direct testimony of the capital expenditures, reliability, and - nyseg

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Case 09-E-____; Case 09-G-____ (NYSEG)DIRECT TESTIMONY OF THE CAPITAL EXPENDITURES,RELIABILITY, AND OPERATIONS PANEL12345678910111213141516171819202122On July 2, 2009, NYSEG filed with the Commission in Case 09-E-0310 –In the Matter of the American Recovery and Reinvestment Act of 2009 – UtilityFilings for New York Economic Stimulus and in Case 09-M-0074 – In the Matterof Advanced Metering Infrastructure on July 2, 2009, for recovery of between50% and 80% of seven (7) projects' costs with an estimated total capitalexpenditure of $151.3 million and an estimated total annual O&M cost of $6.99million.Q. Did the Commission approve the full recovery of costs for the projects identifiedin the NYSEG July 2, 2009 filing through a surcharge?A. The Stimulus Order was clear that only 50% of the cost of a DOE approvedproject would be collected through a NYSEG surcharge. If the DOE were toaward less than a 50% matching grant, NYSEG would need to resubmit theirproject for Commission approval.Q. What Commission-approved projects has the Company proposed for fundingunder the DOE Stimulus Program?A. NYSEG did not have any approved Investment Program projects that needed tobe filed with the DOE on August 6, 2009. NYSEG is party to the NYISOtransmission owner DOE filings for Investment Program grants for PhasorMonitoring Units estimated at $2.1 million and NYISO supported capacitorsestimated at $9.0 million. A Stimulus Program demonstration grant filing wasalso submitted on August 24, 2009 for a Smart Grid demonstration project in theHorseheads/Cooperstown areas estimated at $28.4 million.43
Case 09-E-____; Case 09-G-____ (NYSEG)DIRECT TESTIMONY OF THE CAPITAL EXPENDITURES,RELIABILITY, AND OPERATIONS PANEL12345678910111213141516171819202122Q. What is the status of these projects?A. NYSEG awaits word from the DOE as to the status of any awards. DOE hasindicated that it intends to provide a response on these types of projects byNovember 6, 2009.Q. Will there be material capital or O&M expense impact on the Company as a resultof these projects?A. The Company expects that any DOE-approved projects will be funded forbetween 20% and 50% of the estimated project capital costs. Therefore, NYSEGmay have to resubmit their Commission filing to collect any unfunded capitalcosts between the 50% that the Commission has already approved and up to 80%of the costs that may remain to be recovered. The Commission Stimulus Orderdid allow for a surcharge mechanism that would collect incremental depreciation,O&M expenses, taxes, and a return on the investment once the project is placedin-service.Q. Are the capital and O&M costs for any of the Stimulus Program projects includedin Exhibit __ (NYSEGCRO-1)?A. No.NERC ERO STANDARDS OVERVIEWQ. Can the Panel please provide a brief background on the ERO reliability standards?A. The U.S. Energy Policy Act of 2005 amended Section 15 of the Federal PowerAct ("FPA") to require that FERC adopt mandatory and enforceable reliabilitystandards for the bulk power system ("BPS") and to create a self-regulatory44
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