On October 16, 2018, FERC proposed a new method to determine
whether a utility's return on equity ("ROE") remains
just and reasonable under section 206 of the Federal Power Act
("FPA"). Specifically, FERC discussed three additional
methods, along with the well-known and traditionally used
Discounted Cash Flow ("DCF") analysis, and proposed to
average the results to come to an equitable ROE. This new method
will apply to successive complaints filed against the New England
Transmission Owners ("NETOs"), regarding the justness and
reasonableness of their existing ROE. Briefs related to this
proposal are due on December 17, 2018.
In 2011, a group of transmission customers and state officials
filed a complaint at FERC under FPA section 206 asserting that the
NETOs' ROE of 11.14% was unjust and unreasonable. After an
Administrative Law Judge issued an initial decision on this matter,
FERC issued Opinion No. 531 in 2014. In Opinion No. 531, FERC first
decided to replace its
