Southwest Power Pool CORPORATE GOVERNANCE COMMITTEE MEETING May 10, 2007 Colcord Hotel, Oklahoma City, OK MINUTES

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1 Minutes No. 13 Southwest Power Pool CORPORATE GOVERNANCE COMMITTEE MEETING May 10, 2007 Colcord Hotel, Oklahoma City, OK MINUTES Agenda Item 1 Administrative Items Chair Nick Brown called the meeting to order at 8:00 a.m. Other members in attendance or represented by proxy were: Jim Eckelberger (Director), Harry Dawson (OMPA), Kevin Easley (GRDA), Rob Janssen (Redbud), Steve Parr (KEPCo), Mel Perkins (OG+E), and Stacy Duckett (SPP Staff Secretary). Agenda Item 2 Regional Entity Trustee Interviews The committee interviewed candidates for the three Regional Entity Trustee positions. Candidates had been nominated by Members and staff. Following interviews, the Committee determined to nominate the following to the Membership at a special meeting on June 21: David Christiano Larry Grundmann John Meyer The committee focused on presenting three nominees that together produced a group with balanced and complimentary skills, and who would contribute the necessary time and energy to serving SPP members and customers. Agenda Item 3 Regional Entity Trustees Fees The committee discussed compensation for the Regional Entity Trustees. The committee will recommend the following schedule to the Membership: Annual Retainer: $15,000 Per Meeting Fee: $2,500 (chair); $2,000 (other) Observer Fee for other meetings: $1250 The committee will recommend payment of the full retainer fee for 2007, reflecting the significant start up work that will be required. Following the election, a random drawing will establish the three-year staggered terms. For continuity, the committee will recommend that the initial term ends in December 2008 (rather than 2007). Agenda Item 4 Markets and Operations Policy Committee/Board of Directors Representative Fee The Directors are paid an observer fee of $1250 for voluntary attendance at meetings. The Board of Directors cannot hold a voting seat on the Markets and Operations Policy Committee (MOPC), however they have assigned a Director to attend all MOPC meetings on their behalf. The Corporate Governance Committee will recommend to the Membership that the Director assigned to the MOPC receive the regular meeting fee of $2,000 rather than the observer fee. Agenda Item 5 Vacancies Tom Grennan has resigned from KEPCo, creating vacancies on the Members Committee and the Strategic Planning Committee (SPC), and Walt Yeager has resigned from the Members Committee. Stacy Duckett will provide notice to the appropriate Membership sectors to determine interest in serving on the Members Committee. The Corporate Governance Committee will address these vacancies at a meeting in June.

2 SPP Corporate Governance Committee Minutes May 10, 2007 The committee appointed Les Evans (KEPCo) to fill the vacancy on the SPC. Adjournment Nick Brown thanked everyone for participating and adjourned the meeting at 2:55 p.m. Respectfully Submitted, Stacy Duckett, Secretary 2

3 Southwest Power Pool, Inc. CORPORATE GOVERNANCE COMMITTEE MEETING May 10, 2007 Colcord Hotel, Oklahoma City, OK AGENDA May 9 6:00 Cocktails 6:30 Dinner May 10 8:00 Convene/Continental Breakfast 8:30 Interview 1 9:45 Interview 2 11:00 Interview 3 12:00 Lunch 1:00 Interview 4 2:00 Discussion * 3:30 Adjourn * Time permitting, the committee will also discuss the update resulting from the February meeting. Relationship-Based Member-Driven Independence Through Diversity Evolutionary vs. Revolutionary Reliability & Economics Inseparable

4 SPP Regional Entity Trustees Proposed provisions For reference/corporate Governance Committee Feb 28, Regional Entity Trustees 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 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 any appropriate entity, the Regional Entity Trustees shall abide by the principles in these. Its duties shall include, but are not limited to the following: (a) Monitor all Registered Entities in the SPP footprint for compliance with ERO/FERC requirements, including auditing and issuance of official findings. (b) Administer SPP s Compliance Enforcement Program. (c) Coordinate and manage third party audits to confirm that SPP is conforming to ERO policies and standards; (d) Impose penalties as prescribed and approved by ERO/FERC. (e) Regional Entity staff administration. (f) Regional Entity budget decisions. (g) Track and review Regional Standards from MOPC for submission to the ERO and FERC for approval and implementation. (h) Complete a self-assessment annually to determine how effectively the Regional Entity Trustees are meeting their responsibilities; and (i) Provide an annual report to the Board of Directors regarding the effectiveness of the Regional Entity function and processes Composition and Qualifications Composition The Regional Entity Trustees shall consist of 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. Page 1 of 4

