快活app官网 is a not-for-profit company that serves as the Regional Transmission Organization for New England. To fund the services we provide, we collect fees from the buyers and sellers in the region鈥檚 wholesale electricity markets and from the customers that use regional transmission services. Those service rates are set at a level that lets us recover only what we need to operate. And that amount is determined each year through the budget process described below.
The annual budget process gets underway well before the budget will take effect. Our commitment to cost accountability and transparency starts with judicious internal budget development. A robust external stakeholder review process follows. After the budgets are approved by our independent Board of Directors, we file our budgets with the Federal Energy Regulatory Commission (FERC), which judges whether our collections are just and reasonable.
The services and benefits we provide to keep the power flowing will cost the average New England residential electricity consumer just $1.71 per month in聽2025, based on 750 kilowatt-hours per month聽usage.
Learn about how wholesale costs are reflected in consumers鈥� electricity聽bills.
Before any actual budgeting begins鈥攖he 快活app官网 Board of Directors and senior management create the 快活app官网鈥檚 business plan. The business plan defines objectives for the next five years, as well as the projects and activities needed to achieve those objectives. Three central goals underpin all of our business objectives:
Once our business plan is set, we use it to create an operating budget. This involves:
We also develop a capital budget each year to cover projects that add or improve services for our stakeholders, to purchase IT hardware or software, or to fund other items beyond our typical day-to-day services that align with our the business plan strategies and priorities. While we use private financing for capital projects, the related debt service costs are recovered through our operating budget as depreciation and amortization costs. The cost of each capital project is recouped and paid once.
Once we know our revenue requirement (how much it鈥檒l cost to serve the region in the budget year), we calculate the service rates we鈥檒l need to set in the coming year to collect that amount from our customers. Those rates鈥攁s well as how the revenue requirement is allocated among various service customers鈥攁re shared with stakeholders when they are finalized in late September, and are an integral part of our operating budget filing to FERC. The 快活app官网 Tariff will reflect those revised rates as of January 1, assuming that FERC approves them.
Next, we make sure key stakeholders have multiple opportunities to review and provide feedback on our proposed budgets:
The NEPOOL Participants Committee simultaneously reviews the budgets over one or two meetings, then holds an advisory vote on the budget. The results are reported to the 快活app官网 Board and FERC for consideration.
While we consider feedback from state agencies and NEPOOL in our budget development, authority to approve our budgets rests solely with the 快活app官网 Board. The Board鈥檚 Audit and Finance Committee advises 快活app官网 management throughout the budget development process and provides updates to the Board. Accordingly, while external stakeholders are reviewing the budget proposal, the 快活app官网 Board of Directors undertakes its own intensive review:
At least 60 days before the operating year starts, the budgets are filed with FERC. FERC reviews the budgets鈥攁long with hundreds of pages of supporting documents, testimony, and stakeholder comments. Then FERC determines whether the rate changes are just and reasonable鈥攁nd if necessary, resolves any concerns from regional stakeholders. Once FERC OKs our budget, the revised service rates become part of the 快活app官网 Tariff.
After the budget is approved, we develop a detailed work plan for the year, then share this with state officials and NEPOOL. See our Annual Work Plan. Together, we discuss common objectives and resource limitations, aiming to reach consensus on regional priorities. Generally, priorities are categorized as related to markets, planning and operations, or capital projects. These priorities are ultimately reflected in the Wholesale Markets Project Plan.
Despite our rigorous budget development process, our budgets are an estimate of anticipated costs and of the amount we will collect. Many factors can affect the cost side, such as a required shift in work priorities due to regulatory rulings or stakeholder input. On the revenue side, we collect our rates as a charge on energy consumed or numbers of transactions, and the amount of those units may be more or less than anticipated. For reasons like these, a true-up calculation is performed once the year is complete and is reflected in a future budget. If we collected:
Once the operating year starts, stakeholders have a number of opportunities to review and comment on the 快活app官网鈥檚 performance compared to its budgets:
You can find recent budget filings and updates on the Budget page. The details, rights, and responsibilities related to our budgeting process are detailed in the following documents:
