ISO-NE Proposes Review of Asset Condition Transmission Projects
ISO New England has filed a proposal with the Federal Energy Regulatory Commission (FERC) to review and report on asset condition transmission projects, aiming to provide increased oversight and ensure cost-effectiveness.
The Federal Energy Regulatory Commission (FERC) is set to review a proposal from ISO New England (ISO-NE) to increase oversight of asset condition transmission projects. These projects are chosen and built by transmission owners to replace aging infrastructure.
The proposal, unanimously approved by ISO-NE's stakeholders, would see the grid operator review and report on planned asset condition projects. This would ensure that they are needed and cost-effective, providing stakeholders with ammunition to challenge cost recovery later.
The proposal comes amid concerns about electricity costs in the United States. In New England, asset condition projects make up 73% of all annual transmission owners' capital projects. Transmission rates make up about 15% of an electric bill in Connecticut.
Senator Richard Blumenthal, D-Conn., has expressed concerns about electricity costs and the role transmission construction plays in overall electric rates. He has introduced a bill that would require FERC to consider "affordability" in its definition of just and reasonable electric rates.
Blumenthal has also criticized Eversource Energy's handling of a $360-million asset condition project in New Hampshire, stating that the company mischaracterized the project and received a higher rate of return on expenditures.
The proposed review process would have three main goals:
* Reporting on transmission owner asset monitoring and evaluation practices, identifying variations and inefficiencies, and facilitating consideration of improvements and best practices. * Reporting on individual projects. * Providing annual and periodic reporting to the grid operator's Planning Advisory Committee on asset condition-related matters.
The reviewers' role would be advisory, with ISO-NE stating that it "will not make decisions about whether to proceed with specific asset condition projects, nor will it be the petitioning party in any local, state or federal regulatory or siting proceeding concerning an asset condition project."
Having the review process in place next year will facilitate coordination with other regional planning activities, such as project right-sizing, which stakeholders have said is "essential to maximizing efficiency and reducing long-term costs."
**Asset Condition Projects in New England**
| | | | --- | --- | | Total asset condition projects by 2034 | $5 billion | | Asset condition projects next year | $1.3 billion | | Percentage of annual transmission owners' capital projects | 73% |
**Increased Oversight**
The proposed review process aims to provide increased oversight of asset condition transmission projects, ensuring that they are needed and cost-effective. This would provide stakeholders with ammunition to challenge cost recovery later.
**Stakeholder Support**
The proposal has been unanimously approved by ISO-NE's stakeholders, reflecting the New England region's consensus approach to address the states' and stakeholders' requests for independent oversight and scrutiny of transmission owner capital projects.
**Future Developments**
The proposed review process is set to begin next year, facilitating coordination with other regional planning activities, such as project right-sizing. This would help maximize efficiency and reduce long-term costs.
