FERC mandates transparency for New England utility transmission upgrades

FERC Mandates Enhanced Transparency for New England Transmission Upgrades

The Federal Energy Regulatory Commission (FERC) has taken significant steps to enhance transparency in the New England utilities sector. Following a recent order, these utilities are now required to provide the Maine ratepayer advocate with more detailed information on transmission system upgrades. The decision comes amid growing concerns over the regulatory oversight of local transmission projects, which often proceed with minimal scrutiny.

FERC Commissioner Judy Chang emphasized the need for greater transparency nationwide. "Transmission owners nationwide should strive to proactively address this need for greater transparency," Chang stated, urging utilities to engage with stakeholders to clarify how funds are spent. Rising customer bills and concerns about transmission planning decisions have heightened the urgency of this issue.

Investment and Transparency in U.S. Infrastructure

Commissioner Lindsay See highlighted the importance of being responsible and transparent about infrastructure investments. "It's important for us to make sure that we are being responsible and transparent about the inputs that go into determinations of prudency," See remarked during FERC's recent open meeting.

The matter arose from a challenge by the Maine Office of Public Advocate concerning "asset condition" projects initiated in 2022. These projects, which focus on upgrading aging transmission lines, come under scrutiny due to their significant cost implications. Under FERC's formula rate protocol, expenditures on such projects are deemed prudent unless contested.

Addressing Stakeholder Concerns

FERC found many of the Maine OPA's questions regarding project evaluations and investment procedures valid, according to Chang's concurrence. The investigation aims to ensure the prudence of projects and prevent premature investments, aligning with the principles of transparency and accountability.

Between 2016 and 2023, spending on local transmission projects in New England surged to nearly $800 million annually, according to a report by RMI. However, these projects typically lack comprehensive review from grid operators or FERC, with state regulators having limited oversight.

Implications for Transmission Owners

The FERC decision directly impacts several transmission owners, including Avangrid’s Connecticut Light and Power Co., Maine Electric Power Co., Eversource Energy utilities, National Grid’s New England Power Co., PPL’s Rhode Island Energy, and Vermont Transco.

Key Outcomes from FERC’s Open Meeting

Rosner Calls for Improved Load Forecasting Practices. FERC Chairman David Rosner emphasized the importance of accurate forecasting for large load additions, such as data centers. Improved forecasts could significantly impact investment decisions and consumer bills, Rosner noted.

Progress in Grid Reliability Standards. FERC advanced several reliability standards, addressing issues such as supply chain risks and extreme cold weather. These measures aim to enhance the resilience of the U.S. electric grid.

Approval for SPP Refund Strategy. FERC approved the Southwest Power Pool’s refund plan for network upgrade costs, a process involving significant financial restitution to stakeholders.

Termination of Pumped Storage Application. FERC upheld the termination of Southeast Oklahoma Power Corp.'s application for a pumped hydro project, citing inadequate study plans.