Ruling could deliver more than $1 billion in refunds to New England electricity customers, including millions of dollars in savings for Mainers
Today, the Maine Office of the Public Advocate (OPA) applauded a recent decision from the Federal Energy Regulatory Commission (FERC) reducing the return on equity (ROE) earned on transmission projects in New England. The ROE represents the profits transmission owners are allowed to earn on their investments.
In a decision issued on March 19th on four open cases, the first of which dates back to 2011, FERC concluded that the New England transmission owners have been receiving returns on equity that were “unjust and unreasonable.” FERC determined that the base ROE rate for the transmission owners in place in 2011 (11.14%) and the interim ROE in place since 2014 (10.57%) were higher than was justified. FERC set a replacement base ROE of 9.57%.
FERC ordered the transmission owners to provide refunds, with interest, for a 15-month period from October 1, 2011 to December 31, 2012 and from October 16, 2014 to the present. The going-forward reduction in transmission rates for ratepayers throughout New England will be roughly $140 million per year. Refunds could top $1.5 billion.
The Maine OPA, as well as consumer advocates from every New England state, filed the challenges that resulted in this finding for ratepayers. The litigation has been pending before FERC and the federal appellate courts for nearly 15 years.
The FERC opinion will almost certainly be subject to further litigation, so the timing of refunds and transmission rate reductions remains uncertain. Nonetheless, this decision represents a significant victory for Maine ratepayers.
“We commend FERC for recognizing that the profits granted to New England transmission owners over the last 15 years have been far too high and for taking definitive action to make electric rates more affordable,” said Heather Sanborn, Maine’s Public Advocate. “We will press for the refunds due to Mainers to be returned swiftly to provide real rate relief for folks who are struggling to pay high utility bills.”
The FERC decision can be found here.
The OPA represents the interests of Maine’s utility customers in both state and regional proceedings.