FERC Finds ISO New England’s Formula Rates and Accompanying Tariff Provisions to be Unjust and Unreasonable
On December 28, 2015, the Federal Energy Regulatory Commission (“FERC”) issued an order pursuant to Section 206 of the Federal Power Act (“FPA”)[1] finding that the ISO New England Inc.’s Transmission, Markets and Service Tariff (“Tariff”) is unjust, unreasonable, and unduly discriminatory or preferential. FERC’s determination was based on a finding that the Tariff lacks formula rate protocols and, by extension, lacks adequate transparency and challenge procedures with regard to the formula rates used by the ISO New England Participating Transmission Owners (“PTOs”).[2] FERC also found that the formula rates themselves may be unjust and unreasonable or otherwise unlawful because the formula rates appear to lack sufficient detail to accurately determine how certain costs are derived and recovered.