124 FERC ¶ 61,291

UNITED STATES OF AMERICA

FEDERAL ENERGY REGULATORY COMMISSION

Before Commissioners: Joseph T. Kelliher, Chairman;

Suedeen G. Kelly, Marc Spitzer,

Philip D. Moeller, and Jon Wellinghoff.

+--------------------------------------------+----------+-------------+
| New England Conference of Public Utilities | Docket   | EL08-69-000 |
| Commissioners, Inc.                        | No.      |             |
|                                            |          |             |
| v\.                                        |          |             |
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| Bangor Hydro-Electric Company              |          |             |
|                                            |          |             |
| Central Maine Power Company                |          |             |
|                                            |          |             |
| National Grid, USA                         |          |             |
|                                            |          |             |
| NSTAR Electric & Gas Corporation           |          |             |
|                                            |          |             |
| Northeast Utilities Service Company        |          |             |
|                                            |          |             |
| The United Illuminating Company            |          |             |
|                                            |          |             |
| Vermont Electric Power Company             |          |             |
+--------------------------------------------+----------+-------------+

ORDER DENYING COMPLAINT

(Issued September 25, 2008)

1.  On June 12, 2008, The New England Conference of Public Utilities
    Commissioners, Inc. (NECPUC) filed a complaint against the New
    England Transmission Owners (Transmission Owners)[^1] under section
    206 of the Federal Power Act (FPA)[^2] alleging that it is unjust
    and unreasonable for the Transmission Owners to

    apply the return on equity (ROE) incentive authorized in Opinion No.
    489[^3] for transmission projects in ISO New England Inc.'s Regional
    Transmission Expansion Plan (RTEP)[^4] to project costs in excess of
    those estimated at the time the Commission granted the incentive.
    For the reasons discussed below, we deny NECPUC's complaint.

    **I. [Background]{.underline}**

2.  In November 2003, the Transmission Owners submitted a filing under
    section 205 of the FPA[^5] requesting an ROE adder of 100 basis
    points as an incentive for constructing future transmission
    expansion. The Commission accepted and suspended the proposal,
    subject to refund and to the outcome of a hearing.[^6] Following a
    hearing, the Presiding Judge denied the incentive.[^7]

3.  In Opinion No. 489, the Commission reversed the Presiding Judge and
    authorized in perpetuity an ROE adder of 100 basis points for all
    present and future RTEP projects. The Commission found that the
    Presiding Judge erred by requiring the Transmission Owners to show
    that the projects would not be built "but for" the incentive. The
    Commission held that the correct standard of review was a
    two-pronged test that evaluated (i) whether the proposed incentive
    fell within the zone of reasonable returns and (ii) whether there
    was some link, or nexus, between the incentive being requested and
    the investment being made, i.e., whether the proposed incentive was
    rationally related to the investments being proposed.[^8]

4.  The Commission found that adding 100 basis points to the base-level
    ROE did not push the new ROE outside the zone of reasonable returns
    and that there was sufficient evidence showing a link between the
    cost of the incentive and its benefits. The Commission explained
    that the RTEP process demonstrated an undisputed need for the
    incentive-eligible projects[^9] and that the incentive would help
    ISO New England bring the projects on line in a timely fashion by
    encouraging the Transmission Owners to push hard during all phases
    of the approval process and by assisting them in obtaining favorable
    financing terms. Focusing specifically on the benefits to
    ratepayers, the Commission found that the timely and successful
    completion of the transmission projects would minimize costs
    attributable to an insufficiently robust grid. The Commission
    acknowledged that there was evidence in the record quantifying the
    cost and benefits of the incentive, but stated that it did not need
    to parse these numbers or consider other less quantifiable benefits;
    rather, it found it sufficient to note that, on balance, and based
    on the specific evidence in the record, the timely, successful
    completion of the additions to the grid would inure to the benefit
    of ratepayers.[^10]

5.  Finally, the Commission observed that its standard of review and its
    decision to authorize the ROE incentive were consistent with
    precedent and, although they did not govern the outcome of the
    proceeding, with both section 219 of the FPA[^11] and Order No.
    679.[^12]

