Entergy Arkansas, Inc Cost Benefit Analysis Addendum Study

Charles River Associates

Draft, April 28, 2010

Project Scope

CRA will perform an supplementary cost-benefit analysis focusing on Entergy Arkansas, Inc. (“EAI CBA”) using underlying input assumptions consistent with those being used in the FERC-sponsored SPP-Entergy Cost-Benefit Analysis (“SPP-Entergy CBA”) in which Entergy Arkansas, Inc. (“EAI”) is on a stand-alone basis from the other Entergy Operating Companies. A stand-alone case in which EAI is not in the SPP RTO will be compared to a case in which EAI (but not the other Entergy Operating Companies) joins the SPP RTO.

The EIA CBA study will be structured as follows:

1.  Study time frame

A.  2013-2022 (same as SPP-Entergy CBA)

B.  GE MAPS model years to run

a.  2013, 2016, 2019, 2022 (same as SPP-Entergy CBA). Results for intervening years will be interpolated.

2.  EAI CBA Base Case:

A.  EAI Stand-alone and not a member of the SPP RTO

a.  EAI hurdle rates with the rest of Entergy [possibly including transmission wheeling rates]

b.  EAI hurdle rates with SPP

c.  Other Entergy Operating Companies and Cleco, LEPA, LAFA and LAGN are not members of the SPP RTO.

d.  All else the same as the SPP-Entergy CBA Base Case

3.  EIA CBA Change Case:

A.  EAI is a member of the SPP RTO

a.  Other Entergy Operating Companies and Cleco, LEPA, LAFA and LAGN are not members of the SPP RTO.

1.  EAI hurdles with the rest of Entergy based on SPP hurdles with Entergy

b.  All else the same as the SPP-Entergy CBA Change Case

4.  Sensitivity Cases: None (thus, 8 total EAI CBA MAPS runs, 4 MAPS years x 2 cases)

5.  Transmission: Same 2013 and 2022 power flow as used in the SPP-Entergy CBA.

6.  Results by Case:

A.  EAI Trade Benefits from MAPS runs derived using CRA split-savings methodology (same methodology as SPP-Entergy CBA)

B.  Entergy to then calculate System Agreement impacts for each Entergy operating company for each MAPS run, and provide the results to CRA for summary in the CRA report

C.  Costs:

a.  Base Case:

1.  EAI Costs as part of ITC

b.  Change Case:

1.  Additional SPP costs to have EAI as a member

2.  EAI charges payable to SPP as part of SPP RTO

3.  EAI transmission cost allocations as part of SPP RTO

4.  EAI internal staffing/equipment costs to be in SPP

5.  EAI share of SPP RTO through and out wheeling revenue

6.  Historical through and out wheeling revenue for EAI

a.  Estimated using allocated share of Entergy through and out wheeling revenue

7.  Qualitative Considerations

A.  Issues to be assessed identified per discussions with stakeholders

8.  Draft and Final CRA Report

A.  20 to 40 page report with detailed appendices describing the study and the results.

Project Schedule

The EAI CBA schedule will be contingent on certain milestones being reached in the SPP-Entergy CBA (e.g., completion of a Base Case 2013 GE MAPS run). The project schedule will be updated as needed based on completion of those milestones. The project schedule is outlined in the table below:

Completion Date / Action
May 18 / Stakeholder guidance on EAI hurdle rates completed
May 25 / Status update sent to CRA
June 8 / 2013 GE MAPS Base Case run completed
June 22 / 2013 GE MAPS Change Case run completed
June 25 / Status update sent to SPP, conference call with study stakeholders
July 2 / Post-processing of 2013 cases
July 12 / Analysis of historical transmission revenue completed
July 15 / SPP supplies projected 2013-2022:
- EAI ICT costs
- EIA charges as SPP member
- SPP incremental costs to include EAI as RTO member
- EAI SPP transmission cost allocation
- EAI share of SPP T&O transmission revenue
July 15 / Entergy supplies EAI capital/staffing costs as member of SPP RTO
July 21 / 2016, 2019, 2022 GE MAPS Base and Change Cases completed
July 26 / Status update sent to SPP; conference call with study stakeholders
July 28 / Post-processing of 2016-2022 GE MAPS cases
August 3 / GE MAPS data supplied to Entergy for System Agreement analysis
August 3 / Qualitative issue identification by stakeholders
August 24 / Entergy analysis of Entergy System Agreement using GE MAPS data completed
August 25 / Status update sent to SPP, conference call with study stakeholders
Sept 17 / Draft report
October 2 / Final report

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