Opinion: Transmission regulation and costs
|Published: 11-08-2023 6:00 AM
Terry Cronin lives in Hopkinton.
Given the jurisdiction and power of states’ authority over electricity markets, why does their oversight of transmission projects lack regulatory vim?
In June, UtilityDive published a column titled, “When it comes to transmission, customers must come first.” Tony Clark, a former FERC and North Dakota Public Service Commissioner wrote the piece and recounts his experience two years earlier at a congressional hearing. He testified that “transmission and generation projects exist to support customers. Customers don’t exist to support transmission projects.”
But in New England we do.
Regulators in some New England states abdicated their transmission planning authority, and into the void, regional monopoly transmission owners have assumed the right to levy billions of dollars on ratepayers for elective work. The work, so-called “Asset Condition” projects, involves efforts to repair, replace, and upgrade existing high-voltage transmission lines. And though the grid operator does not depend on Asset Condition projects, the costs for them now dwarf the costs of those they do, “Reliability” projects.
This problem stems from states failing to regulate the need for transmission projects and the necessity of siting them within their own borders. Absent state scrutiny of what transmission owners determine are “inadequate conditions” of their infrastructure assets, at the regional level New England transmission owners have been free to push slews of projects onto regional grid plans unabated. For example, transmission owners’ Asset Condition project costs increased from $1.6 billion in February 2023 to almost $5 billion by July.
The burgeoning pace, scale and costs of the work have incited stakeholder calls for a halt and a rollback, as monopoly transmission owner profligacy flourished.
As bad as last winter’s New England energy supply market got, the market now faces more international conflicts and the likelihood of even greater energy supply volatility. And the added burden of exorbitant regional transmission costs only intensifies the risk of a destabilized New England electricity market.
Here in the Granite State, in May 2023, Kris Pastoriza of Easton petitioned the New Hampshire Public Utility Commission in Concord for a complete assessment of Eversource’s share of New Hampshire Asset Condition projects, booked through the New England grid operator. She cited the March 2023 Independent System Operator of New England expense list showing details of the monopoly’s 55 New Hampshire projects from 2018 into 2023. They totaled $863,668,000 statewide. She asked the committee to review the projects for their compliance with state law.
In July, Pastoriza filed another petition. About two weeks later the commission asked Eversource and the NH Department of Energy to brief whether the PUC has jurisdiction over the projects. In August both the company and the energy department responded and agreed the issues within the Pastoriza petition lie with federal authorities and that the PUC should dismiss the case.
Given that the commission failed to ask the New Hampshire Department of Justice for its opinion about PUC jurisdiction over the projects and then asked Eversource and the NHDOE for their views, but not the consumer advocate for his, raises serious concern about the PUC’s ethical charge with maintaining the public trust.
Nevertheless, the consumer advocate, Donald Kreis, submitted a brief with his opinion on PUC jurisdiction in the interests of residential ratepayers.
Kreis writes that federal law does not prevent the PUC from “looking into …out-of-control spending on Asset Condition projects” with no regulatory scrutiny.
He also reminded the commission it has “plenary authority over the state’s public utilities” and “as to just and reasonable rates.”
Kreis praises Pastoriza as a hero.
Pastoriza’s attorney Arthur Cunningham of Hopkinton told the PUC that Eversource in its brief materially misrepresented applicable law regarding jurisdiction of federal and state regulatory authorities over power lines, and that the NHDOE’s filing reflects a willingness to forfeit decades of commission jurisdiction over New Hampshire utilities to federal authority.
Now Pastoriza and New Hampshire residential ratepayers await a hearing on the merits of her petition and look forward to the PUC establishing a timeline on this urgent matter. But the commission has not acted on the petition since July 14th. Why the silence?