Dive Brief:
- Eversource Energy misclassified a roughly $385-million transmission project as an “asset management project” to avoid regulatory scrutiny, ratepayer advocates from five New England states said in a complaint filed Tuesday with the Federal Energy Regulatory Commission.
- Under ISO New England’s rules, the asset condition management classification is only for projects that have been “damaged or destroyed” and only allows those facilities to be brought back to “substantially the same condition, character or use,” according to the complaint. Eversource’s disputed project in northern New Hampshire — X-178 — doesn't meet those conditions, the ratepayer advocates said.
- Eversource contends the complaint is based on outdated information and is a misreading of ISO-NE’s rules for asset management projects, which the utility company will address in its response to the complaint at FERC, Olessa Stepanova, an Eversource spokeswoman, said in an email.
Dive Insight:
The dispute comes amid growing concerns about electric affordability across the United States and the role transmission construction can play in utility bills, including in New England. At the same time, ratepayer advocates and others have been pressing for stricter reviews of local projects that are planned by utilities with relatively little regulatory oversight.
In New England, asset management projects — called local projects in the PJM Interconnection — are proposed by utilities and are designed to replace aging infrastructure. The projects are reviewed by an advisory committee, but receive little to no scrutiny over their costs and drivers, according to the complaint.
In the case of Eversource’s X-178 project, less than 10% of the project’s 594 structures along the 49-mile line have anything more than “minimal defects,” the ratepayer advocates said, citing a February 2024 presentation by Eversource.
They told FERC the project should have been reviewed through ISO-NE’s more rigorous regional transmission planning process.
“Eversource, and other ISO New England Transmission Owners, stand to financially benefit from taking this path of least resistance,” the ratepayer advocates said. “Economists have long noted that, because of their market power, utilities will have the incentive to goldplate their facilities as a way to increase rate base.”
About $6.6 billion in asset condition projects have been installed in New England and an additional $5.2 billion are expected to be added by 2033, according to a March 24 ISO-NE presentation. Also, about $13.1 billion in regional projects have been built in New England, with an additional $282 million planned by 2033.
If FERC determines that under the Transmission Operating Agreement between ISO-NE and New England’s transmission owners that Eversource has the sole discretion to decide whether the X-178 project is an asset condition project, the commission should find the agreement to be “unjust and unreasonable” and order it to be changed, the ratepayer advocates said.
The complaint notes that ISO-NE is working with stakeholders to develop a review process for asset management projects that would be conducted by the grid operator and is set to be in place by 2027.
The complaint was filed by the Maine Office of the Public Advocate, the Connecticut Office of Consumer Counsel, the Rhode Island Division of Public Utilities and Carriers, the New Hampshire Office of the Consumer Advocate and the Vermont Department of Public Service.
Eversource defends project
Eversource contends the ratepayer advocates ignored more recent information on the project.
In an October 2024 update on the project to ISO-NE’s Planning Advisory Committee, Eversource said new surveys found that about a quarter of the line's structures needed to be replaced due to deterioration and an additional roughly 15% of its “uplift” structures needed to be replaced.
Also, the project’s estimated cost was lowered to $360.6 million, according to the presentation.
“As with all asset condition projects, regional stakeholders have had ample opportunities for questions and feedback through the ISO-NE Planning Advisory Committee process,” Eversource’s Stepanova said.
The X-178 project is essential to improving grid reliability for customers and making the transmission system more resilient to extreme weather, she said.
“Rebuilding the entire line at one time will limit impacts to our customers and the environment — resulting in a more efficient, cost-effective and responsible solution to address system needs,” Stepanova said.
Transmission costs grow in New England
In Maine, a Central Maine Power residential customer will pay 29.3 cents/kWh this year, including 5.3 cents/kWh for transmission, up from 14.7 cents/kWh and 2.7 cents/kWk, respectively, a decade ago, according to the Maine Public Utilities Commission.
New England transmission owners estimate that last year they spent $1.2 billion on “regional network system” transmission projects, including $822.5 million, or 68% of the total, on asset condition projects, according to a rate forecast overview from New England’s transmission owners. They expect to spend $1.1 billion this year on regional projects, including $847.2 million, or 77% of the total, on asset condition projects.
The transmission owners estimate that New England transmission rates could grow by 20% to $220/kW-year in 2030 from $184/kW-year this year.
