20240816PAC to Staff 113 - Attachment 2024 COSR_Business Plan and Budget_FINAL DRAFT_20240308.pdf.pdf

Western Resource Adequacy Program
Committee of State Representatives
2024 Business Plan and Budget
March 8, 2024
Under Consideration by:
Appointed Members of the
Western Resource Adequacy Program
Committee of State Representatives
1600 Broadway, Suite 1020
Denver, CO 80202
720-897-4600
www.westemenergyboard.org

WRAP Committee of State Representatives 2024 Business Plan and Budget
TABLE OF CONTENTS
Introduction.....................................................................................................................................3
OrganizationalOverview................................................................................................................4
Membershipand Governance......................................................................................................... 5
2024 Strategic Priorities and Goals................................................................................................. 6
2024 Budget and Assumptions ....................................................................................................... 7
WorkingCapital Reserve.............................................................................................................. 12
Budget Projections for 2025 & 2026............................................................................................ 13
Under Consideration by Members of the COSR 2

WRAP Committee of State Representatives 2024 Business Plan and Budget
Introduction
The Western Resource Adequacy Program (WRAP) Committee of State
Representatives' (COSR)proposed budget for 2024 is $147,100. This is the first iteration of the
COSR budget since the COSR was formally stood up in April 2023. The budget is based upon
employment of 1 full time equivalent (FTE) employee consisting of three Western Interstate
Energy Board(WIEB)staff in 2024.The following table summarizes the COSR proposed budget
for calendar year 2024:
Table 1. COSR Budget for 2024
COSR—Total Resources
Total FTEs 1.00
Direct Labor $75,400
Indirect Expense (95.1%) $71,700
Total Expense $147,100
The COSR funding assessment is allocated to State-Regulated WRAP Participants
(SRWPs)using the following methodology as specified in the SRWP contract:
1) Determine SRWP's load for each applicable state (i.e., each state where the
SRWP serves load that is subject to WRAP) using most recent publicly
available EIA data.
2) For each state, add up the total WRAP load (which may be comprised of one
or more SRWPs)
3) A limit is set to distinguish between small and large load states using a
10,000,000 MWh threshold.
4) If a state's total WRAP load is above the threshold, it is assigned an equal
proportion of the total WIEB expense based on the total number of WRAP
states, e.g., if there are ten WRAP states,the large load state receives one tenth
of the total expense.
5) If a state's total WRAP load is below the threshold, it is assigned half the
proportion of the total expense compared to large load states, e.g., if there are
ten WRAP states, the small load state receives one-twentieth of the total
expense.
6) This allocation method leaves a residual amount of a total expense that is then
assigned equally to the large load states.
7) Each SRWP's load in each state is then assigned a proportion of the total state
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WRAP Committee of State Representatives 2024 Business Plan and Budget
allocation according to that SRWP's respective share of that state's WRAP
load.
8) Each SRWP's total expense share by state is then added together to get each
SRWP's compensation share of the total expense.
The following table summarizes the funding allocation by state for 2024:
Table 2. COSR Funding Allocation by State for 2024
COSR 2024 Funding Allocation by State
Arizona $19,613.33
California $7,355.00
Idaho $19,613.33
Montana $7,355.00
Nevada $19,613.33
New Mexico $7,355.00
Oregon $19,613.33
Utah $19,613.33
Washington $19,613.33
Wyoming $7,355.00
Total $147,100
Under Consideration by Members of the COSR 4

WRAP Committee of State Representatives 2024 Business Plan and Budget
Organizational Overview
The WRAP-COSR is a standing committee of the WRAP, a first-of-its-kind reliability
program in the West operated by the Western Power Pool (WPP). The WRAP tariff was
approved by the Federal Energy Regulatory Commission(FERC)at the beginning of 2023,and
the COSR was established soon after in April 2023 in accordance with the WRAP Bylaws. The
COSR aims to support state and provincial engagement in the WRAP and share perspectives
on pertinent program matters with WRAP participants and stakeholders. The COSR provides
advice to the WPP Board of Directors, Program Review Committee (PRC), Resource
Adequacy Participants Committee (RAPC), any associated working groups or task forces, and
FERC on matters related to WRAP governance,program design, and operations.
