Jan 10, 2016 11:24 AM
New England's costly electric transmission rates focus of federal investigation
Federal energy officials are launching an investigation into New England electric transmission rates, a portion of electric bills related to moving electricity around the grid.
According to the Union Leader, the Federal Energy Regulatory Commission says New England transmission rates are much higher than in other parts of the country and appear to be “unjust, unreasonable and unduly discriminatory or preferential.”
The owners of transmission towers are accused of setting rates without meaningful justification or transparency, triggering the call for further investigation.
The federal commission's work could lead to a settlement with the transmission tower owners and ISO-New England, the grid operator; or it could lead to hearings, legal arguments and an eventual order setting rules for how rates will be set.
“It used to be a few years ago, about 50 or 60 percent of the electric bill would be made up of the cost of the energy,” said Dan Dolan, president of the New England Power Generators Association. “Now we are seeing upwards of 60 percent of a bill being made up of transmission and distribution costs. It's been a complete flip from the historical norms, with a massive build-out that the utilities have undertaken.”
The same does not hold true in other parts of the country, where transmission and distribution make up much smaller portions of the bill.
“This activity is driven in large part by FERC's interest in implementing a consistent approach to rate transparency across the country,” said Martin Murray, a spokesman for Eversource, which along with National Grid owns 80 percent of the transmission load in New England.