proposed 2015 budget - Long Island Power Authority

2015 Proposed Operating Budget
2015 Proposed Capital Budget
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Long Island Power Authority and Subsidiaries
2015 Proposed Operating and Capital Budgets
Executive Summary
The revenue and expenditure forecasts contained herein represent the proposed Operating and Capital Budgets of the Long
Island Power Authority and its subsidiaries (“Authority” or “LIPA”) for the year ending December 31, 2015.
The Authority’s mission is to oversee the performance of our primary service provider, PSEG Long Island, meet the
expectations of our bondholders, and faithfully carry out our fiscal and contractual duties, all with the goals of providing
efficient, reliable, and affordable service to Long Island electric customers. While our goals require continual improvement
and change, the 2015 budget benefits from the significant progress made in 2014, including reorganization of the utility
business model under a new and unique public-private structure; seating a new Board of Trustees; developing a new
Authority management team; transitioning utility operations to PSEG Long Island on January 1, 2014; signing agreements
for over $1.4 billion of federal grants for storm recovery and hardening; establishing a constructive dialogue with the newly
formed Long Island Office of the Department of Public Service; and continued progress on the evaluation of important
energy efficiency and renewable investments.
During this period, PSEG Long Island has demonstrated the value of an experienced and focused utility operator. PSEG
Long Island has made measurable progress toward achieving (or maintaining) first quartile performance within five years for
nearly all operating performance metrics under the Amended and Restated Operations Services Agreement (“OSA”);
maintained 99.9% system reliability with fewer outages; made significant progress in the JD Power Residential and Business
Customer Satisfaction Surveys with improvements of 78 and 51 points, respectively; achieved nearly 90% customer
satisfaction in after-call customer surveys; begun implementation of over 40 business process change initiatives; improved
customer-facing technology in the call centers and for storm response; demonstrated management and employee
engagement in the Long Island community; completed a new Emergency Response Plan; and filed its first annual Utility 2.0
Long Range Plan.
The proposed Operating and Capital Budgets for 2015 incorporate additional initiatives designed to further improve the
levels of reliable service, enhance customer satisfaction, improve storm response, accommodate system needs, promote
energy efficiency and renewable energy, and complete the transition of remaining operating functions from the Authority to
PSEG Long Island. The budget reflects both the Authority and PSEG Long Island’s continued commitment to managing
costs while meeting our goals. The budget also reflects the continued benefits to customers of Long Island Power Authority
ownership, including the Authority’s non-profit status, lower cost of capital, and access to federal and state grants, which are
estimated to save customers approximately $400 million per year.
-1-
Long Island Power Authority and Subsidiaries
2015 Proposed Operating and Capital Budgets
The proposed Operating Budget maintains delivery (i.e., non-fuel related) rates at their 2014 levels. Since 2006, the cost of
electricity on Long Island has increased 3.9% compared to a general increase in the cost of living in the region of 15.2%. In
real terms (after inflation), the cost of electricity on Long Island has declined by 11.3% over the period, as compared to
increases at neighboring utilities (in real terms) of up to 19.9%.
The proposed 2015 Operating Budget totals $3.6 billion. This is an increase of $74.0 million or 2.1% from the approved
budget for 2014, primarily reflecting higher projected fuel and purchased power costs of $80.4 million, decreased grant and
other income of $121.0 million, and offsetting reductions in operating expenses of $127.4 million.
The proposed 2015 Capital Budget totals $677.8 million, representing a record level of investment in electric system
resiliency and reliability, with significant positive effects on the local economy and jobs. Over $176 million of this investment
will fund a storm hardening program, better preparing Long Island for the effects of climate change and severe weather.
This investment will be paid for by a $730 million grant secured during 2014 from the Federal Emergency Management
Agency (“FEMA”). This FEMA grant is expected to be sufficient to harden between 300 and 400 of the worst performing
electric circuits on the Authority’s electric grid over the next several years, positively impacting service reliability and
customer satisfaction.
Electric sales for 2015 are forecast at 20,077,119 MWh, which is 0.9% less than the budgeted sales level for 2014 (but 2.4%
higher than the current projection of 2014 sales, largely due to cooler than normal temperatures in 2014 and an expectation
of normal weather conditions in 2015). The sales forecast reflects general economic conditions in the region and a higher
level of energy conservation efforts employed by customers.
Revenues reflect continued monthly Power Supply Charge adjustments for actual fuel and purchased power costs as incurred
as well as two cost recovery riders implemented in 2010: (1) a rider to recover costs associated with the Efficiency Long
Island (“ELI”) and Renewable Energy programs, similar to the System Benefit Charge mechanisms used by New York
regulated utilities; and (2) a rider to recover costs associated with the New York State Temporary Energy and Utility
Conservation Assessment, enacted by the State in 2009. This budget also proposes a revenue decoupling mechanism,
budgeted at zero, with the first of any such adjustment to occur in 2016, to mitigate the revenue losses arising from proposed
increased investment in demand-side management and end-use energy efficiency as well as the sales-related variability in
revenues from weather and general economic factors. Each of these riders is similar to mechanisms approved by the New
York State Public Service Commission for regulated utilities.
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Long Island Power Authority and Subsidiaries
2015 Proposed Operating and Capital Budgets
Fuel and Purchased Power expenses for 2015 are budgeted at $1.60 billion, an increase of 5.3% as compared to the 2014
budget. The budget is based on forecasted commodity prices using the ten-day average of the forward price curve as of
October 20, 2014 and the projected cost of purchased power and nuclear fuel. The primary drivers of the increase, versus the
budgeted level in 2014, are higher projected commodity expenses, net of lower sales and the projected impact of the
Authority’s commodity hedge positions.
PSEG Long Island Operating Expenses are budgeted at $457.9 million, which is $37.6 million below the level approved for
2014. PSEG Long Island Operating Expenses include the following major areas: Transmission and Distribution - $136.5
million, Customer Services - $95.7 million, Shared Services – $116.8 million, Power Markets - $14.7 million, and Energy
Efficiency and Renewable Energy Program - $83.9 million. The proposed budget for the Energy Efficiency and Renewable
Energy Program reflects the additional peak load reductions of the ELI initiative as well as support of customer-based solar
and wind distributed generation. The Operating Budget includes $2.0 million towards development costs of the Utility 2.0
Long Range Plan and $13.3 million for program implementation. An additional $3.9 million for Utility 2.0 AMI deployment
is contained in the 2015 Capital Budget.
Both amounts are contingent upon a recommendation for
implementation/deployment to the Board of Trustees. The budget also reflects the transition to the statewide NY Sun
residential and commercial solar rebate programs administered by the New York State Energy and Research Development
Authority (“NYSERDA”). Also included in PSEG Long Island Operating Expenses is $16.3 million associated with the
Transition Services Agreement (“TSA”) with National Grid related to the termination of this agreement, including the
transition of these functions to PSEG Long Island in early 2015.
PSEG Long Island Managed Expenses are budgeted at $582.1 million, a decrease of $6.7 million as compared to 2014. These
costs include the National Grid Power Supply Agreement (“PSA”) – $456.0 million, activities associated with LIPA’s 18%
ownership interest in the Nine Mile Point 2 (“NMP2”) nuclear power generating plant – $28.4 million, storm restoration –
$48.6 million, assessments – $21.5 million, and losses on uncollectible accounts – $21.7 million.
Transmission and Distribution (“T&D”) Utility Depreciation is budgeted at $107.7 million in 2015, $51.1 million below the
budgeted level for 2014. This is comprised of the depreciation of Authority-owned electric assets managed by PSEG Long
Island. The year-over-year reduction is due to the adoption of updated depreciation rates in 2014 that more accurately
reflect the estimated service lives of the assets.
Taxes and assessments imposed by the State, counties, and local jurisdictions continue to represent a large burden to Long
Island electric customers. Such taxes and assessments are budgeted at $549.1 million, or 15.3% of customer bills (see
schedule A-7). This reflects a decrease of $18.9 million, or 3.3% as compared to the 2014 budget. A portion of these
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Long Island Power Authority and Subsidiaries
2015 Proposed Operating and Capital Budgets
expenses appear in the line items for Payments In Lieu of Taxes (“PILOTs”), while the remainder are components of PSEG
Long Island Managed Costs. The 2015 Operating Budget benefits from the first year of a 2% cap on year-over-year increases
in T&D system PILOTs under the LIPA Reform Act. However, the Authority also incurs real property-based taxes on
generation assets under contract through the National Grid PSA, which do not benefit from this cap. The Authority
continues to challenge the property tax assessments on the PSA plants, which are significantly over-assessed, so as to reduce
this expense for our customers.
The Authority’s Operating Expenses are budgeted at $60.9 million. This represents a decrease of $22.8 million, or 27.2%, as
compared with the budgeted level for 2014, primarily due to the planned transition of the power supply planning and
contract management functions from the Authority to PSEG Long Island on January 1, 2015. The Authority’s primary
Operating Expense is the PSEG Long Island management fee budgeted at $45.4 million, before the reduction for the portion
associated with capital planning and expenditures of $10.0 million. Authority Salaries and Benefits are budgeted at $10.1
million and constitute approximately 0.3% of revenues for 2015. The Salaries and Benefits budget reflects a staffing level of
40 employees, ten less than the level budgeted in 2014. General and Administrative Expenses, including office rent,
insurance and other administrative activities, are budgeted at $5.5 million, a decrease of $1.2 million or 17.9%, and
constitute 0.15% of revenues for 2015. Professional Services, consisting primarily of engineering consulting, auditing, legal,
financial, and grant administration activities, are budgeted at $9.9 million, a decrease of $7.9 million or 44.2% as compared
with the budgeted level for 2014. These expenses are approximately 0.3% of revenues for 2015. Authority Depreciation and
Amortization is budgeted at $117.4 million and consists primarily of the amortization of the Acquisition Adjustment of $111.4
million related to the acquisition of the Long Island Lighting Company in 1998.
Interest Expense is budgeted at $367.0 million, an increase of $14.3 million, or 4.0% as compared to the level budgeted for
2014. The higher expense for 2015 reflects an anticipated borrowing in December 2014 to fund capital investments made as
part of the Capital Budgets in 2014 and 2015, assumed higher average interest rates on variable rate debt for 2015, and
certain non-cash charges associated with a December 2013 debt refinancing. The average level of debt outstanding for 2015
is forecast at $7.62 billion, including the securitized debt issued in 2013, as compared to $7.65 billion in 2014.
Other Income and Deductions is budgeted at $31.6 million, $6.3 million lower than the 2014 budgeted level. The decrease
reflects lower short-term investment income and lower carrying charges on the deferred Shoreham property tax settlement.
Grant Income is budgeted at $76.0 million for 2015, $114.7 million lower than the 2014 budgeted level. Grant Income
primarily consists of a grant received from NYSERDA Regional Greenhouse Gas Initiative (“RGGI”) funds to support energy
efficiency programs (budgeted at $34.6 million) and a $143.4 million grant received from the Governor’s Office of Storm
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Long Island Power Authority and Subsidiaries
2015 Proposed Operating and Capital Budgets
Recovery from HUD Community Development Block Grant (“CDBG”) funds (of which $107.42 million is projected in 2014
and $36 million is budgeted in 2015). The CDBG grant provides the local match component of grants received from FEMA
for storm restoration and funds certain storm mitigation protective measures. The FEMA grant for storm hardening
mentioned above is an offset to capital costs in the Capital Budget and as such is not reflected in the 2015 Operating Budget.
Pursuant to the LIPA Reform Act, the Authority and PSEG Long Island will file a three-year rate plan with the Department of
Public Service by February 1, 2015, which will include a five year projection of revenues, expenses, sales, fuel and purchased
power commodity costs, and capital budgets.
-5-
2014 Operating Highlights
PSEG Long Island assumed operating responsibility for the electric grid
serving customers across Long Island and in the Rockaways on January 1st
 Committed to a stable delivery rate in 2014 and 2015, while enhancing system
reliability and storm response, and improving customer satisfaction