The COSR has chosen to rely on the Western Interstate Energy Board (WIEB) as the
vehicle to obtain independent staff support. WIEB was formed in 1970 pursuant to the Western
Interstate Nuclear Compact, P.L. 91-461. WIEB provides the instruments and framework for
developing energy policy cooperatively among member states and provinces and the federal
government to enhance the economy of the West. WIEB currently shares staff resources with
the Western Interconnection Regional Advisory Body (WIRAB) and the Western Energy
Imbalance Market Body of State Regulators (WEIM-BOSR). WIRAB was created by the
Federal Energy Regulatory Commission (FERC) in 2006 upon petition of the western
Governors. WEIM-BOSR was created in 2015 as part of a governance proposal adopted by the
California Independent System Operator (CAISO) Board of Governors to address the regional
nature of its energy imbalance market. In addition to WIRAB, WEIM-BOSR, and WRAP-
COSR,WIEB also provides staffing and support for the Southwest Power Pool Markets+ States
Committee (SPP-MSC). Initial membership of the MSC is broad given the uncertainty about
which states will ultimately participate in Markets+and currently includes representatives from
any states or provinces with entities that may plausibly choose to participate in the ultimate
Markets+ day-ahead market structure. WIEB, WIRAB, WEIM-BOSR, WRAP-COSR, and
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WRAP Committee of State Representatives 2024 Business Plan and Budget
SPP-MSC are independent sister organizations that share a common staff and organizational
resources but maintain independent governance, decision-making, and funding. The following
chart illustrates the organizational relationships:
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WRAP Committee of State Representatives 2024 Business Plan and Budget
Figure 1. Organizational Relationships
Western Interstate Western Western EIM Body of Western RA Program Markets+State
Energy Board Interconnection State Regulators Committee of State Committee
Regional Advisory Representatives
(wIEB) Body(wIRA6) (WEIM-BOSR) (MSC)
(WRAP-COSR)
• Created as an Created by western Created Board
California Created in
interstate compact by governors pursuant ISO Board to Created t partnership with the
to Section 215' of Governors to address Northwest Power Southwest Power
western states and 0) the regional nature of Pool Board of Pool to provide
ratified b Congress the Federal Power
y g Act. the Western Energy Directors to address Western state
(P.L.91-461). Imbalance Market the regional nature of perspectives on
Governors of AZ,CA, WIEB Board (WEIM). the Western Markets+.
Members from AZ, One commissioner Resource Adequacy
DuringPhase One of
CO,ID,MT,NV,NM, CA,CO,ID,MT,NV, from each state Program(WRAP). the Markets+
OR,UT,WA,WY, NM,OR,UT,WA, public utilities One representative development,
and Premiers of AB WY,BC,and AB commission in which from each state or membership is open
and BC appoint appoint member a regulated load- province in which a to one representative
representatives.
member serving utility load-serving entity from any state or
Governors from NE,
representatives. participates or plans participates in the province with an
SD,TX,and Baja to participate in the WRAP. entity that is
• Provides the California Mexico p p ty
instruments and appoint member Western EIM. Provides advice to considering joining
framework for representatives. Provides a forum for the Northwest Power Markets+.
s advice to state commissioners Pool and FERC on Provides advice to
developing energy Provide
FERC, advice
and to:(1)select a voting the design and the Markets+
policy cooperatively member of the WEIM operation of the Participant Executive
among member WECC on electric Governing Body Western Resource Committee and the
states and provinces reliability matters in Nominating Adequacy Program. Markets+
the Western Committee, 2 learn Independent Panel
and the federal Interconnection. ( ) p
government to about and discuss on the design and
the the EIM and CAISO operation of
"enhance
economy th the West markets,and(3) Markets+.
express a common
and contribute to the position to the WEIM
well-being of the Governing Body on
region's people." EIM issues.
