Omaha, NE July 31, 2018 MINUTES Age - Southwest Power ...

1

Southwest Power Pool, Inc. SPECIAL MEETING OF MEMBERS

Embassy Suites Downtown/Old Market – Omaha, NE July 31, 2018

MINUTES

Agenda Item 1 – Administrative Items

SPP Board of Directors Chair Mr. Larry Altenbaumer called the meeting to order at 8:00 a.m. Mr. Altenbaumer asked for a round of introductions. There were 146 people in attendance either in person or via the phone representing 29 Members (Attendance List – Attachment 1). Mr. Nick Brown reported proxies (Proxies – Attachment 2). Agenda Item 2a – Election of Members Committee Representatives

Mr. Nick Brown began by reporting on the three items under consideration for the Membership. There is the election of three new Members Committee representatives (Membership Recommendation Members Committee Ballot – Attachment 3), revisions to the Bylaws in sections 4.1, 4.6, 5.1, 9.0, 9.2, 9.3, 9.4, 9.5, 9.6, 9.7, and 10 (Membership Recommendation Revision to Bylaws/SPP Regional Entity Removal – Attachment 4) and revisions to the Bylaws in section 4.2 (Bylaws/De Minimis Investments – Attachment 5). There are two vacancies and one new slot on the Members Committee. It is the responsibility of the Corporate Governance Committee (CGC) to fill vacancies on the Members Committee on a temporary basis, which was done in June, until the next meeting of the Membership. Representatives on the Members Committee do serve on staggered three-year terms. The openings are in the investor owned utility sector (IOU), independent power producer/marketer sector (IPP/Marketer) and large retail customer sector. The large retail customer (LRC) sector has been in place since 2003 and Walmart is the first company to join and qualify to fill the vacant seat. The CGC met on June 1 and agreed to nominate three individuals to these open seats. Mr. Brown reminded the Membership that it is only one vote per affiliate group. The nominees are Mr. Bleau LaFave, NorthWestern Energy (IOU sector), Ms. Holly Carias, NextEra Energy Resources (IPP/Marketers sector), and Mr. Chris Hendrix, Walmart Inc. (LRC sector). Mr. Larry Altenbaumer asked if there were any nominations from the floor. There were none. The Membership voted by ballot. The ballots were counted. The three candidates were elected. The term for Mr. Bleau LaFave will expire in 2019. The terms for Ms. Holly Carias and Mr. Chris Hendrix will expire in 2020. Agenda Item 2b – SPP Bylaws Revisions (Removal of the Regional Entity)

Last year the Board of Directors and Members Committee approved the dissolution of the SPP Regional Entity (SPP RE). On July 1, the Midwest Reliability Organization and SERC Reliability Corporation regional entities took over the responsibilities from the SPP RE, and on August 31 the SPP RE will legally be dissolved. In order to effectuate the process there are modifications to the SPP Bylaws that must be approved and then the changes will be filed with FERC. The proposed changes were approved by the CGC unanimously at the June 1 meeting. Mr. Mike Wise moved to accept the revisions to the Bylaws for the removal of the Regional Entity. Mr. Stuart Lowry seconded the motion. The Membership voted in favor with one abstention (Nebraska Public Power District). Agenda Item 2c – SPP Bylaws Revisions (De Minimis Investments) Mr. Brown reported on the bylaws revisions concerning de minimis investments by board members within the SPP suite of services. Over the years many of the ISOs/RTOs have hit this particular issue earlier because of retail access in their footprint. FERC approved similar modifications very easily with little to no protest. All revisions

SPP Special Meeting of Members Minutes July 31, 2018

2

proposed are patterned after the other three RTOs. This becomes more important with the addition of Walmart. The modifications are in section 4 of the Bylaws. The revisions were approved unanimously by the CGC. Mr. David Osburn moved to accept the revisions to the Bylaws for De Minimis Investments. Mr. Stuart Lowry seconded the motion. The Membership voted in unanimous approval; the motion passed. Adjournment

With no further business, Mr. Altenbaumer adjourned the Special Meeting of Members at 8:20 a.m.

Respectfully Submitted, Paul Suskie, Corporate Secretary

Antitrust: SPP strictly prohibits use of participation in SPP activities as a forum for engaging in practices or communications that violate the antitrust laws. Please avoid discussion of topics or behavior that would result in anti-competitive behavior, including but not limited to, agreements between or among competitors regarding prices, bid and offer practices, availability of service, product design, terms of sale, division of markets, allocation of customers or any other activity that might unreasonably restrain competition.

Southwest Power Pool, Inc.

BOARD OF DIRECTORS/MEMBERS COMMITTEE MEETING July 31, 2018

Embassy Suites Downtown/Old Market – Omaha, NE • A G E N D A •

8:00 a.m. – Noon Special Meeting of Members

1. Call to Order and Administrative Items……………………………………...…Mr. Larry Altenbaumer

2. Corporate Governance Committee Report……………………………………………..Mr. Nick Brown

a. Election of Members Committee Representatives b. SPP Bylaws Revisions (Removal of the Regional Entity) c. SPP Bylaws Revisions (De Minimis Investments)

Adjourn for Board of Directors/Members Committee Meeting Board of Directors/Members Committee Meeting

1. Call to Order and Administrative Items…………………………………………Mr. Larry Altenbaumer

2. Reports to the Board

a. President’s Report………………………………………………………………..Mr. Nick Brown

b. Regional State Committee Report…………………………….President Shari Feist Albrecht

c. Federal Energy Regulatory Commission Report…………………………..Mr. Patrick Clarey

d. Regional Entity Trustees Report…………………...Messrs. Mark Maher and Steve Whitley

e. Oversight Committee Report……………………………………………….......Mr. Josh Martin

f. Finance Committee Report……………………………………………………Mr. Bruce Scherr

g. Strategic Planning Committee Report…………………………………………..Mr. Mike Wise

h. Holistic Integrated Tariff Team Report…………………………………………...Mr. Tom Kent

3. Consent Agenda

a. Approve April 24, 2018 Minutes

b. Corporate Governance Committee i. Recommendation – Finance Committee Nomination ii. Recommendation – SPP Bylaws and Membership Agreement Revisions