►
System Reliability
•
•
►
Enhanced Storm Response
•
•
►
•
Implemented world-class IVR and call center procedures
Dramatically improved J.D. Power customer & business scores and achieved nearly 90 percent customer
satisfaction in after-call customer surveys
Opened the first utility customer service walk-in center in the Rockaways
Increased engagement in the communities we serve
►
►
►

Implemented a state-of-art Outage Management System (OMS)
Updated the Emergency Response Implementation Procedures and Finalized the Protocol for Post Flood Actions to
towns and villages
Improved customer satisfaction
•
•

Maintained 99.9 percent system reliability with fewer outages
Improved the tree trim program to a four-year, industry best practice cycle
Participation in community causes at staff levels (e.g., top corporate participant in Jones Beach walk against
breast cancer, team spirit award at Marcum Workplace challenge)
Executive involvement in Long Island non-profits
PSEG foundation grants to Long Island causes
Began work to utilize the $720 million in FEMA grant funds to make the T&D
System more resilient
6
Budget Highlights
Budget maintains delivery rate stability for 2015 and reflects PSEG
Long Island’s commitment to manage costs
 Lower costs offset lower sales and grant income while budget
continues investments to improve service and maintain reliability
 $678 million 2015 Capital Budget represents record investment in
electric system resiliency and reliability, with benefits to local economy
and jobs

►

$176 million in storm hardening paid for by FEMA grant
Public ownership continues to benefit customer bills
►
Non-profit utility with lower cost of capital and access to grants estimated to
save customers nearly $400 million annually
7
2015 Sales1, Delivery Revenue, and Grant
Income2 Projected Lower than 2014
Delivery Revenue and Grants
Energy Sales
21,000
19,893
278
19,615
20,000
19,500
GWhs
$2,192
$2,150
20,258 $1,950
Projected Normal weather adds growth adds 0.9% to 1.4% to energy sales energy sales in 2015
in 2014
18,000
17,500
$191
$2,084
$2,071
$136
$76
$2,050
$2,000
19,000
18,500
$2,100
20,077
184
$ millions
20,500
$2,200
$2,002
$1,995
$1,948
$1,900
$1,850
$1,800
$1,750
Down 2.7% due to actual decline in energy sales
$1,700
$1,650
$1,600
Up 2.4% due to projected growth in energy sales
$1,550
$1,500
17,000
2014
Approved
Annual Sales
2014
Projected
Weather
2015
Proposed
Growth
1) 2015 sales are reduced by 529 GWhs (2.1%)
for efficiency and renewables programs.
2014
Approved
2014
Projected
Delivery and Other Revenue
2015
Proposed
Grant Income
2) Grant income reflects income in the Operating
Budget. LIPA also receives grants that reduce
the Capital Budget (e.g. FEMA grant).
8
Use of 2015 Revenue Dollars
(before deductions for grants and other income)

State, County, and local jurisdiction taxes and assessments of $549
million (15% of revenue) remain a burden on customers
LIPA continues to challenge the property tax assessments on PSA plants
► 2015 is first year customers benefit from 2% cap on increases in T&D property taxes
►
9
PSEG-LI Committed to Managing Costs
While Enhancing Customer Satisfaction
PSEG Long Island operating expenses are down $36 million or 7.3%
 PSEG Long Island commitment to maintaining reliability, enhancing
storm response, improving customer satisfaction, and managing costs

►
►
►
►
►
Investment in preventative/corrective maintenance, vegetation
management, planning/training for storm response, and capital
Execution of the FEMA storm hardening grant
Investment in customer facing technology and process improvement
Migration off National Grid TSA accelerated, providing significant savings
Focus on reducing cost for shared services
Power markets and fuel management functions move to PSEG Long
Island, completing LIPA transition to new business model
 Continued investment in energy efficiency and renewables

LIPA solar rebate programs replaced by NY Sun state-wide program
► Utility 2.0 program development budget of $2 million with $13.3 million for
implementation upon review of plans and DPS/LIPA recommendation to
the Board
►
10
LIPA Operating Expenses are Down 27%

LIPA operating expenses of $61 million continue to decline
►
►
►
►
►
►
PSEG Long Island management fee largest expense at $45 million (before
reduction for portion associated with capital planning)
Other operating expenses of $23 million down 27%
LIPA headcount lowered from 50 to 40 FTEs (down 20%)
Remaining staff responsible for contract oversight, finance, and legal with
transition of operational responsibility to PSEG Long Island
Outside professional fees decline by $7.8 million or 44%
Total LIPA operating expenses excluding management fee are 0.7% of
revenues
11
Delivery Rate Stable for Third Year

Total delivery rate (excluding the Power Supply Charge) stable at the
2014 level
Efficiency and Renewables Charge will be reduced, due to NYSERDA
assumption of solar rebates and larger RGGI grant funding
► NY State Assessment lowered from 1.0% to 0.5%
► Delivery rates will be adjusted to maintain parity with the 2014 levels
►

Revenue decoupling proposed for 2015
Mitigates revenue loss associated with continued investment in energy
efficiency through ELI and Utility 2.0
► Consistent with PSC practice for all the regulated electric utilities
► First adjustment will occur, as necessary, in 2016
►

Only actual fuel and purchased power cost will continue to be
recovered through Power Supply Charge each month
12
Rates for a Typical Residential Customer
Apr 1, 2014
Approved
Rate
Mar 1, 2015
Proposed
Rate
Change in
Delivery
Rate
Change in
Total
Bill
$/kWh
$/kWh
$/kWh
(%)
0.0930
0.0930
0.0000
0.00%
Delivery Charge
0.1046
0.1071
0.0025
1.23%
Efficiency/Renewables Charge
0.0032
0.0017
-0.0015
-0.74%
NYS Assessment
0.0020
0.0010
-0.0010
-0.49%
Revenue Taxes
0.0040
0.0040
0.0000
0.00%
0.1098
0.1098
0.0000
0.00%
$85.10
$85.10
$0.00
Residential (180)
Rate Components
Power Supply Charge
Total Delivery Rate
1
2
Monthly Delivery Bill @ 775 kWhs
note 1) Assumes estimated annual rate from calendar year 2014
note 2) Delivery bill consists of Delivery Charge, E&R Charge, NYS Assessment and PILOTs
13
Commitment to Affordability
Cumulative Change in Residential Rate since 2006
(including power supply and delivery charges)
United Illuminating
19.9%
Orange & Rockland
18.2%
Consolidated Edison
17.2%
Atlantic City Electric
Jersey Central Power & Light
Long Island Power Authority
Connecticut Light & Power
37.3%
8.0%
‐7.9%
3.9%
‐11.3%
Nominal Increase
38.3%
13.1%
‐3.6%
‐16.1%
40.7%
‐1.7%
Real Increase
14
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Long Island Power Authority and Subsidiaries
2015 Proposed Operating and Capital Budgets
Table of Contents
Schedule
Schedule
A-1
Statements of Revenues and Expenses
A-4.7
National Grid Power Supply Agreement
A-2
Sales and Revenues
A-4.8
Nine Mile Point 2 Expenses
A-3
Fuel and Purchased Power Costs
A-5
LIPA - Operating Expenses
A-4
Operating Expenses
A-6
Depreciation and Amortization
A-4.1
PSEG Long Island - Operating Expenses
A-7
Taxes, Payments in-lieu-of Taxes, and Assessments
A-4.2
PSEG Long Island - Transmission & Distribution
A-8
Other Income and Deductions
A-4.3
PSEG Long Island - Customer Services
A-9
Grant Income
A-4.4
PSEG Long Island - Shared Services
A-10
Interest Expense
A-4.5
PSEG Long Island - Power Markets
A-11
Cost of Debt
A-4.6
PSEG Long Island - Energy Efficiency & Renewable
Energy Programs
B-1
Capital and Deferred Expenditures
Long Island Power Authority and Subsidiaries
2015 Proposed Operating and Capital Budgets
Statements of Revenues and Expenses
(Thousands of Dollars)
Projected (a)
Approved
Revenues
Fuel and Purchased Power Costs
$
Revenue Net of Fuel Costs
PSEG Long Island Operating and Managed
Expenses
PSEG Long Island Operating Expenses
PSEG Long Island Managed Expenses(b)
Utility Depreciation
PILOTs - Revenue-Based Taxes
PILOTs - Property-Based Taxes
LIPA Expenses
LIPA Operating Expenses
LIPA Depreciation and Amortization
Interest Expense
Total Expenses
3,525,675
1,524,067
$
$
2,001,608
$
495,556
$
$
Other Income and Deductions
Grant Income
Excess of Revenues Over Expenses
3,625,620
1,677,889
$
$
1,947,731
$
495,556
588,791
158,809
37,631
299,242
$
3,599,685
1,604,422
$
$
1,995,263
$
(6,345)
-0.3%
$
457,951
$
(37,606)
-7.6%
(6,733)
(51,126)
(640)
(1,336)
-1.1%
-32.2%
-1.7%
-0.4%
(22,789)
(21,432)
14,270
-27.2%
-15.4%
4.0%
(127,392)
-5.9%
598,119
104,607
35,167
295,630
83,719
138,820
352,735
$
2,155,303
$
Change from
Approved 2014
$
%
Proposed
2015
2014
582,058
107,682
36,991
297,906
64,109
119,642
360,153
$
2,072,984
$
60,930
117,388
367,005
$
2,027,910
$
74,010
80,355
2.1%
5.3%
Ref.
A-2
A-3
A-4.1
A-4
A-6
A-7
A-7
A-5
A-6
A-10
37,942
35,570
31,632
(6,310)
-16.6%
A-8
190,753
135,783
76,015
(114,738)
-60.2%
A-9
-
0.0%
75,000
$
46,100
Note: (a) Projection as of September 30, 2014
(b) PSEG Long Island Managed Expenses includes the Power Supply Agreement and Storm Restoration expenses.
A-1
$
75,000
$
Long Island Power Authority and Subsidiaries
2015 Proposed Operating and Capital Budgets
Sales and Revenues
Change from
Proposed
2015
2014
Projected (a)
Approved
Sales of Electricity (MWh)
Residential Sales
Commercial & Industrial Sales
Other Sales to Public Authorities/Street Lighting
Total Sales of Electricity (MWh)
Revenues ($ in thousands)
Delivery Charge
Power Supply Charge
Energy Efficiency and Renewable Energy
New York State Assessment
Suffolk Property Tax Settlement
Revenue Related PILOTS
Sales for Resale
Amortization of Suffolk Property Tax Settlement
$
Wheeling Revenues
Pole Attachment Fees
Late Payment and Dishonored Check Charges
Prior Years Over/(Under) Recovery of Efficiency and Renewables
Miscellaneous Revenues
Total Revenues
$
Approved 2014
$
%
9,809,663
9,867,433
581,062
9,282,242
9,744,394
588,698
9,562,411
9,935,481
579,227
(247,252)
68,048
(1,835)
-2.5%
0.7%
-0.3%
20,258,158
19,615,334
20,077,119
(181,039)
-0.9%
$
20,789
80,356
(25,236)
(11,174)
884
(4,450)
1,069
(884)
298
130
2,883
8,339
1,005
1.1%
5.3%
-33.9%
-31.2%
2.1%
-10.7%
176.1%
2.1%
8.0%
3.4%
17.9%
-100.0%
20.7%
$
74,010
1,829,014
1,524,066
74,527
35,839
41,578
41,440
607
(41,578)
3,737
3,813
16,108
(8,339)
4,863
3,525,675
Note: (a) Projection as of September 30, 2014
A-2
$
$
1,771,588
1,677,889
73,876
36,994
40,184
35,167
1,928
(40,184)
3,665
6,133
14,188
4,191
3,625,620
$
$
1,849,803
1,604,422
49,291
24,665
42,462
36,991
1,676
(42,462)
4,035
3,943
18,992
5,868
3,599,685
2.1%
Long Island Power Authority and Subsidiaries
2015 Proposed Operating and Capital Budgets
Sales and Revenues
Electric sales for 2015 are forecasted at 20,077,119 MWh, or 0.9% lower than the level included in the approved 2014
Budget and 2.4% higher than the full year sales level projected for 2014, largely reflecting the cooler than normal
temperatures experienced in 2014. LIPA’s load and energy forecast is prepared utilizing econometric regression models
and incorporates the effects of reductions related to LIPA’s efficiency and renewables programs. The forecast assumes
normal weather for 2015.
Revenues are budgeted at $3.6 billion, or 2.1% higher than the level budgeted for 2014, reflecting forecast higher Power
Supply Charges to recover the costs of fuel and purchased power. Revenues net of fuel and purchased power costs are
forecasted at $1,995 billion, or 0.3% lower than the budgeted level for 2014 due to lower budgeted sales. Revenues are
derived primarily from retail sales of electricity to residential, commercial and industrial customers. Also included are
revenues from electric sales to public authorities and for street lighting. In accordance with LIPA’s Tariff for Electric
Service (“Tariff”), LIPA’s Delivery Charge recovers the costs associated with maintaining and improving its transmission
and distribution system and serving its retail customers. Additionally, LIPA recovers those costs associated with
purchasing and producing electric energy (fuel and purchased power) through the Power Supply Charge. Finally, LIPA
imposes various surcharges and non-electric service charges, such as those to recover costs associated with its Efficiency
and Renewables program, assessments, revenue-related PILOTs, fees for pole attachments, late payment charges to