6.  On rehearing, the Commission affirmed most of Opinion No. 489 but
    found that the decision to authorize the ROE incentive in perpetuity
    for all future RTEP projects would cause transmission investment in
    New England to be treated differently than transmission investment
    in the rest of the country, which could receive incentives under the
    case-by-case, project-specific approach pursuant to Order No.
    679.[^13] The Commission explained that it authorized the ROE
    incentive for all future RTEP projects, without the need for any
    further factual showings of any kind, and that it applied a standard
    of review that was satisfied by an evidentiary record that focused
    on the RTEP process "in its broadest contours" and that did not
    require the Commission to consider the various classes of RTEP
    projects involved or the specific projects themselves.[^14] The
    Commission contrasted this approach with the approach under Order
    No. 679, which authorizes incentives for specific projects, requires
    a case-by-case showing that the total package of incentives
    requested is tailored to address the demonstrable risks and
    challenges presented by each project, and forecloses incentives for
    future projects absent a separate case-by-case showing that
    incentives are justified for each project.[^15] Consequently, the
    Commission granted rehearing with respect to the prospective effect
    of Opinion No. 489, holding that the ROE incentive granted in that
    opinion would apply only to projects completed and placed in service
    by December 31, 2008.

# II. NECPUC's Complaint

7.  NECPUC alleges that it is unjust and unreasonable to apply the ROE
    incentive granted in Opinion No. 489 to all costs associated with
    the transmission projects. NECPUC asserts that the incentive should
    apply only to the costs estimated for the projects at the time of
    Opinion No. 489.

8.  NECPUC claims that the Commission's decision to grant the ROE
    incentive was predicated on its conclusion that evidence in the
    record demonstrated a sufficient link between the cost of the
    incentive and the benefits to be derived from it.[^16] NECPUC
    asserts that this evidence included the approximately \$3 billion
    cost of constructing the projects, the \$148.2 million cost of the
    incentive (on a pre-tax basis), the \$76 million in annual benefits
    attributable to the incentive, and the benefits of timely and
    successful completion of the eligible projects.[^17]

9.  NECPUC claims that the costs of many of the eligible projects have
    increased dramatically. For example, NECPUC states that between 2004
    and 2007 the estimated cost of NSTAR's 345 kV Transmission
    Reliability Project increased roughly

    30 percent,[^18] while the estimated cost of the joint Middletown to
    Norwalk project (M-N project) increased more than 51 percent.[^19]
    NECPUC claims that even comparing estimates between July 2006 and
    October 2007 reveals a striking increase in costs. For example,
    NECPUC highlights two projects that were delivered at an increase of
    more than 100 percent of their estimated costs,[^20] four projects
    whose estimated costs increased by at least 100 percent,[^21] and
    seven projects whose estimated costs increased by at least 50
    percent.[^22]

10. NECPUC acknowledges that project costs cannot be estimated with
    complete precision; however, it claims that the cost increases it
    has identified represent a significant change in the core
    circumstances that led to the Commission finding a sufficient link
    between the cost of the ROE incentive and its benefits.[^23] NECPUC
    asserts that the cost of the ROE incentive is now decidedly larger
    for those projects than what was expected when the Commission issued
    Opinion No. 489.[^24] NECPUC argues that these cost overruns may
    wipe out the incentive's assumed benefits, removing the basis for
    granting the incentive in the first place.[^25]

11. NECPUC asserts that in *BG&E* [^26] the Commission recognized the
    danger in preauthorizing rate incentives for planned projects based
    on estimates of future expenditures, rejecting a preauthorization
    without any restriction on a project's final cost as contrary to
    Commission policy. NECPUC explains that in *BG&E* the Commission
    rejected a request to apply an ROE incentive to projects that had
    not yet been approved in the regional planning process. NECPUC
    acknowledges that this case differs from *BG&E* in that many of the
    projects here had already received regional approval at the time the
    Commission authorized the ROE incentive. However, NECPUC argues that
    this distinction does not diminish the Commission's concern that
    differences between conditions at the time an incentive is
    authorized and future conditions might require further consideration
    of whether application of the incentive remains justified.

