2017 budget stakeholder presentation draftv2.0 · 2018. 2. 10. · summary of completed and active...
TRANSCRIPT
Page 1ISO Public
2017 Budget and Grid Management ChargeInitial Stakeholder Meeting
June 16, 2016
Page 2ISO Public
Agenda
Topic Presenter(s)
2017 Budget Process & GMC Rate Outlook Ryan Seghesio &April Gordon
Managing Employee Compensation Doreen Fender
2016 - 2017 Project Release Plans Janet Morris
2015 & 2016 Project Summaries Jan Cogdill
2015 & Q1 2016 Financial Summaries Denise Walsh
2017 Budget Calendar & Next Steps April Gordon
Stakeholder Feedback & Discussion Group
Page 3ISO Public
Budget Process and Rate Outlook
Ryan SeghesioCFO and Treasurer
April GordonManager, Financial Planning and Procurement
Page 4ISO Public
Budget Principles and Highlights
• Principles:
– Provide transparency into the budget process
– Enhance stakeholder understanding of the budget
– Deliver a revenue requirement under the $202 million cap
• Highlights:
– Consider the cost internal campaign
– Lincoln backup site
– EIM revenue
Page 5ISO Public
Annual Revenue Requirement projected to remain under $202M cap.
$100
$120
$140
$160
$180
$200
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019O&M All Other Components
ProjectedActualMillions
Page 6ISO Public
Grid management charge rates remain stable.
$0.0850
$0.2979
$0.0049$0.00
$0.05
$0.10
$0.15
$0.20
$0.25
$0.30
$0.35
2012 2013 2014 2015 2016
Market Service Charge Systems Operations Charge CRR Services Charge
Page 7ISO Public
Managing Employee Compensation
Doreen FenderManager, Total Rewards
Page 8ISO Public
Managing employee compensation reflects ISO philosophy to attract, train, motivate and retain top talent.
• Competitive Pay – Market pay practices– Bi-annual salary surveys covering 100% of ISO positions
• Pay for Performance Philosophy– High Performance Goals aligned to meet annual Corporate objectives– Year-end evaluation of performance results against objectives– Differentiation of merit dollars based on performance
• Strong Performance Management Program– Individual performance plans– Stretch objectives– Ongoing feedback, coaching and support
• 3% Budgeted Merit – Optimal utilization of available merit dollars– Not all employees receive pay increases
Page 9ISO Public
2016 - 2017 Project Release Plans
Janet MorrisDirector, Program Office
Page 10ISO Public
Release planning information is updated and discussed regularly throughout the year.
Release planning page: http://www.caiso.com/informed/Pages/ReleasePlanning/Default.aspx
• Stakeholder Initiative Milestones
– http://www.caiso.com/Documents/StakeholderInitiativeMilestones.pdf– Updated on the first of each month
– Multi-year time horizon
• Market Performance and Planning Forum– Every eight weeks
– Technical and release plan updates
• Release Users Group– Bi-weekly updates to release plan
– Interactive review of project impact assessment and milestones
• Technical Users Group– Monthly discussion forum of technical topics
– Brainstorm and evaluate solutions for technology and process based problems
Page 11ISO Public
Release Plan 2016
Independent 2016• Bidding Rules Enhancements – Part A• Aliso Canyon Initiative • Capacity Procurement Mechanism Replacement• Reliability Services Initiative • Commitment Cost Enhancements Phase 2 (remainder)• Post Implementation OMS Enhancements• Expanding Metering and Telemetry Options Phase 2• Demand Response Registration Enhancements• RIMS Functional Enhancements
Fall 2016 • BAL-003 Compliance• Flexible Ramping Product • BCR modifications and VER settlement • Acceptable Use Policy - CMRI• OMAR Replacement• PIRP System Decommissioning• Energy Imbalance Market (EIM) Year 1 Enhancements Phase 2• Energy Imbalance Market (EIM) 2016 Arizona Public Service (APS)• Energy Imbalance Market (EIM) 2016 Puget Sound Energy (PSE)• Energy Storage and Distributed Energy Resources (ESDER)
Page 12ISO Public
Release Plan 2017
Independent 2017• RTD Local Market Power Mitigation (LMPM) Enhancements
Fall 2017 (tentative, to be confirmed)• Reliability Services Initiative Phase 1B and Phase 2• Bidding Rules Enhancements – Part B• Stepped Constraints• Commitment Cost Enhancement Phase 3• Reactive Power Requirements and Financial Compensation• Flexible Resource Adequacy Criteria and Must-offer Obligation Phase 2• Bid Cost Recovery Enhancements• Contingency Modeling Enhancements• Energy Imbalance Market (EIM) Year 2 Enhancements• EIM 2017 Portland General Electric (PGE)