customers whose bills are in arrears and other miscellaneous service fees.
A-2 (a)
Long Island Power Authority and Subsidiaries
2015 Proposed Operating and Capital Budgets
Fuel and Purchased Power Costs
(Thousands of Dollars)
Projected (a)
Approved
Fuel Oil
Natural Gas
Purchased Power
Regional Greenhouse Gas Initiative
Renewable Power
Wheeling Charges
Capacity Charges
Nine Mile Nuclear Fuel (incl. Disposal and Decomm. Costs)
Y-49 Cable Operating Costs
Fuel Hedging Program Costs
ESCO Bill Credit Adjustment Payments
Transco
Power Supply Management Services
Fuel Management Services
Total Fuel and Purchased Power Costs
Change from
Approved 2014
Proposed
2015
2014
$
$
59,166
261,657
618,934
16,702
35,608
28,805
433,565
16,687
26,008
1,066
8,736
11,680
5,454
$
143,278
383,041
505,983
16,481
35,794
30,791
457,920
12,407
23,650
4,636
46,626
12,012
5,270
$
61,605
297,256
635,382
21,122
36,416
28,875
425,747
15,471
25,506
11,273
18,254
9,274
13,941
4,300
$
$
1,524,067
$
1,677,889
$
1,604,422
$
1
Note: (a) Projection as of September 30, 2014
A-3
%
2,439
35,600
16,448
4,419
808
70
(7,818)
(1,216)
(502)
10,207
9,519
9,274
2,261
(1,154)
80,355
4.1%
13.6%
2.7%
26.5%
2.3%
0.2%
-1.8%
-7.3%
-1.9%
957.5%
109.0%
n/m
19.4%
-21.2%
5.3%
Long Island Power Authority and Subsidiaries
2015 Proposed Operating and Capital Budgets
Fuel and Purchased Power Costs
Fuel and purchased power costs for 2015 are budgeted at $1.604 billion, an increase of 5.3% as compared with the expense
level budgeted for 2014, and a decrease of 4.4% when compared with the expense level projected for 2014. The primary
driver of the increase is higher projected commodity expenses, net of the impact of lower sales and LIPA’s commodity
hedge positions.
Fuel and purchased power cost projections are prepared utilizing a generation economic dispatch model that considers
among other variables, the availability and efficiency of generating resources, delivered fuel prices, and environmental
regulatory requirements. The projected fuel prices are currently provided by energy consulting firm EVA, whose forecast
was as of October 20th of forward prices by month for 2015.
In addition to the cost for generation fuels and purchased power, fuel and purchased power costs include expenditures for
environmental compliance related to generation, generation and transmission cable capacity covered by contract, LIPA’s
share of costs incurred by the New York, New England and PJM independent system operators (“ISO”), electric power
wheeling, payments made to Energy Service Companies (“ESCOs”) in accordance with the Long Island Choice program,
services received under energy, power and fuel management agreements, fuel hedging program costs, and renewable
energy resources. The cost is net of revenues from the sale of ancillary services.
A-3 (a)
Long Island Power Authority and Subsidiaries
2015 Proposed Operating and Capital Budgets
Operating Expenses
(Thousands of Dollars)
Change from
Approved 2014
Proposed
2014
Approved
2015
Projected
Ref
$
%
(27,483)
-6.8%
A-4.1
(10,123)
(37,606)
-10.8%
-7.6%
A-4.6
14,916
(4,289)
860
765
3.4%
-13.1%
4.1%
1.6%
A-4.7
A-4.8
(b)
(b)
PSEG Long Island Operating Expenses
PSEG Long Island Operating Services Agreement
$
401,546
$
405,542
$
374,063
Energy Efficiency & Renewable Energy Programs
Total PSEG Long Island Operating Expenses
$
94,010
495,556
$
90,014
495,556
$
83,887
457,951
PSEG Long Island Managed Expenses
National Grid Power Supply Agreement
Nine Mile Point 2 O&M
Uncollectible Accounts
Storm Restoration
Fuel Supply and Fuel Management Contract
Transition Cost
NYS Conservation Assessment and ORPS
Accretion of Asset Retirement Obligation
Miscellaneous
Total PSEG Long Island Managed Expenses
Total PSEG Long Island Operating and
Managed Expenses
LIPA Operating Expenses
Management Fee (including incentive)
Capitalized Management Fee
LIPA Operating Costs
Total LIPA Operating Expenses
Total Operating Expenses
$
441,059
32,720
20,866
47,832
$
443,817
32,859
26,524
47,832
$
455,975
28,431
21,726
48,597
$
$
5,833
3,183
-
(5,833)
-100.0%
(b)
$
37,323
4,244
2,337
598,119
21,463
4,611
1,254
582,058
(13,353)
531
(331)
(6,733)
-38.4%
13.0%
-20.9%
-1.1%
A-7
(b)
(b)
$
34,816
4,080
1,585
588,791
$
1,084,347
$
1,093,675
$ 1,040,009
(44,339)
-4.1%
$
$
$
44,500
39,219
83,719
$
902
(10,000)
(13,691)
(22,789)
2.0%
n/m
-34.9%
-27.2%
$
1,074,056
$
$
(57,005)
-5.3%
$
n/m=Not meaningful
Note: (a) Projection as of September 30, 2014
(b) Not detailed on a separate schedule
A-4
44,507
(9,896)
29,498
64,109
1,067,771
$
$
$
$
45,402
(10,000)
25,528
60,930
1,017,051
$
(b)
(b)
A-5
Long Island Power Authority and Subsidiaries
2015 Proposed Operating and Capital Budgets
Operating Expenses
Total Operating Expenses are budgeted at $1.017 billion, a decrease of 5.3% from the budgeted expense level for 2014.
Operating Expenses are comprised primarily of costs associated with operating and maintaining LIPA’s T&D system and
providing generated and purchased power. They consist of three major expense categories: PSEG Long Island Operating
Expenses, which are budgeted at $457.9 million, a decrease of $37.6 million from the approved 2014 level; PSEG Long
Island Managed Expenses, which are budgeted at $582.1 million, a decrease of $6.7 million from 2014, and LIPA
Operating Expenses, which are budgeted at $60.9 million, a decrease of $22.8 million from the budgeted level for 2014.
Costs related to each category of expense are detailed and discussed on Schedules A-4.1 through A-4.6(a).
PSEG Long Island Operating Expenses, budgeted at $457.9 million, are based on the Amended and Restated Operating
Services Agreement (“OSA”) and include costs related to the following major areas: Transmission and Distribution ($136.5
million); Customer Services ($95.7 million); Shared Services ($116.8 million); Power Markets ($14.7 million) and Energy
Efficiency and Renewable Energy Programs ($83.8 million). The budget for the Energy Efficiency and Renewable Energy
Programs provides for additional peak load reductions as well as customer-based solar and wind distributed generation.
Also included is $16.3 million in costs associated with the Transition Services Agreement (“TSA”) with National Grid
related to the termination of this agreement and the transition of these functions to PSEG-LI.
PSEG Long Island Managed Expenses total $582.1 million and include costs related to the National Grid Power Supply
Agreement, Assessments, LIPA’s 18% share of operation and maintenance expenses related to the Nine Mile Point 2
nuclear generating plant, losses on uncollectible accounts, and Storm Restoration.
LIPA Operating Expenses, which are budgeted at $60.9 million are detailed on Schedule A-5 and consist of the PSEG Long
Island Management fee and costs related to LIPA staff and outside professional services.
Major variances from the 2014 budgeted level include