(Removal of the Regional Entity) iii. Recommendation – SPP Bylaws Revisions (De Minimis Investments) iv. Recommendation – Charter Approvals

1. Model Development Working Group 2. Reliability Compliance Working Group

c. Markets and Operations Policy Committee i. CTPTF

1. RR279 Competitive Upgrade Re-Evaluation Process

Antitrust: SPP strictly prohibits use of participation in SPP activities as a forum for engaging in practices or communications that violate the antitrust laws. Please avoid discussion of topics or behavior that would result in anti-competitive behavior, including but not limited to, agreements between or among competitors regarding prices, bid and offer practices, availability of service, product design, terms of sale, division of markets, allocation of customers or any other activity that might unreasonably restrain competition.

ii. MWG 1. RR177 Remove Reference to NERC Standards 2. RR266 JOU Combined Single Resource Modeling post Settlement Share

Allocation 3. RR277 ARR Funding Amount Correction 4. RR304 Accelerate Frequently Constrained Area Process 5. RR306 Multi-Day Minimum Run Time 6. RR310 Order 844 Compliance

iii. ORWG 1. RR309 Separation of RC Area SOL Methodology from Planning Criteria

iv. PCWG 1. Multi-Road Runner kV 115 Loop Rebuild 2. NTC 200401 Modification

v. RTWG 1. RR278 Seams and Interregional Agreement Clean-up 2. RR312 Schedule 12 FERC Assessment Charge 3. RR315 Removal of References to SPP Acting in the Role of Regional

Entity vi. TWG

1. 2018 ITPNT Assessment and Report 2. NW Aberdeen Upgrade

4. Markets and Operations Policy Committee Report…………………………….........Mr. Paul Malone a. MWG

i. RR272 NDVER to DVER Conversion

5. Future Meetings

2018 RSC/BOD – October 29-30……………………………………….Little Rock, AR BOD – December 4…………………….………………………….Little Rock, AR 2019 RSC/BOD – January 28-29……………………………………….New Orleans, LA RSC/BOD – April 29-30…………………………………………...Tulsa, OK BOD – June 10-11…………………………………………………Little Rock, AR RSC/BOD – July 29-30……………………………………………Denver, CO RSC/BOD – October 28-29……………………………………….Little Rock, AR BOD – December 3…………………….………………………….Little Rock, AR

Note: Following the Board of Directors/Members Committee meeting, the Board of Directors/Members Committee will convene an executive session.

Arkansas Electric Cooperative Corporation

Reliable ● Affordable ● Responsible

1 Cooperative Way P.O. Box 194208 Little Rock, Arkansas 72219-4208 (501) 570-2200

July 25, 2018 Ms. Shaun Scott, Assistant Corporate Secretary Southwest Power Pool 201 Worthen Drive Little Rock, Arkansas 72223-4936 Dear Shaun: By this letter, I assign my proxy to Andrew Lachowsky for the SPP Members Committee meeting on July 31, 2018. Sincerely,

Duane Highley President/CEO DH:lh

I will not be able to attend this BOD meeting due to a company board meeting conflict. Pleaseaccept Bill Grant as my proxy on the Members Committee.

Thank you,David T. HudsonXcel Energy | Responsible By NaturePresident, TX & NM790 S. Buchanan St., Amarillo, TX 79101P: 806.378.2824E: [email protected]________________________________________________XCELENERGY.COMPlease consider the environment before printing this email.

mailto:/O=SPPCORP/OU=EXCHANGE ADMINISTRATIVE GROUP (FYDIBOHF23SPDLT)/CN=RECIPIENTS/CN=SMSCOTT1

mailto:[email protected]


http://www.xcelenergy.com/

Southwest Power Pool, Inc. CORPORATE GOVERNANCE COMMITTEE

Recommendation to the Membership July 31, 2018

Nominations to Fill Vacancies on the Members Committee

Background There are three vacancies on the Members Committee due to a retirement, a job change, and an open position that had never been filled due to the absence of a Member in the sector. The open positions are to fill three mid-term vacancies. Analysis Representatives on the Members Committee are elected by the SPP Membership for staggered three-year terms. When a vacancy occurs the Corporate Governance Committee may elect an interim representative from the same sector to serve until a replacement representative from the same sector is elected and takes office. A special election shall be held at the next meeting of Members to fill the vacancy for the unexpired term. The replacement representative shall take office immediately following the election. Recommendation The following candidates are nominated for the respective terms indicated:

Members Committee (sector): Bleau LaFave (IOU) – Term ending 2019 Holly Carias (IPP) – Term ending 2020 Chris Hendrix (LRC) – Term ending 2020 Other nominations for the Members Committee may be made from the floor. Approved: Corporate Governance Committee June 1, 2018 Action Requested: Conduct the election

Southwest Power Pool, Inc. SPECIAL MEETING OF MEMBERS

July 31, 2018

Ballot for SPP Members Committee Special Election

SPP MEMBERS COMMITTEE: Each Member should vote for the number of nominees allocated for each sector. Investor Owned Utilities: (All Members should vote for 1 nominee)

Recommended by Corporate Governance Committee: For Against

Bleau LaFave (NorthWestern Energy) – Term Expires 2019 Additional Nominees:

_____________________________________________ _____________________________________________ IPP/Marketer: (All Members should vote for 1 nominee)


Holly Carias (NextEra Energy Resources) – Term Expires 2020

Additional Nominees:

_____________________________________________ _____________________________________________

Large Retail Customer: (All Members should vote for 1 nominee)


Chris Hendrix (Walmart) – Term Expires 2020

_____________________________________________ _____________________________________________

MEMBER: ___________________________________________________________________ REPRESENTATIVE’S SIGNATURE: ______________________________________________

Members Committee Nomination Form Nominee Name & Title:

Bleau LaFave; Director Long Term Planning

Company:

NorthWestern Energy

Type of Experience & Responsibilities with Company:

Long Term Planning of electric and natural Gas systems; Production Asset Optimization; Regional Market(s) Oversite; Natural Gas Production and Storage

Nominee’s Phone Number & Email Address:

605-798-2897; [email protected]

Nominated by:

John Hines – VP Supply

Sector:

Investor-Owned Utility Member



Holly Carias; Sr. Director, Regulatory Affairs

Company:

NextEra Energy Resources, LLC


In Holly’s current role on the NextEra Regulatory and Legislative Team, she is responsible for coverage of the stakeholder process for both MISO and the SPP region. Since Holly covers multiple regions, I believe she would be a very valuable asset to the SPP Members Committee. Prior to this role, Holly was on our Power Origination team negotiating and executing long-term energy purchases and sales contracts with various public power entities and cooperatives. Holly started with the company in our Wind Development team focused on development of projects in the SPP region. Her main responsibilities included site prospecting, financial analysis, contract negotiations, and coordinating with internal subject matter experts. It was during this role that Holly became familiar with SPP. She frequently attended stakeholder groups including the MOPC and several working groups. In addition, Holly advocated for NextEra to become a SPP member and allocate a Regulatory individual to the SPP region. Holly is from Oakley, Kansas. She holds a BS in Mathematics from Kansas State University, and a MA in Human Resource Management from Webster University. Prior to joining NextEra Energy, she worked for the Air Force as a Personnel Officer and was stationed in Kansas, Alaska, and Illinois.


561-358-6821

Nominated by:

Michele Wheeler, VP, Regulatory and Political Affairs

Sector:

Independent Power Producer – Transmission Using Member


Chris Hendrix

Company:

Walmart


Responsible for directing and implementing regulatory and legislative policies for Walmart’s retail and wholesale business interests related to electricity and natural gas in the competitive markets of the United States and the United Kingdom. Participates in the ISO Stakeholder process of ERCOT, PJM, and ISO-NE.


[email protected]

Nominated by:

self

Sector:

Large Retail Customer – Transmission Using Member



Revision to Bylaws/SPP Regional Entity Removal

Background The SPP Regional Entity’s delegated authority and its registered entities will transfer to the Midwest Reliability Organization and SERC Reliability Corporation, respectively, on July 1, 2018, and the SPP Regional Entity will dissolve on August 31, 2018, concurrent with the Federal Energy Regulatory Commission approved termination effective date for the Regional Delegation Agreement between SPP and the North American Electric Reliability Corporation. Analysis The proposed revisions are necessary to remove references to the SPP Regional Entity from SPP’s Bylaws. Section 10 of the Bylaws requires that modifications to Sections 4, 5, 9, and 10 be approved by the Membership. Notice of these Bylaws changes were provided to the Membership by Assistant Corporate Secretary Shaun Scott on June 25, 2018. Recommendation Approval of the removal of references to the SPP Regional Entity from the Bylaws as outlined above and reflected in the changes to Bylaws Sections 4.1, 4.6, 5.1, 9.0, 9.1, 9.2, 9.3, 9.4, 9.5, 9.6, 9.7, and 10 (attached).

Approved: Corporate Governance Committee June 1, 2018 Action Requested: Approve recommendation

Governing Documents Tariff --> Bylaws, First Revised Volume No. 4 --> Bylaws 4.0 Board of Directors --> Bylaws 4.1 Duties

Effective Date: 8/5/2010 - Docket #: ER10-2145 - Page 1

4.1 Duties

The Board of Directors shall at all times act in the best interest of SPP in its

management, control and direction of the general business of SPP. The Board of

Directors shall solicit and consider a straw vote from the Members Committee as an

indication of the level of consensus among Members in advance of taking any actions

other than those occurring in executive session. Its duties shall include, but are not

limited to the following:

(a) Direct activities of all SPP Organizational Groups;

(b) Serve on SPP Organizational Groups;

(c) Remove Members, and approve the re-entry of Members that have been

removed;

(d) Authorize all substantive contracts and debt instruments;

(e) Select and review the performance of SPP Officers, who shall serve at the

pleasure of the Board of Directors;

(f) Approve policies by which positions, duties, qualifications, salaries,

benefits and other necessary matters pertaining to the SPP Officers are

determined;

(g) Review, approve, disapprove or recommend revision to the actions of any

Organizational Group;

(h) Act on appeals pursuant to Section 3.10;

(i) Approve and implement Regional Criteria for enforcement under the

terms and

conditions of the SPP Membership Agreement;

(j) Provide input with the Members Committee to the Regional Entity

Trustees, on

SPP Regional Reliability Standards presented by the MOPC to the

Trustees or otherwise developed under the auspices of the Trustees for

submission to the ERO for its approval;

(kj) Approve or revise the operating and capital budgets and any additional

expenditures;

Formatted: Indent: Hanging: 0.5"

Governing Documents Tariff --> Bylaws, First Revised Volume No. 4 --> Bylaws 4.0 Board of Directors --> Bylaws 4.1 Duties


(lk) Convene a meeting of Members at least annually;

(ml) Approve amendments to these Bylaws as permitted by these Bylaws;

(nm) Approve amendments to the Membership Agreement as permitted by the

Membership Agreement;

(on) Approve Regional Criteria pertaining to planning and operating standards

and policies and penalties for non-compliance with such Criteria; and

(po) Authorize filings with regulatory bodies.