5 Qualifications SPP Regional Entity Trustees Proposed provisions For reference/corporate Governance Committee Feb 28, 2007 Regional Entity Trustees shall have relevant senior management expertise and experience in the reliable operation of the bulk electric transmission system in North America 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 indirectly own securities through a mutual fund or similar arrangement (other than a fund or arrangement specifically targeted toward the electric industry or any segments thereof) under which the trustee does not control the purchase or sale of such securities. 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 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. Initial staggering of terms will be decided by lottery with one trustee s term to expire in the first year, one in the second year, and one in the third year. The election process shall be as follows: (a) At least three months 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 one month prior to the meeting of Members, the Corporate Governance Committee shall notify the President in writing of the person it nominates for election as a trustee, specifying the nominee for any vacancy to be filled. The President 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 or removing trustees only, Members with Affiliate Relationships shall be considered a single Member; Page 2 of 4

6 SPP Regional Entity Trustees Proposed provisions For reference/corporate Governance Committee Feb 28, 2007 (d) (e) At the meeting of Members, any additional nominee(s) may be added to the ballot if a motion is made and seconded by Members; and At the meeting of Members, the required number of trustees shall be elected by written ballot. Each sector of the Membership votes separately with the result for that sector being a percent of approving votes to the total number of Members voting. Each Member shall be entitled to cast a number of votes equal to the number of trustees to be elected. A Member may not cumulate votes. The candidate(s) receiving the highest percent of the average of approving vote ratios within each Membership sector will fill vacancy(ies) 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 Membership may remove a trustee with cause by the vote of a majority of each Membership sector 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 trustee who is the subject of removal proceedings shall be given fifteen days to respond to the Member petition in writing to the President Vacancies If a vacancy occurs, the Corporate Governance Committee will appoint an interim trustee to serve until a replacement trustee 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 trustee shall take office immediately following the election Meetings and Notice of Meetings The Regional Entity Trustees will meet coincident in time and location as the regularly scheduled SPP Board of Directors meetings, and additionally upon the call of the chair or upon concurrence of at least two trustees. Except as otherwise provided in these, all meetings will be open to any interested party. At least fifteen days' written notice shall be given by the Page 3 of 4

7 SPP Regional Entity Trustees Proposed provisions For reference/corporate Governance Committee Feb 28, 2007 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 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 Quorum and Voting Two trustees shall constitute a quorum of the Regional Entity Trustees necessary for a binding vote. Decisions of the Regional Entity Trustees require two affirmative votes. 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 Compensation of Regional Entity Trustees Regional Entity Trustees shall receive compensation as recommended by the Human Resources Committee, and 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 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. Page 4 of 4

8 David J. Christiano, P.E. Monday, April 30, E. Grand Springfield, Missouri home: cell: Traits Creative, resourceful, intelligent, caring. Intimate knowledge of utility systems from source to sink. A communicator, action taker, teacher. Pre-retirement activities B.S.E.E. - Clarkson College (Potsdam, New York) Consolidated Edison Company of New York Senior Engineer, transmission and inter-utility planning; worked extensively on the analysis of the 1977 New York City Blackout City Utilities of Springfield, Missouri (CU) Various titles including Manager of Electric Systems Control and Director of System Planning for Electric, Gas, and Water Systems. Conducted studies and published Master Plans for the City Utilities Electric Transmission System, the Electric Distribution System, the Natural Gas Transmission System, and the Water System. Responsible for Forecasting; Resource, Transmission, and Inter-utility Planning; and operation of the Electric System Control Center. Registered Professional Engineer in Missouri. Authored numerous technical papers and articles in the water and electrical industry and been a speaker on many occasions; (and a winner of the Dr. Warren Kramer award from the Missouri Section of the American Water Works Association for best technical paper). A prior Chairman of the American Public Power Association System Planning Committee. Member DOE National Defense Executive Reserve. Former member Local Emergency Planning Committee. Southwest Power Pool Activities Positions: Member - Board of Directors Chairman - System Interruption Assessment Committee Chairman - Compliance Committee (SPP Criteria/NERC Standards) Chairman - Engineering & Operating Committee Co-chair - RTO Task Force Member - Market Operations and Planning Committee Member - Members Committee (similar to MISO Stakeholder s Committee) Member - Corporate Governance Committee Member - Strategic Panning Committee NERC Activities Former member of the NERC Engineering Committee (representing SPP) and the NERC Operating Committee (representing TDUs). Served on the Standards & Measurement Task Force and Standards & Compliance Task Force. CU representative for NERC Standards Development (TDU sector) and member of virtually all ballot pools.