PSEG Long Island Operating Expenses, excluding Efficiency & Renewables programs and Storm Restoration costs
(decrease of $27.5 million, or 6.8%): See Schedules A-4.1 through A-4.5 (a)
A-4 (a)
Long Island Power Authority and Subsidiaries
2015 Proposed Operating and Capital Budgets

Energy Efficiency & Renewable Energy program, including LIPA Edge and research costs (decrease of $10.1 million
due to transition of the Long Island solar rebate program to the NYSERDA NY Sun program): See Schedules A-4.6
and A-4.6 (a)

National Grid Power Supply Agreement (increase of $14.9 million): See Schedules A-4.7 and A-4.7 (a)

NMP2 (decrease of $4.3 million): See Schedules A-4.8 and A-4.8 (a)

NYS Conservation and ORPS Assessments (decrease of $13.4 million)

LIPA Operating Costs (decrease of $22.8 million): See schedules A-5 and A-5(a)
LIPA and PSEG Long Island continue to discuss certain proposed items in the operating and capital budgets totaling
approximately $15 million and $6.5 million, respectively. Resolution of such items will be reflected in the final adopted
2015 operating and capital budgets, as amended.
A-4 (b)
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Long Island Power Authority and Subsidiaries
2015 Proposed Operating and Capital Budgets
PSEG Long Island Operating Expenses
(Thousands of Dollars)
2014
Projected (a)
Approved
Transmission & Distribution
$
154,943
Customer Services
$
Change from
Approved 2014
$
%
Proposed
2015
142,673
$
136,525
$
Ref
(18,418)
(11.9%)
A-4.2
99,652
87,085
95,746
(3,907)
(3.9%)
A-4.3
Shared Services
113,966
100,056
116,784
2,818
2.5%
A-4.4
National Grid Transition Services Agreement
32,985
75,728
16,309
(16,676)
-
-
14,725
14,725
94,010
90,014
83,887
-
-
Power Markets
Energy Efficiency & Renewable Energy Programs
PSEG Long Island Vacancy Rate
Subtotal
$
495,556
$
495,556
(50.6%)
A-4.4
n/m
A-4.5
(10,123)
(10.8%)
A-4.6
(1,591)
n/m
462,385
(33,171)
(6.7%)
(1,591)
$
2015 Non-Capital Portion of FASB Accounting Differential
of Pensions and OPEBs
-
-
54,996
54,996
n/m
Deferral of 2015 Non-Capital Portion of FASB Accounting
Differential of Pensions and OPEBs
-
-
(54,996)
(54,996)
n/m
Rate Case Cost(b)
-
-
(4,434)
(4,434)
n/m
(37,605)
(7.6%)
Total PSEG Long Island Operating Expenses
$
495,556
n/m=Not meaningful
Note: (a) Projection as of September 30, 2014
(b) LIPA will defer these costs and amortize them over the period of the rate case.
A-4.1
$
495,556
$
457,951
$
Long Island Power Authority and Subsidiaries
2015 Proposed Operating and Capital Budgets
PSEG Long Island Operating Expenses
PSEG Long Island 2015 Operating Expenses are budgeted to be $462.4 million. These costs are related to six major
areas: Transmission and Distribution - $136.5 million; Customer Services - $95.7 million; Shared Services - $116.8
million; National Grid TSA expenses - $16.3 million; Power Markets - $14.7 million, and Energy Efficiency and
Renewable Energy Programs - $83.9 million.
PSEG Long Island’s budget is based on the Amended and Restated OSA that became effective on January 1, 2014. This
budget is aligned with the OSA metrics and PSEG Long Island’s commitments to enhance customer satisfaction,
maintain reliability, and improve storm response. This budget includes significant investment in process improvement
activities including storm response and communication, preventative maintenance activities and vegetation
management. It also reflects the utilization of newly implemented systems including the Outage Management System,
Interactive Voice Response (IVR) technology, and the Asset Management Model in T&D. Labor costs are based on an
organization structure consisting of 2,261 employees. The benefit costs are based on programs designed and utilized in
2014 that substantially duplicated the benefits of the transitioned bargaining unit employees from National Grid and in
accordance with the requirements of the OSA and the Collective Bargaining Agreement. The operating costs for
Pension are based on expected contributions to the Pension Investment Trust during 2015 and do not reflect the
additional requirement of non-cash FASB pension cost of $55 million. Post-retirement medical costs are budgeted on
a “pay-as-you-go” basis. During 2015, PSEG Long Island will migrate to the PSEG ERP system. The interim use of the
National Grid ERP System through the National Grid TSA agreement will be discontinued in 2015.
A-4.1 (a)
Long Island Power Authority and Subsidiaries
2015 Proposed Operating and Capital Budgets
PSEG Long Island - Transmission & Distribution
(Thousands of Dollars)
Proposed
2015
2014
Projected
Approved
Asset Management
Overhead / Underground
T&D Operations
Projects & Construction
Substation / Protective / Telecom
T&D Services
Total Transmission & Distribution
Operating Expenses
Change from
Approved 2014
(a)
$
%
$
22,570
18,020
35,241
43,084
32,180
3,848
$
17,330
16,888
45,293
35,272
22,669
5,222
$
18,673
18,496
38,720
31,477
22,903
6,256
$
(3,897)
476
3,480
(11,607)
(9,278)
2,409
(17.3%)
2.6%
9.9%
(26.9%)
(28.8%)
62.6%
$
154,943
$
142,673
$
136,525
$
(18,418)
-11.9%
Note: (a) Projection as of September 30, 2014
A-4.2
Long Island Power Authority and Subsidiaries
2015 Proposed Operating and Capital Budgets
PSEG Long Island – Transmission and Distribution
The 2016 T&D operating costs are budgeted at $136.5 million. The budget is based on a T&D organization consisting of
1,262 employees, and supports the safe and reliable operation of the T&D System.
The T&D organization is comprised of the following departments: Asset Management, Overhead & Underground
Construction, T&D Operations, Projects and Construction, Substation/Protection/Telecom, Emergency Planning, and
T&D Services.
The 2015 budget provides for the following major activities: 24 x 7 x 365 monitoring and operation of the T&D system; 24
x 7 x 365 response to outages and emergencies; preventative maintenance tree trimming, preventative maintenance of
substations and switching stations; preventative maintenance of lines and equipment; corrective maintenance; operation
of fleet cars, trucks and specialty equipment; operation of the damage prevention program; and planning and training for
storm response.
A-4.2 (a)
Long Island Power Authority and Subsidiaries
2015 Proposed Operating and Capital Budgets
PSEG Long Island - Customer Services
(Thousands of Dollars)
Proposed
2015
2014
Projected
Approved
Revenue Operations
Meter Services
Customer Contact and Billing
Customer Experience and Utility Marketing
Total Customer Services Operating
Expenses
Change from
Approved 2014
(a)
$
%
$
20,995
31,824
31,403
15,430
$
17,702
28,005
27,908
13,470
$
17,449
31,121
33,508
13,668
$
(3,546)
(703)
2,105
(1,763)
(16.9%)
(2.2%)
6.7%
(11.4%)
$
99,652
$
87,085
$
95,746
$
(3,907)
-3.9%
Note: (a) Projection as of September 30, 2014
A-4.3
Long Island Power Authority and Subsidiaries
2015 Proposed Operating and Capital Budgets
PSEG Long Island – Customer Services
The Customer Services organization is comprised of four departments, which include Revenue Operations, Meter Services,
Customer Contact and Billing, and Customer Experience and Utility Marketing.
Customer Services plays a key role in the success of the organization. Of the 18 non-financial OSA targets, Customers
Services has direct responsibility for 10 targets and shared responsibility for five OSA targets, resulting in an 80% stake in
the OSA metrics. Of the 15 OSA targets that Customer Services influences, 14 of them are improvement metrics, meaning
that by the year 2018, it is expected that all 14 of these targets would be in the top quartile of their benchmark. To achieve
the improvement path, Customer Services must close the gap between 2013’s performance level and top quartile
performance by 20% each year.
Customer Services operating costs are budgeted at $95.7 million. The budget is based on a Customer Services organization
consisting of 718 employees, which falls within the industry benchmark for top quartile companies based on the number of
employees per customer served. The operating budget consists of 80% labor, inclusive of all labor related costs, such as
base labor, OT spend, fringe benefits, and payroll taxes, and 20% non-labor, inclusive of outside services costs, vendor
contracts, materials and business expenses. The non-labor portion of the budget includes funding for billing and payment
processing functions that are primarily performed by outside vendors, customer communications, and vendor/supplier
support for various areas of the business. Customer Services has 96 vendors/suppliers supporting the business.
Also included in the Customer Services budget is funding to support improved Customer technology such as the “My
Account” application, paperless billing, and the municipal storm portal.
The Revenue Operations department is responsible for the overall collections strategy, timely and accurate processing of
customer payments, revenue integrity via investigations of metering conditions, business documentation and controls,
and walk-in customer offices. The department has direct responsibility for three OSA metrics, which includes Days Sales
Outstanding (DSO), Net Write-Off Per $100 Billed Revenue, and Personal Contact Survey, specifically for our walk-in
centers.
A-4.3 (a)
Long Island Power Authority and Subsidiaries
2015 Proposed Operating and Capital Budgets
The Meter Services department is responsible for meter reading, field collections, systems and technology infrastructure
to support meter and field services, testing and maintenance, and acts as the lead for Customer Services regarding health
and safety related initiatives. The department has direct responsibility for one OSA metric, which is Actual Meter Read
Rate, with significant contributions to Days Sales Outstanding (DSO) and Net Write-Off Per $100 Billed Revenue.
The Customer Contact and Billing department is responsible for all call center operations, bill calculation, bill print, and
billing support. The department has direct responsibility for five Operating Service Agreement (OSA) metrics, which
includes After-Call Surveys for both residential and business customers, Average Speed of Answer (ASA), Abandonment
Rate, and Timely Billing.
The Customer Experience and Utility Marketing department is responsible for the management of major customer
accounts, marketing and promotional initiatives, customer relations, customer experience, and customer-facing
technology. The department has direct responsibility for three OSA metrics, which includes JD Power Residential Survey,
JD Power Business Survey and Web Transactions Completed.
Note: All areas have shared responsibility for OSHA Injury Rate, OSHA Severity Index, Personal Contact Survey, and JD
Power Residential and Business Surveys.
A-4.3 (b)
Page intentionally left blank.
Long Island Power Authority and Subsidiaries
2015 Proposed Operating and Capital Budgets
PSEG Long Island - Shared Services
(Thousands of Dollars)
Proposed
2014
Projected
Approved
Business Performance Excellence
Communications
Public Affairs
Finance & Accounting
Human Resources
Information Management
Procurement
Legal
Internal Audit
NMP-2 Oversight
Facilities Management
Security
Other
$
3,096
1,579
974
22,065
7,373
33,813
4,516
17,333
1,962
516
27,020
4,878
(11,158)
Change from
Approved 2014
(a)
2015
$
%
$
1,494
1,099
682
16,621
4,094
31,884
3,947
9,764
1,537
475
18,755
5,737
3,968
$
2,642
1,253
389
