Carmel, IN, June 19, 2006 — The Midwest Independent Transmission System Operator Inc. (Midwest ISO) announced it will cut its 2006 operating costs by approximately $10 million, a reduction of about six percent from the original budget of $160.6 million.
The reductions were identified during a comprehensive review of planned expenditures for the balance of 2006, said Midwest ISO president and CEO T. Graham Edwards.
“When we developed this budget last year, the Midwest Energy Markets were barely off the ground,” Edwards said. “Our markets have matured a great deal since then, and we have identified areas where we have been able to gain efficiencies.”
Vice president and CFO Michael P. Holstein presented the outcome of the operating budget review to the Midwest ISO board of directors late last week.
“Subsequent to our internal review, we have undertaken actions that allow us to reduce our level of spending for the remainder of this year,” Holstein said, adding that the organization is planning to extend the cost reductions in its 2007 budget.
The majority of the savings to the Midwest ISO’s 2006 operating budget will be in the IT and operations areas, Holstein added. The balance of the reductions will be spread across a variety of areas throughout the organization.
Edwards said the cuts will help mitigate the effect of E.ON US subsidiaries Louisville Gas & Electric and Kentucky Utilities withdrawal from the Midwest ISO later this year. “We needed to minimize the impact of LG&E’s departure on our members and other market participants,” he said. “I’m pleased that we will be able to accomplish that.”
The reductions align with one of Edwards’ primary focuses. When he accepted the position of President and CEO on an interim basis in January, he cited cost control as among his top three priorities — a position he reemphasized when he accepted the position permanently in late May.
For more news and exclusive features from Utility Automation & Engineering T&D and Electric Light & Power online, please click here.