The Maine Office of the Public Advocate has asked FERC to initiate evidentiary hearing procedures to answer questions about the prudency of investments by New England transmission owners in asset condition projects placed in service in 2022.
In a filing submitted Dec. 17, the OPA wrote that it has “serious doubts about whether the policies and practices that governed the decisions that led to the asset management projects included in the 2023 ISO transmission rates were prudent” (ER20-2054).
Asset condition spending, which typically is intended to address issues with deteriorating transmission infrastructure, has risen significantly in recent years and accounts for the majority of New England’s pooled transmission investment. TOs spent nearly $4 billion on asset condition projects placed in service between 2020 and 2024 and forecast nearly $1.5 billion on projects placed in service in 2025.
Reining in asset condition costs has been a top priority for consumer advocates and the New England states, and earlier this year, ISO-NE agreed to assume a nonregulatory asset condition project reviewer role to help provide transparency into these investments. (See ISO-NE Gives Update on Asset Condition Reviewer Role.)
The OPA’s request comes after a FERC ruling in September that required New England TOs to provide additional information responding to a series of questions issued by the OPA to the companies in 2023.
FERC’s ruling required the companies to provide additional details about the timing of projects and directed transmission owners to provide more information about how they evaluated needs and selected solutions. (See FERC: New England TOs Must Disclose More Info on Asset Upgrades.)
In a concurrence with FERC’s order, Commissioner Judy Chang emphasized the TOs’ transparency obligations under formula rate protocols.
“If further action by the commission is needed to ensure customers have access to information needed to assess the prudence of transmission owners’ investments, I encourage parties to bring the issue to the commission,” Chang wrote in her Sept. 18 concurrence.
The OPA wrote that the responses it received following FERC’s order still failed to adequately address questions about the TOs’ processes for minimizing their asset management costs.
Denis Bergeron, an expert tasked by the OPA with reviewing the TOs’ responses, wrote they raised questions about a lack of information on how the companies “weighed various alternatives and their relative costs,” along with concerns about “unexplained differences among the useful life assumptions by New England transmission providers.”
The responses raise “serious doubt as to whether these starkly different practices taken together are providing cost-effective results for the region’s consumers,” he said, adding that it is his “informed conclusion that these questions are left unresolved with the data provided by the transmission owners and can only be answered through further discovery in a hearing to explore the prudence of the transmission owners’ replacement projects.”
He noted that while Vermont Electric Power Co. assumes about a 60-year life expectancy for its structures, Eversource Energy wrote in its responses that “while the physical life of a transmission line may exceed 35 years, due to changing load patterns, it cannot be assumed that the line will be electrically viable after 35 years.”
He said National Grid’s response indicated a complicated and potentially contradictory approach to evaluating the useful life of assets. He was not able to discern Rhode Island Energy’s approach to asset life from the company’s response, he added.
Regarding the evaluation of project alternatives, he said the companies failed to “quantitatively demonstrate how the alternatives were weighed.”
While the responses specifically relate to already-in-service projects, Bergeron said Eversource’s approach raises concerns about the company’s proposed rebuild of the X-178 line in New Hampshire. The project would replace about 580 structures on the 49-mile transmission line, which has an average structure age of about 46 years. Construction is slated to begin in early 2027, according to the project website. (See New England States Raise Alarm on Eversource Asset Condition Project.)
“The [Public Service Company of New Hampshire] decision to undertake this project was presumably based on the same policy governing earlier replacement projects,” he wrote. “If so, it raises a serious doubt about whether the criteria they apply result in the most economic projects.”
Representatives of Eversource, National Grid and Avangrid declined to comment on the OPA’s request.