9 Post-Retirement Activities/Personal Interests Avid greenhouse grower of Bromeliads (epiphytic plants of the Americas) and other tropicals, bicyclist (average 2,000 miles/year), sports car driver (Porsche 914-6) and ralliest, amateur photographer, PC guru (and gamer) and webmaster for several sites. 1 Travel, especially Europe and the Caribbean. With my wife of 35 years, an avid amateur chef. Music (mostly classical/opera) and multimedia (home theater). Four children including one M.D., one M.B.A., and two undergraduate seniors. More details on my family web site. (See footnote.) Springfield Regional Opera - President of the Board of Directors (former) Ozark Chapter, Missouri Society of Professional Engineers - Board of Directors (former) Southwest Missouri Amateur Radio Club President (former) Multiple Sclerosis Society MS-150 Bike Tour Planning Committee Fulfilling my Life List with my dear wife Watching my children grow Limited and interesting/challenging professional activities Technical Training (System Planning/System Operations) My Personal Heroes Thomas Edison for tenacity Leonardo Da Vinci for brilliance Winston Churchill for leadership 1 geocities.com/ne0b/ (family site) springbike.org (local bicycling club)

10 LAWRENCE (LARRY) C. GRUNDMANN, JR 6375 Woodman Drive, Oroville, CA Phone: , Cell: Proven leader with extensive business planning and project development accomplishments. Successfully directed business development activities for major independent power companies. Started-up and provided direction to energy production, fuels procurement, and diversified business venture subsidiaries of one of the nation s largest utility systems. Strengths: Strategic planning and decision-making Conceptualization, organization and start-up of new operations and ventures Virtually every phase of fossil fuels production, transportation and utilization Business risks evaluation, including economic and financial analysis Energy market analysis Legislative and regulatory analysis and policy formulation Litigation and rate case strategy development and support MAJOR ACCOMPLISHMENTS Energy market analysis, planning and business risk evaluation Acquired General Partner ownership position in a foundering project and as Development Manager turned it around. Completely restructured and successfully closed non-recourse financing on the $275 million project within 21 months. It was refinanced with investment grade ratings while still under construction then an industry first for a solid fueled project. Analyzed the changing competitive U.S. generating market. Identified and implemented responsive acquisition strategies and redevelopment or disposal strategies to create added value from existing facilities. Developed innovative financing alternatives for generating unit fuel conversions, cogeneration and independent power producer projects. Provided options under the company s cash constrained condition or off-balance sheet financing objectives. As an independent consultant on behalf of PacifiCorp and as company witness for system operating utilities developed and presented expert testimony. Successfully defended positions in cross examination in multiple rate cases before five different state regulatory commissions. Team Leadership Having established a successful track record based on understanding of project drivers and proposal evaluation criteria, organized a consortium of five (5) multi-national corporations in developing the winning bid for an 1800 MW power plant and LNG receiving facility against formidable international competition. Directed a team in planning and acquiring $100 million lease-financed integrated oil storage and delivery facilities and waterborne transportation equipment. Resulted in the utility

11 2/3 L. GRUNDMANN system having the capabilities to readily convert 8000 MW to fuel oil firing when its natural gas supplies were cut off. Guided executive fossil fuel decision for the entire Middle South Electric System, resulting in highly reliable, lower cost operations during highly turbulent energy market period. Repeatedly chosen by company, industry groups, and professional societies to represent them in regulatory, legislative, and policy-making forums, including: state legislative committees; congressional staff and committees; cabinet-level offices (DOT, DOE, OTA, etc.); and industry and professional conferences and committees. Start-up of new operations/ventures Developed business plans and entry strategies for a large international energy producer to enter the downstream power business in several Asian countries. Through successful bidding and acquisitions, the company added several thousand MW s and an LNG terminal to its development and operating portfolio Established and staffed satellite office, for independent power developer, created and implemented business plans that created backlog of large power plant prospects in the U.S. and Europe under adverse market conditions. Staffed and directed key functions of new diversified fuels procurement and production subsidiary. Operational reviews and PSC audits cited its high reliability and documented fuel cost savings of more than $600 million during the energy crunch of the 70 s and early 80 s. Started-up the utility system s first diversification subsidiary as a creative business venture and developed focused business plans that were successfully implemented and profitable. PROFESSIONAL HISTORY UNOCAL CORPORATION One of the world s largest independent exploration and production companies. Senior Advisor - Power Development EDISON MISSION ENERGY A world leader in the independent power markets. Director, Business Development Americas AHLSTROM DEVELOPMENT CORPORATION (formerly Pyropower) A major player in the independent power markets, focusing on lower-quality fuels for use by the company s clean burning technology. Director, Business Development - U.S. & Europe General Manager, Project Development ENTERGY CORPORATION (System Fuels, Inc.) The fuels procurement subsidiary for the utility operating companies. Vice President Vice President Engineering and Coal Operations Vice President Engineering Engineering Manager

