On March 19, 2020, in lieu of holding its scheduled open meeting, Federal Energy Regulatory Commission (“FERC”) Chairman Neil Chatterjee held a news conference and issued a public statement regarding a Notice of Proposed Rulemaking (“NOPR”) on FERC’s transmission incentives policy, in Docket No. RM20-10.
Chairman Chatterjee provided the following details regarding the soon-to-be released NOPR, indicating that the NOPR proposes to: (1) grant project incentives based on consumer benefits, rather than the existing approach based on the project’s risks and challenges; (2) award up to a 100 basis point adder to the return on equity (“ROE”) for transmission projects demonstrating economic benefits; (3) award up to a 50 basis point ROE adder for projects showing reliability benefits beyond NERC requirements; (4) increase the ROE adder for participation in a Regional Transmission Organization or Independent System Operator from 50 to 100 basis points, regardless of whether participation is voluntary; (5) modify the existing abandoned plant incentive; and (6) modify the existing ROE incentive cap to a 250 basis point cap on total ROE incentives. The Chairman also indicated that FERC will address cybersecurity-related project incentives in a future proceeding.
Comments on the NOPR are due July 1, 2020.
The Chairman’s statement is accessible here: https://www.ferc.gov/media/statements-speeches/chatterjee/2020/03-19-20-chatterjee.asp#.XnOp7ahKg2w
FERC’s Press Release on this NOPR is accessible here: https://www.ferc.gov/CalendarFiles/20200319121201-Incentive%20ROE%20NOPR%20Press%20Release%20031920%20FINAL.pdf