By William Opalka

New York transmission owners filed a proposed settlement with FERC on Nov. 5 establishing the cost allocation and rate of return for three transmission projects intended as contingencies for the potential closure of the Indian Point nuclear power plant in Westchester County (ER15-572-004). (See Divided FERC Trims ROE on NY Tx Projects, Orders Hearing.)

The proposal settles the revenue requirements, including the return on equity and the inclusion of adders, of New York Transco, the organization of investor-owned utilities in the state that will develop and own the Transmission Owner Transmission Solutions (TOTS) projects.

“This settlement agreement results in a total ROE (10%) for the TOTS projects that is lower than the base ROE (10.60%) proposed by the applicants and supported by the applicants’ filing,” the settlement says.

The agreement leaves intact the 50-basis-point adder for the TOTS projects, as granted by FERC, for costs up to $228 million. The agreement says the adder accounts for benefits to customers, including congestion relief.

That resolves the New York Public Service Commission’s objection to having a separate adder for the transcos’ participation in an RTO and the transcos’ inclusion of additional adders for other ratepayer benefits, according to the settlement.

The agreement also includes transmission owners New York Power Authority and Long Island Power Authority as signatories. Because they are public authorities, they cannot join the NY Transco organization without a law allowing them to form a subsidiary company. Also agreeing to the settlement are the New York Public Service Commission; the New York State Department of State Utility Intervention Unit; New York City; the New York Association of Public Power; the Municipal Electric Utilities Association of New York; and an unincorporated group of about 60 industrial, commercial and institutional energy consumers.

The cost allocation is “voluntarily agreed to by all participants who will bear the costs of the TOTS projects under the NYISO [Tariff],” according to the settlement.

NY Transco’s members and their allocations are: Central Hudson Gas and Electric (5.99%); Consolidated Edison of New York and Orange and Rockland Utilities (63.18%); National Grid’s Niagara Mohawk Power (12.16%); and New York State Electric and Gas and Rochester Gas and Electric (10.12%).

The agreement does not include two AC projects in the FERC order from April: the estimated $1 billion Edic-Pleasant Valley 345-kV line and the $246 million Oakdale-Fraser 345-kV line.

Rehearing requests for them will remain pending but held in abeyance, as those projects may be subject to further action by NYISO, according to the settlement. The ISO could issue a “viability and sufficiency assessment,” which would restart their settlement negotiations.