24,096
5,944
40,013
4,273
15,424
1,457
16,447
4,651
195
$
(454)
(326)
(585)
2,031
(1,430)
6,200
(242)
(1,909)
(505)
(516)
(10,573)
(226)
11,353
Total Shared Services Operating
Expenses
$
113,966
$
100,056
$
116,784
$
2,818
National Grid Transition Services
Agreement
$
32,985
$
75,728
$
16,309
$
(16,676)
n/m = not meaningful
Note: (a) Projection as of September 30, 2014
A-4.4
(14.7%)
(20.7%)
(60.0%)
9.2%
(19.4%)
18.3%
(5.4%)
(11.0%)
(25.7%)
(100.0%)
(39.1%)
(4.6%)
(101.7%)
2.5%
(50.6%)
Long Island Power Authority and Subsidiaries
2015 Proposed Operating and Capital Budgets
PSEG Long Island – Shared Services
The Shared Services organization is comprised of Business Performance Excellence, Communications and Public Affairs,
Finance and Accounting, Human Resources, Information Management, Procurement, Legal, Internal Audit, Facilities
Management, and Security.
The Shared Services organization operating costs are budgeted at $116.8 million and consists of 215 employees. The
operating budget is 21% labor (including labor-related costs) and 79% non-labor. The non-labor portion of the budget is
comprised of costs relating to insurance, facilities leases and operating costs, decommissioning cost for the use of the
National Grid ERP system and migration to the PSEG ERP system, information technology license and maintenance
agreements, and data center and network costs.
The 2015 budgets for the Shared Services organizations reflect lower costs as compared to 2014 achieved through a
continued focus on cost reduction.
In 2014 PSEG Long Island utilized the National Grid SAP and other information technology systems. The cost for the use
of these systems is included within the cost of the National Grid Transition Services Agreement (“TSA”). In addition, the
majority of the Finance and Accounting staff remained with National Grid as required to utilize the National Grid financial
system and these costs were included within the costs of the TSA as well. The schedule to transition from the National
Grid SAP has been accelerated, resulting in an earlier transition to the PSEG SAP system. The earlier transition reduces
2015 costs. In 2015 the cost for PSEG Long Island systems is included within the budget for the Information Management
organization and the transitioned staff positions are included within Finance and Accounting. The 2015 budgeted costs
for the National Grid TSA are substantially one time decommissioning costs.
In 2014 the costs for Nine Mile Point 2 oversight were budgeted in the Shared Services Organization. In 2015 the
oversight of Nine Mile Point 2 is included within the functions of the Power Markets organization.
A-4.4 (a)
Long Island Power Authority and Subsidiaries
2015 Proposed Operating and Capital Budgets
PSEG Long Island - Power Markets
(Thousands of Dollars)
Proposed
2015
2014
Approved
(a)
Projected
Change from
Approved 2014
(a)
$
%
Labor and Benefits
Resource Procurements
Resource Planning and Project Management
Offshore Wind
NY Transco
Association Dues
Data Systems
Professional Fees
General and Administrative
$
-
$
-
$
5,202
5,022
1,576
100
600
544
520
660
502
$
5,202
5,022
1,576
100
600
544
520
660
502
n/m
n/m
n/m
n/m
n/m
n/m
n/m
n/m
n/m
Total Power Markets Operating Expenses
$
-
$
-
$
14,725
$
14,725
n/m
Note: (a) The 2014 Approved Budget and 2014 Projection are not comparable as Power Markets was part of LIPA during 2014.
A-4.5
Long Island Power Authority and Subsidiaries
2015 Proposed Operating and Capital Budgets
PSEG Long Island – Power Markets
The Power Markets organization is comprised of three major areas, Strategy and Planning, Cost and Rate Impact Analysis,
and Power Resources and Contract Management. The organization performs long term supply planning including the
Integrated Resources Plan; manages the power plant contracts, merchant transmission contracts and the Nine Mile Point
2 agreement; supports LIPA’s management of the NYISO, PJM, ISO-NE and FERC relationship, and develops and
monitors the Fuel and Purchased Power budget.
The Power Markets 2015 operating costs are budgeted at $14.7 million. Fuel and Purchased power costs are budgeted
separately from the department’s operating budget. The budget is based on an organization consisting of 21 employees.
The Power Markets department is being created in 2015 by combining the functions of LIPA’s Power Supply Long Island
department with staff from PSEG Long Island in the areas of Resource Planning, Power Asset Management, and Nine Mile
Point 2 contract oversight. A s a result, there is no meaningful 2014 budget comparison.
A-4.5 (a)
Long Island Power Authority and Subsidiaries
2015 Preliminary Operating Budget
PSEG Long Island - Energy Efficiency & Renewable Energy Programs
(Thousands of Dollars)
Projected (a)
Approved
Change from
Approved 2014
Proposed
2015
2014
$
%
Expenses Recoverable Under ELI Tariff and
RGGI Funding
Residential
Efficient Products
Home Performance with Energy Star
Home Performance Direct
Cool Homes
$
Residential Energy Affordability Partnership
Residential New
Commercial
Renewables (b)
LIPA Edge Program
Research, Development & Demonstration
Total Efficiency and Renewables O&M
Expenses
$
Labor, General and Administrative
Total Energy Efficiency & Renewable Energy
Program Expenses
14,664
986
3,370
7,407
$
$
14,672
1,582
4,126
7,098
2,820
1,892
2,868
520
42,705
11,149
1,532
500
275
42,700
11,149
1,290
-
43,822
648
1,391
-
85,652
$
8,358
$
14,300
1,085
3,259
5,796
94,010
81,746
$
8,268
$
90,014
76,207
$
$
7,680
$
83,887
$
8
596
756
(309)
0.1%
60.4%
22.4%
(4.2%)
48
1.7%
(520)
1,117
(10,501)
(141)
(500)
(100.0%)
2.6%
(94.2%)
(9.2%)
(100.0%)
(9,445)
(11.0%)
(678)
(8.1%)
(10,123)
(10.8%)
Utility 2.0 - Development(c)
-
-
15,300
15,300
n/m
Deferred Utility 2.0 Expenditures
-
-
(15,300)
(15,300)
n/m
(10,123)
(10.8%)
Total Energy Efficiency & Renewable Energy
Expenses
$
94,010
$
90,014
n/m = not meaningful
Note: (a) Projection as of September 30, 2014
(b) LIPA solar rebate program merged into NYSERDA's NY Sun and not reflected in Renewables budget.
(c) Does not include Utility 2.0 AMI cost that appear in the capital budget.
A-4.6
$
83,887
$
Long Island Power Authority and Subsidiaries
2015 Proposed Operating and Capital Budgets
PSEG Long Island – Energy Efficiency & Renewable Energy Program
This category of expense includes those programs designed to promote the efficient use of electric energy and the
development and expanded use of renewable energy technologies to reduce reliance on fossil fuels, with the goal of
delaying the need for additional generating capacity to serve customers during peak demand periods and investments in
T&D infrastructure to meet load growth in certain pockets of the electrical system. To accomplish its objectives, the
program relies on rebates and incentives to promote utilization of efficient equipment and other conservation measures as
well as the expansion of renewable technologies. The program also relies on industry and government-sponsored research
and development programs, including qualified program funding, and participation in related demonstration projects.
The 2015 budget is based on achieving a reduction of 70 MWs of peak demand, a 17% increase over the amount budgeted
in 2014, but at a lower net cost, primarily through the transition of the Long Island solar rebate program to the statewide
NYSERDA NY Sun program. The budget for the programs under the Efficiency & Renewables program is proposed at
$83.9 million, a decrease of $10.1 million, or 10.8%, from the approved level for 2014. The reduction reflects the
transition to NY Sun and does not include the solar PV rebates paid directly by NYSERDA for the installation of solar PV
on Long Island.
PSEG Long Island expects that the funding level proposed for 2015 will allow it to continue to achieve program goals. The
approved budget reflects programs in the Commercial and Industrial and Residential sectors that take advantage of costeffective approaches that appeal to customers.
Utility 2.0 programs are budgeted at approximately $2.0 million for program development and $13.3 million for program
implementation. An additional $3.9 million for Utility 2.0 AMI deployment is contained within the 2015 Capital Budget
(see schedule B-1). The review of the implementation budget will occur with recommendation by the Department of
Public Service and approval by the LIPA Board of Trustees. Utility 2.0 costs will be recovered from customers over the
period each program provides customer benefit.
A-4.6 (a)
Long Island Power Authority and Subsidiaries
2015 Proposed Operating and Capital Budgets
National Grid Power Supply Agreement
(Thousands of Dollars)
Proposed
2015
2014
Projected
Approved
Power Supply Agreement
Operation and Maintenance Expenses
Property Taxes
$
244,781
196,279
Total Power Supply Agreement
$
441,059
$
Note: (a) Projection as of September 30, 2014
A-4.7
$
Change from
Approved 2014
$
%
(a)
246,001
197,816
$
443,817
$
263,247
192,729
$
455,975
$
18,466
(3,550)
14,916
7.5%
-1.8%
3.4%
Long Island Power Authority and Subsidiaries
2015 Proposed Operating and Capital Budgets
National Grid Power Supply Agreement
Expenses included in this section are comprised of costs related to the Power Supply Agreement (“PSA”) with National
Grid. PSA O&M expenses include a return of and a return on National Grid’s generating facilities that serve LIPA,
including projected capital additions, and other related operating costs. PSA costs also include property taxes assessed on
the facilities.
PSA costs are budgeted at $456.0 million, an increase of $14.9 million or 3.4%, as compared with the 2014 budgeted level.
The largest component of increased cost is increases in pension funding and recognition of the future costs for other
retirement benefits.
A-4.7 (a)
Long Island Power Authority and Subsidiaries
2015 Proposed Operating and Capital Budgets
Nine Mile Point 2 Expenses
(Thousands of Dollars)
Proposed
2015
2014
Approved
Refueling Outage Amortization
Non-Outage Operating Expenses
Total Nine Mile Point 2 O&M Expenses
Projected
(a)
$
4,638
28,082
$
4,517
28,343
$
32,720
$
32,859
Note: (a) Projection as of September 30, 2014
A-4.8
Change from
Approved 2014
$
%
$
$
4,499
23,933
28,431
$
(140)
(4,149)
-3.0%
-14.8%
$ (4,289)
-13.1%
Long Island Power Authority and Subsidiaries
2015 Proposed Operating and Capital Budgets
Nine Mile Point 2 Expenses
This category relates to LIPA’s share of expenses incurred to operate and maintain the NMP2 nuclear generating station.
NMP2, of which LIPA owns an undivided 18% interest, is one of two nuclear units at the Nine Mile nuclear power station
located in Oswego, New York. The other 82% interest in NMP2 is owned by CNG, a nuclear generating company jointly
owned by Exelon Corporation and EDF. CNG is managed by Exelon Corporation. LIPA is responsible for 18% of all
operation, maintenance and capital expenditures related to NMP2 (see Schedule B-1 for budgeted capital expenditures.)
NMP2 O&M expenses are budgeted at $28.4 million, a decrease of 13.1% from the level budgeted for 2014, largely
reflecting the benefits of merger integration synergies at Exelon Corporation.
A-4.8 (a)
Long Island Power Authority and Subsidiaries
2015 Proposed Operating and Capital Budgets
LIPA Operating Expenses
(Thousands of Dollars)
Projected (a)
Approved
$
44,500
-
$
$
14,770
2,249
1,684
2,769
21,472
$
$
$
5,263
3,033
969
1,545
840
807
5,000
291
17,747
