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 PANEL12345678910111213141516171819202122Q. How will the Company select assets that will be replaced under the GMI?A. NYSEG will utilize its asset information to prioritize replacement projects to beundertaken during the subsequent budget period. Prioritization will be based onage as the primary characteristic and would use other criteria including condition,customer impact, maintenance test results, equipment loading, short circuit duty(breakers only), design obsolescence, and restoration time to further prioritizeassets that would be replaced. The Company determined the base number of unitsthat would be expected to be replaced annually by dividing the total number ofunits of a specific type of equipment installed on the system by the depreciablelife for that equipment type.Q. In addition to the base number of units needing replacement, did the Companyidentify additional units of a specific type of electric equipment that would needreplacement?A. Yes. Utilizing the Commission-approved depreciable life for each type ofequipment, the Company calculated an 'ideal average age' equal to half of thedepreciable life for the equipment. The Company then selected the number ofunits needing to be replaced to adjust the current average age of the equipment tothe ideal average age.Q. How did the Company calculate the capital investment for the GMI?A. The Company determined the GMI capital requirements utilizing the averagereplacement cost for each type of equipment and assuming a ten (10) year periodto complete the initiative.24