12. Similarly, NECPUC observes that while it did not literally apply to
    Opinion No. 489, Order No. 679 cautions that a declaratory order
    pre-approving an incentive rate does not constitute automatic
    approval of its implementation in a section 205 filing. NECPUC also
    argues that under Order No. 679 the assurance that incentives will
    remain in place for a fixed term is qualified to account for
    changing circumstances, as applicants must demonstrate how they will
    ensure that their plans will actually deliver the benefits that
    formed the basis for the Commission's approval.[^27]

13. NECPUC claims that applying the ROE incentive to the entire costs of
    the eligible projects, no matter how much they exceed their
    estimates, does not serve the public interest, is not required to
    spur investment, provides no discernable benefit to customers, does
    not assure ratepayers that the incentive plan is delivering the
    benefits that justified it, and reduces incentives to contain costs
    and promote timely deployment. NECPUC asserts that even if the cost
    increases are supported by valid reasons, such as increased labor
    and material costs, applying the ROE incentive to a rate base
    increased by uncontrollable costs serves no public purpose, leaves
    unanswered why many other projects reduced or maintained their
    estimates, and undercuts incentives for stronger cost control
    measures.

14. NECPUC contends that limiting recovery of the ROE incentive to no
    more than a project's estimated costs at the time the Commission
    authorized the incentive appropriately matches the incentive with
    the investment decision being made. NECPUC argues that to the extent
    the ROE incentive is needed to encourage investment in new
    transmission, it is only needed for the cost estimates provided by
    the Transmission Owners, as these should represent the full amount
    of the investment that the Transmission Owners are willing to make
    and thus the full amount to which the ROE incentive should apply in
    order to encourage investment. NECPUC states that if these cost
    estimates prove to be too low, then the Transmission Owners should
    bear the risk that they will not recover the incentive for costs in
    excess of their original estimates.

15. NECPUC states that it is mindful of concerns that restricting
    application of the ROE incentive may defeat investor expectations or
    create incentives for the Transmission Owners to inflate their
    initial cost projections. With respect to investor expectations,
    NECPUC argues that limiting application of the ROE incentive to
    original cost estimates does not defeat any realistic or reasonable
    investor expectations. NECPUC claims that having made a good faith
    representation to the New England Power Pool (NEPOOL) Planning
    Advisory Committee that they could build their projects at a certain
    estimated cost, including a contingency factor, and having asked for
    the incentive based on that estimate, the Transmission Owners and
    their shareholders could not have had a reasonable expectation that
    they would earn the incentive on cost overruns. With respect to the
    possibility of inflated estimates, NECPUC states that necessary
    safeguards already exist. For example, NECPUC states that a
    transmission owner is already required to demonstrate that its
    project is economical compared to other alternatives, including
    demand side solutions.

16. In order to ensure that the proper incentive exists to encourage
    cost efficiency, NECPUC proposes that the Commission allow the
    Transmission Owners that complete a project below its estimated cost
    to collect a higher ROE incentive (i.e., in excess of 100 basis
    points) calibrated so that the total incentive return dollars would
    equal the incentive related income had the project been completed at
    its estimated cost.[^28] NECPUC argues that this proposal will
    encourage cost efficiency by providing the Transmission Owners with
    a "symmetrical incentive" to complete projects at or below their
    estimated costs.

17. NECPUC emphasizes that it is only seeking prospective relief. NECPUC
    requests that the Commission establish June 12, 2008, the date of
    its complaint, as the refund effective date. NECPUC states that the
    Transmission Owners will owe refunds only for the incentive applied
    to the cost increases, and only from the refund effective date.

18. NECPUC asserts that there is no need for a hearing because the basic
    facts at issue in its complaint are not in dispute and show that the
    current actual costs or most recent estimated costs of many of the
    projects identified in the RTEP-04 process are substantially higher
    than the cost estimates relied upon by the Commission when it
    approved the ROE incentive. NECPUC contends that the Commission does
    not need to hold an evidentiary hearing to explore the reasons for
    the cost escalation because there are only three possible
    explanations for the cost escalation and each explanation supports
    its complaint. NECPUC states that these explanations are that: (1)
    the Transmission Owners intentionally understated the original
    estimates, (2) the Transmission Owners misestimated the original
    estimates, or (3) the cost increases were the result of
    circumstances beyond the Transmission Owners' control.

