New England States Committee on Electricity (NESCOE) David L. O’Connor, Commissioner Massachusetts Division of Energy Resources Electric Restructuring Roundtable June 18, 2004 T://tm-pubinfo/presnt-tm-dt/reliability/NESCOE 06-18-04 doc

Origins of NESCOE FERC White Paper on SMD invites formation of Regional State Committees. Designed to enable States to participate in development of regional electricity policies. The New England Governors directed energy and environmental regulators to file plan with FERC.

FERC’s Guidance “…primary responsibility for determining regional proposals and the transition process” in funding for transmission enhancements the structure of regional access charges, and allocation of Financial Transmission Rights (“FTR”) “…the RSC should also determine the approach for resource adequacy across the region.” Source: FERC’s Order approving the Southwest Power Pool RTO (Docket Nos. RTO4-1-1000 and ER04-48-000).

NESCOE’s Policy Concerns Transmission system planning and expansion Resource adequacy Should the Committee play a role in the siting of inter-state transmission lines? The RSC’s scope can be expanded or contracted but only by unanimous agreement of the states

Governance Governors appoint one or more members to represent their state but each state has a single vote The goal is to achieve consensus of all states on any Committee determination If no consensus, “Majority Determinations” must succeed on each of two votes: a “one state, one vote” basis, and a weighted vote for each state based on electricity consumption Changes in voting structure allowed only with unanimous consent of the states

Procedural Rights Committee receives notice from RTO-NE or TO’s of any proposed additions or changes to market rules or tariffs. Committee is given reasonable opportunity to recommend its own additions or changes. A Committee determination is to be filed with FERC by RTO-NE or TOs, with explanation of why it was or was not followed. Committee determinations are to be filed with FERC by RTO-NE or TOs pursuant to their rights in Section 205 of the FPA. FERC asked to give “deference” to Committee determinations.

Organization and Funding A non-profit corporation with full-time staff Governors’ appointees serve as Board of Directors Funded by a regional tariff collected by RTO-NE from transmission providers Transmission providers recover costs from all New England retail electricity customers