Membership and Governance
The WRAP-COSR is composed of one representative from each state or provincial
jurisdiction that regulates at least one WRAP Participant. State and provincial representatives
are nominated by the Chair or President of their respective public utility commission and may
include representatives from the state or provincial energy offices or state or provincial funded
consumer advocates. The COSR operates in a public setting and welcomes other regional
stakeholders to attend committee meetings to foster engagement and collaboration.Below is the
list of current COSR member representatives:
Table 3. COSR Membership List
State/Province Representa Title/A enc Leadership
Arizona Nick Myers Commissioner, Arizona
Corporation Commission
California Alice Reynolds President, California Public
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WRAP Committee of State Representatives 2024 Business Plan and Budget
Utilities Commission
Idaho John Hammond Commissioner, Idaho Public
Utilities Commission
Montana James Brown President, Montana Public
Service Commission
Commissioner Public Utilities
Nevada Tammy Cordova Commission of Nevada Chair
Commissioner,New Mexico
New Mexico James Ellison Public Regulation
Commission
Oregon Megan Decker Chair, Oregon Public Utility
Commission
Director Utah Division of
Utah Chris Parker Vice Chair
Public Utilities
Chair, Washington Utilities
Washington Dave Danner and Transportation
Commission
Wyoming Chris Petrie Deputy Chair, Wyoming
Public Service Commission
2024 Strategic Priorities and Goals
Since the FERC approval of WRAP in early 2023, WRAP Participants and WPP have
been developing the Business Practice Manual. This process has been the focus of the PRC and
RAPC for the majority of 2023 with work continuing into 2024. The Business Practice Manual
work is expected to conclude by Summer of 2024 with a final vote from the WPP Board of
Directors to approve the Business Practice Manual. COSR staff have been engaged in this
process, following the development of different aspects of the Business Practice Manual
through PRC and RAPC meetings, and submitting questions and comments when applicable.
As the WRAP continues its development to go-live, consistent, and informed regulator
engagement on WRAP operations and developments is crucial to enhancing the reliability in
the West. To continue to enable that engagement,the COSR aims in 2024 to work with its staff
to:
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WRAP Committee of State Representatives 2024 Business Plan and Budget
• Advance education and understanding among western commissioners regarding WRAP
initiatives and WRAP coordination with the emerging wholesale electricity markets.
Over the past year, COSR representatives have been engaging with WPP to better
understand the basic functions of the WRAP, and members will engage in more
advanced conversation and learning as the WRAP matures to its later development
stages.
• Provide a forum for discussion and opportunities to form a common
state/provincial perspective on issues relating to reliability and resource
adequacy. This includes:
o Organizing two in-person WRAP-COSR meetings in 2024;
o Holding virtual monthly WRAP-COSR meetings;and
o Organizing other workshops or webinars, as necessary.
• Support the COSR members' effective engagement in relevant WRAP processes by:
o Tracking and participating in the WRAP initiatives most relevant to the WRAP-
COSR, including those that relate to policy, program design, or governance.
o Arranging or providing briefings and training on policy and technical matters,
such as technical program enhancements or other developments in the resource
adequacy space that impact WRAP operations.
o Further developing internal technical expertise to better engage the COSR
members in conversation with WRAP Participants and WPP.
o Facilitating COSR members consideration of potential consensus positions
relevant to WRAP initiatives or other initiatives that could impact WRAP
operations.
• Engage with other key organizations and partners in the West, such as WEIM-BOSR,
SPP-MSC, and WIRAB, as well as WRAP Participants, regulators and policymakers
from other regions, and the Federal Energy Regulatory Commission.
Under Consideration by Members of the COSR 9

WRAP Committee of State Representatives 2024 Business Plan and Budget
2024 Budget and Assumptions
The COSR proposed budget for 2024 is $147,100. The budget is based upon
employment of 1 FTE in 2024, at a direct labor expense of$75,400 and indirect expense of
$71,700. The COSR's projected working capital reserve will be assessed in 2025 and based
on actual spending in 2024.
The COSR 2024 budget is based on the following key assumptions:
• The COSR will hold regular monthly business meetings to address ongoing
WRAP activity and stakeholder participation.
• The COSR will organize and sponsor webinars and workshops on key WRAP
issues for state and provincial representatives,industry representatives,and other
interested stakeholders.
• A COSR representative will participate in all WPP Board of Directors
meetings.
• A COSR representative will participate in all PRC and RAPC meetings.A staff
person will be appointed to monitor RAPC meetings in Executive Sessions, in
accordance with a signed non-disclosure agreement.
• COSR members will participate in selected WRAP meetings and workshops on
relevant topics.
