FERC continues its focus on transmission formula rates, recently opening an investigation into ISO-NE's processes. This follows FERC's investigation into MISO formula rates several years ago.
In its December 28 Order, FERC set the justness and reasonableness of ISO-NE's RNS and LNS formula rates and the development of protocols for hearing. FERC said the current formula rates lack transparency and sufficient detail to determine how certain costs are derived and recovered. The rates also lack sufficient protocols to ensure the data is correct, calculations are performed correctly and that the charges are reasonable and prudent. The protocols also lack sufficient notice, review, and challenge procedures for interested parties.
There seems to be some concern over the timing and synchronization between RNS (regional) and LNS (local) rates. Currently, transmission owners submit their own revenue requirements for a combined RNS formula rate, in addition to individual LNS rate filings.
This article in the NH Union Leader presents a handy-dandy graph of transmission costs in different regions. ISO-NE's transmission charges are nearly double those of second place transmission rate champion, PJM. Does ISO-NE really have that much more transmission, or are things simply out of control on the formula rate front that allows "errors" to boost annual revenue requirements with bogus charges?
Who's currently monitoring whether transmission owners are doubling their return by including the same costs in both RNS and LNS formula rates? FERC's Order says its impossible to determine right now.
And what if companies like Eversource are accidentally including costs for things, like advertising for their Northern Pass project, in RNS/LNS rates collected from ratepayers, instead of including them in the transmission service agreement costs formula rate to be paid by HQ Hydro? All sorts of "mistakes" could happen in the current rate scheme.
Who's minding the store up there? FERC says ISO-NE currently has an option to audit the RNS/LNS rates, but I wonder how much real auditing actually happens?
Good thing that FERC is taking on the challenge of shedding a little light into ISO-NE formula rates. But the work doesn't stop there... even the best formula rates and protocols are useless unless someone takes advantage them to actually take a look at the rates on a yearly basis, long after FERC's work here is done.
Good luck on getting a handle on your transmission costs problem, New England!
In its December 28 Order, FERC set the justness and reasonableness of ISO-NE's RNS and LNS formula rates and the development of protocols for hearing. FERC said the current formula rates lack transparency and sufficient detail to determine how certain costs are derived and recovered. The rates also lack sufficient protocols to ensure the data is correct, calculations are performed correctly and that the charges are reasonable and prudent. The protocols also lack sufficient notice, review, and challenge procedures for interested parties.
There seems to be some concern over the timing and synchronization between RNS (regional) and LNS (local) rates. Currently, transmission owners submit their own revenue requirements for a combined RNS formula rate, in addition to individual LNS rate filings.
This article in the NH Union Leader presents a handy-dandy graph of transmission costs in different regions. ISO-NE's transmission charges are nearly double those of second place transmission rate champion, PJM. Does ISO-NE really have that much more transmission, or are things simply out of control on the formula rate front that allows "errors" to boost annual revenue requirements with bogus charges?
Who's currently monitoring whether transmission owners are doubling their return by including the same costs in both RNS and LNS formula rates? FERC's Order says its impossible to determine right now.
And what if companies like Eversource are accidentally including costs for things, like advertising for their Northern Pass project, in RNS/LNS rates collected from ratepayers, instead of including them in the transmission service agreement costs formula rate to be paid by HQ Hydro? All sorts of "mistakes" could happen in the current rate scheme.
Who's minding the store up there? FERC says ISO-NE currently has an option to audit the RNS/LNS rates, but I wonder how much real auditing actually happens?
Good thing that FERC is taking on the challenge of shedding a little light into ISO-NE formula rates. But the work doesn't stop there... even the best formula rates and protocols are useless unless someone takes advantage them to actually take a look at the rates on a yearly basis, long after FERC's work here is done.
Good luck on getting a handle on your transmission costs problem, New England!
RSS Feed