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. Are there any restrictions placed on the use of the NYSEG Gas R&D funds?A. Yes. As stated in the JP, NYSEG is not permitted to use any excess R&D costsfor any other purpose, or book such costs to earnings, without the approval of theCommission.Q. How does NYSEG manage R&D?A. NYSEG has a centralized staff in the Energy Technology Group to administer theR&D program as well as manage individual projects and uses project managersthroughout the organization on a project-by-project basis. Executive managementprovides program direction to maximize the benefit of the program to NYSEG'scustomers and shareholders. Frequent communication between RG&E and theNYSEG Energy Technology Group keeps the two companies' programs inalignment with each other and the NYSEARCH Millennium program. Wheneverthere are sufficient funds, NYSEG and RG&E collaboratively fund projects thatwould provide benefit to both Companies. However, due to the limitations on theuses of Millennium funds and the disparity in funding levels, there are manyprojects in which RG&E is not able to be a participant.Q. Can you please provide examples of how the Gas R&D funds have been used bythe Company for the benefit of the ratepayers?A. The NYSEG/RG&E gas R&D program has had several significant successes. ForNYSEG, these successfully deployed technologies come from NYSEARCH andGTI collaboratively-funded projects as well as from in-house projects. Theygenerated significant cost savings that exceed the annual R&D investment of87