12 3/3 L. GRUNDMANN ELECTEC, INC Entergy s diversification subsidiary created in Vice President and General Manager NEW ORLEANS PUBLIC SERVICE, INC One of Entergy s major system operating companies. System Planning Engineer Mechanical Engineer EDUCATION/TRAINING Postgraduate courses in Business, Economics, Finance and Management Louisiana State University, Baton Rouge, LA B.S. in Mechanical Engineering Tulane University, New Orleans, LA. Public Utility Management Course Southeastern Electric Exchange REGISTRATIONS Registered Professional Engineer State of Louisiana RELATED EXPERIENCE Twice appointed by Energy Secretary, Hazel R. O Leary, to serve on the National Coal Council, a quasi-government advisory agency to the Department of Energy. Achieved top leadership positions in more than 10 professional/industry organizations, including: - National Independent Energy Produces and Electric Generation Association - Electric Power Research Institute Advisory Structure - Edison Electric Institute Policy Committees - Local Chapters and National Conference of Professional, Technical, and Civic Societies Consistently appointed to serve on or lead system-wide strategic and organizational planning task forces. Frequently directed and/or implemented company s industry and governmental relations activities.

13 C V Lawrence C. Grundmann, Jr. Mr. Grundmann has an extensive energy and electric power background with broad business planning and project development accomplishments. In over 25 years with one of the United States largest utility systems, he managed projects in virtually every phase of fuel supply, electric generation, transmission and distribution. He served with the Utility System s planning committee during the period of its expansion to the majority of its current generation and transmission facilities. He also started-up and provided direction to energy production, fuels procurement and diversified business venture subsidiaries of the System, serving as an executive officer of the latter two. Entering the independent power business in 1985, he developed and implemented business plans that created a portfolio of large power plant prospects in the US and later certain European markets. During this time he was also personally the development manager for two projects that reached successful closure. One involved the acquisition of a General Partnership in a foundering project, which he turned around and completely, restructured, reaching non-recourse, financial closure on the $275 million project in just 21 months. In the last seven years before retiring, he guided Unocal Corporation s power development efforts initially in India, and later additional power development teams in China, Indonesia and Thailand. He led a number of initiative and proposal efforts with the result that the company brought several thousand MW s, including an LNG terminal, into various stages of development with partners in these countries. His experience includes project evaluation and asset acquisition and divestiture. In his later energy project advisory role, he was frequently asked to counsel policymakers in these emerging economies on privatization and regulatory principles as they sought to divest state owned entities and promote competitive energy environments. He has been frequently chosen by company, industry groups and professional organizations to represent them in regulatory and policy-making forums. He served two terms on the National Coal Council, a quasi-government advisory panel to the US Department of Energy, to which he was appointed by the Secretary of Energy in recognition of his broad based knowledge of energy production, transportation and utilization. Earlier in his career, he also served on policy and research advisory boards of the Electric Power Research Institute, one of the US leading power research organizations. In 2003 he and his wife, Kathleen, moved to Lake Oroville, CA, where he continues to serve in several civic and professional capacities, including County Water Commissioner and as representative of a regional citizens group negotiating recreational mitigation facilities with the California Department of Water Resources pursuant to its FERC relicensing process for the 650 MW Lake Oroville Dam. Grundmann/letter/resme.doc

14 Professional Biography of Frederick John Meyer Frederick John Meyer is the Vice President of Regulatory Affairs for Reliant Energy. He is responsible for developing and communicating policies concerning RTO and wholesale market structure at FERC and involved states. In addition, he is responsible for policy statements in electric energy filings at FERC. Prior to his involvement in regulatory policies, he was Vice President of Commercial Development. In this capacity, he led efforts to bid on existing generation auctions around the United States, including the purchase of 3,800 MW in California and 600 MW in Florida. Before moving to the Wholesale Energy Group in March 1997, Mr. Meyer was the General Manager of Transmission and Substation Operations and Engineering for Houston Lighting & Power Company and was responsible for the engineering and operations activities associated with the HL&P transmission electric power system. He holds a Bachelor of Science degree and a Master of Science degree in Electrical Engineering and has thirty-eight years of experience in the utility industry. He is a Registered Professional Engineer in the State of Texas. Mr. Meyer is a former member of the Technical Advisory Committee of the Electric Reliability Council of Texas (ERCOT) and, in 2003, he served on the ERCOT Board He was a member of the NERC Stakeholder Committee until it dissolved in He has worked internationally in the electric power industry in Argentina, Brazil and Peru. Mr. Meyer was the head of the working group requested by the Texas Public Utility Commission (PUCT) that provided the agreement for the ERCOT ISO. This agreement was unanimously approved by the PUCT commissioners on August 21, 1996, marking Texas as the first state with an approved ISO structure. Mr. Meyer led the stakeholder group in ERCOT, which formulated the policy issues necessary to implement a retail ISO in ERCOT by January 1, The policy issues were expressed in the ERCOT Protocols approved by the Public Utility Commission of Texas in April Mr. Meyer has also served on the PJM Members Committee, MISO Advisory Committee, and is currently on the Reliability Policy Issues Committee of WECC. He will retire from Reliant Energy by July 1, 2007.