19. NECPUC argues that if a project's estimate was intentionally
    understated (which it does not allege for any project), such an
    underestimate would have unfairly biased the transmission planning
    decision in favor of the project and against other possible
    alternatives that were consequently artificially made to look
    uneconomic and a Transmission Owner should not be rewarded with an
    incentive under such circumstances. NECPUC asserts that an honest
    misestimate would not justify the application of the ROE incentive
    to excess costs either because a project's initial estimate
    represented the Transmission Owner's reasonable expectations about
    the costs of completing the project (and also included a substantial
    contingency factor) and it is logical to assume that if there was a
    nexus between the incentive and the Transmission Owner's decision to
    proceed with the project, it was based on the Transmission Owner's
    project cost estimates; in other words, the transmission owner was
    prepared to proceed with the project at its projected cost. NECPUC
    claims that there is no rational reason to reward the transmission
    owner for mistakenly underestimating the project's actual cost.
    Finally, NECPUC states that continued application of the ROE
    incentive is not warranted if the transmission owner misses its
    projected cost due to factors beyond its control -- increases in
    regional labor costs, escalations in the cost of critical materials
    whose prices are determined in world markets, or similar factors.
    NECPUC argues that applying the incentive to cost increases
    attributed to these factors irrationally rewards the transmission
    owner for doing nothing and reduces the incentive of the
    transmission owner to ascertain whether a cost is truly beyond its
    ability to control.

**III. [Notice of Filing and Responsive Pleadings]{.underline}**

20. Notice of NECPUC's complaint was published in the *Federal*
    *Register*,[^29] with comments and interventions due on or before
    July 2, 2008. Allegheny Energy Transmission Owners and PATH West
    Virginia Transmission Company,[^30] American Electric Power Services
    Corporation,[^31] Connecticut Municipal Electric Energy Cooperative,
    Dominion Resources Services, Inc.,[^32] Exelon Corporation, the PSEG
    Power Companies,[^33] and the Vermont Department of Public
    Service[^34] filed timely motions to intervene. The Boston Gen
    Companies,[^35] Florida Power and Light Company-New England
    Division, and the New Jersey Board of Public Utilities filed motions
    to intervene out-of-time. The Maine Public Utilities Commission and
    the New Hampshire Public Utilities Commission filed notices of
    intervention.

21. The Attorneys General of Massachusetts and Rhode Island and the
    Connecticut Office of Consumer Counsel (collectively, the Attorneys
    General and CT Counsel), the Connecticut Department of Public
    Utility Control (Connecticut DPUC), NEPOOL Industrial Customer
    Coalition (NICC), and Massachusetts Municipal Wholesale Electric
    Company (MMWEC) filed timely motions to intervene and comments. The
    Massachusetts Department of Public Utilities (Mass DPU) filed a
    notice of intervention and comments. The Transmission Owners filed
    an answer. UI filed a separate answer. NECPUC filed an answer to the
    answers.

    **A. [Comments ]{.underline}**

22. The Attorneys General and CT Counsel support NECPUC's complaint with
    the exception of its proposal to grant a symmetrical incentive to
    Transmission Owners that complete a project below its estimated
    cost. The Attorneys General and CT Counsel argue that such an
    incentive is unnecessary, and that any ROE incentive that the
    Commission grants to future transmission projects should apply to
    either the lower of the project's initially estimated costs or its
    final costs.

23. Although CT DPUC generally supports NECPUC's complaint, it is
    concerned that NECPUC's requested relief is backward-looking and
    would increase uncertainty and reluctance to invest in new
    transmission projects. CT DPUC explains that the complaint appears
    to request that the Commission create a new rule that would prohibit
    application of the ROE incentive to any costs above the RTEP-04
    estimates. CT DPUC argues that the retroactive tenor of NECPUC's
    proposed new rule---which was not contemplated when transmission
    project estimates were prepared for RTEP-04---does not facilitate a
    stable environment for new transmission investment and may be unfair
    to transmission owners who undertook prudent investments that
    exceeded preliminary cost estimates. CT DPUC argues that any relief
    should be on a prospective basis only.

24. CT DPUC also contends that in seeking to disallow application of the
    incentive to all cost overruns, NECPUC is essentially questioning
    whether the excess costs were prudently incurred. CT DPUC states
    that while there may be legitimate questions about the prudence of
    some costs, the Commission has well-established principles for
    determining when an investment has been prudently incurred. CT DPUC
    states that under Commission precedent prudence determinations are
    based on the facts of each project, and not by a policy
    recommendation as suggested by NECPUC. CT DPUC argues that to the
    extent the Commission finds it necessary, it should set the projects
    for hearing on a case-by-case basis.

