direct testimony of the capital expenditures, reliability, and - nyseg
direct testimony of the capital expenditures, reliability, and - nyseg direct testimony of the capital expenditures, reliability, and - nyseg
Case 09-E-____; Case 09-G-____ (NYSEG)DIRECT TESTIMONY OF THE CAPITAL EXPENDITURES,RELIABILITY, AND OPERATIONS PANEL1234567891011121314151617181920maintenance, generating system maintenance, and other resources to provide safeand reliable service. We discuss the cost impacts of compliance with regulatorymandates, including the Electric Reliability Organization ("ERO") standards,FERC hydro license compliance, NYSEG's compliance with the conditions in theIberdrola/Energy East Merger Order relating specifically to the concerns raised bythe rural electric cooperatives ("Cooperatives"), increased stray voltagerequirements, and recommendations to improve storm response.Q. Can you please briefly summarize the electric capital investment and operatingexpenditures that you support in your testimony?A. We support a NYSEG capital investment plan for electric and allocated generalcapital of $145.6 million in 2010 and $290.5 million in 2011. The Company'scapital investment plan funds projects that are required by regulation, required tomeet our obligation to serve customers, and that are necessary to provide safe andreliable service. We also support $43.8 million of incremental O&Mrequirements in the rate year to maintain reliable service. These costs aresummarized in Exhibit __ (NYSEGCRO-13).NYSEG CAPITAL PLANQ. What has been the Company's historical capital expenditures?A. The Company's historical capital expenditures are set forth in Exhibit __(NYSEGCRO-4).9
Case 09-E-____; Case 09-G-____ (NYSEG)DIRECT TESTIMONY OF THE CAPITAL EXPENDITURES,RELIABILITY, AND OPERATIONS PANEL12345678910111213141516171819202122Q. Would you please describe the Company's capital forecast for the electricdivision?A. The capital forecast is a multi-year projection of the investment needed to serveincremental electric load growth, to fulfill regulatory obligations and to maintainthe electric system infrastructure. It consists of specific projects and lesserdefinedexpenditures that are estimated based largely on historical trends.Q. How is the capital forecast prepared?A. Exhibit __ (NYSEGCRO-7) depicts the Company's process for developing itscapital forecast. The capital forecast is prepared as a collaborative effort withcontributions from subject matter experts representing all affected areas of theCompany. Proposals are developed by the functional areas including system anddistribution planning, maintenance engineering, field engineering and fieldoperations as well as by areas with a focus on investments that are applicableacross gas and electric.Q. Did the Company follow the exact details set forth in the normal capital budgetapproval process reflected in Exhibit __ (NYSEGCRO-7) for the 2009 capitalplan?A. No. Given the historic turmoil in the financial markets and the resulting cashflow challenges faced by the Companies in late 2008 and 2009, a formal capitalbudget was not approved by the Boards of NYSEG and RG&E for 2009. Rather,the Companies utilized a more flexible approach that focused on scrutinizingevery capital project as it arose in order to conserve cash and minimize spend, all10
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Case 09-E-____; Case 09-G-____ (NYSEG)DIRECT TESTIMONY OF THE CAPITAL EXPENDITURES,RELIABILITY, AND OPERATIONS PANEL12345678910111213141516171819202122Q. Would you please describe <strong>the</strong> Company's <strong>capital</strong> forecast for <strong>the</strong> electricdivision?A. The <strong>capital</strong> forecast is a multi-year projection <strong>of</strong> <strong>the</strong> investment needed to serveincremental electric load growth, to fulfill regulatory obligations <strong>and</strong> to maintain<strong>the</strong> electric system infrastructure. It consists <strong>of</strong> specific projects <strong>and</strong> lesserdefined<strong>expenditures</strong> that are estimated based largely on historical trends.Q. How is <strong>the</strong> <strong>capital</strong> forecast prepared?A. Exhibit __ (NYSEGCRO-7) depicts <strong>the</strong> Company's process for developing its<strong>capital</strong> forecast. The <strong>capital</strong> forecast is prepared as a collaborative effort withcontributions from subject matter experts representing all affected areas <strong>of</strong> <strong>the</strong>Company. Proposals are developed by <strong>the</strong> functional areas including system <strong>and</strong>distribution planning, maintenance engineering, field engineering <strong>and</strong> fieldoperations as well as by areas with a focus on investments that are applicableacross gas <strong>and</strong> electric.Q. Did <strong>the</strong> Company follow <strong>the</strong> exact details set forth in <strong>the</strong> normal <strong>capital</strong> budgetapproval process reflected in Exhibit __ (NYSEGCRO-7) for <strong>the</strong> 2009 <strong>capital</strong>plan?A. No. Given <strong>the</strong> historic turmoil in <strong>the</strong> financial markets <strong>and</strong> <strong>the</strong> resulting cashflow challenges faced by <strong>the</strong> Companies in late 2008 <strong>and</strong> 2009, a formal <strong>capital</strong>budget was not approved by <strong>the</strong> Boards <strong>of</strong> NYSEG <strong>and</strong> RG&E for 2009. Ra<strong>the</strong>r,<strong>the</strong> Companies utilized a more flexible approach that focused on scrutinizingevery <strong>capital</strong> project as it arose in order to conserve cash <strong>and</strong> minimize spend, all10
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