GROUP 3

Establishing a Uniform System of Accounts (USoA) for the NESI The USoA establishes the regulatory accounting reporting framework for all licensees in the NESI. It enables the Commission to monitor the financial health and compliance with set performance benchmarks/KPIs. The USoA provides for the ring-fencing of accounts of licensed utilities from those of unregulated business. 2

Adapting the FERC version to suit our local peculiarities Getting the buy-in of key stakeholders who will be responsible for implementation? Reporting and enforcement issues? – What new items need to be added to our license terms and conditions to ensure and improve compliance ? – Are our requirements often vague? – What training programmes are required to facilitate compliance by licensees? – Does NERC have resources to analyze the submissions? – Do licensees have adequate/qualified staff to perform the analysis we require? 3 Challenges To Establishing The USoA

3 day workshop for USoA No feedback/comments from participants Desk officers of licensed utilities did not attend the workshop Participants from the Successor Companies only 4

Going forward Set up Industry Working Group with representations from all Sectors of NESI Incorporate other operating licensees Ensure only the key officers responsible for accounts preparation are invited Send out draft chart of accounts and draft NESI USoA for review before next stakeholder meeting 5

Going forward cont’d Memo to Commission requesting approval of draft USoA to go for public consultation » submitted Get a team 1 to work on developing a draft template for transiting to the proposed system » 1 week Draft document is uploaded to NERC website for stakeholder comments 2 » 2 weeks after Commission approval Desk officer collates comments and sends them out to the team for review » At expiration of 21days on website 6

Going forward cont’d Team produces a final report with a covering memo requesting approval for a consultation meeting » After 2weeks Stakeholder consultation meeting » 2 weeks New comments are reviewed and incorporated. » 1 week Team produces a final report for Commission to make rule » 2 weeks Training workshops for utilities with the assistance of a consultant who may act as expert facilitator. 7

RECOMMENDATIONS Train Commission’s accountants on USoA so that it first becomes an accepted in-house document before the industry adopts it. Commission should take responsibility for taking action on the advice of staff as relates to compliance and enforcements. The regulator first needs to be accountable if it demands accountability from the industry. Be consistent: decide, take action. Make the website electricity-user friendly. 8

Group members 9