Governing Documents Tariff --> Bylaws, First Revised Volume No. 4 --> Bylaws 4.0 Board of Directors --> Bylaws 4.6 Functioning of the Board of Directors

Effective Date: 8/15/2015 - Docket #: ER15-1924-000 - Page 1

4.6 Functioning of the Board of Directors

In reaching any decision and in considering the recommendations of any

Organizational Group or task force, the Board of Directors shall abide by the principles in

these Bylaws.

4.6.1 Meetings and Notice of Meetings

The Board of Directors shall meet at least three times per calendar year

and additionally upon the call of the Chair or upon concurrence of at least a

majority of directors. At least fifteen days' written notice shall be given by the

President to each director, the Members Committee, and the Regional State

Committee of the date, time, place and purpose of a meeting of the Board of

Directors, unless such notice is waived by the Board of Directors. Telephone

conference meetings may be called as appropriate by the Chair with at least one-

day prior notice. Board of Directors’ meetings shall include the Members

Committee, a representative from the Regional Entity Trustees, and a

representative from the Regional State Committee (as defined in Section 7.2) for

all meetings except when in executive session; provided however, the failure of

representatives of the Members Committee and/or of the Regional Entity Trustees

and/or of the Regional State Committee to attend, in whole or in part, shall not

prevent the Board of Directors from convening and conducting business, and

taking binding votes. The Chair shall grant any Member’s request to address the

Board of Directors.

4.6.2 Chair and Vice Chair; Election and Terms

The Board of Directors shall elect from its membership a Chair and Vice

Chair for two-year terms commencing upon election and continuing until their

duly elected successors take office or until their term as a director expires without

re-election. The President of SPP may not serve as the Chairman of the Board of

Directors. The Vice Chair shall act for the Chair:

(a) at the request of the Chair;

(b) in the event the Chair should become incapacitated and unable to

discharge the functions of the office; or

Governing Documents Tariff --> Bylaws, First Revised Volume No. 4 --> Bylaws 4.0 Board of Directors --> Bylaws 4.6 Functioning of the Board of Directors


(c) if the office of Chair becomes vacant, until the next regularly

scheduled meeting of the Board of Directors, at which meeting a

new Chair shall be elected by the Board of Directors to fill the

vacancy. The Chair shall appoint a director to fill a vacant Vice

Chair position until the next meeting of the Board of Directors, at

which meeting a new Vice Chair shall be elected by the Board of

Directors to fill the vacancy.

4.6.3 Quorum and Voting

A majority plus one of the directors shall constitute a quorum of the Board

of Directors; provided, that a lesser number may adjourn the meeting to a later

time. Decisions of the Board of Directors shall be by simple majority vote of the

directors present and voting. Directors must be present at a meeting to vote; no

votes by proxy are permitted. Voting will be by secret ballot. The Corporate

Secretary will collect and tally the ballots, and announce the results of a vote.

Only voting results will be announced and recorded in the minutes; individual

votes will not be announced or recorded.

4.6.4 Compensation of Directors

Directors shall receive compensation as recommended by the Corporate

Governance Committee, and approved by the Membership, and shall be

reimbursed for actual expenses reasonably incurred or accrued in the performance

of their duties.

4.6.5 Executive Session

Executive sessions (open only to directors and to parties invited by the

Chair) shall be held as necessary upon agreement of the Board of Directors to

safeguard confidentiality of sensitive information regarding employee, financial,

or legal matters.

Governing Documents Tariff --> Bylaws, First Revised Volume No. 4 --> Bylaws 5.0 Committees Advising the Board of Directors --> Bylaws 5.1 Members Committee


5.1 Members Committee

The Members Committee shall work with the Board of Directors to manage and

direct the general business of SPP. Its duties shall include, but are not limited to

the following:

(a) Provide individual and collective input to the Board of Directors,

including but not limited to a straw vote from the Members Committee

representatives as an indication of the level of consensus among Members,

on all actions pending before the Board of Directors;

(b) Serve on committees reporting to the Board of Directors as appointed by

the Board of Directors; and

(c) Provide input with the Board of Directors to the Regional Entity Trustees

on SPP Regional Reliability Standards presented by the MOPC to the

Trustees or otherwise developed under the auspices of the Trustees for

submission to the ERO for its approval.

5.1.1 Composition and Qualifications

5.1.1.1 Composition

Provided that Membership is sufficient to accommodate these provisions,

the Members Committee shall consist of up to 24 persons. Six representatives

shall be investor owned utilities Members; five representatives shall be

cooperatives Members; two representatives shall be municipals Members

(including municipal joint action agencies); three representatives shall be

independent power producers/marketers Members; two representatives shall be

state power agencies Members; one representative shall be from a Federal Power

Marketing Agency; two representatives shall be alternative power/public interest

Members; one representative shall be from an independent transmission company

Member, defined as having assets under the OATT and no Affiliate Relationships

in other categories of Membership; one representative shall be a large retail

customer Member, defined as non-residential end-use customers with individual

or aggregated loads of 1-MW or more; and one representative shall be a small

retail customer Member, defined as residential customers and other customers



with individual or aggregated loads of less than 1-MW. Representatives will be

elected in accordance with Section 5.1.2 of these Bylaws.

5.1.1.2 Qualifications

A representative shall be an officer or employee of a Member with

decision-making responsibility over SPP related activities, and must be the

Member's representative to the Membership.

