Sharp divide emerges over proposed policy on ROE for transmission projects

摘要

Municipal utilities in Massachusetts pushed back on the Federal Energy Regulatory Commission’s proposal for setting transmission rates of return on equity, contending the new framework would undermine consumer protections. New England transmission owners, on the other hand, threw their support behind the policy, pitched in October, that would weigh and set transmission ROE using up to four different models rather than relying solely on the discounted cash flow methodology. FERC’s proposal came in response to a 2017 remand from the DC Circuit Court of Appeals (Emera Maine, et al. v. FERC, 15-1118), and has implications for a batch of long-pending disputes over the amount of returns FERC should allow on transmission investments. The commission said the changes it proposed were necessary to more accurately reflect how investors make their decisions. The new approach would create a wider band of acceptable ROEs, making room for a higher total ROE after incentives are added.