15 John Marschewski In January of 2004, Mr. Marschewski retired as President of Southwest Power Pool, Inc (SPP) completing nearly 40 years of service in the electric utility industry. He joined SPP in 1972, served in a number of management positions in the organization, and was named President and member of the Board of Directors in January John began his electric utility career with Arkansas Power & Light Company (now Entergy) in 1965, serving in System Planning before joining SPP. Mr. Marschewski served SPP during a period of significant transition in the electric utility industry and helped guide SPP from a regional reliability organization with a staff of 14 persons in 1989 to a multi-functional organization in 2004 with a staff of 125 skilled professionals whose major responsibilities were to provide regional bulk-power security and transmission tariff administration across all or parts of 8 states in the south central part of the United States. Over the five years prior to his retirement he worked closely with state and federal regulatory officials, as well as senior management executives of the various diversified membership of SPP, in laying the groundwork for SPP becoming in November 2004 a federally recognized regional transmission organization. John has industry and professional affiliations with IEEE, the Arkansas Society of Professional Engineers, the Arkansas Academy of Electrical Engineers, and the National Society of Professional Engineers. John is a registered professional engineer in the State of Arkansas and a retired major from the Arkansas National Guard having served in various command positions spanning a 20 year career. Mr. Marschewski holds bachelors and masters degrees in Electrical Engineering from the University of Arkansas and a master s degree in Pastoral Ministry from Loyola University of New Orleans. He is also an ordained a deacon in the Roman Catholic Church and was named as Minister to Deacons for the Diocese of Little Rock (State of Arkansas) in January He is a husband of nearly 42 years, the father of three children, and Papa to five beautiful and energetic grandchildren. John Marschewski. 9 Arles Road, Little Rock, Arkansas Home , Cell , jmarschewski@comcast.net

16 Gerald (Gerry) Burrows 8122 S. Enochs Mill Road Grain Valley, Mo (816) Objective A leadership role in ensuring the success of SPP's Regional Entity Highlights Directed the planning and operation of the power transmission system to provide safe, economical, and reliable service to KCPL customers. Took a leadership role in SPP and have been chairperson of various committees, subcommittees, and task forces. I have promoted changes within SPP over the years including the implementation of the Regional Tariff and its movement to a RTO, establishment of the SPP Operating Center, and was one of the initial promoters of the SPP Operating Reserve Sharing program. Took a leadership role in NERC and have held various positions within the NERC organization. I served on the NERC Operating Committee as a SPP and an Investor Owned Utility Representative. I was on the group that defined the NERC Functional Model and Entities and was chairperson of SAR and Standards Drafting Teams. I was active in promoting the changing culture at KCPL and establishing career paths for engineers and technical professions. The company implemented a different management compensation program resulting from recommendations of the compensation committee I was on. I promoted changes at KCPL for the company to be among the leaders of the changes that was taking place the industry beginning with the FERC Pro Forma Tariff and SPP's Regional Tariff and continuing today. Experience Manager Transmission Services 1996 to 2006, Kansas City Power & Light Directed transmission operation, transmission planning, and provided real-time computer networks and applications for the company's operating entities. I was responsible for the overall reliability and planning of the bulk power transmission system and administration of KCPL's open access transmission tariff. I represented KCPL on various SPP groups. I recommended positions KCPL should take and its response to the changing industry regarding transmission issues. Manager System Control Center 987 to 1996, Kansas City Power & Light Responsible for the economic dispatch and commitment of the company's generating resources, transmission operations, transmission planning, and the reliability of the bulk power system. I was responsible for revenues from the sales and purchases of capacity and energy from other utilities. My group was responsible for working with KCPL's largest customers for their electric service and the administration of interruptible contracts. Engineer, Supervisor, and Manager positions 1971 to 1987, Kansas City Power & Light Engineer in System Planning and Supervisory and Manager positions in Power Dispatching Page 1 of 2

17 Education University of Mo - Rolla Rolla, Mo. B.S., Electrical Engineering, 1970 University of Mo - Columbia Columbia, Mo. M.S., Electrical Engineering, 1979 Awards Eagle Scout with gold palm Technology Champion Award - EPRI 1999 Resolution from NERC for service 2005 Resolution from SPP for service 2006 References References are available on request. Page 2 of 2

