American Transmission Co. won permission from FERC last week for a corporate reorganization that will split its existing transmission assets from its development partnership with Duke Energy.
ATC said the separation was driven by its owners — utilities, co-operatives and municipalities — who were unwilling or unable to take part in projects outside of the company’s 9,500 miles of “existing core transmission” in Wisconsin, Michigan, Illinois and Minnesota.
FERC approved the creation of a new holding company, ATC Holdco LLC, which will assume most of ATC’s 50% share in Duke-American Transmission Co., which is seeking development opportunities in PJM, MISO and SPP (EC16-47).
ATC’s owners can remain invested in the legacy transmission only or exchange their interests for shares in the development arm.
The companies pledged to not pass on any transaction-related costs to customers for five years, but FERC reminded them that the commission doesn’t allow rate recovery to finance transactions.
“Regardless of the terms of applicants’ hold-harmless commitment, we remind applicants that the commission historically has not permitted rate recovery of acquisition premiums,” FERC wrote in the order, issued Wednesday. “If applicants seek recovery of any acquisition premium associated with the transaction, they must be able to demonstrate in a subsequent proceeding … that its acquisition was ‘prudent and provides measurable, demonstrable benefits to ratepayers.’”
No comments were filed opposing the transaction. Wisconsin Electric Power Co. and Wisconsin Public Service Corp. submitted their written support.
— Amanda Durish Cook