25. CT DPUC also argues that the Commission should not rely only on the
    RTEP-04 estimates in measuring cost overruns. CT DPUC explains that
    the projects listed in the RTEP-04 were at different planning stages
    and that ISO New England's rules permit the degree of an estimate's
    certainty to vary with the project's maturity. CT DPUC asserts that
    using the RTEP-04 estimates as a baseline may unnecessarily
    discriminate against certain projects by penalizing those in an
    earlier development stage that had less certain cost estimates and
    were not required to have a high degree of accuracy like those
    projects in later design stages. Finally, CT DPUC argues that
    NECPUC's proposed symmetrical incentive is unlikely to facilitate
    accountability and cost efficiency.

26. NICC and MMWEC support NECPUC's complaint. NICC argues that the
    combination of limiting recovery of the ROE incentive to original
    cost estimates and rewarding transmission owners through a
    symmetrical incentive will provide better incentives for development
    of transmission infrastructure in a financially prudent manner.
    MMWEC argues that NECPUC's complaint, while not eliminating the
    incentive altogether, will at least reduce in part the consumer cost
    impact of what it contends was an unwarranted decision by the
    Commission to authorize the incentive in the first place.

27. Finally, Mass DPU argues that because cost overruns are
    unanticipated by definition there is no nexus between the
    investments being made and the application of the ROE incentive to
    the cost overruns identified in NECPUC's complaint, regardless of
    whether the excess costs were prudently incurred.

    **B. [Answers]{.underline}**

28. The Transmission Owners argue that granting NECPUC's complaint would
    have little or no impact on controlling the costs that are the focus
    of the complaint because NECPUC's requested relief would apply
    almost exclusively to sunk costs. The Transmission Owners claim,
    however, that granting the complaint would have an adverse impact on
    the conduct that incentives seek to encourage because it would send
    a strong message to transmission owners and investors across the
    country that the Commission might revoke incentives upon which they
    have relied. The Transmission Owners argue that in the Opinion No.
    489 Rehearing Order the Commission recognized the importance of
    avoiding sending this message when it refused to retroactively apply
    the requirements of Order No. 679 to projects eligible for the
    Opinion No. 489 ROE incentive.

29. The Transmission Owners reject NECPUC's assertion that they did not
    have a reasonable expectation of recovering the ROE incentive adder
    on cost overruns. The Transmission Owners claim that they expected
    that planning estimates provided at a project's conceptual planning
    stage would almost certainly change, that the projects initially
    described in those plans might be quite different from those
    approved by ISO New England and regulators, and that regulatory
    delays and hidden costs could substantially increase the projects'
    costs. The Transmission Owners state that the incentive NECPUC seeks
    to limit is part of the filed rate upon which public utilities and
    their customers rely upon in conducting their business affairs, and
    argue that NECPUC's section 206 complaint to change the filed rate
    is itself evidence that the Transmission Owners had a reasonable
    expectation that the incentive would apply to actual costs.

30. The Transmission Owners contend that NECPUC's complaint is a
    collateral attack on Order No. 679, where the Commission denied the
    request to limit recovery of incentives to the amount originally
    budgeted and noted that it would be difficult to hold electric
    transmission projects to the original budget estimate because it can
    be 10 to 15 years between the time a project is proposed and
    actually built.

31. The Transmission Owners also assert that NECPUC has mischaracterized
    the Commission's analysis in Opinion No. 489 by making it appear as
    if the Commission considered individual project estimates in
    deciding whether or not to authorize the ROE incentive. The
    Transmission Owners acknowledge that the Commission summarized some
    of the benefits attributable to the ROE incentive, but state that
    the Commission expressly found that there was no need to "parse the
    numbers" with respect to the projects. The Transmission Owners claim
    that there is nothing in Opinion No. 489 or the Opinion No. 489
    Rehearing Order to indicate that the Commission intended to limit
    the application of the ROE incentive to RTEP-04 estimates (or any
    other cost estimates) or that the Commission even considered any
    estimates to be relevant to its decision. On the contrary, the
    Transmission Owners observe that the Commission authorized the ROE
    incentive for all projects approved in the RTEP. The Transmission
    Owners contend that the premise underlying NECPUC's argument is that
    in Opinion No. 489 the Commission engaged in a cost-benefit analysis
    and authorized the incentive after judging that its costs and
    benefits were roughly equal, such that any increase in costs would
    tip the scale against the incentive. Putting aside their
    disagreement with this interpretation of Opinion No. 489, the
    Transmission Owners argue that NECPUC has provided no evidence that
    applying the ROE incentive adder to increases in estimated costs
    would, in fact, cause the costs to outweigh the benefits, and
    consequently, has failed to sustain its burden of proof. In its
    separate answer, UI makes similar arguments.

