FERC last week conditionally accepted Jersey Central Power & Light’s proposed rate request, subject to refund following hearing and settlement judge procedures (ER20-227).
The commission accepted the FirstEnergy operating company’s request for a 50-basis-point adder on its PJM base return on equity. However, FERC said its preliminary analysis found JCP&L’s request may be unjust and unreasonable.
FERC said the filing raised issues of material fact — including the determinations of base ROE and capital structure and the treatment of excess accumulated deferred income taxes — that couldn’t be resolved based on the record before it and ordered settlement procedures.
JCP&L filed its request in October to replace its current transmission revenue requirement with a new formula rate and associated protocols, effective Jan. 1, 2020.
The New Jersey Division of Rate Counsel, the state’s Board of Public Utilities and the Public Power Association of New Jersey opposed JCP&L’s request. They argued that the utility did not correctly apply the ROE methodology, resulting in an ROE above the applicable portion of the zone of reasonableness, and that it did not “sufficiently” prove that the adder will benefit ratepayers.
The groups also argued that JCP&L incorrectly presented its capital structure as a net long-term debt figure, ignoring FERC’s requirement of a gross long-term debt figure instead.
The commission found the requested adder to be consistent with Section 219 of the Federal Power Act and its own precedent. It conditioned its approval on the adder being applied to a base ROE that has been shown to be just and reasonable and subject to the resulting ROE being within the applicable zone of reasonableness, as may be determined in the settlement proceeding.
— Tom Kleckner