18 Southwest Power Pool, Inc. For Discussion Purposes Only SPP Corporate Governance Committee February 28May 10, 2007 Southwest Power Pool, Inc. B Y L A W S Issued by: L. Patrick Bourne, Manager Effective: May 1, 2004

19 Southwest Power Pool, Inc. Original Sheet No. 1 Southwest Power Pool Table of Contents 1.0 DEFINITIONS Affiliate Relationships Articles of Incorporation Board of Directors Criteria Member Membership Membership Agreement NERC Net Energy for Load Officers Organizational Group SPP Staff Transmission Owning Member Transmission Using Member MEMBERSHIP Qualifications Applications Member Responsibilities and Obligations Termination, Removal and Reinstatement ORGANIZATIONAL ADMINISTRATION Structure Proxy Leadership...9 Comment [s1]: Does not reflect changes in document Issued by: L. Patrick Bourne, Manager Effective: May 1, 2004

20 Southwest Power Pool, Inc. Original Sheet No Appointment Terms Vacancies Executive Authority Meetings Order of Business Expenses Quorum Voting Appeal Staff Independence and Support Publications and Data Bases Dispute Resolution Instigation Dispute Resolution Panel Resolution Procedures Expenses Liability Meeting of Members Liability, Insurance and Indemnification Waiver of Liability Insurance Indemnification of Directors, Officers, Agents and Employees Limitations Compliance Monitoring Market Monitoring...20 Issued by: L. Patrick Bourne, Manager Effective: May 1, 2004

21 Southwest Power Pool, Inc. Original Sheet No BOARD OF DIRECTORS Duties Composition and Qualifications Composition Qualifications Conflicts of Interest Term and Election Resignation and Removal of Directors Vacancies Functioning of the Board of Directors Meetings and Notice of Meetings Chair and Vice Chair; Election and Terms Quorum and Voting Compensation of Directors Executive Session COMMITTEES ADVISING THE BOARD OF DIRECTORS Members Committee Composition and Qualifications Term and Election Resignation and Removal of Members Committee Representatives Vacancies Meetings COMMITTEES REPORTING TO THE BOARD OF DIRECTORS Markets and Operations Policy Committee Strategic Planning Committee Human Resources Committee Compliance Committee Finance Committee Corporate Governance Committee...35 Issued by: L. Patrick Bourne, Manager Effective: May 1, 2004

22 Southwest Power Pool, Inc. Original Sheet No REGULATORY INVOVELEMTN AND REGIONAL STATE COMMITTEE Retention of State Regulatory Jurisdiction Regional State Committee Retention of Other Regulatory Jurisdiction FISCAL ADMINISTRATION Operating Budget Annual Membership Fee NERC Assessment Monthly Assessments Fiscal Agent Auditors Financial Obligation of Withdrawing Members NORTH AMERICAN ELECTRIC RELIABILITY COUNCIL AMENDMENTS TO THESE BYLAWS, THE ARTICLES OF INCORPORATION, AND MEMBERSHIP AGREEMENT EFFECTIVE DATE AND TRANSITION PROVISIONS...41 Issued by: L. Patrick Bourne, Manager Effective: May 1, 2004

23 Southwest Power Pool, Inc. Original Sheet No. 5 B Y L A W S of Southwest Power Pool, Inc. PREAMBLE The values and principles upon which SPP is incorporated and formed include: a relationship-based organization; member-driven processes; independence through diversity of Organizational Group membership; recognition that reliability and economic/equity issues are inseparable; and, deliberate evolutionary, as opposed to revolutionary, implementation of new concepts. These values and principles should guide those serving this organization. The Board of Directors will endeavor to ensure equity to all Members while also assuring the continuous adaptation to controlling conditions within these stated values and principles. 1.0 DEFINITIONS 1.1 Affiliate Relationships Affiliate Relationships are relationships between SPP Members that have one or more of the following attributes in common: (a) are subsidiaries of the same company; (b) one Member is a subsidiary of another Member; (c) have, through an agency agreement, turned control of a majority of their generation facilities over to another Member; (d) have, through an agency agreement, turned control of a majority of their transmission system over to another Member, except to the extent that the facilities are turned over to an independent transmission company recognized by FERC; (e) have an exclusive marketing alliance between Members; or (f) ownership by one Member of ten percent or greater of another Member. Issued by: L. Patrick Bourne, Manager Effective: May 1, 2004

