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U.S. FERC finds New England power transmission rates unjust

Reuters - UK Focus

Oct 16 (Reuters) - The U.S. Federal Energy Regulatory Commission on Thursday found the New England Transmission Owners' existing base return on equity (ROE) unjust and unreasonable.

FERC monitors ROE and other components of power rates to ensure they are just and reasonable and market prices reflect supply and demand.

In a release, FERC said it will also hold a hearing on a complaint alleging that the Midcontinent Independent System Operator Inc Transmission Owners' 12.38 percent base ROE is unjust and unreasonable.

Over the past couple of years, the commission has received numerous complaints from consumer groups that rates paid to the region's transmission owners were too high.

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FERC in June adopted a new discounted cash flow methodology for electric utility ROEs that is the same used for natural gas and oil pipeline ROEs.

In gas and oil pipeline proceedings, FERC said it uses projected growth in gross domestic product as a measure of long-term growth.

FERC said it set base ROE at 10.57 percent; requires refunds, plus interest, for the period October 1, 2011 through December 31, 2012; and finds that the New England Transmission Owners' maximum ROE, including incentives, cannot exceed 11.74 percent.

The some of the biggest transmission companies in New England and the Midwest include units of National Grid Plc (LSE: NG.L - news) , Northeast Utilities (NYSE: NU - news) , Iberdrola SA, ITC Holdings Corp and Duke Energy Corp. (Reporting by Scott DiSavino; editing by Andrew Hay)