DC Circuit Remands FERC Order On ISO New England Base ROE

On April 14, 2017, the United States Court of Appeals for the District of Columbia Circuit ("DC Circuit") held that FERC erred in setting the base return on equity ("ROE") for ISO New England Inc. ("ISO-NE") at 10.57 percent. The DC Circuit granted a petition filed by a group of New England transmission owners ("NETOs"), and a separate petition filed by a group of wholesale transmission customers and other consumer-side stakeholders (collectively, "Customers") located in the New England region. The DC Circuit vacated the underlying FERC order and remanded the case to FERC for further consideration.

This case stemmed from a 2011 complaint filed by the Customers under Section 206 of the Federal Power Act ("FPA"). The Customers alleged in the complaint that ISO-NE transmission owners' base ROE of 11.14 percent, which had been initially established in 2006, had become unjust and unreasonable due to changes in the capital markets. The complaint was adjudicated before a