By Suzanne Herel
FERC last week granted Northeast Transmission Development some incentives for its Artificial Island project but denied one adder and set its requested base return on equity for hearing and settlement procedures.
NTD is a subsidiary of LS Power, which PJM chose to build a stability fix for the Salem and Hope Creek nuclear reactors in New Jersey. Its proposed formula rates were challenged by the Delaware Public Service Commission, the Delaware Municipal Electric Corp. (DMEC) and American Municipal Power (AMP). (See LS Power’s Artificial Island Rate Filing Challenged.)
FERC denied in part NTD’s request for rate incentives, saying it had not provided adequate support for its proposed 50-basis-point “risks and challenges” adder (ER16-453).
But the commission accepted NTD’s request for a 50-basis-point adder for its participation in PJM. The commission also approved NTD’s hypothetical capital structure, recovery of deferred pre-commercial and corporation formation costs and abandoned plant recovery.
“The project will require a number of siting and permitting processes at multiple jurisdictional levels and may be canceled or modified through the PJM [Regional Transmission Expansion Plan] process,” FERC said. “The project also faces significant construction challenges regardless of whether NTD ultimately decides to construct an overhead or submarine line.”
FERC set for hearing NTD’s proposed base ROE of 10.5% in the face of protests from DMEC, which asked FERC to set a base ROE of 8.91%, and AMP, which called for a base of 8.88%. If a settlement is not reached, a trial-type evidentiary hearing will be held.
The formula rate and protocols will be accepted effective Feb. 16, subject to refund.
PJM planners are considering reconfiguring the project as a result of Public Service Electric and Gas’ $272 million cost estimate for its portion of the project — nearly double what PJM had estimated. That could alter the project’s scope enough to require it be rebid under FERC Order 1000. (See FERC Upholds Cost Allocation for Artificial Island, Bergen-Linden Projects.)