24 Southwest Power Pool, Inc. First Revised Sheet No. 6 Superseding Original Sheet No Articles of Incorporation SPP s articles of incorporation as filed with the state of Arkansas. 1.3 Board of Directors The Board of Directors of SPP, which shall manage the general business of SPP pursuant to these. 1.4 These bylaws. 1.5 Criteria Planning and operating standards and procedures as approved by the Board of Directors. 1.5a Existing Obligations Certain financial obligations as defined in Section of these. 1.6 Member An entity that has met the requirements of Section 2.2 of these. 1.7 Membership The collective Members of SPP. 1.8 Membership Agreement The contract, that specifies the rights and obligations of the parties, executed between SPP and an entity seeking to become an SPP member. 1.9 NERC The North American Electric Reliability Council or successor organizations Net Energy for Load The electrical energy requirements of an electric system are defined as system net generation plus energy received from others, less energy delivered to others through interchange. It includes system losses but excludes energy required for the storage at energy storage facilities Officers The officers of SPP as elected by the Board of Directors. The Officers consist of the President and the Corporate Secretary, at a minimum. Any Officer must be independent of any Member organization. Issued by: L. Patrick Bourne, Director Effective: July 26, 2005 Issued on: August 9, 2005 Filed to comply with order of the Federal Energy Regulatory Commission, Docket Nos. RT04-1 and ER04-48, issued February 11, 2005, 110 FERC 61,138 (2005).

25 Southwest Power Pool, Inc. Original Sheet No Organizational Group A group, other than the Board of Directors, comprising a committee or working group that is charged with specific responsibilities toward accomplishing SPP s mission SPP Southwest Power Pool, Inc Staff The technical and administrative staff of SPP as hired by the Officers to accomplish SPP s mission Transmission Owning Member A Member that has placed more than 500 miles of non-radial facilities operated at or above 60 kv under the independent administration of SPP for the provision of regional transmission service as set forth in the Membership Agreement Transmission Using Member A Member that does not meet the definition of a Transmission Owning Member. 2.0 MEMBERSHIP 2.1 Qualifications Membership in SPP is voluntary and is open to any electric utility, Federal power marketing agency, transmission service provider, any entity engaged in the business of producing, selling and/or purchasing electric energy for resale, and any entity willing to meet the membership requirements, including execution of the Membership Agreement. Membership also is open to any entity eligible to take service under the SPP Open Access Transmission Tariff (OATT). These entities desire the greater efficiency and service reliability gained through better coordination by voluntary association in SPP as constituted herein and in the SPP Articles of Incorporation. Members recognize that such association has a significant effect upon the availability and reliability of the bulk electric power supply of the region, and thereby affects the reliability of the nation's electric power supply. Issued by: L. Patrick Bourne, Manager Effective: May 1, 2004

26 Southwest Power Pool, Inc. Original Sheet No Applications Membership by an entity shall be obtained upon meeting the following requirements: (a) Meeting membership qualifications; (b) Providing an application for membership to the SPP President; and (c) Executing the Membership Agreement and delivering a signed copy to the President. The President shall review applications, approve those meeting membership qualifications and promptly give written notice of the new Member to all other Members. The Board of Directors will review any disputes arising as to the qualifications of the new Member. Membership will commence at the beginning of the next calendar month following completion of these requirements. 2.3 Member Responsibilities and Obligations Members recognize that SPP exists and operates for the benefit of the bulk electric transmission system and to ensure the reliability of the nation s power supply. As such, Members are required to act to further these goals by participating in projects, and complying with regulatory requirements. Failure to comply with these provisions will be considered a violation of these and the Member may be removed in accordance with the provisions for Removal of Members in the Membership Agreement. 2.4 Termination, Removal and Reinstatement The Board of Directors may terminate the membership of any Member in accordance with the Membership Agreement. The President shall promptly give written notice of the removal to all other Members. Any former Member seeking to rejoin SPP shall apply to the Board of Directors for reinstatement. In its application for reinstatement, the former Member shall: (a) provide evidence that it has fully paid any accrued financial obligation to SPP; (b) demonstrate it has corrected the reason for its removal; (c) establish that it will be in compliance with SPP membership requirements; and (d) deliver an executed Membership Agreement to the President. Issued by: L. Patrick Bourne, Manager Effective: May 1, 2004