Spring 2018 • EIM 2018 Idaho Power Company
Fall 2018 (tentative, to be confirmed)• Metering Rules Enhancements• Regional Resource Adequacy• Transmission Access Charge Options
Page 13ISO Public
Project Summaries
Jan CogdillLead Financial Planning
Page 14ISO Public
2016 and 2017 Capital and Project Budgets
• 2016 Budget– Approved at $16.5M
• 2017 Budget
– Targeted at $18M - $20M
– Excess of 75 proposed projects will be prioritized to meet final budget limit
Page 15ISO Public
Summary of Completed and Active Projects
• Projects completed from April 2015 to March 2016 – 13 Capital Projects
• Budgeted costs $8.3M, actual costs $8M
– 39 Requirements & Other Projects• Budgeted costs $5.6M, actual costs $5.3M
• Active projects as of March 31, 2016– 44 Capital Projects
• Budgeted costs $21.5M, YTD spent $8.9M
– 34 Requirements & Other Projects• Budgeted costs $5.5M, YTD spent $3.3M
Page 16ISO Public
Summary of Supplemental Projects
• EMS and LOC Projects– Budgeted costs $43.9M, YTD spent $9.8M
• FERC and EIM Implementations– Budgeted costs $3.9M, YTD spent $1.7M
– EIM implementations include:
• Puget Sound Energy
• Arizona Public Service
• Portland General Electric
• Idaho Power Company
Page 17ISO Public
2015 & 2016 Q1 Financial Summaries
Denise WalshController
Page 18ISO Public
2015 Highlights
Key components of the 2015 actual to budget results:
• Operating revenues = $206.2 million vs. $206.0 million
- Higher miscellaneous revenues
• Operating expenses = $163.6 million vs. $165.1 million
- Lower outside legal and audit costs, partially offset by higher consulting and contracting
• Capital Expenditures = $8.3 million vs. $15.9 million (approved)
- Original budget was $20.0 million
Page 19ISO Public
Q1 2016 Monthly GMC Revenues
$10
$11
$12
$13
$14
$15
$16
$17
$18
$19
$20
$ in
mill
ions
Actual 14.89 13.66 14.96
Budget 14.96 13.40 15.30 14.81 15.27 17.43 18.87 19.52 18.31 16.66 15.03 15.79
Variance (0.07) 0.26 (0.34)
Cum Variance (0.07) 0.19 (0.15)
Jan-16 Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Page 20ISO Public
Q1 2016 Cumulative Operating RevenuesRevenues = GMC & Other Revenues
$0
$25
$50
$75
$100
$125
$150
$175
$200
$225
$ in
mill
ions
Actual 15.90 30.42 45.77
Budget 15.69 29.83 45.86 61.40 77.40 95.56 115.16 135.41 154.45 171.84 187.60 204.12
Variance 0.20 0.59 (0.08)
Jan-16 Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Page 21ISO Public
Jan-16 Feb Mar Apr May Jun Jul Aug Sep Oct Nov DecMonthly Actual 10.53 12.98 13.50Monthly Budget 13.30 13.33 13.47 13.39 17.05 13.31 12.75 12.75 13.54 16.55 12.70 17.19Cum Actual 10.53 23.51 37.01Cum Budget 13.30 26.63 40.10 53.49 70.54 83.85 96.60 109.35 122.89 139.44 152.14 169.33Cum Variance 2.77 3.12 3.09
$0
$20
$40
$60
$80
$100
$120
$140
$160
$180
$ in
mill
ions
Q1 2016 Operating and Maintenance Expenses
Page 22ISO Public
2016 Budgeted Capital
Q1 2016 Cumulative Capital Expenditures
$0
$5
$10
$15
$20
$25
$ in
milli
ons
Budgeted capital 16.50
Cumulative Expenditures 0.06 0.07 1.33
Approved projects 5.16 7.91 7.91
Jan-16 Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Page 23ISO Public
Budget Calendar and Next Steps
April GordonManager, Financial Planning and Procurement
Page 24ISO Public
2017 Budget and GMC Rates Timeline
Initial 2017Budget
Stakeholder Meeting
June 2016
BoardDec 2016
Stakeholder Input
We are here
PresentDraft 2017 Budget to
Board August 2016
2017 Budget
Stakeholder Meeting
Sept 2016
Public Comments to BoardOct 2016
Page 25ISO Public
Key Calendar Dates and Next Steps• Stakeholder comments due June 23
– Send to [email protected]• Internal budget process June - Aug• Board of Governors meeting (executive session) August 31
– Present preliminary 2017 budget• Post preliminary 2017 budget information for Stakeholders Sept 22• Stakeholder meeting to review preliminary budget Sept 29• Written Stakeholder comments due to ISO Oct 6• Board of Governors meeting Oct 2
– Public comments to board on 2017 budget• Board of Governors meeting Dec 14
– Request approval of 2017 budget• Post rates and budget documentation to ISO website Dec 21