Minutes of the Annual Meeting of the Power - New York Power ...

I. Issue: Inclusion of Research & Development Costs
Public Comments:
The MEUA, Neighboring States, and NYAPP argue that most, if not all, of the
Authority’s Research & Development (R&D) costs should not be allocated to the
Cost-of-Service. All parties contend that most of the programs which make up
the R&D cost projections do not relate to hydroelectric production and should
therefore be excluded. (MEUA Statement at 3; NS Comments § 4; Russell at 37-
38). The MEUA and Neighboring States further argue that the projected
contributions to EPRI and NYSERDA should be excluded because under
Federal Energy Regulatory Commission (FERC) policies, such costs should not
be allocated to wholesale customers. NYAPP further recommends that R&D
costs be excluded unless it can be shown that such costs are related to the
Hydro Projects CoS.
Staff Analysis:
The Authority is mindful of, but not bound to follow, FERC precedent in this area.
Because the customers benefit from NYPA’s funding for and involvement in the
R&D programs, it is appropriate that such costs be included in the Cost-of-
Service. The R&D funding supports a wide range of initiatives which, among
other things, promote energy conservation, increase efficiency and operation of
power plants and transmission facilities and promote environmentally sound
technologies which either directly or indirectly benefit NYPA’s wholesale
customers.
Recommendation:
Staff does not recommend any changes to the R&D component of the Cost-of-
Service
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