1. Grace Anderson Chair, Budget Work Group April 19, 2017
WECC 2018 Budget Review
Grace Anderson
Chair, Budget Work Group
April 19, 2017

2. Work Group Members Rob Kondziolka, Class 1 Russ Noble Class 2
Gary Tarplee Class 3
Michele Beck Class 4
Grace Anderson Class 5, Chair
Diana Wilson International

3. Work Group Activities (1)
Draft budget and program briefing 2/24;
Members identify major issues/questions;
Chair presents WG Initial Observations to FAC 3/7;
Workgroup meets weekly March-April, with staff;
Members refine major issues;
Chair submits formal Request for Documentation and Justification to WECC staff 3/21

4. Work Group Activities (2)
Staff responds: BP&B Supplemental Document 4/3
Jim Robb participates in WG meeting 4/3
Staff presents directional revisions 4/10
WG Chair presents Second Report to MAC 4/19
Staff summarizes budget revisions/details 4/19
MAC Chair leads straw poll of MAC 4/19
WG Chair drafts budget resolution for WG review 4/24

5. WG: Request for Additional Information (1)
Enhanced Justification of Budget Increases:
Has all duplication been eliminated?
Are all tasks performed by existing staff consistent with goals?
Is there a work plan for new activities of incremental staff?
Can the gas electric interface study be scoped more narrowly?
Could work be contracted to eliminate need for expansion?

6. WG: Request for Additional Information (2)
Improved Documentation of Budget Increases:
Merit salary increase necessity and comparability;
Formation of RAC and ADS;
Consistency with Strategic Plan Initiative;
2017/18 expenditures and board reserve policy;
Tracking WECC costs by program.

7. WG: Request for Additional Information (3)
“….The MAC Budget Work Group summarizes that the overall proposed increase of 2.4% is larger than expected and lacks written justification. We are hopeful that the preparation of enhanced justification and improved documentation will facilitate refinements to minimize increases and support articulation of a strong case for those found essential.”
MAC Budget Work Group Comments and Requests (Anderson to Lessner) March 21, 2017

8. Highlights: 2018 Revised Proposed Budget
2018 budget is approx $300,000 (644,000) increase
2018 is 1.1% (2.4) increase over 2017
Load serving entity assessment held constant (>1%)
Necessary new work adequately funded:
Electric/natural gas interface project;
NERC mandates;
Project Manager positions relieve engineers of administration.
Reserve levels meet adopted Board policy
Budget consistent with Board strategic priorities
Schedule revision: Stakeholder comments due 5/16

9. Updates to Budget from March Version
Assessments remain at 2017 level
Penalties funding increases $167K
Consulting decreases $100K related to Board Director search fees
Consulting decreases $235K related to
State Rep and NGO travel and stipends
Scope of some reliability assessment work
Scope of some modeling tool enhancements

10. Current 2018 Draft Compared to 2017

11. 2018 Budget Milestones (1)
April 19: Budget Work Group Second Report to MAC;
April 19: MAC Straw Poll on proposed budget;
May 1: Draft 1 of 2018 BP&B posted to website;
May 1: Draft BP&B includes Supplemental Document;
May 4, 5, 10: Staff holds BP&B webinars/member input;
May 16: Stakeholder comments due on draft BP&B.

12. 2018 Budget Milestones (2) May 17: MAC considers Resolution on budget;
May 19: MAC submits Resolution to WECC Board; OR
June __: MAC revises Resolution; submits to Board;
June 20-21: Board approval of 2018 BP&B;
July 6: Final 2018 budget submittal due to NERC, including LSEs and NEL data;
Aug-Nov: NERC and FERC review and approval.

13. Budget WG--Initial Observations RAPA and CMEP: Activities and FTE
Reference Slides
Budget WG--Initial Observations RAPA and CMEP: Activities and FTE

14. Workgroup: Initial Observations
Efficient Realignment of Existing Resources. Support realigning resources and for looking at ways to reallocate staff time to areas of greater need: focus on strategic priorities; elimination of duplication.
Assessment Stabilization Policy. Encouraged to see it being implemented and achieving success in avoiding large fluctuations in the assessments; preferable to some would be vigilance in keeping assessment level constant.
Documentation of Need for Expanded FTE. Proposing a permanent increase of over $600,000 (3% merit adjustment and 3 new FTE) requires more justification.
Merit Salary Increase Necessity and Comparability. Request better explanation of how comparability is established and in what way the overall WECC compensation package compares to Canadian and western utility entities and other REs
Formation of RAC/Creation of ADS. The promises of efficiency made merging TEPPC and PCC into a new Reliability Assessment Committee are not realized, nor are there efficiencies of merging data sets into one Anchor Data Set (ADS).We request improved documentation of efficiencies realized by the PCC/TEPPC merger and the impacts on the 2017 and 2018 budget; and, commitment to track ADR and RAC costs.

15. Workgroup: Initial Observations
Scope and Approval of Electricity/Natural Gas Interface Project. The scope and cost of this proposed project merits continues scrutiny with focus on an explicit approval process, finding data for analysis that can result in defensible, quantitative conclusions, and evaluating solutions to potential reliability challenges.
Consistency with Strategic Plan Initiative. A cross-check is needed to confirm all items in the Strategic Plan WECC Operating Plan are funded in 2018 budget.
2017 and 2018 Expenditures and Board Reserve Policy. Understanding of reserves drawdown in 2017 and replenishment in 2018 merits preparation of a reserves “summary sheet”
Schedule. The schedule allows only ten working days for individual member entities to file written comments (BP and B posted May 1/ comments May 12). MAC files comments May 19.
Overall Budget Increase. The overall proposed increase of 2.4% is larger than expected. The team is hopeful that further evaluation and refinement by WECC leadership will identify ways to minimize increases and articulate a stronger justification for those needed.

16. RAPA Activities and FTE

17. CMEP Activities and FTE