Dive Brief:
- Eversource Energy’s X-178 transmission project in New Hampshire “epitomizes” the need to reform the “asset condition” review process in New England, the New England States Committee on Electricity told federal energy regulators on Monday.
- New England “severely lacks” regulatory oversight of asset condition projects — typically those for the replacement of aging transmission infrastructure, according to NESCOE, which represents the region’s governors. NESCOE didn’t take a stance on a challenge to the project brought by state ratepayer advocates.
- Eversource urged the Federal Energy Regulatory Commission to dismiss the ratepayer advocates’ complaint, saying it misrepresents facts about the X-178 project and misstates provisions of the transmission operating agreement between ISO New England and transmission owners that give the transmission owners the authority to build asset condition projects.
Dive Insight:
The complaint triggering the comments at FERC was filed in mid-May 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.
The ratepayer advocates contend that Eversource misclassified its $360.6 million X-178 transmission project to avoid regulatory scrutiny.
In New England, there are two types of transmission projects: asset condition projects, selected by utilities, and reliability projects, which grow out of regional transmission planning.
The Regional System Plan projects undergo extensive analysis by ISO-NE transmission planning staff and review by the grid operator’s Planning Advisory Committee and its board, NESCOE said. In contrast, ISO-NE does not participate in asset condition project planning or proposal review, according to NESCOE. The PAC reviews asset condition projects on an advisory basis, the group said.
Since 2016, $6.5 billion in asset condition projects have been installed in New England — 55% of all transmission projects, according to NESCOE. Looking ahead, $5.5 billion of asset condition projects are planned, proposed or under construction compared with $281 million in regional projects, the group said.
Eversource said its X-178 Project has been “extensively reviewed” in the ISO-NE PAC process.
Eversource also said it followed ISO-NE’s rules in planning the project and that the ratepayer advocates failed to identify any rule the utility company violated.
“The TOA is clear: [Transmission owners] control the ‘physical operation, repair, maintenance and replacement of their Transmission Facilities,’ and [they] need not wait for their facilities to fail before taking action to repair or replace them,” Eversource said.
In addition, the ratepayer advocates failed to show that ISO-NE’s rules are unjust or unreasonable, according to Eversource.
Eversource rejected allegations it sought to “goldplate” the project.
“Complainants identify no evidence — nor can they — indicating that project scope, design, or timing was influenced by compensation considerations rather than engineering judgment, asset condition assessments, and reliability obligations,” Eversource said.
National Grid and other utilities also urged FERC to drop the complaint.
The complaint relies on “numerous legal and factual errors as a basis for asking the Commission to modify the TOA in a manner that will prevent the [transmission owners] from expeditiously repairing or replacing transmission facilities where needed to maintain system reliability,” the utilities said.
However, the Maine Public Utilities Commission, the Massachusetts attorney general’s office and Conservation Law Foundation backed the complaint.
Only part of the existing X-178 project includes poles and wires that need to be replaced, according to the Maine PUC. FERC should audit the project and disallow cost recovery for undamaged portions of the transmission line, the agency said.
A solution to New England’s transmission planning issues the complaint raises needs to be addressed through FERC Order 1920 compliance filings and a pending asset condition reviewer proposal, the PUC said.
ISO-NE is working with stakeholders to develop a review process for asset condition projects that the grid operator would conduct starting in 2027.
Under the proposal, ISO-NE would assess the need for planned asset condition projects. It would also review proposed solutions and alternatives and report its findings to the PAC to inform stakeholders. ISO-NE’s role would be advisory and wouldn’t include determinations on whether project costs were prudent.
ISO-NE expects its Participants Committee will vote on the review process proposal in August before it files the proposal at FERC for approval, according to a May 28 presentation on the asset condition reviewer plan.