27 Southwest Power Pool, Inc. Original Sheet No ORGANIZATIONAL ADMINISTRATION 3.1 Structure Member input on decision-making shall be accomplished primarily through Membership participation in Organizational Groups. Members are expected to provide representation to Organizational Groups as requested. Working Group representation will be appointed by the Board of Directors, which shall consider the various types and expertise of Members and their geographic locations, to achieve a widespread and effective representation of the Membership. The Chair of any Organizational Group may appoint an ad hoc Task Force as necessary to fulfill its mission. Task Force appointments shall be made with due consideration of the various types and expertise of Members and their geographic locations. Criteria for serving on an Organizational Group will be determined in the Group s scope. Except for any full representation Organizational Group, an appointment to an Organizational Group is for an individual, not a corporate entity Participation in certain sessions of Organizational Group meetings where market sensitive issues are discussed may be restricted to persons representing entities that have executed NERC s Confidentiality Agreement. Representatives on all Organizational Groups will be documented on the SPP website maintained by the Staff. Organizational Group vacancies will be filled on an interim basis by appointment of the President unless otherwise provided for in these. 3.2 Proxy If a Member's designated representative is unable to attend an Organizational Group meeting, it may in writing and in advance of the meeting appoint a substitute representative who shall have such rights to participate and vote as the Member specifies. A proxy will be recorded as attendance at a meeting, but will not serve to meet the quorum requirements. A representative may not grant a proxy for more than three consecutive meetings without the express consent of the chair of the Organizational Group. If a representative exceeds the proxy limit, he/she will be considered to have resigned from the Organizational Group and the vacancy will be filled in accordance with these ; except, in the case of any full representation Organizational Group, in which case a new representative will be solicited from the member company. 3.3 Leadership Issued by: L. Patrick Bourne, Manager Effective: May 1, 2004

28 Southwest Power Pool, Inc. Original Sheet No Appointment The Chair of all Organizational Groups shall be nominated by the Corporate Governance Committee for consideration and appointment by the Board of Directors. A Vice Chair shall be elected by the members of an Organizational Group, unless provided otherwise in these. A Vice Chair shall act for a Chair: (a) at the request of the Chair; (b) if the Chair becomes incapacitated and unable to discharge the functions of the position; or (c) if the position of the Chair becomes vacant, until a new Chair takes office Terms The terms of the Chair and Vice Chair of all Organizational Groups shall coincide with the two-year term of the Chair of the Board of Directors. Working Group representation will be reviewed for appropriateness annually by the Corporate Governance Committee Vacancies Should any individual having been appointed as a Chair of any Organizational Group be unable to serve for the term specified, or be unable to serve on a NERC Organizational Group under provisions of these, a replacement shall be appointed by the Chair of the Board of Directors for the unexpired term of office. 3.4 Executive Authority The Officers shall carry out the rights, duties, and obligations of SPP pursuant to the authority granted by the Board of Directors. Officers will execute the SPP Standards of Conduct upon employment and annually thereafter. The Officers shall be empowered to: (a) employ qualified technical and administrative employees; (b) engage office space; (c) employ outside technical and special service organizations; (d) execute contracts; (e) provide for independent regional reliability coordination, and transmission service administration, and other services as may be directed by the Board of Directors; (f) serve as SPP s representative before regulatory bodies, NERC, and in other public forums; Issued by: L. Patrick Bourne, Manager Effective: May 1, 2004

29 Southwest Power Pool, Inc. Original Sheet No. 10 (g) (h) incur reasonable expenses; and make Staff resources available to individual Members or groups of Members on a non-firm, non-priority, first-come-first-serve basis so as not to interfere with current or future needs and priorities established by SPP. Issued by: L. Patrick Bourne, Manager Effective: May 1, 2004

30 Southwest Power Pool, Inc. Original Sheet No Meetings Organizational Groups shall meet as necessary. SPP meetings shall be open, however, any Organizational Group may limit attendance at a meeting by an affirmative vote of the Organizational Group as necessary to safeguard confidentiality of sensitive information, included but not limited to Order 889 Code of Conduct requirements, personnel, financial, or legal matters. Representatives shall be given at least fifteen calendar days written notice of the date, time, place and purpose of each regular or special meeting. Telephone conference meetings may be called as appropriate by the Chair of any Organizational Group with at least one-day prior notice. 3.6 Order of Business The latest edition of Robert's Rules of Order will generally govern all SPP meetings on any point not specifically covered in these. 3.7 Expenses The expenses of a representative participating in the activities of SPP Organizational Groups and task forces shall be borne by that representative. 3.8 Quorum The quorum for a meeting of the Markets and Operations Policy Committee or the Membership shall be those Members present. The quorum for any other Organizational Group or task force shall be one-half of the membership thereof, but not less than three members; provided, that a lesser number may adjourn the meeting to a later time. A proxy will not serve to meet the quorum requirement. The quorum for a meeting must be maintained throughout the meeting in order for the Organizational Group to take binding action. 3.9 Voting Each participant in an Organizational Group shall have one vote. Upon joining, Members shall be assigned to one of two Membership sectors for the sole purpose of voting: Transmission Owning Members, or Transmission Using Members. Markets and Operations Policy Committee and Membership actions are taken in the following process. Each sector votes separately with the result for that sector being a percent of approving votes to the total number of Members voting. Then the action is approved if the average of these two percentages is at least Issued by: L. Patrick Bourne, Manager Effective: May 1, 2004