5.1.2 Term and Election

Representatives shall be nominated by the Corporate Governance Committee and

elected each year at the meeting of Members to staggered three-year terms commencing

upon election and continuing until their duly elected successors take office. The election

process shall be as follows:

(a) At least 90 calendar days prior to the meeting of Members at which

election of new representatives is required, the Corporate Governance

Committee shall nominate persons equal in number to the representatives

to be elected;

(b) At least 30 calendar days prior to the meeting of Members, the Corporate

Governance Committee shall determine the persons it nominates for

election as representatives, specifying the nominee for any vacancy to be

filled. The Corporate Secretary shall prepare the ballot accordingly,

leaving space for additional names, and shall deliver same to Members at

least two weeks prior to the meeting of Members;

(c) For purposes of electing and removing representatives only, each group of

Members with Affiliate Relationships shall be considered a single vote;

(d) At the meeting of Members, any additional nominee or nominees may be

added to the ballot if a motion is made and seconded to add such nominee

or nominees; and

(e) The required number of representatives shall be elected by written ballot.

A Member shall be entitled to cast a number of votes equal to the number

of representatives to be elected. A Member may not cumulate votes. The

candidates in each sector receiving the greatest number of votes will fill

vacancies.

Formatted: Keep with next, Keep lines together



5.1.3 Resignation and Removal of Members Committee Representatives

Any representative may resign by written notice to the President noting the

effective date of the resignation. A representative may be removed, with cause, by the

affirmative vote of a majority of the Members at a meeting of Members. Removal

proceedings may only be initiated by a petition signed by not less than twenty percent of

the Members. The petition shall state the specific grounds for removal and shall specify

whether the removal vote is to be taken at a special meeting of Members or at the next

regular meeting of Members. A representative who is the subject of removal proceedings

shall be given fifteen days to respond to the Member petition in writing to the President.

5.1.4 Vacancies

If a vacancy occurs the Corporate Governance Committee may elect an interim

representative from the same sector to serve until a replacement representative from the

same sector is elected and takes office. A special election shall be held at the next

meeting of Members to fill the vacancy for the unexpired term. The replacement

representative shall take office immediately following the election.

5.1.5 Meetings

The Members Committee shall meet only with the Board of Directors.

Formatted: Keep with next, Keep lines together

Governing Documents Tariff --> Bylaws, First Revised Volume No. 4 --> Bylaws 9.0 Regional Entity Function


9.0 REGIONAL ENTITY FUNCTIONReserved for future use

Governing Documents Tariff --> Bylaws, First Revised Volume No. 4 --> Bylaws 9.0 Regional Entity Function --> Bylaws 9.1 Regional Entity


9.1 Regional Entity

SPP operates as a Regional Entity under FERC jurisdiction with oversight powers

delegated to it by the ERO. The Regional Entity Trustees shall appoint representatives to

ERO organizational groups as necessary to represent the interests of the SPP Regional

Entity. SPP may pay appropriate associated travel expenses of those appointed

representatives upon receipt by the Secretary to the Trustees of an expense report as

normally filed within the representative’s system.

Governing Documents Tariff --> Bylaws, First Revised Volume No. 4 --> Bylaws 9.0 Regional Entity Function --> Bylaws 9.2 Regional Entity Staff


9.2 Regional Entity Staff

The Regional Entity Trustees will oversee staffing requirements for the SPP

Regional Entity. All SPP Regional Entity staff shall report through the Regional Entity

(RE) General Manager to the Trustees.

Governing Documents Tariff --> Bylaws, First Revised Volume No. 4 --> Bylaws 9.0 Regional Entity Function --> Bylaws 9.3 RE General Manager


9.3 RE General Manager

The RE General Manager shall be selected by and report to the SPP Regional

Entity Trustees, and will provide leadership and vision, oversee the execution of RE

strategic direction, and direct the day-to-day operations of the RE. The RE General

Manager shall carry out the rights, duties and obligations of the SPP RE pursuant to the

authority granted by these Bylaws, the Regional Entity Trustees, and SPP corporate

policies. The RE General Manager’s responsibilities shall include but are not limited to:

(a) Providing guidance and oversight of the execution of the performance of

delegated statutory functions from the ERO;

(b) Developing and managing an appropriate organizational structure and

staffing levels to accomplish the RE functions;

(c) Developing an annual RE business plan and budget for RE Trustee, NERC

and FERC approval;

(d) Providing sound fiscal management;

(e) Ensuring compliance with SPP’s Bylaws and Regional Entity Delegation

Agreement, as well as other applicable federal, state, and local laws; and

(f) Interfacing with SPP members and stakeholders, federal and state

regulators, other Regional Entities, and NERC on matters related to the

reliability of the bulk power system.

The President shall ensure that the RE General Manager has adequate resources,

access to information, and the full cooperation of Staff and Organizational Groups for the

effective execution of his/her duties.

Governing Documents Tariff --> Bylaws, First Revised Volume No. 4 --> Bylaws 9.0 Regional Entity Function --> Bylaws 9.4 Duties of Regional Entity Staff


9.4 Duties of Regional Entity Staff

Regional Entity functions related to compliance monitoring and enforcement shall

include but are not limited to:

(a) Investigation of all reports or discoveries of non-compliance with

approved ERO policies and standards;

(b) Obtaining all information needed to investigate all facets of possible

noncompliance with ERO policies and standards;

(c) Performance of in-depth reviews of operations in conjunction with the

Compliance Monitoring and Enforcement Program (CMEP);

(d) Comprehensive audits when recurring issues covering a broad spectrum of

violations of ERO policies and standards are determined and documented;

(e) Recommendation of financial penalties and/or sanctions for non-

compliance with ERO policies and standards pursuant to ERO guidelines;

(f) Assist the Regional Entity Trustees with third party audits to confirm that

SPP is conforming to ERO policies and standards;

(g) Utilization of dispute resolution procedures as necessary to resolve

conflicts or appeals; and

(h) Coordination of policy modifications to clearly define ERO requirements,

and penalties in order to objectively monitor compliance.

