Settlement talks terminated in Mass. AG complaint against New England TOs

Massachusetts Attorney General Martha Coakley’s complaint against New England transmission owners is moving to an administrative hearing after settlement discussions failed.

The chief settlement judge, Judith Dowd, on Aug. 1 recommended termination of settlement judge procedures as the parties involved had reached an impasse (FERC Docket No. EL11-66).

As such, Judge Dowd was relieved of her settlement judge duties, and administrative law judge (ALJ) Michael Cianci, Jr., was appointed as the presiding judge in Track II proceedings to preside at the hearing ordered by FERC, and to issue an initial decision. 

According to the procedural schedule set on Aug. 14, a hearing is scheduled for May 6, 2013, with an initial decision scheduled for Sept. 10, 2013. 

Coakley and complainants on Sept. 30, 2011, filed a complaint with FERC seeking an order to reduce the base return on equity (ROE) used in calculating formula rates for transmission service under ISO-New England’s open access transmission tariff from 11.14% to a “just and reasonable” rate of 9.2%. 

“The complainants are pursuing this under Section 206 of the Federal Power Act, which puts the burden on the complainant – in this case the attorneys general – to show the existing rate is not just and reasonable,” an industry lawyer told TransmissionHub Aug. 14. “If they can show that, there’s the second part of the test which is determining what rate is just and reasonable.”

“If FERC finds the current rate is not just and reasonable then it’s obliged to change the rates so that the rate is just and reasonable, so that change would be effective going forward,” the lawyer added.

Unlike in the natural gas industry, companies in the electric industry have no interest in delaying a FERC decision, given the retroactive refund date, the lawyer said.

“On the gas side, there is no retroactive refund date, so if someone tries to change an existing rate you don’t get relief until FERC acts on it; whereas on electric side there’s retroactive relief,” the lawyer said. “Essentially you’re not giving the utility any particular incentive to delay the proceeding.”

A change to the base ROE would be retroactive to Oct. 1, 2011.


Procedural Schedule:

September 14, 2012 Preliminary Statement of Issues

October 1, 2012 Complainants’ Direct Case 

November 20, 2012 Respondents’ Answering Case

January 18, 2013 Staff Direct and Answering Case

February 12, 2013 Respondents’ Cross-Answering Case

February 27, 2013 Complainants’ Rebuttal Case

March 6, 2013 Last Day for Serving Discovery Requests

March 18, 2013 Last Day for Serving Discovery Responses

March 27, 2013 Joint Stipulation of Issues and Witness and Exhibit List

April 2, 2013 Last Day for Dispositive Motions and any Evidentiary Motions and Last Day for Objections to Exhibits

April 17, 2013 Updated ROE Analyses Using Previously Filed ROE Methodology (All participants) and Updated Exhibit List for ROE Update

April 17, 2013 Written Responses to Evidentiary and Dispositive Motions/Objections

April 22, 2013 Objections to Updated Exhibits

April 29, 2013 Pre-hearing Trial Briefs (Limited to 35 Pages per Side)

April 30, 2013 Answers to Objections to Updated Exhibit List

May 1, 2013 Pre-Hearing Conference (10:00 a.m.)

May 6, 2013 Hearing (10:00 a.m.)

June 6, 2013 Initial Briefs

June 28, 2013 Reply Briefs

September 10, 2013 Initial Decision

About Rosy Lum 525 Articles
Rosy Lum, Analyst for TransmissionHub, has been covering the U.S. energy industry since 2007. She began her career in energy journalism at SNL Financial, for which she established a New York news desk. She covered topics ranging from energy finance and renewable policies and incentives, to master limited partnerships and ETFs. Thereafter, she honed her energy and utility focus at the Financial Times' dealReporter, where she covered and broke oil and gas and utility mergers and acquisitions.