By William Opalka
A FERC administrative law judge last Tuesday set the return on equity for transmission projects over two periods in New England lower than what transmission owners sought but higher than what states and commission trial staff advocated.
The 371-page initial decision by Judge Steven Sterner lowered the base and ceiling ROEs for the New England Transmission Owners to 9.59 and 10.42% respectively for December 2012 to March 2014 and set the range at 10.9 to 12.19% for July 2014 through October 2015 (EL13-33, EL14-86).
The decision came in a consolidation of two complaints initiated by state officials against the New England TOs: Eversource Energy, Central Maine Power, National Grid and NextEra.
The case was heard under the new framework FERC set in its June 2014 ruling that switched to a two-step discounted cash flow (DCF) model incorporating short-term and long-term growth rate estimates (EL11-66-001, Opinion 531).
The TOs had sought a base ROE of either 10.24 or 11.14% for the period ending March 2014 and a maximum of 11.14% for the later period. The states had sought 8.75% and 8.16%.
Sterner held an evidentiary hearing last June and July. (See Hearing over New England Transmission ROE Nears End.) A decision was expected by the end of the year, but Sterner on Dec. 18 ruled there was “was insufficient evidence in the record from which he could establish a zone of reasonableness” because no parties had performed the DCF methodology in accordance with Opinion 531.
After the calculations were rerun, FERC staff recommended a base ROE of 8.68 or 8.74% for the 2014/15 timeframe.
The states and FERC staff contended the recovery in the stock market made the TOs more attractive to the investment community and that capital markets were returning to more normal conditions.
Sterner rejected their arguments. “The evidence shows that the same types of anomalous capital market conditions that existed [before December 2012]” prevailed in the time periods of the cases, “distorting the inputs to the DCF model,” he wrote.
“Alternative benchmark methodologies show that the midpoint of the DCF range of reasonableness would not be a just and reasonable base ROE for the NETOs. Under these circumstances, a mechanical application of the DCF model will not satisfy regulatory standards and an upward adjustment from the midpoint of the zone of reasonableness is necessary in order to comply with” Supreme Court precedent, Sterner wrote.
What about April, May, June 2014?
The story of the cyberattack — the first publicly acknowledged assault to cause power outages — was spelled out in riveting detail in a 
The employees enabled macros in the files that allowed the installation of BlackEnergy 3 malware on the companies’ systems, providing access to command and control Internet Protocol addresses.
The report concludes with a number of recommendations, including eliminating unnecessary VPN pathways and developing “cyber blackstart” capabilities. But it warns that “it is likely that the adversary will modify attack approaches in follow‐on campaigns and these mitigation strategies may not be sufficient.”
Transmission projects expected to be in service by 2020 are adequate to leave the boundaries of the four zones intact for the capacity commitment period of 2020/21, ISO-NE Director of Transmission Services and Strategies Al McBride told the Planning Advisory Committee last Tuesday. The zones are also unaffected by resource retirements and additions already accounted for.
Among the report’s highlights: More than 4,200 MW of the region’s conventional nuclear, coal- and oil-fired generating capacity has retired recently or is scheduled to retire soon; about a third of the 13,000 MW of proposed generation projects are wind resources; and pipeline constraints and few delivery points for LNG will continue to pose challenges for fuel supply.
If Dominion Energy’s three-reactor Millstone Power Station were to close, more than 1,000 jobs would be lost and carbon emissions in New England would increase by 27%, officials told a legislative panel.
Commonwealth Edison will begin using data collected by smart meters to calculate greenhouse-gas reductions that can be linked to initiatives to reduce peak demand.
State regulators on March 21 agreed to postpone until this week whether to reconsider their rejection of international investors’ $4.9 billion bid for Cleco. The Public Service Commission is considering whether to change last month’s order that nixed the acquisition of the utility.
State officials, concerned about the possibility of leaks from pipelines that run under Lake Michigan, have asked Enbridge to provide specific condition information on Line 5, a pair of pipelines that cross the Straits of Mackinac.
A state district judge has struck down a water-discharge permit for a southeastern coal mine, saying officials failed to fully consider the effects of pollutants on several nearby creeks.
After 61 years of providing electricity to the Tennessee Valley, the Colbert Fossil Plant has been disconnected from the grid.
Environmental groups want the Nuclear Regulatory Commission to revoke licenses for two new reactors at the South Texas Project, claiming the project is controlled by a foreign owner in violation of the Atomic Energy Act.
Critics of the state’s process for selecting sites for renewable energy projects are opposing proposed legislation designed to give regional planning commissions greater say in where solar and wind power projects are located.
Electricity rates in the state are among the highest in the Midwest, but residents pay less than customers in surrounding states because they use less power on than average, according to a recent study by the Public Service Commission.
Duke has contracted with Carbon Cycle Energy, which will build and own a plant that will generate enough electricity from chicken and swine waste to power about 10,000 homes a year.
Black Hills Energy has started construction on a 144-mile, $54 million transmission line that will run from northeast Wyoming to Rapid City, S.D.
The operator of the Atlantic Coast Pipeline, a $5 billion pipeline that will deliver natural gas from Appalachian shale fields to Virginia and North Carolina, has sold 96% of the future pipeline’s capacity and surveyed 90% of the 550-mile route, according to an update from the company.
Lincoln Electric System, the Nebraska public utility serving the state capital region, approved a six-year $453 million capital budget to replace and upgrade infrastructure.
Two Hutchinson, Kan., residents were arrested in separate incidents for threatening Westar Energy employees who swapped out their old electric meters.
Duke Energy Renewables has purchased a proposed 20-MW solar project in California from EDF Renewable Energy. The project, to be built in San Bernardino County near Barstow, will be called the Longboat Solar Power Project.
Dynegy’s coal-fired Wood River plant in Illinois will be shuttered in June after a MISO study concluded it was no longer needed to ensure reliability in the region.
Power DC, a coalition formed against the deal, said, “We are profoundly disappointed and saddened that the D.C. Public Service Commission has ignored the clear opposition to the proposed Exelon-Pepco merger voiced by the district’s elected officials, community and business leaders, and residents.