terms and conditions shall thereupon 
become effective and applicable to the Transmission Service 
furnished by the Transmission Provider under this Agreement, in 
accordance with and on the effective date specified in the order of 
the appropriate authority.
    2.2  The Transmission Provider shall promptly notify the 
Transmission Customer in writing of the redetermination and/or 
changes and modifications made in the then-effective Transmission 
Provider's rate schedules for Transmission Service.
    2.3  If such notice advises that the rates to be paid by the 
Transmission Customer for the Transmission Service furnished by the 
Transmission Provider under this Agreement are greater than the 
then-effective rate for such service, The Transmission Customer may, 
by written notice to the Transmission Provider at any time within 90 
days

[[Page 519]]

following the date of receipt of such notice from the Transmission 
Provider, terminate this Agreement in its entirety, such termination 
to become effective as of the last day of any month following no 
less than 6 months after the date of receipt by the Transmission 
Provider of such notice of termination from the Transmission 
Customer.
    2.4  In the event that the Transmission Customer elects to 
terminate this Agreement pursuant to this Section 2, the 
Transmission Customer shall pay for services under this Agreement at 
the then-effective rates during the interim between the date of such 
notice and the effective termination date specified in such notice.
    3  Availability of Funds to the Transmission Provider: This 
Agreement and all rights and obligations hereunder, and the 
expenditure of funds by the Transmission Provider under its 
provisions, are expressly conditioned and contingent upon the U.S. 
Congress's making available (through direct appropriation, 
authorization of a revolving fund, the authority to borrow funds, or 
through such other means as it may provide) the necessary funds to 
enable the Transmission Provider to carry out the provisions of this 
Agreement, and if such funds are not available, this Agreement shall 
terminate and have no further force or effect as of the last day for 
which funds were available, and the Transmission Customer hereby 
releases the Transmission Provider from any and all liability for 
failure to perform and fulfill its obligations under this Agreement 
for that reason.
    3.1  No obligation contained herein for the future payment of 
money by the Transmission Provider, or liability on the part of the 
Transmission Provider for breach of any of the provisions contained 
herein, shall be binding upon or enforceable against the 
Transmission Provider unless and until funds, as provided in this 
Section 3, are available out of which such obligations or liability 
can be legally paid.
    3.2  Nothing in this Agreement may be considered as implying 
that the U.S. Congress will, at a later date, appropriate funds 
sufficient to meet any deficiencies or obligations incurred under 
this Agreement.
    4  Covenant Against Contingent Fees. The Transmission Customer 
warrants that no person or selling agency has been employed or 
retained to solicit or secure this Agreement upon an agreement or 
understanding for a commission, percentage, brokerage, or contingent 
fee, except bona fide employees or bona fide established commercial 
or selling agencies maintained by the Transmission Customer for the 
purpose of securing business. For breach or violation of this 
warranty, the Transmission Provider shall have the right to annul 
this Agreement without liability, or, at its discretion, to add to 
the Agreement price or consideration the full amount of such 
commission, percentage, brokerage, or contingent fee.
    5  Termination for Breach. If either Party breaches a material 
provision of this Agreement, the other Party, at its option, may 
terminate this Agreement upon 30 days' prior written notice of its 
intention to do so, and this Agreement ipso facto shall terminate at 
the end of such 30-day period unless such violation is corrected 
within that period. Neither Party shall be considered to be in 
default or breach with respect to any obligation under this 
Agreement if prevented from fulfilling such obligation by reason of 
an Uncontrollable Force.
    6  Convict Labor. In connection with the performance of work 
under this Agreement, the Transmission Customer agrees not to employ 
any person undergoing sentence of imprisonment except as provided by 
Public Law 89-176, September 10, 1965 (18 U.S.C. 4062 (c)(2)), and 
Executive Order 11755, December 29, 1973.
    7  Equal Employment Opportunity. During the performance of this 
Agreement, the Transmission Customer agrees to abide by and to 
fulfill the nondiscrimination requirements of the ``equal 
opportunity clause'' contained in Section 202 of Executive Order 
11246 dated September 24, 1965 (30 FR 12319), any Executive Order 
amending such order, and any other Executive Order superseding such 
order.
    8  Affirmative Action for Disabled Veterans and Veterans of the 
Vietnam Era. During the performance of this Agreement, the 
