Eight New England transmission companies must provide the Maine Office of Public Advocate with more information on asset condition projects placed in service in 2022, FERC has ruled.
The ruling partly granted a formal challenge by the OPA alleging the eight transmission companies, including subsidiaries of Eversource Energy, National Grid, Avangrid and PPL, along with Vermont Transco, “refused to answer questions regarding investment policies and practices related to prudence of these investments” (ER20-2054).
Commissioner Judy Chang wrote in a concurrence that the Sept. 18 order “should serve as a call to action for transmission owners across the country to provide greater transparency regarding their transmission investments.”
Asset condition spending has been a major focus for New England consumer advocates in recent years as costs associated with upgrades to existing transmission infrastructure have skyrocketed.
Although there is broad consensus that significant investments are needed to maintain and upgrade the region’s aging grid, state representatives and consumer advocates have expressed concern about a lack of transparency and oversight over these investments. ISO-NE recently agreed to take on a non-regulatory role in reviewing asset condition project proposals. (See ISO-NE Open to Asset Condition Review Role amid Rising Costs.)
The OPA’s formal challenge stems from a series of questions the office submitted to the companies in September 2023 seeking information on how the companies evaluated asset condition needs, considered solutions and alternatives, and determined when to proceed with projects.
The OPA wrote in its challenge that the transmission companies violated the formula rate protocols by failing to adequately respond to the information request.
Consumer advocates from Massachusetts, Connecticut, New Hampshire and Rhode Island supported the OPA’s challenge and emphasized the importance of information requests for providing consumers with the information needed to evaluate — and potentially challenge — the prudence of transmission investments.
The consumer advocates encouraged FERC to “interpret the [formula rate protocols] liberally and to issue a decision in this matter that fosters open and transparent exchange of information that will allow interested parties to evaluate and determine whether formula rate costs are reasonable and were prudently incurred.”
In a joint response to the OPA’s challenge, the transmission companies argued that the OPA filing does not meet the requirements for a formal challenge, that the OPA’s challenge is based on many “inaccurate or false” claims and that the companies “did provide responses and supporting documentation in response to Maine OPA’s information and document requests, in addition to objecting to certain questions.”
The companies asked FERC to reject the challenge, writing that “failure to do so would invite needless litigation and divert resources away from the ongoing New England stakeholder process on transparency enhancements to the transmission regional planning process for asset condition projects.”
In its ruling, FERC directed the companies to provide more information in response to several of the OPA’s requests, while finding some of the requests to be outside the scope of the companies’ requirements under the protocols.
“We find that most of Maine OPA’s questions clearly set forth the request for information in a manner such that identified NETOs [New England transmission owners] could make a good faith effort to answer those questions as required by the protocols,” FERC wrote.
The commission found the OPA’s requests for the identities of individuals involved in asset condition decisions and those seeking an undefined number of documents to be outside the scope of the companies’ requirements.
FERC also found that, to varying degrees, the companies adequately responded to some of the questions, including the request that the companies describe their procedures for evaluating project alternatives.
However, FERC ruled that the companies did not adequately explain how they ensure projects are not placed in service before they are needed.
The commission also found that subsidiaries or Eversource, National Grid and Avangrid failed to make a “good faith effort” to document their procedures for evaluating asset condition needs or disclose whether any employee or consultant “recommended against proceeding with a particular asset condition project.”
“This refusal to provide information that is reasonably necessary to determine the prudence of actual costs and expenditures included in the 2023 Annual Update could preclude Maine OPA from ever raising a prudence challenge by denying it the information required to raise serious doubt,” FERC wrote.
It directed the transmission companies to provide more information correcting the deficient answers within 30 days.
In her concurrence, Commissioner Chang emphasized the importance of transparency regarding transmission investments, along with stakeholders’ “fundamental right to transmission planning and investment information through existing formula rate protocols.”
“At a time of sharply rising customer bills and increasing concern about the prudence of transmission planning decisions, transmission owners have an obligation to address those concerns and help customers, state regulators and stakeholders better understand how their money is being spent,” Chang said.
She advocated for more standardization disclosures around transmission investments throughout the country and encouraged stakeholders to collaborate to develop these structures.
“If further action by the commission is needed to ensure customers have access to information needed to assess the prudence of transmission owners’ investments, I encourage parties to bring the issue to the commission, as Maine OPA has done in this case,” Chang wrote.