Total Labor, General, Administrative &
Professional Services
$
Total LIPA Operating Expenses
$
PSEG Long Island Management Fee
Capitalized Fee
Labor, General and Administrative
Employee Salaries & Benefits Expenses
Insurance
Office Rent
Miscellaneous
Total Labor, General and Administrative
Professional Services
Engineering
Legal
Financial Advisor/Cash Management
Deferred Rate Case Expenses
Accounting and Audit Services
Information Technology
Risk Management-Fuel & Insurance
Superstorm Sandy Grant Administration
428 Program Grant Administration
Grant Admin. Reimbursement
Insurance Claim Administration
Insurance Claim Admin. Reimbursement
Miscellaneous
Total Professional Services
$
$
$
45,402
(10,000)
$
902
(10,000)
2.0%
n/m
11,127
2,266
1,711
1,951
17,054
$
10,128
2,397
1,685
1,421
15,631
$
(4,642)
148
1
(1,348)
(5,840)
(31.4%)
6.6%
0.1%
(48.7%)
(27.2%)
$
1,700
4,250
1,560
(1,000)
1,702
840
439
1,500
2,000
(3,500)
1,300
(1,300)
406
9,897
$
$
4,263
3,433
1,184
1,545
1,400
619
12,444
(3,563)
1,217
592
(1,000)
157
(368)
(3,500)
2,000
(3,500)
1,300
(1,300)
115
(7,851)
(67.7%)
40.1%
61.1%
n/m
10.1%
0.0%
(45.7%)
(70.0%)
n/m
n/m
n/m
n/m
39.7%
(44.2%)
39,219
$
29,498
$
25,528
$ (13,691)
(34.9%)
83,719
$
64,109
$
60,930
$ (22,789)
(27.2%)
$
n/m=Not meaningful
Note: (a) Projection as of September 30, 2014
A-5
44,507
(9,896)
Change from
Approved 2014
$
%
Proposed
2015
2014
$
$
$
$
Long Island Power Authority and Subsidiaries
2015 Proposed Operating and Capital Budgets
LIPA Operating Expenses
LIPA Operating Expenses are projected at $61.4 million. This represents a decrease of $22.3 million, or 26.6%, as
compared with the budgeted level for 2014.
The salaries and benefits budget of $10.1 million reflects a decrease in staffing from 50 to 40 positions with the transition
of power supply planning and contract management positions from LIPA to PSEG Long Island on January 1, 2015.
General and Administrative expenses, consisting of office rent, insurance and other administrative activities, are budgeted
at $5.5 million, a decrease of $1.2 million, or 17.9% from the approved 2014 level.
Professional Services, including engineering consulting, auditing, financial, legal, and grant administration activities, are
budgeted at $10.4 million. This represents a decrease of $7.4 million, or 41.5% from the budgeted level approved for 2014.
The lower budgeted level for 2015 is primarily due to the transition of power supply planning and contract management
responsibilities to PSEG Long Island and reimbursement from Federal grants and insurance proceeds for administrative
costs related to auditing and processing invoices and insurance claims related to Superstorm Sandy.
A-5 (a)
Long Island Power Authority and Subsidiaries
2015 Proposed Operating and Capital Budgets
Depreciation and Amortization
(Thousands of Dollars)
Proposed
2015
2014
Projected
Approved
PSEG Long Island Managed Utility
Depreciation
Change from
Approved 2014
$
%
(a)
$
158,809
$
104,607
$
107,682
$
(51,126)
(32.2%)
$
111,375
23,287
4,158
$
111,375
2,488
5,779
$
111,375
1,513
4,500
$
(21,774)
342
0.0%
(93.5%)
8.2%
Total LIPA Depreciation and Amortization
$
138,820
$
119,642
$
117,388
(21,432)
(15.4%)
Total Depreciation and Amortization
$
297,629
$
224,250
$ 225,070
(72,558)
(24.4%)
LIPA Depreciation and Amortization
Amortization of Acquisition Adjustment
Depreciation - LIPA
Deferred Transition Cost Amortization
Note: (a) Projection as of September 30, 2014
A-6
$
Long Island Power Authority and Subsidiaries
2015 Proposed Operating and Capital Budgets
Depreciation and Amortization
Depreciation and Amortization is budgeted at $225.0 million, a decrease of 24.4% versus the budgeted expense level for
2014.
PSEG Long Island Managed Utility Depreciation, which consists primarily of transmission and distribution and
information technology assets, is budgeted at $107.7 million, a decrease of $51.1 million, or 32.2% from the approved level
for 2014. The lower expense reflects the adoption of depreciation rates from a depreciation study completed in 2014 that
more accurately reflects the estimated service lives of LIPA-owned electric utility assets. The depreciation rates are
consistent with the service lives approved by the New York Public Service Commission.
LIPA Depreciation and Amortization consists primarily of the amortization of the Acquisition Adjustment related to the
merger with the Long Island Lighting Company in 1998, which is budgeted at $111.4 million (consistent with the 2014
budget), and certain LIPA leasehold improvements referred to as LIPA Depreciation. LIPA Depreciation is budgeted to
decline from $23.3 million to $1.5 million. The lower budgeted expense level reflects the reclassification of transitionrelated capital expenditures from LIPA Depreciation to PSEG Long Island Managed Utility Depreciation.
Amortization of Deferred Transition Costs are budgeted at $4.5 million and reflect the amortization of certain costs
associated with the transition to PSEG Long Island as LIPA’s service provider. The cost is based on an amortization
period that corresponds to the 12 year term of the OSA.
A-6 (a)
Long Island Power Authority and Subsidiaries
2015 Proposed Operating and Capital Budgets
Taxes, Payments in-lieu-of Taxes, and Assessments
(Thousands of Dollars)
Projected (a)
Approved
PILOTs - Revenue-Based Taxes
Change from
Approved 2014
$
%
Proposed
2015
2014
$
37,631
$
35,167
$
36,991
$
(640)
-1.7%
$
282,036
6,030
11,176
$
278,350
6,046
11,234
$
280,709
5,674
11,522
$
(1,327)
(356)
346
-0.5%
-5.9%
3.1%
Total PILOTs - Property-Based Taxes
$
299,242
$
295,630
$
297,906
$
(1,336)
-0.4%
Property Taxes on National Grid Power Plants
(PSA) (b)
$
196,279
$
197,816
$
192,729
$
(3,550)
-1.8%
Other Taxes and Assessments
NYS Temporary Energy and Utility Conservation
Assessment
NYS Office of Real Property Services
$
34,655
$
37,323
$
21,295
$
(13,360)
-38.6%
Total Other Taxes and Assessments
$
34,815
$
37,323
$
21,463
$
(13,352)
-38.4%
Total PILOTs, State and Local Taxes and
Assessments
$
567,967
$
565,936
$
549,089
$
(18,878)
-3.3%
PILOTs - Property-Based Taxes
Long Island and New York City
Nine Mile PILOTs
Merchant Power Plants
160
-
168
Note: (a) Projection as of September 30, 2014
(b) PSA property taxes are contractually increased and not subject to the 2% property tax cap on Transmission and Distribution property.
A-7
8
4.9%
Long Island Power Authority and Subsidiaries
2015 Proposed Operating and Capital Budgets
Taxes, Payments-in-Lieu of Taxes and Assessments
Payments-In-Lieu of Taxes (“PILOTs”) and NYS assessments are budgeted at $549.1 million, or 15.3% of LIPA’s total
revenues. This reflects a decrease of $18.9 million, or 3.3%, compared to the 2014 budget. Taxes and Assessments are
provided for elsewhere in the budget are shown here to present a compilation of the non-discretionary costs imposed on
LIPA by the State, counties and local jurisdictions.
Revenue-based PILOTs are budgeted at $37.0 million, a decrease of 1.7% as compared with the approved level for 2014.
These PILOTs are based on gross revenues received from the sale of electricity and tax assessments on other sources of
revenues.
Property-based PILOTs are budgeted at $297.9 million, a decrease of $1.3 million, or 0.4%, as compared with the level
budgeted for 2014. The lower budgeted expense for 2015 is primarily attributable to a 2% cap in the increase in T&D
property based PILOTs allowable under the LIPA Reform Act.
Additionally, LIPA also incurs real property-based taxes associated with the generating assets under contract through the
PSA, which are included in Operating Expenses. These taxes are budgeted at $192.7 million, a decrease of $3.6 million, or
1.8% below the 2014 budget. LIPA continues to challenge the property tax assessments on the PSA plants, which are overassessed, to reduce this expense.
The budget for the New York State Temporary Energy and Utility Conservation Assessment is $21.3 million, a decrease of
$13.4 million, or 38.6% as compared to the 2014 budget. The lower budgeted expense level for 2015 reflects the continued
phase-out of this charge through 2017.
A-7 (a)
Long Island Power Authority and Subsidiaries
2015 Proposed Operating and Capital Budgets
Other Income and Deductions
(Thousands of Dollars)
2014
Approved
Short-Term Investment Income
$
Carrying Charges on Deferred Shoreham Property Tax
Settlement Costs
4,250
$
Projected (a)
213
Change from
Approved 2014
$
%
Proposed
2015
$
619
$
(3,631)
(85.4%)
27,973
27,968
25,660
(2,313)
(8.3%)
Income on Nuclear Decommissioning Trust Fund
3,783
3,128
3,500
(283)
(7.5%)
Miscellaneous Income and Deductions
1,936
4,261
1,853
(83)
(4.3%)
(6,310)
(16.6%)
Total Other Income and Deductions
$
37,942
Note: (a) Projection as of September 30, 2014
A-8
$
35,570
$
31,632
$
Long Island Power Authority and Subsidiaries
2015 Proposed Operating and Capital Budgets
Other Income and Deductions
Other income and deductions are budgeted at $31.6 million, a decrease of $6.3 million, or 16.6%, compared with the level
budgeted for 2014. This category consists of income on LIPA’s short-term investments, non-cash carrying charges
accrued on deferred balances related to the Shoreham property tax settlement, earnings on NMP2 decommissioning fund
balances, and miscellaneous sources of revenues and expenses, such as income from certain customer-requested work not
included in electric rates. The decrease reflects lower short-term investment income and lower carrying charges on the
Shoreham property tax settlement costs.
A-8 (a)
Long Island Power Authority and Subsidiaries
2015 Proposed Operating and Capital Budgets
Grant Income
(Thousands of Dollars)
2014
Approved
Build America Bonds Subsidy - U.S. Treasury
Smart Grid Corridor Project - ARRA
Efficiency & Renewables - RGGI Funding
Storm Restoration Costs - FEMA
Community Development Block Grant
Offshore Wind Study - Congressional Grant
Total Grant Income
$
$
3,763
2,890
24,600
14,500
144,500
500
$
190,753
$
Note: (a) Projection as of September 30, 2014
A-9
Projected (a)
3,763
24,600
107,420
135,783
Change from
Approved 2014
$
%
Projected
2015
$
$
3,763
1,602
34,600
36,000
50
$
(1,288)
10,000
(14,500)
(108,500)
(450)
76,015
$ (114,738)
0.0%
(44.6%)
40.7%
(100.0%)
(75.1%)
(90.0%)
(60.2%)
Long Island Power Authority and Subsidiaries
2015 Proposed Operating and Capital Budgets
Grant Income
Grant Income is budgeted at $76.3 million, $114.7 million, or 60.2% lower than the level budgeted in 2014. This budget
category consists primarily of a grant of $34.6 million to be received from NYSERDA Regional Greenhouse Gas Initiative
funds to support LIPA’s energy efficiency programs and a $143.4 million grant to be received from the Governor’s Office of
Storm Recovery using HUD Community Development Block Grant (“CDBG”) funds (of which $107.4 million is projected
in 2014 and $36.0 million is budgeted in 2015). The CDBG grant funds the local match component of grants received
from FEMA for storm restoration as well as certain storm mitigation protective measures. Additionally, in February 2014,
LIPA signed a Letter of Undertaking (“LOU”) with FEMA that provides for $730 million of grant funding for storm
hardening measures. These grants are an offset to capital costs and are not reflected in the Operating Budget. $176.3
million is budgeted to be received from this LOU in 2015 (see schedule B-1).
The budget for Grant Income also includes:

Subsidy payments from the United States Treasury equal to 35% of the interest payable on LIPA’s debt issued as
Build America Bonds pursuant to the American Recovery and Reinvestment Act of 2009 ($3.8 million).

Partial funding of costs associated with LIPA’s smart grid demonstration project ($1.6 million)

Grant to fund a portion of LIPA’s participation in an offshore wind study ($50,000).
A-9 (a)
Long Island Power Authority and Subsidiaries
2015 Proposed Operating and Capital Budgets
Interest Expense
(Thousands of Dollars)
Projected (a)
Approved
Interest Expense on Debt Securities
Amortization of Premium
Net Interest Expense on Debt Securities
Other Interest Expense
NYSERDA Loan
Amortization of Deferred Debt Issue Costs
$
$
$
337,725
(15,176)
322,549
8,075
3,573
$
$
$
341,359
(23,025)
318,334
4,570
Change from
Approved 2014
$
%
Proposed
2015
2014
$
362,634
(20,236)
$ 342,398
$
$
$
-
Amortization of Deferred Losses on Refundings
11,436
30,696
4,758
19,857
Letter of Credit Fees
Interest on Customer Security Deposits
Bond Administration Costs and Bank Fees
Remarketing Fees
Other
13,848
461
901
796
455
12,702
640
779
505
743
9,231
703
500
490
-
$ 377,937
$
15,843
4.4%
8,816
10,932
1,573
16.8%
360,153
$ 367,005
14,270
4.0%
Subtotal - Interest Expense
$
362,094
$
352,735
Note: (a) Projection as of September 30, 2014
A-10
$
(33.3%)
52.5%
(44.5%)
(38.4%)
(100.0%)
368,969
50,635
$
(4,617)
242
(401)
(306)
(455)
(10.1%)
$
Total Interest Expense
73.6%
(4,006)
39,545
9,359
8,421
(100.0%)
33.2%
$
$
Less: Capitalized Interest
(8,075)
1,185
7.4%
33.3%
6.2%
35,539
Total Other Interest Expense
$
$
24,909
(5,060)
19,849
$
Long Island Power Authority and Subsidiaries
2015 Proposed Operating and Capital Budgets
Interest Expense
Interest expense is budgeted at $367.0 million, an increase of $14.3 million, or 4%, as compared with the level budgeted
for 2014. The budgeted expense for 2015 is based on forecasted levels of outstanding debt, associated fees, and the
amortization of debt-related deferred charges and credits. The assumed rate of interest on the debt issues planned for
December 2014 range from 3.792% to 4.593% for fixed rate taxable and tax-exempt debt. Variable rate debt is budgeted at
0.75%-1.25%. Interest expense to be incurred on debt securities is detailed by issue on Schedule A-11. (Please note that
Schedule A-11 reflects interest expense related to debt securities. It does not include interest expense incurred on nondebt related liabilities such as customer deposits and overpayments.)
The budgeted expense level for 2015 reflects a long-term bond sale expected to occur in December 2014 and short-term
borrowing expected to occur during 2015. The average level of debt outstanding for 2015 is budgeted at $7.6 billion,
including the securitized debt issued in 2013. The effective interest rate is 4.9%. This debt outstanding and effective
interest cost compare with $7.6 billion and 4.7%, respectively, budgeted for 2014.
A-10 (a)
Long Island Power Authority and Subsidiaries
Cost of Debt - 2015
Series
Type
Senior Lien Debt
1998 A
Capital Appreciation Bonds
2009-2028
2000 A
Capital Appreciation Bonds
2009-2028
Maturity
2015
2015
Year-End
Principal
Outstanding
($Thousands)
$119,711
348,279
12 - Month
Average Principal
Outstanding
($Thousands)
Effective
Interest Rate
Interest Expense
($Thousands)
$116,895
5.209%
$6,089
352,869
5.546%
19,571
2003 C
Term Bonds
2027-2033
36,645
36,645
4.900%
1,796
2006A
Serial Bonds
2009-2026
564,125
564,125
4.564%
25,744
2006B
Serial Bonds
2035
95,655
95,655
4.866%
4,655
2006C
Term Bonds
2035
194,105
194,105
4.948%
9,604
2006D
Serial Bonds
2009-2025
85,155
85,155
4.741%
4,037
2006D
Serial Bonds - CPI
-
74,118
4.093%
3,034
2006E
Serial Bonds
2009-2022
2015
391,085
391,085
4.414%
17,263
2006F
Serial Bonds
2009-2028
159,835
166,540
4.128%
6,874
2006F
Term Bonds
2033
91,055
91,055
4.250%
3,870
2008 A
Term Bonds
2033
598,720
598,720
5.932%
35,518
2008 B
Serial Bonds
2019-2025
94,740
94,740
5.770%
5,466
2008 B
Term Bonds
2033
51,985
51,985
5.750%
2,989
2009 A
Serial Bonds
2014-2039
302,025
302,025
5.189%
15,672
2009 A
Term Bonds
29,195
29,195
6.250%
1,825
2010 B
BABs - Serial Bonds
2020-2041
210,000
210,000
5.612%
11,784
2033
2011 A
Serial Bonds
2016-2036
113,360
113,360
3.812%
4,322
2011 A
Term Bonds
2038
132,230
132,230
5.000%
6,612
2012 A
Term Bonds
2037-2042
250,000
250,000
4.694%
11,734
2012 B
Serial Bonds
2012-2029
188,715
189,122
3.816%
7,217
2012 C
Serial Bonds - Variable Rate
2030-2033
175,000
175,000
0.750%
1,313
2013T
UDSA-Taxable
2017-2023
482,934
482,934
2.356%
11,376
2013TE
UDSA-Tax-Exempt
2014-2039
1,434,390
1,448,765
4.502%
65,222
20,505
20,505
4.406%
903
2014A
(1)
Serial Bonds-Tax-Exempt Refunding
2034
A-11
Long Island Power Authority and Subsidiaries
Cost of Debt - 2015
Series
Type
2014B (1)
Maturity
2015
Year-End
Principal
Outstanding
($Thousands)
2015
12 - Month
Average Principal
Outstanding
($Thousands)
Effective
Interest Rate
Interest Expense
($Thousands)
Term Bonds-Tax-Exempt New Money
2035-2039
423,550
423,550
4.593%
19,452
2014C
(1)
Serial Bonds-Taxable New Money
2018-2034
251,450
251,450
3.792%
9,534
2014D
(1)
Variable Rate Refunding
2027-2033
300,000
300,000
1.250%
3,750
Fixed Rate and Basis Swaps Swaps
13,384
Total Senior Lien Debt
$
7,144,449
$
7,241,826
4.565%
200,000
0.750%
$
330,607
Subordinate Debt
Series 2003 1A-3B
Variable Rate
2033
200,000
1,500
Fixed Rate Swap
Commercial Paper/Revolver
8,978
Variable Rate
Various
175,000
175,000
0.750%
1,313
Total Subordinated Debt
$
375,000
$
375,000
3.144%
$
11,791
Total Debt Securities
$
7,519,449
$
7,616,826
4.495%
$
342,398
Other Debt-Related Interest Expense(2)
Rebates Associated with Build America Bonds
34,836
(3,763)
Total Average Debt Outstanding/Embedded Cost of Debt
$
Notes: (1) Preliminary estimate
(2) Excludes customer deposits
A-11.1
7,519,449
$
7,616,826
4.903%
$
373,471
Long Island Power Authority
2015 Proposed Capital Budget
Capital and Deferred Expenditures
(Thousands of Dollars)
% Chg.
From
2014
Projected (a)
Approved
Transmission and Distribution
Regulatory Driven
Load Growth
Reliability
Economic/Salvage
Tools, Equipment & Other
FEMA Related Projects(b)
Total Transmission and Distribution Projects
Other PSEG Long Island Capital Expenditures
Information Technology Projects
Information Technology Projects - Timing(c)
Utility 2.0 - Deferred Expenses
Utility 2.0 - AMI
Customer Operations
Other General Plant Projects
Total Other PSEG Long Island Capital Expenditures
LIPA Capital and Deferred Expenditures
Nine Mile Point 2 - Including Capitalized Nuclear Fuel
LIPA - Accounting System
Deferred Rate Case Expenses - PSEG Long Island
Deferred Rate Case Expenses - LIPA
LIPA Capital and Deferred Expenditures
Capitalization of FASB Accounting Differential
for Pensions and OPEBs
Deferred Power Supply Management Expenses
Caithness and N-1-1 Reliability Projects
$
Proposed
2015
$
2014
17,848
81,759
136,884
6,741
6,190
-
$
$
249,421
$
229,430
$
496,785
$
84,889
9,547
8,192
7,554
$
92,400
22,129
5,680
3,659
$
77,410
15,300
3,907
11,464
8,487
$
110,182
$
123,867
$
116,569
$
9,387
-
$
9,221
16
$
33,056
5,000
4,434
1,000
431
252.1%
n/m
n/m
n/m
n/m
25,659
-
n/m
18,603
6,000
-
(100.0%)
(100.0%)
16,369
33,300
20,832
70,013
136,343
6,747
(4,506)
-
Approved
36,024
126,456
148,584
1,324
8,075
176,323
101.8%
54.7%
8.5%
(80.4%)
30.5%
n/m
99.2%
(8.8%)
(100.0%)
n/m
n/m
39.9%
12.4%
5.8%
Total LIPA Capital Expenditures & Deferrals
$
59,056
$
59,499
$
43,921
(25.6%)
Capitalized Interest and Allocations
$
19,252
$
18,712
$
20,932
8.7%
FEMA Contribution
$
-
$
-
$
(176,323)
Total Capital Expenditures & Deferrals
$
437,911
$
431,508
$
501,884
n/m=Not meaningful
Note: (a) Projection as of September 30, 2014.
(b) Amounts not available to be reallocated within the approved budgets.
(c) Information Technology projects where costs have shifted from 2013 to 2014. These projects remain within the total project budget.
B-1
n/m
14.6%
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