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 PANEL12345678910111213141516171819202122density and proximity to energized conductors that can be achieved with periodic,scheduled clearing, and the reduction in handling costs for the large trees removedduring the first cycle can mitigate the cost of subsequent clearing cycles. Further,a comprehensive cycle program would allow for even more efficient planning andcontracting of clearing work, reducing per-mile maintenance costs. Cyclical lineclearance also helps improve customer satisfaction. Customers are moreamenable to frequent cutting of small limbs and trees, and generally view this asacceptable. During the first cycle, however, customer satisfaction may beexpected to decrease as ROW is reclaimed. The incremental annual cost is $25.3million and the total annual cost for this program would be $36.19 million.Q. Has the Company utilized a partial clearing cycle in the past?A. Yes. Distribution line clearance has been funded to achieve established reliabilitytargets. This has resulted in the implementation of a partial clearing cycle.Transition to a full cycle clearing program has multiple benefits as described inthe previous response.Q. Is the Company proposing a change in accounting treatment?A. Yes. The cost to perform full cycle distribution line clearance is significantlygreater than the present spend. Additionally, costs for line clearance can varybased on market conditions and the expected volume of work per mile. TheCompany proposes that costs to achieve full cycle distribution line clearance bereconciled as part of the deferral recovery mechanism surcharge or surcreditmechanism that is discussed in detail by the Revenue Requirements Panel.55