Governing Documents Tariff --> Bylaws, First Revised Volume No. 4 --> Bylaws 9.0 Regional Entity Function --> Bylaws 9.5 Regional Reliability Standards Development...


9.5 Regional Reliability Standards Development Process

When an SPP working group or task force is considering an SPP Regional

Reliability Standard, it will be designated the Standards Development Team (SDT) for

that Standard in accordance with the SPP Regional Entity Standards Development

Process Manual. For purposes of an SDT, participation and voting will be open to any

interested party in accordance with the Standards Development Process and without

regard to membership status in SPP.

Governing Documents Tariff --> Bylaws, First Revised Volume No. 4 --> Bylaws 9.0 Regional Entity Function --> Bylaws 9.6 Compliance Monitoring and Enforcement...


9.6 Compliance Monitoring and Enforcement Program

The Regional Entity Trustees will oversee SPP’s Compliance Monitoring and

Enforcement Program (CMEP). The CMEP will enforce compliance according to ERO

reliability standards for Registered Entities. Regional Entity staff shall oversee

compliance auditing of registered entities, and will report audit results to the Regional

Entity Trustees. All audits of SPP’s compliance with ERO reliability standards will be

performed by external third party auditors as coordinated and managed by the Regional

Entity Trustees.

Governing Documents Tariff --> Bylaws, First Revised Volume No. 4 --> Bylaws 9.0 Regional Entity Function --> Bylaws 9.7 Regional Entity Trustees


9.7 Regional Entity Trustees

9.7.1 Functions and Duties of the Regional Entity Trustees

The Regional Entity Trustees shall at all times act in the best interests of SPP’s

role as the SPP Regional Entity in its management, control, and direction of the general

business of the Regional Entity functions. In reaching any decision and in considering the

recommendations of an appropriate entity, the Regional Entity Trustees shall abide by the

principles in these Bylaws. Its duties shall include, but are not limited to oversight of the

following:

(a) Select, oversee and review the performance of the SPP RE General

Manager in carrying out the statutory functions and duties as defined in

the Delegation Agreement between ERO and SPP;

(b) Approve the annual RE business plan and budget;

(c) Perform function assigned by the SPP Compliance Monitoring and

Enforcement Program;

(d) Track and review Regional Standards from MOPC for submission to the

ERO and FERC for approval and implementation.

(e) Complete a self-assessment annually to determine how effectively the

Regional Entity Trustees are meeting their responsibilities; and

(f) Provide an annual report to the Board of Directors regarding the

effectiveness of the Regional Entity function and processes.

9.7.2 Composition and Qualifications

9.7.2.1 Composition

The Regional Entity Trustees shall consist of up to four (4) persons, but no

less than three (3) persons. The trustees shall be independent of the SPP Board of

Directors, any Member, industry stakeholder, or SPP organizational group.

Regional Entity Trustees do not serve as members of the SPP Board of Directors.

A trustee shall not be limited in the number of terms he/she may serve.

9.7.2.2 Qualifications



Regional Entity Trustees shall have relevant senior management expertise

and experience in the reliable operation of the bulk electric transmission system in

North America.

9.7.2.3 Conflicts of Interest

Regional Entity Trustees shall not be a director, officer, or employee of,

and shall have no direct business relationship, financial interest in, or other

affiliation with, a Member, a customer of services provided by SPP, or a

Registered Entity in the SPP footprint. Trustees may invest in accordance with the

SPP Standards of Conduct. Participation in a pension plan of a Member,

customer, or Registered Entity in the SPP footprint shall not be deemed to be a

direct financial benefit if the Member’s, customer’s, or Registered Entity’s

financial performance has no material effect on such pension plan.

9.7.3 Term and Election

Regional Entity Trustees shall be elected at the meeting of Members to a three-

year term commencing upon election and continuing until his/her duly elected successor

takes office. The election process shall be as follows:

(a) At least 90 calendar days prior to the meeting of Members when election

of a new trustee is required, the Corporate Governance Committee shall

commence the process to nominate persons for the position to be elected;

(b) At least 45 calendar days prior to the meeting of Members, the Corporate

Governance Committee shall determine the person it nominates for

election as a trustee, specifying the nominee for any vacancy to be filled.

The Corporate Secretary shall prepare the ballot accordingly, leaving

space for additional names, and shall deliver same to Members at least 30

calendar days prior to the meeting of Members;

(c) For purposes of electing or removing trustees only, only Members that are

Registered Entities in the SPP Regional Entity footprint shall be

considered a Member, and Members with Affiliate Relationships shall be

considered a single Member;

(d) Any additional nominee(s) may be added to the ballot if a petition is

received by the Corporate Secretary at least 15 calendar days prior to the



meeting of Members and evidencing support of at least 20 percent of the

existing Members; and

(e) 1) If only one candidate is nominated for a seat, each Member shall be

entitled to cast a vote for or against the nominee. The votes will be

calculated in accordance with Section 3.9 Voting of these Bylaws, which

requires a super majority. In the event a trustee position is not filled the

Corporate Governance Committee will determine a new nominee for

recommendation for election by the Members at a special meeting of

Members to be held but no later than the next regular Board of

Directors/Members Committee meeting;

2) If multiple candidates are nominated for a seat, each Member shall be

entitled to cast a vote for only one nominee, but may vote against each

candidate. The votes will be calculated in accordance with Section 3.9

Voting of these Bylaws, with the exception that a simple majority of votes

cast will determine which nominee is elected. In the event a trustee

position is not filled, the Corporate Governance Committee will determine

a new nominee for recommendation for election by the Members at a

special meeting of Members to be held no later than the next regular

Board of Directors/Members Committee meeting.