Transmission Customer agrees to comply with Section 402 of the 
Vietnam Era Veterans Readjustment Assistance Act of 1974, Public Law 
93-508 as it amends Public Law 92-540, to take affirmative action to 
employ and advance in employment qualified disabled veterans and 
veterans of the Vietnam era, and to fulfill the requirements of the 
``affirmative action clause,'' 38 USCA Sections 2011 and 2012 
(1979); 41 CFR 60-250 et seq.
    9  Affirmative Action for Handicapped Workers. During the 
performance of this Agreement, the Transmission Customer agrees to 
comply with Section 503 of the Rehabilitation Act of 1973, Public 
Law 93-516, to take affirmative action to employ and advance in 
employment qualified handicapped individuals, and to otherwise 
fulfill the requirements of the ``affirmative action clause,'' 29 
USCA Section 793 (1979); 41 CFR 60-741 et seq.
    10  Contract Work Hours and Safety Standards. This Agreement, to 
the extent that it is of a character specified in Section 103 of the 
Contract Work Hours and Safety Standards Act, 40 U.S.C. 327-333 
(1986), is subject to the provisions of the said Act and to 
regulations promulgated by the Secretary of Labor pursuant to the 
said Act. The following provisions are applicable only to 
Transmission Customers which receive service through facilities 
which are (1) jointly used by the Transmission Provider and the 
Transmission Customer, (2) where the Transmission Customer would 
have occasion to enter the facilities of the Transmission Provider, 
(3) where the Transmission Customer owns facilities installed on the 
property of the Transmission Provider, and/or (4) when the 
Transmission Customer takes service directly from facilities owned 
and maintained by the Transmission Provider.
    11  Meter Tests and Adjustments. Any metering equipment which 
may be used in power accounting for Transmission Service under this 
Agreement shall be inspected and tested at least once each year by 
the Party responsible, and at any reasonable time upon request by 
either Party. Metering equipment found to be defective or inaccurate 
shall be repaired and readjusted or replaced by the owner.
    11.1  A meter shall be considered inaccurate if it is found to 
deviate from an accurate standard meter in excess of 0.5 percent 
when tested at 100 percent of load or 1.0 percent when tested at 10 
percent of load.
    11.2  If any meter inspection or test discloses an error 
exceeding 2 percent, a correction based upon the inaccuracy found 
shall be made on the records of electric service furnished since the 
beginning of the monthly billing period immediately preceding the 
billing period during which the test was made, and such correction, 
when made, shall constitute full adjustment of any claim between the 
parties hereto arising out of such inaccuracy of metering equipment.
    12  Reliability, Safety, Health, and Environmental Requirements 
in Regard to Construction, Operation, and Maintenance on U.S. 
Government Property. The provisions of this Section 12 shall apply 
only if the Transmission Customer, its agents or contractors, or its 
member entities perform maintenance, operations, or construction on 
the property of the U.S. Government (Government), or on easements 
shared by the Government and the Transmission Customer.
    12.1  Such construction, maintenance, and operation shall be 
performed in accordance with standards at least equal to those 
provided by the National Electrical Safety Code and shall conform to 
safety, environmental, and security procedures identified by 
Transmission Provider as appropriate to each facility in which such 
work is performed. The Transmission Provider provides such written 
procedures in each of the facilities it maintains and to affected 
Transmission Customers.
    12.2  The Transmission Customer and/or its member entities shall 
take all reasonable precautions in the performance of such work to 
protect the public and the environment. The Transmission Customer 
and/or its member entities shall comply with all applicable local, 
state, and Federal regulations and requirements in the performance 
of such work, including, but not limited to, the National 
Environmental Policy Act, the Clean Air Act; the Clean Water Act; 
the Comprehensive Environmental Responsibility, Compensation, and 
Liability Act; the Toxic Substances Control Act; the Resource 
Conservation and Recovery Act; the Superfund Amendments and 
Reauthorization Act (SARA); SARA Title III (Emergency Planning and 
Community Right-to-Know Act of 1986); and the Occupational Safety 
and Health Act.
    12.3  In the event that the Transmission Provider, at its sole 
option and in its sole judgment, determines that construction, 
maintenance, or operation of facilities which are performed under 
this Agreement by the Transmission Customer, and/or one of its 
member entities, do not meet the standards and/or regulations and 
requirements specified in this Section 12, or if the Transmission 
Provider determines, in its sole judgment, that a condition exists 
which provides a potentially adverse impact (1) on the reliability 
of services provided by

[[Page 520]]

