Press Release  AG Healey Calls on Federal Energy Regulators to Limit Unnecessary Incentive Payments to Transmission Developers

BOSTON — Massachusetts Attorney General Maura Healey joined a coalition of 16 attorneys general and state ratepayer advocates in calling on the Federal Energy Regulatory Commission (FERC) to reform its practice of issuing unnecessarily large and unjust incentive payments to electric transmission developers.

 “These unnecessary incentive payments to transmission companies do nothing except burden ratepayers with hundreds of dollars in extra costs each year,” AG Healey said. “We’re calling on FERC to protect ratepayers and reverse these unjust handouts for transmission operators.”

In April, FERC issued a draft rulemaking revisiting a proposal issued under the Trump Administration that would provide a series of generous new transmission incentives, including extra payments to transmission developers to join regional transmission organizations (RTOs) or Independent System Operators (ISOs)—something developers generally have to do anyway. In comments filed with FERC on Friday, the coalition outlined its opposition to overgenerous incentives for participation by transmission utilities in RTOs or ISOs, particularly if their participation is mandatory. Limiting these incentives would result in significant savings for electric ratepayers.

The coalition writes that there is “no evidence that any financial incentive is needed to encourage participation in a Transmission Organization,” and urges FERC to “scrutinize any proposed incentive consistent with its obligation under the [Federal Power Act] to ensure that consumers are not charged excessive costs.” Specifically, the coalition argues that any incentives paid to transmission utilities for participation in RTOs and ISOs should be limited to the minimum amount necessary to encourage participation while minimizing costs for electricity rate payers. These comments reiterate points that AG Healey and others raised in prior comments filed with FERC in July 2020.

While the coalition overall argues that no incentive is necessary, the comments note that if FERC determines that an incentive is needed or is required by section 219 of the Federal Power Act, FERC should ensure it is appropriately limited and it does not apply where participation in an RTO or ISO is mandatory

Transmission costs have increased substantially over the last decade and currently account for almost 20 percent of ratepayer bills in New England. 

AG Healey is committed to ensuring access to clean electricity at affordable prices for all Massachusetts ratepayers, and is working with other state attorneys general and consumer advocates to ensure operation of a reliable and efficient transmission system, at the lowest cost to ratepayers and that also respects and accommodates state climate change and clean energy policies.

Joining AG Healey in sending the comments were the attorneys general of California, Illinois, Maryland, Michigan, New Jersey, Pennsylvania, Rhode Island, Vermont, and the District of Columbia, as well as the Connecticut Department of Energy and Environmental Protection, the Connecticut Office of Consumer Counsel, the Maine Ratepayer Advocate, Maryland Office of People's Counsel, the Rhode Island Division of Public Utilities and Carriers, and the People’s Counsel for the District of Columbia.  

This matter is being handled by Special Assistant Attorney General for Climate Change Megan Herzog, Assistant Attorney General Christina Belew, and Chief Rebecca Tepper of AG Healey’s Energy and Environment Bureau.

###