9.7.4 Resignation and Removal of Regional Entity Trustees

Any Regional Entity Trustee may resign by written notice to the President noting

the effective date of the resignation. The Members may remove a trustee with cause in

accordance with Section 3.9 Voting of these Bylaws. Removal proceedings may only be

initiated by a petition signed by not less than twenty percent of the Members. The petition

shall state the specific grounds for removal and shall specify whether the removal vote is

to be taken at a special meeting of Members or at the next regular meeting of Members.

A trustee who is the subject of removal proceedings shall be given fifteen days to respond

to the Member petition in writing to the President.

9.7.5 Vacancies

If a vacancy occurs, the Corporate Governance Committee will present a nominee

to the Members for consideration and election to fill the vacancy for the unexpired term



at a special meeting of Members following 30 calendar days notice from the corporate

Secretary. The election will be held in accordance with Section 9.7.3 Term and Election

of these Bylaws. The replacement trustee shall take office immediately upon election.

9.7.6 Meetings and Notice of Meetings

Regular Regional Entity Trustees’ meetings will be scheduled in conjunction with

the regularly scheduled SPP Board of Directors meetings, provided the meeting schedule

may be adjusted for good cause and with sufficient notice, and additionally upon the call

of the chair or upon concurrence of at least a majority of trustees. Except as otherwise

provided in these Bylaws, all meetings will be open to any interested party. At least

fifteen days' written notice shall be given by the chair to each trustee, the Board of

Directors, and the Members Committee of the date, time, place and purpose of a meeting,

unless such notice is waived by the trustees. Telephone conference meetings may be

called as appropriate by the chair with at least one-day prior notice. The chair shall grant

any party’s request to address the Regional Entity Trustees.

9.7.7 Chair

The Regional Entity Trustees shall elect from its membership a chair for a two-

year term commencing upon election and continuing until the chair’s duly elected

successor takes office or until the chair’s term as a trustee expires without re-election.

The panel may elect to rotate the chair to the senior member of the panel when the initial,

or subsequent, chair’s term expires.

9.7.8 Quorum and Voting

A majority of the trustees shall constitute a quorum of the Regional Entity

Trustees necessary for a binding vote. Decisions of the Regional Entity Trustees require a

simple majority vote. Trustees must be present at a meeting to vote; no votes by proxy

are permitted. All Regional Entity Trustee decisions regarding the Regional Entity are

final except as subject to oversight by the ERO and FERC.

9.7.9 Compensation of Regional Entity Trustees

Regional Entity Trustees shall receive compensation as recommended by the

Corporate Governance Committee, and approved by the Members that are Registered

Entities in the SPP Regional Entity footprint, submitted for approval as part of the ERO



budget process. Trustees shall be reimbursed for actual expenses reasonably incurred or

accrued in the performance of their duties.

9.7.10 Executive Session

Executive sessions (open only to Trustees and parties invited by the chair of the

Regional Entity Trustees) shall be held as necessary upon agreement of the Regional

Entity Trustees to safeguard confidentiality of sensitive information regarding employee,

financial or legal matters, or confidential information related to compliance matters.

Governing Documents Tariff --> Bylaws, First Revised Volume No. 4 --> Bylaws 10.0 Amendments To These Bylaws, The Articles...


10.0 Amendments To These Bylaws and, The Articles Of Incorporation, And

Membership Agreement

Except for modifications to Section 4.0 BOARD OF DIRECTORS, Section 5.0

COMMITTEES ADVISING THE BOARD OF DIRECTORS, Section 8.7.5 LIMITATION ON

FINANCIAL AND PENALTY OBLIGATIONS, Section 9.0 REGIONAL ENTITY

FUNCTION, and Section 10.0 AMENDMENTS, these Bylaws may be amended, repealed, or

added to by the Board of Directors only upon 30 days written notice to the Membership of the

proposed modification(s). Approval of amendments to the Bylaws by the Board of Directors

must be by an affirmative vote of a majority plus one of directors. Sections 4.0, 5.0, 8.7.5, 9.0,

and 10.0 of these Bylaws and the Articles of Incorporation may be amended, repealed, or added

to only by approval of the Membership. Provided, that all changes to Federal Power Marketing

agency/administration representation in Section 5.1.1 and any change to Section 8.7.5 must be

mutually agreed to by the Federal Power Marketing Agency Member and SPP. All amendments

are subject to the requisite regulatory approval(s).

Commented [A1]: Amendment of the Membership Agreement is per section 8.12 of that agreement.



Revision to Bylaws/De Minimis Investments Background The Corporate Governance Committee has considered and recommends incorporating the proposed de minimis investment methodology into Bylaws Section 4.2.3 - [Board of Directors] Conflicts of Interest to clarify in SPP’s Bylaws the concept of a financial interest in principle with the methodology accepted by the Federal Energy Regulatory Commission (“Commission”) for other Independent System Operators (“ISOs”) and Regional Transmission Organizations (“RTOs”) to allow SPP directors to invest in companies that have a de minimis relationship with SPP and the electric sector. Analysis The Commission’s regulations (specifically Orders No. 888 and 2000) require that ISOs and RTOs, their employees, and any non-stakeholder directors not have financial interests in any market participant and maintain independence from “any entity whose economic or commercial interests could be significantly affected by the RTO’s actions or decisions.”1 The term “market participant” is defined in the Commission’s

regulations as:

(i) Any entity that, either directly or through an affiliate, sells or brokers electric energy, or provides ancillary services to the [RTO], unless the Commission finds that the entity does not have economic or commercial interests that would be significantly affected by the [RTO]’s actions or decisions; and

(ii) Any other entity that the Commission finds has economic or commercial interests that would be significantly affected by the [RTO]’s actions or decisions.2

Per Order No. 2000 Commission approval is required for SPP to adopt a de minimis investment methodology.

