1. Texoma Regional Public Meeting
April 4, 2014
Fritha Ohlson
Director, Division of Resources & Rates

2. Slide 2 Southwestern Power Administration
Topics
 SWPA General Information
 SWPA Customers
 SWPA System
 U.S. Electric Grid Interconnections & SWPA System Map
 SWPA Rates
 Denison Hydropower
 Funds Returned to U.S. Treasury
 SWPA Denison Drought Operations
 Generation Data
 SWPA Denison Outlook
 Recap

3. Slide 3
SWPA General Information
Southwestern Power Administration (SWPA)
 Agency of the US Department of Energy
 Power Marketing Administration
 Section 5 of the Flood Control Act of 1944
“…encourage most widespread use at lowest
possible rates…
…sound business principles…
…preference to public bodies and cooperatives.”
 Cost based rates; not for profit
 Repay Federal Investment

4. Slide 4 Southwestern Power Administration
SWPA General Information

5. Slide 5 Southwestern Power Administration
SWPA Customers
 SWPA markets cost-based, wholesale power
to not-for-profit preference customers in six
states: Arkansas, Kansas, Louisiana,
Missouri, Oklahoma, and Texas.
 Over 100 customers
 21 Cooperatives
 78 Municipalities
 3 Military installations
 Over 8 million end users

6. Slide 6

7. Slide 7
SWPA System
 SWPA markets hydropower from 24 Federal, multi-
purpose hydropower projects owned by the U.S. Army
Corps of Engineers (Corps).
 Marketed capacity: 2,052.6 MW
 Average annual energy: 5,570,000 MWh
 SWPA operates 1,380 miles of high-voltage transmission
line, 25 substations, and 46 communications sites.
 Of the 24 hydropower projects, 19 are operated as an
Interconnected System within the Southwest Power Pool
(SPP) region (Eastern Interconnection).
 Denison (Lake Texoma), which is one of the 5 remaining
electrically isolated projects, is within the ERCOT region
(ERCOT Interconnection).
Southwestern Power Administration

8. Slide 8
U.S. Electric Grid Interconnections
Southwestern Power Administration

9. Slide 9 Southwestern Power Administration
SWPA System Map
Disconnected

10. Slide 10
SWPA Rates
 Cost Based – 100% of hydropower cost and the allocated
percent of joint-use costs unique to each project:
-Initial construction costs
-Interest during construction
-Interest on investment
-Annual operation and maintenance
-New replacement equipment
 22 of 24 projects – including Denison – are blended
together to make the “Integrated System Rate.” There
are 2 other rate systems, Sam Rayburn and Robert Willis,
both isolated projects in Texas.
 Although Denison, Narrows, and Whitney are electrically
isolated, they are financially integrated.
Southwestern Power Administration

11. Slide 11
Denison Hydropower
 Denison is located in the ERCOT region and contractually
its full output is received by two Texas Electric
Cooperatives: Tex-La and Rayburn Country
 Based on current SWPA rates and an average hydrological
year, the annual revenue returned to the U.S. Treasury
from Denison generation is about $6 million. The
estimated annual replacement cost is nearly $19 million.
 Important power resource for the region providing quick-
response peaking power.
 In an average hydrological year, the clean, renewable
generation from Denison prevents the emission of 182,200
tons of greenhouse gases by offsetting the need for fossil
fuel generation (1.9 billion cubic feet of natural gas or
113,900 tons of coal).
Southwestern Power Administration

12. Slide 12
Distribution of Funds Returned to
U.S. Treasury by SWPA
Southwestern Power Administration
24 Projects Denison
Original Investment $788 Million $30 Million
Interest $772 Million $25 Million
Operations & Maintenance $1,255 Million $75 Million
Total $2,815 Million $130 Million
As of fiscal year ending September 30, 2013 (unaudited)

13. Slide 13
Funds Returned to U.S. Treasury
from Lake Texoma
Southwestern Power Administration

14. Slide 14
Drought 2011-14 Texoma Inflow and Elev.
Southwestern Power Administration

15. Slide 15
SWPA Denison Drought Operations
Southwestern Power Administration
 SWPA strictly adheres to the Corps’ Lake Texoma Water
Control Manual and Drought Contingency Plan
 Southwestern operates in full compliance with Public Law
100-71
 Between 617-612 feet: Normal generation
 Between 612-607 feet: Rapid response, short term peaking
 Between 607-590 feet: Critical power needs
 The project is designed so that inflows combined with the
conservation pool storage provide a reliable water source
for the water supply and hydropower authorized purposes
to which conservation pool storage is allocated,
especially during times of drought.

16. Slide 16
SWPA Denison Drought Operations
Southwestern Power Administration
 SWPA has been operating in drought mode since
January 2011, generating only 25% of average.
 Since May 2012, generation has been even less,
about 19% of average.
 2013 – Lowest year of power generation ever
since generation began at Denison in 1945.
 In 2013, SWPA customers spent over
$5,000,000 to replace hydropower usually
produced at Denison.

17. Slide 17
Historical Generation
Southwestern Power Administration

18. Slide 18
2011-2014 Monthly Generation
Southwestern Power Administration

19. Slide 19
SWPA Denison Outlook
Southwestern Power Administration
 Will continue to operate the generation at
Denison pursuant to PL 100-71, Corps
regulations and approved plans, and SWPA’s
Federal contracts.
 Member of Lake Texoma Advisory Committee.
 Generation outlook is mindful of drought
conditions. SWPA customers predict that this
trend will continue in 2014 if low water levels
persist, and that they will continue replacing
hydropower usually generated out of Denison
with power purchased from other sources.

20. Slide 20
Lake Texoma Pool Elevation 2014 Outlook
Assumptions: Current level water supply use; 2011 evaporation; Median Inflow at 2, 4, and 6
hours/day generation; Historical Low Inflow (2011) at 2 and 4 hours/day generation.

21. Slide 21
Recap
Southwestern Power Administration
 Lake Texoma drought conditions: 2011-present.
 Denison hydropower generation at historical
lows.
 Lake Texoma conservation storage is working as
designed.
 SWPA will continue to operate in drought mode
until the Lake Texoma Red River watershed
recovers, pursuant to all applicable laws,
regulations, and Federal contracts.