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New England States

Committee on Electricity





June 1, 2012
VIA ELECTRONIC FILING
The Honorable Kimberly D. Bose, Secretary
Federal Energy Regulatory Commission
888 First Street, N.E.
Washington, D.C. 20426

RE: New England States Committee on Electricity 5-year Pro Forma Budget
Informational Filing, Docket ER12-____-000
Dear Secretary Bose:
In accordance with the Memorandum of Understanding (MOU)
1
among ISO New England Inc.
(ISO-NE), the New England Power Pool (NEPOOL), and New Englands Regional State
Committee, the New England States Committee on Electricity (NESCOE), NESCOE submits
herewith for information a 5-year Pro Forma Budget covering years six through ten of its operations
(2013-2017) (the 5-year Pro Forma Budget).
2
As required by prior Commission Orders,
3
and
consistent with the annual budget process set forth in the MOU,
4
NESCOE and ISO-NE will continue
to submit each year for Commission approval annual NESCOE budgets and the rate for the recovery
of funding for NESCOE operations that is included in Schedule 5 to Section IV.A of the ISO-NE
Tariff.

In sum, the 5-year Pro Forma Budget is based on NESCOEs 2012 annual budget, which was
approved by the NEPOOL Participants Committee and the Commission.
5
The Pro Forma framework

1
See Exhibit A to the MOU (the NESCOE Term Sheet) at p. 5. The MOU was submitted for
information in Docket No. ER07-1324-000 on Nov. 21, 2007 and is also available on-line at
http://www.iso-ne.com/regulatory/part_agree/index.html.
2
See ISO New England Inc., 122 FERC 61,029 (2008) at P 25 (accepting NESCOEs first five-year pro
forma budget for informational purposes and noting that ISO-NE and NESCOE are required to annually
file their budgets for Commission approval).
3
Id.
4
NESCOE Term Sheet at pp 6-7.
5
ISO New England Inc., Docket ER12-163-000 (Nov. 21, 2011) (unpublished letter order).
20120601-5376 FERC PDF (Unofficial) 6/1/2012 4:53:59 PM
"
allows for an annual budget that may include a three (3) percent inflation adjustment for recurring
items. The 5-year Pro Forma Budget also includes a safeguard mechanism that allows for
unanticipated needs but commits that at no time during the 5-year period will NESCOE seek an
increase of more than ten (10) percent in any one year or more than thirty (30) percent on a
cumulative basis.
6
As in prior years, collections will be reconciled such that any funds collected but
unspent will reduce future years collections. The 5-year Pro Forma Budget is included herewith as
Attachment A.

In accordance with the MOU, NESCOE presented the 5-year Budget Framework for review in the
NEPOOL Participant Processes. NEPOOLs Budget & Finance Subcommittee considered the 5-year
Pro Forma Framework on February 13, 2012 and recommended it without objection to the
Participants Committee. The Participants Committee considered the 5-year Pro Forma Framework
on March 9, 2012 and approved it, with Opposition registered by the Massachusetts Municipal
Wholesale Electric Company and each of the Publicly Owned Entities that it represented, and
abstentions noted by: BP Energy Company, Cross-Sound Cable Company, Energy America,
New Hampshire Electric Cooperative, Hess Corporation and PPL EnergyPlus.

Respectfully Submitted,
New England States Committee on
Electricity


By its Attorney
/s/ Benjamin S DAntonio
Benjamin S DAntonio, Esq.
Counsel & Analyst
New England States Committee
on Electricity
655 Longmeadow Street
Longmeadow, MA 01106
Tel: (603) 828-8977
Email: BenDAntonio@nescoe.com
June 1, 2012

Enc. Attachment A

6
This 5 year Pro Forma Framework ceiling is lower than the structure previously agreed to by NEPOOL,
which was that in the absence of agreement with at least the NEPOOL Participants Committee to the
contrary, the Second Budget Framework was required to provide for annual budgets that would not
increase more than 15% in any one year and would not increase more than 50% on a cumulative basis
over the subsequent five-year period.
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NESCOE
PRO FORMA BUDGET 2013-2017*
Expense Category
Year 6
(2013)
Year 7
(2014)
Year 8
(2015)
Year 9
(2016)
Year 10
(2017)
Salaries and Wages
Salaries 800,000 824,000 848,720 874,182 900,407
Payroll Taxes 80,000 82,400 84,872 87,418 90,041
Health and Other Benefits 200,000 206,000 212,180 218,545 225,102
Retirement 401(k) 25,000 25,750 26,523 27,318 28,138
Total, Salaries and Wages 1,105,000 1,138,150 1,172,295 1,207,463 1,243,687
Direct Expenses - Consulting
Technical Analysis 460,000 473,800 488,014 502,654 517,734
Legal (FERC) 125,000 128,750 132,613 136,591 140,689
Total Direct Expenses - Consulting 585,000 602,550 620,627 639,245 658,423
General and Administrative
Rent 16,000 16,480 16,974 17,484 18,008
Utilities 4,000 4,120 4,244 4,371 4,502
Office and Administrative Expenses 42,000 43,260 44,558 45,895 47,271
Professional Services 71,000 73,130 75,324 77,584 79,911
Travel and Lodging 100,000 103,000 106,090 109,273 112,551
Total General and Administrative 233,000 239,990 247,190 254,605 262,244
Capital Expend. & Contingencies
Office Funiture
Computer Equipment 5,000 5,150 5,305 5,464 5,628
Contingencies 192,800 198,584 204,542 210,678 216,998
Total Capital Expend. & Contingencies 197,800 203,734 209,846 216,141 222,626
TOTAL EXPENSES** 2,120,800 2,184,424 2,249,957 2,317,455 2,386,979
*Based on projected 3% annual adjustment. Line items and categories subject to increases greater than, or decreases from, amounts projected
Any such changes will be subject to review, input, and recommendations by the NEPOOL Participants Committee (and/or its designees).
**At no time during this 5-year period will NESCOE seek a budget increase of more than 10% in any 1 year or more than 30% on a cumulative basis.
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Document Content(s)
NESCOE_5YrBudgetFramework_1June2012.PDF...............................1-3
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