Transmission Provider to its customers, (2) on the safety and/or 
health of the public or employees and agents of the parties hereto, 
and/or (3) on the environment, then Transmission Provider may 
provide written notice to the Transmission Customer and/or its 
member entity of the deficient condition; Provided, That, if such 
condition, in Transmission Provider's sole judgment and at 
Transmission Provider's sole option, requires immediate attention 
and does not allow time for such notice, Transmission Provider will 
remedy the condition and, where appropriate, bill the Transmission 
Customer.
    12.4  Where, in the Transmission Provider's sole judgment, 
remedy of the said deficient condition is not time critical, the 
Transmission Customer and/or its member entity shall provide a 
written plan and schedule to Transmission Provider within 30 days of 
receipt of the said written notice. Such plan and schedule shall 
provide for correction of the said deficiency at the earliest 
possible time available to the Transmission Customer and/or its 
member entity; Provided, That, the maximum time allowed for the 
Transmission Customer and/or its member entity to correct any such 
deficiency shall not exceed 18 months from receipt of the said 
written notice. The Transmission Customer shall coordinate or, if 
applicable, cause its member entity to coordinate, any work and 
outages which may involve Transmission Provider's facilities with 
Transmission Provider's Dispatch Center (Dispatch Center) in 
Springfield, Missouri.
    12.5  Unless otherwise agreed in writing, correction of 
deficiencies pursuant to this Section 12 shall be at the expense of 
the Transmission Customer.
    12.6  If the Transmission Customer and/or its member entity 
fails to correct the deficiency within the time provided pursuant to 
this Section 12, the Transmission Provider shall have the right, at 
its sole option and in its sole discretion, to terminate service 
through the affected facilities until such deficiencies are 
corrected to the satisfaction of Transmission Provider.
    12.7  If, within the time period provided pursuant to this 
Section 12, an emergency condition occurs which, in the sole 
judgment of Transmission Provider, may cause an adverse impact on 
the reliability of the Transmission System of Transmission Provider 
and/or on the environment, or which poses a hazard to the safety 
and/or health of the public or employees and agents of the parties 
hereto, then Transmission Provider may, at its sole option, remedy 
or repair such condition or equipment and bill the Transmission 
Customer, and the Transmission Customer agrees to render the 
Transmission Provider reimbursement.
    13  Right of Installation and Access: Each Party grants to the 
other permission, or will obtain such permission for the other 
Party, to install, maintain, and operate, or cause to be installed, 
maintained, and operated, on the System of Transmission Provider and 
on the System of the Transmission Customer, at the Point(s) of 
Delivery between the System of Transmission Provider and the System 
of the Transmission Customer utilized under this Agreement, any and 
all terminal equipment and associated electrical apparatus and 
devices necessary in the performance of this Agreement.
    13.1  Each party shall permit, or shall obtain permission for, 
duly authorized representatives and employees of the other Party to 
enter upon the System of the Transmission Provider and the System of 
the Transmission Customer at the said Point(s) of Delivery for the 
purpose of reading or checking meters; for inspecting, testing, 
repairing, renewing, or exchanging any or all of the equipment owned 
by the other party located on such premises; or for the purpose of 
performing any other work necessary in the performance of this 
Agreement.
    13.2  Access for any work performed by one party under this 
Section 13 which may affect the other Party's equipment shall 
normally be preceded by at least one day's notice to the affected 
Party, except in the event of an emergency, in which case such 
notice shall be made as soon as possible after such emergency 
occurrence. Notice to Transmission Provider pursuant to this Section 
13 shall be made to the Dispatch Center.
    13.3  Any access to property controlled by the Transmission 
Provider shall include notification to Transmission Provider at the 
time of entry. Any employee or agent of the Transmission Customer, 
or of its member entities, who enters a Transmission Provider 
facility is expected to call the Dispatch Center from a telephone 
located in the control building in that facility and to identify 
himself or herself. Security devices located in the control 
buildings at Transmission Provider facilities sound an alarm in the 
Dispatch Center when the building is entered. Local law enforcement 
officers may be asked to investigate any unidentified entry.
    13.4  Any equipment, apparatus, or devices installed on the 
System of the Transmission Provider by the Transmission Customer, as 
provided under this Section 13, shall be clearly and permanently 
marked to indicate ownership, and, in addition, a detailed 
description of each item so installed (including, if applicable, 
manufacturer's name, serial number, model number, etc.) shall be 
communicated to Transmission Provider to aid in maintenance of plant 
accounts.
    13.5  In the event the equipment, apparatus, or devices are not 
marked in accordance with Section 13.4, ownership of said equipment, 
apparatus, or devices shall be presumed to be vested in Transmission 
Provider.
    13.6  The Transmission Customer agrees that, if requested by 
Transmission Provider, the description required under Section 13.4 
shall include a detailed analysis of all dielectrical oil, 
including, but not limited to, tests for polychlorinated biphenyls 
(PCBs). If such analysis indicates the presence of a known hazardous 
substance, which, in the Transmission Provider's sole judgment, 
presents a significant hazard to the environment or to the health 
and safety of employees of the parties hereto, the Transmission 
Provider may require, at its sole option, by written request, 
removal of any equipment containing such substance, and the 
Transmission Customer agrees to comply with such request for removal 
at no cost to Transmission Provider.
    14  Right of Removal: Any and all equipment, apparatus, or 
devices placed or installed or caused to be placed or installed by 
the Parties on or in the System of the Transmission Provider or the 
System of the Transmission Customer shall be and shall remain the 
property of the Party owning and installing such equipment, 
apparatus, devices, or facilities, regardless of the mode or manner 
of annexation or attachment to real property, and, upon the 
termination of this Agreement, the owner thereof shall have the 
right to enter upon the premises or system of the other and shall, 
within a reasonable time, remove such equipment, apparatus, devices, 
or facilities, subject to the provisions of Section 13.5.
    15  Right to Upgrade Facilities: The Transmission Provider 
reserves the right to modify or upgrade its Transmission System and 
any of the elements which support such Transmission System, 
including, but not limited to, changes in: (1) The Transmission 
Provider's transmission voltages, (2) The Transmission Provider's 
transmission system components, (3) The Transmission Provider's 
communications system, (4) The Transmission Provider's Supervisory 
Control and Data Acquisition (SCADA) System, and (5) other 
modifications necessary to comply with the standards and/or 
regulations and requirements mentioned in Section 16.
    15.1  If, during the term of this Agreement, the Transmission 
Provider determines, in its sole judgment and at its sole option, 
that modifications or upgrades to its Transmission System and 
associated facilities are required, then, in that event, the 
Transmission Customer shall be responsible for any and all costs and 
expenses incurred by the Transmission Customer in order to continue 
to receive services provided under this Agreement.
    15.2  If the Transmission Customer elects not to make changes in 
its facilities which, in The Transmission Provider's judgment, are 
required for the Transmission Customer to continue to receive 
reliable service from the Transmission Provider's modified or 
upgraded facilities, then the Transmission Customer will discontinue 
receipt of the services provided under this Agreement which are 
dependent on such modified or upgraded facilities, and the 
provisions of this Agreement which describe such services shall be 
terminated or, at the Transmission Provider's sole option, 
suspended, until the Transmission Customer completes the changes in 
its facilities which the Transmission Provider, in its sole 
judgment, deems necessary for safe and reliable service to the 
Transmission Customer.
    15.3  The Transmission Provider shall notify the Transmission 
Customer of the specific sections or articles of the Agreement which 
are to be terminated or suspended pursuant to this Section 15.
    15.4  Any provisions of this Agreement which are not 
specifically terminated or suspended pursuant to Section 15.3 shall 
not in any way be affected and shall remain in full force and effect 
except insofar as the services provided pursuant to the terminated

