FERC last week approved Transource Kansas’ settlement with the Kansas Corporation Commission, under which the company will receive a 9.8% base return on equity for any transmission facilities in SPP (ER15-958).
The company will earn a total of 10.3%, including a 50-basis-point adder previously approved by the commission for participation in an RTO.
FERC trial staff supported the settlement in an April 27 filing but noted that the agreement was silent on the top end of the discounted cash flow (DCF) zone of reasonableness. “Therefore, if Transource Kansas (or its affiliates) makes a future request seeking additional ROE incentive rate adders for a specific transmission project, the commission’s approval of this settlement will not eliminate the need for the applicant to make a Section 205 filing that includes a two-step DCF analysis establishing a zone of reasonableness, the top of which will cap any total ROE,” staff said.
Transource Kansas is a subsidiary of Transource Energy, a joint venture between American Electric Power and Great Plains Energy.
– Rich Heidorn Jr.