Personnel and Indirect Expenses
Personnel expenses in the COSR's budget total $75,400 for a total of 1 FTE. The FTE
breakdown is allocated to 0.05 FTE to the Executive Director, 0.65 to the Government
Relations Specialist, and 0.30 to the Resource Adequacy and Markets Analyst. The Western
Interstate Energy Board uses a single rate method for indirect expenses. The indirect expenses
include office expenses,medical and retirement expenses as well as holiday,vacation,and sick
leave for COSR staff. The indirect rate is a percentage of direct labor expense associated with
COSR activities. The indirect rate is 95.1% in the 2024 budget.
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WRAP Committee of State Representatives 2024 Business Plan and Budget
Working Capital Reserve
The COSR will determine an appropriate working capital reserve commencing with the
calendar year 2025 budget. The level of reserves will be based on actual year to date spending
of the 2024 budget. A typical working capital reserve ranges from 5% to 20% of budgeted
expenses. Reserves are intended to provide a cushion to cover unexpected expenses. The
reserve policy will be reviewed in future years when budget risks can be more clearly identified.
The adjustment to the funding requirement to meet the desired level of reserves is the
mechanism by which the COSR will ensure that budget surpluses in any given budget year will
be used to reduce the funding requirement in the subsequent budget year.
Table 4. Working Capital Reserve Analysis, 2024
COSR-Working Capital Reserve Analysis 2024
Beginning Working Capital Reserve (Deficit),December 31,2024 0
Plus: 2024 Funding(from SRWPs) 147,100
Plus: 2024 Other funding sources 0
Minus: 2024 Projected expenses&capital expenditures 147,100
Projected Working Capital Reserve (Deficit),December 31,2024 0
Desired Working Capital Reserve,December 31,2024 0
Minus: Projected Working Capital Reserve,December 31,2024 0
Incre as e(de ere as e)in funding requirement to achieve Working Capital Reserve 0
2024 Expenses and Capital Expenditures 147,100
Less: Penalty Sanctions 0
Less: Other Funding Sources
Adjustment:To achieve desired Working Capital Reserve -
2024 COSR Assessment 147,100
Budget Projections for 2025 & 2026
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WRAP Committee of State Representatives 2024 Business Plan and Budget
The COSR projects a 5.2% increase to its 2025 annual budget due to an increase in the
indirect rate from 95.1% to 97.3%, and a 4% cost-of-living adjustment. The COSR projects a
typical 4% increase to its 2026 annual budget. These steady increases reflect expected cost-of-
living adjustments to personnel expenses for employees. The increases are consistent with those
approved by WIEB and WIRAB.
Table 5. Comparison of 2024 Budget to 2025 Budget and Working Capital
Statement of Activities and Change in Working Capital
2024 Budget&Projection,and 2025 Budget
Variance
2025 Budget
2024 2024 Variance 2025 v 2024 Budget
Budget Projection Over(Under) %Change Budget Over(Under) %Change
Funding
COSR Funding
Assessments $ 147,100 $ 147,100 $ 0.0% $ 162,451 $ 15,351 10.4%
Total COSR Funding $ 147,100 $ 147,100 $ 0.0% $ 162,451 $ 15,351 10.4%
Interest - $ $ -
Miscellaneous - - - -
Total Funding(A) $ 147,100 $ 147,100 $ 0.0% $ 162,451 $ 15,351 10.4%
Expenses
Personnel Expenses
Salaries 75,400 75,400 0.0% 78,416 $ 3,016 4.0%
Total Personnel Expenses $ 75,400 $ 75,400 $ - 0.0% $ 78,416 $ 3,016 4.0%
Meeting Expenses
COSR Meetings $ $ -
State Travel $ $
Staff Travel $ $
Total Meeting Expenses $ - $ $ - $ - $ -
Operating Expenses
Consultants&Contracts $ $
Miscellaneous - -
Total Operating Expenses $ - $ - $ $ - $
Total Direct Expenses $ 75,400 $ 75,400 $ 0.0% $ 78,416 $ 3,016 4.0%
Indirect Expenses $ 71,700 $ 71,700 $ - 0.0% $ 76,300 $ 4,600 6.4%
Other Non-Operating Expenses $ - $ - $ - - $ - $ - -
TOTAL BUDGET(B) 147,100 $ 147,100 $ - 0.0% $ 154,700 $ 7,600 5.2%
CHANGE IN WORKING CAPITAL(=A $ - $ - $ - - $ 7,751 $ 7,751 -
FTEs 1.00 1.00 0.0% 1.00 - 0.0%
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