[[Page 521]]

or suspended provisions which are reflected in other provisions of 
this Agreement will also be terminated or suspended.
    15.5  Termination or suspension of specific provisions of this 
Agreement pursuant to this Section 17 shall be without penalty to 
either of the Parties, except that the rights of the Parties, if 
any, which accrued prior to the date of such termination or 
suspension shall be and hereby are preserved.
    16  Limitation on Rights of Entry: The Transmission Provider 
reserves the right, upon notice to the Transmission Customer, to 
revoke or cancel the rights of entry granted under this Agreement 
with regard to any particular representative of the Transmission 
Customer, if, in the sole judgment of the Transmission Provider, 
such revocation or cancellation is required in the interest of 
national security.
    17  Assistance by Contracting Parties: If assistance in 
maintenance and utilization of their respective systems is rendered 
by the Transmission Provider and/or the Transmission Customer, the 
following terms and conditions shall apply:
    17.1  If, in the maintenance or utilization of their respective 
transmission systems and related facilities for the purpose of this 
Agreement, it becomes necessary by reason of any emergency or 
extraordinary condition for the Transmission Provider or the 
Transmission Customer to request the other to furnish personnel, 
materials, tools, and equipment for the maintenance or modification 
of, or other work on, such transmission systems and related 
facilities to insure continuity of power and energy deliveries, the 
Party requested shall cooperate with the other and render such 
assistance as the Party requested may determine to be available.
    17.2  The Party making such request, upon receipt of properly 
itemized bills, shall reimburse the Party rendering such assistance, 
including overhead and administrative and general expenses. The 
Transmission Customer and the Transmission Provider agree to account 
for any incurred costs under a Work Order accounting procedure and 
in accordance with the Uniform System of Accounts prescribed for 
public utilities by the Commission.
    17.3  Billing statements rendered by the Transmission Customer 
and the Transmission Provider for such reimbursement shall be due 20 
days from the date thereof.

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 is not limited 
to, provisions addressing the following matters:

    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 set forth in the 
Transmission Provider's rate schedule for transmission services.

Attachment I

Index of Network Integration Transmission Service Customers

    Customer  Date of Service Agreement.
    Transmission Provider has no Network Customers at this time.

[FR Doc. 98-132 Filed 1-5-98; 8:45 am]
BILLING CODE 6450-01-P