FERC on Thursday accepted a settlement that replaces the New York Power Authority’s stated transmission rates with a cost-of-service formula including a base return on equity of 8.95%. NYPA will receive an additional 50 basis points for its participation in NYISO (ER16-835).

The organization will receive a 50-basis-point “congestion relief adder” for the Marcy South Series Compensation project in Delaware County for the original $55.7 million cost of the project. Costs exceeding the cap will revert to the base ROE.

NYISO filed the request on NYPA’s behalf in January 2016, with the commission ordering a settlement proceeding in March. The settlement, which was not contested, was supported by FERC trial staff. The commission said the rate formula became effective April 1, 2016.

NYPA was ordered to file an amended Tariff within 30 days.

The organization last January said it needed to convert to a formula rate because it anticipates spending approximately $726 million in its transmission life extension and modernization program through 2025. Some assets are more than 70 years old, NYPA said.

– William Opalka