Forming a Cost Assignment/ Cost Recovery Team RMATS Steering Committee January 13, 2004.

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Forming a Cost Assignment/ Cost Recovery Team RMATS Steering Committee January 13, 2004

Transcript of Forming a Cost Assignment/ Cost Recovery Team RMATS Steering Committee January 13, 2004.

Page 1: Forming a Cost Assignment/ Cost Recovery Team RMATS Steering Committee January 13, 2004.

Forming a Cost Assignment/

Cost Recovery Team

RMATS Steering Committee

January 13, 2004

Page 2: Forming a Cost Assignment/ Cost Recovery Team RMATS Steering Committee January 13, 2004.

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Objective: Commercially viable alternatives

To meet this objective, the alternatives must … Pull together commercial parties Be technically feasible Maintain or increase reliability/security and price stability Add flexibility and robustness to network to facilitate competitive

wholesale markets Show benefits to ratepayers/customers Be cost-effective Benefits commensurate with risks Ensure a high probability of cost recovery (investors likely to look favorably upon) Pass muster with state regulatory bodies Pass muster with FERC

Focus of new team

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Steering Committee has approved forming a cost assignment/cost recovery team

Purpose: Research, develop, and evaluate cost assignment/recovery issues and alternatives

Scope: Transmission alternatives coming out of RMATS Reports to RMATS Steering Team (at least initially) Life of team may extend beyond RMATS Seeking participants:

• State Regulators• Utilities• Developer reps from RM sub-region• Market reps - export markets• FERC staff (consultation)

Seeking co-chairs: state regulator and utility or market rep

Recommended schedule:• Convene the team: early February• Draft issues list and alternatives: early March• Recommend alternatives for further consideration: end March• Assist RMATS report writing, further develop and evaluate alternatives: April on

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Starter list of issues

Benefits• Define “benefits” and “beneficiaries” for this purpose• How benefits should be measured• How modeling should be conducted

Cost Assignment• Current regulatory policies (Federal and State)• What other regions are doing• Principles/criteria that should apply• Methodological alternatives

Cost Recovery Issues• Role and policy issues – FERC and States• Regulatory impediments and/or incentives for cost recovery• Investor risks and requirements• Potential Solutions


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