The Federal Energy Regulatory Commission should put a hold on a decision that will require New England utilities to pay their customers about $1.5 billion in refunds for transmission charges going back to 2011, according to utility companies Eversource and Avangrid.
Eversource’s utilities — Connecticut Light and Power, NSTAR Electric and Public Service Co. of New Hampshire — owe about $880 million in refunds while Avangrid’s New England utilities — Central Maine Power Co. and The United Illuminating Co. — owe about $203 million, according to an April 2 filing at FERC. Separately, Jefferies equity analysts estimate that National Grid owes about $260 million in refunds.
Other companies facing refunds include: Emera Maine, Green Mountain Power, Unitil, Vermont Electric Power Co., Vermont Transco and PPL’s Rhode Island Energy.
The potential refunds are driven by FERC’s March 18 decision to cut the base return on equity for New England transmission owners 1 percentage point to 9.57%
Eversource and Avangrid asked FERC to stay the decision. Separately, ISO New England and the region’s utilities asked FERC to extend the 30-day deadline for making the refunds to Dec. 13.
FERC’s decision resolved four complaints over the ROE for New England transmission owners. The first complaint was filed in 2011. An appeals court in 2017 vacated FERC’s initial decision on the first three complaints.
FERC ordered the transmission owners — mainly utilities — to provide refunds, with interest, for a 15-month period starting Oct. 1, 2011, and also from Oct. 16, 2014, to the present. The decision reduces New England transmission rates by about $140 million a year, according to the Maine Office of the Public Advocate.
However, the transmission owners will likely sue FERC to overturn its decision. Before they can go to court, they must ask FERC to reconsider its decision, which they haven’t done yet.
Eversource and Avangrid contend that the agency should put its decision on hold while potential litigation plays out.
The companies said that making the refunds will cause “immediate and irreparable harm” to them, their investors and their customers.
They said making the refunds will put severe pressure on their liquidity and cash flow; hurt their credit metrics; hurt investor confidence, which will increase their cost of capital; and, increase their borrowing costs when they must finance essential transmission operations and large‑scale capital programs.
“Granting a stay serves the interests of customers by avoiding the rate whiplash and volatility that would occur if the retroactive refund obligation is implemented now but later reversed on rehearing or appeal,” Eversource and Avangrid said.
Also, a federal appeals court is considering a case brought by transmission owners in the Midcontinent Independent System Operator region that could affect FERC’s authority to require refunds, according to Eversource and Avangrid.
The utility companies asked FERC to give people three business days to comment on the request — with an April 7 deadline — and for the agency to make a decision by April 13. The motion from ISO-NE and all the region’s transmission owners to delay the refund date had the same request for an expedited comment period and decision.
The Connecticut Public Utilities Regulatory Authority and the Massachusetts Attorney General’s office on Monday asked FERC to dismiss the requests for expedited comment periods and agency decisions.
New England ratepayers have been waiting for relief from transmission charges that took effect in 2011, while paying some of the highest electric rates in the United States, PURA and the attorney general’s office said.
“The Complainants, including New England states, consumer advocates, and public power systems, should be given a full and fair opportunity to consider and respond to any suggestion that relief should be further delayed,” they said.
Jefferies expects FERC will extend the refund deadline, but reject the request that the agency stay its decision, according to a client note issued Monday.
New England consumers paid about $24/MWh in base transmission charges in 2024, which is about $15/MWh higher than in New York and about $6/MWh above the PJM Interconnection, according to Jefferies. To reduce those charges, New England lawmakers may seek to bar transmission owners from earning an extra 0.5% ROE for being ISO-NE members, the firm’s equity analysts said.
