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ARTICLE · 10 JUNE 2020

FERC Revises Return On Equity Methodology For Electric Utilities, Yet Again

Jones Day
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On May 21, 2020, FERC issued Opinion No. 569-A, further refining the methodology it established in Opinion No. 569 for setting the ROE that electric utilities are authorized to earn on electric ...

United StatesEnergy and Natural Resources
Jones Day
Jones Day
David Martin Connelly
David Martin Connelly
Kenneth Driver
Kenneth Driver
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In Short

The Decision: The Federal Energy Regulatory Commission ("FERC") issued Opinion No. 569-A, refining the methodology it established in Opinion No. 569 for setting the return on equity ("ROE") that electric utilities earn on electric transmission investments.

The Impact: Opinion No. 569-A increased the Midcontinent Independent System Operator, Inc. transmission owners' ROE from 9.88% to 10.02%.

Looking Ahead: In the near term, there is increased uncertainty as a result of FERC changing their approach in Opinion No. 569. In the long term, Opinion No. 569-A may reduce perceived risks and bring greater stability to transmission ROE if the methodology proves durable.

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