Section 10 of the Bylaws requires that modifications to Section 4 be approved by the Membership. Notice of these Bylaws changes were provided to the Membership by Assistant Corporate Secretary Shaun Scott on June 25, 2018. Recommendation Approval of the incorporation of a de minimis investment methodology into SPP’s Bylaws as outlined above and reflected in the changes to Bylaws Section 4.2 (attached).

Approved: Corporate Governance Committee June 1, 2018 Action Requested: Approve recommendation

1 Regional Transmission Organizations, Order No. 2000, FERC Stats. & Regs. ¶ 31,089 (1999),

order on reh’g, Order No. 2000-A, FERC Stats. & Regs. ¶ 31,092 (2000), aff’d sub nom. Pub. Util. Dist. No. 1 v. FERC, 272 F.3d 607 (D.C. Cir. 2001).

2 18 C.F.R. §35.34(b)(2).

Governing Documents Tariff --> Bylaws, First Revised Volume No. 4 --> Bylaws 4.0 Board of Directors --> Bylaws 4.2 Composition and Qualifications


4.2 Composition and Qualifications

4.2.1 Composition

The Board of Directors shall consist of up to ten persons, but no less than

seven persons. The directors shall be independent of any Member; one director

shall be the President of SPP. A Director shall not be limited in the number of

terms he/she may serve. The President shall be excluded from voting on business

2related to the office of President or the incumbent of that office. No other Staff

member shall be permitted to serve as a director

4.2.2 Qualifications

Directors shall have recent and relevant senior management expertise and

experience in one or more of the following disciplines: finance, accounting,

electric transmission or generation planning or operation, law and regulation,

commercial markets, and trading and associated risk management.

4.2.3 Conflicts of Interest

Directors shall not be an employee, director, officer, or

employeeconsultant or contractor of, and shall have no direct business

relationship, financial interest in, or other affiliation with, any Third Party, or any

of its AffiliatesMember or customer of services provided by SPP, which shall be

deemed to include ownership (outside of a mutual fund, blind trust, or similar

arrangement as permitted herein) by a Director or his/her immediate family

members of Prohibited Securities.

For purposes of this section:

“Affiliates” include any two or more entities of which one controls the other or

they are under common control. “Control” shall mean the possession, directly or

indirectly, of the power to direct the management or policies of an entity.

Ownership of publicly-traded equity securities of another entity shall not result in

control or affiliation for purposes of these Standards if the securities are held as an

investment, the holder owns (in its name or via intermediaries) less than 10% of

the outstanding securities of the entity, the holder does not have representation on

the entity's board of directors (or equivalent managing entity) or vice versa, and



the holder does not in fact exercise influence over day-to-day management

decisions. Unless the contrary is demonstrated to the satisfaction of the Corporate

Governance Committee, control shall be presumed to arise from the ownership of

or the power to vote, directly or indirectly, 10% or more of the voting securities of

such entity.

“Immediate family members” include spouses, minor children, or any person for

whom the Director has power of attorney or guardianship rights.

“Prohibited Securities” include the securities of a Third Party that has been

engaged or qualified to engage in activities or transactions under the SPP OATT

in the previous 12 months or the securities of its Affiliates, if:

(i) the primary business purpose of the Third Party, or its Affiliates, is to buy,

sell or schedule energy, power, capacity, ancillary services or transmission

services as indicated by an industry code within the “Electric Power

Generation, Transmission, and Distribution” industry group under the

North American Industry Classification System (NAICS) or otherwise

determined by SPP;

(ii) the Third Party has been pre-qualified as eligible to be a Qualified RFP

Participant pursuant to Attachment Y to the SPP OATT;

(iii) the total (gross) financial settlements regarding the use of transmission

capacity of the Transmission System and/or transactions in the centralized

markets that SPP administers under the SPP OATT for all Third Parties

affiliated with the publicly-traded entity at issue during its most recently

completed fiscal year is equal to or greater than 0.5% of its gross revenues

for the same time period; or

(iv) the total (gross) financial settlements regarding the use of transmission

capacity of the Transmission System and/or transactions in the centralized

markets that SPP administers under the SPP OATT for all Third Parties

affiliated with the publicly-traded entity at issue during the prior calendar

year is equal to or greater than 3% of the total transactions for which the

Integrated Marketplace Counterparty is a counterparty pursuant to

Attachment AE to the SPP OATT for the same time period.



“Securities” shall mean negotiable or non-negotiable investment of financing

instruments that can be sold and bought. Securities include bonds, stocks,

debentures, notes, and options.

If an SPP Director owns Prohibited Securities, he/she must dispose of

them within six months of:

(i) the commencement of engagement at SPP;

(ii) notification of a new Third Party conducting business with SPP; or

(iii) the date of receipt of a gift or inheritance or other taking of legal control of

those Prohibited Securities.

“Third Party” shall mean a Member; a customer of services provided by SPP

under the SPP OATT or any other tariff that SPP administers; an entity for which

SPP provides services under contract, including, but not limited to, tariff

administration services; or an entity that has been pre-qualified as eligible to be a

Qualified RFP Participant pursuant to Attachment Y to the SPP OATT.

SPP Directors may indirectly own publicly-traded Prohibited Securities

through a mutual fund, blind trust, or similar arrangement under which the SPP

Director does not control the purchase or sale of such Prohibited Securities,

except for any fund or arrangement specifically targeted towards the electric

utility industry, or any segments thereof.

SPP will maintain a listing of Third Party entities and publicly-traded

Prohibited Securities for SPP Directors’ reference.

Directors may invest in accordance with SPP’s Standards of Conduct.

Participation in a pension plan of a Member or customer shall not be deemed to

be a direct financial benefit if the Member’s or customer’s financial performance

has no material effect on such pension plan.

Omaha, NE July 31, 2018 MINUTES Age - Southwest Power ...

Documents

Transcript of Omaha, NE July 31, 2018 MINUTES Age - Southwest Power ...