32. Similarly, the Transmission Owners contend that NECPUC has provided
    no evidence that the cost increases it has identified are "cost
    overruns" or were incurred imprudently. The Transmission Owners
    state that they are careful to forecast costs as accurately as
    possible, but their estimates are based on preliminary or conceptual
    engineering and an imperfect knowledge of field conditions. The
    Transmission Owners explain that firm cost estimates require a
    detailed project design, which may not be available in the early
    stages of a project. The Transmission Owners state that ISO New
    England recognizes this point, observing that when it estimated the
    total costs of all projects in RTEP-04, it expressed the dollar
    figure as a broad range and noted that the actual costs would depend
    on the final design of the upgrades.

33. The Transmission Owners contend that NECPUC's complaint arbitrarily
    identifies a handful of the 246 projects in RTEP-04 and compares
    artfully selected cost estimates without providing any explanation
    or justification or acknowledging that the siting/permitting process
    can have a significant impact on project costs. The Transmission
    Owners further claim that NECPUC fails to recognize that in recent
    years there have been significant increases in the costs of building
    electric infrastructure projects, including transmission facilities,
    due to a rising global demand for products and services used in
    construction. The Transmission Owners argue that NECPUC attempts to
    create the impression, without providing any specific evidence, that
    differences between early planning estimates and actual costs may be
    the result of failures or shortcomings of the Transmission Owners.

34. The Transmission Owners reject NECPUC's claim that applying the ROE
    incentive adder to cost increases reduces the incentive to contain
    project costs and possibly creates a perverse incentive to delay
    project deployment. The Transmission Owners argue that this
    assertion is a collateral attack on Opinion No. 489 because it
    challenges the Commission's decision to apply the ROE incentive
    adder to actual rather than estimated costs. The Transmission Owners
    also reject this argument because it assumes without evidence that
    the Transmission Owners would not control costs if not held to
    original estimates.

35. The Transmission Owners also reject NECPUC's claim that the ROE
    incentive applies to all costs without limits, noting that
    Commission policy limits its application to prudently incurred costs
    only. The Transmission Owners claim that NECPUC acknowledges that
    the cost increases it has identified are beyond the Transmission
    Owners' control, but has offered no explanation why such costs
    should be treated any differently than other costs incurred to build
    transmission projects. The Transmission Owners argue that one of the
    risks that they face in building transmission projects, and thus one
    of the reason incentives are necessary, is that they may incur cost
    increases they cannot control, such as increases in the cost of raw
    materials.

36. In addition to agreeing with the Transmission Owners that NECPUC's
    complaint mischaracterizes Opinion No. 489, UI argues that NECPUC's
    complaint is a collateral attack on Order No. 679, where the
    Commission stated that it would not limit the application of
    incentives to a project's estimated costs at the time of its
    incentive application and that it would not require applicants to
    conduct a cost-benefit analysis. UI also argues that NECPUC's
    complaint is a collateral attack on the Commission's order
    authorizing an additional 50 basis point ROE incentive and recovery
    of 100 percent of construction work in progress (CWIP) for UI's M-N
    project.[^36]

    **IV. [Commission Determination]{.underline}**

**A. [Procedural Matters]{.underline}**

37. Pursuant to Rule 214 of the Commission's Rules of Practice and
    Procedure,[^37] the timely, unopposed motions to intervene and the
    notices of intervention serve to make the entities that filed them
    parties to this proceeding.

38. Pursuant to Rule 214(d) of the Commission's Rules of Practice and
    Procedure,[^38] the Commission will grant the late-filed motions to
    intervene given the parties' interest in the proceeding, the early
    stage of the proceeding, and the absence of undue prejudice or
    delay.

39. On July 16, 2008, NECPUC submitted an answer to the answers of the
    Transmission Owners and UI. Rule 213(a)(2) of the Commission's Rules
    of Practice and Procedure[^39] prohibits an answer to an answer
    unless otherwise ordered by the decisional authority. We are not
    persuaded to accept NECPUC's answer and will, therefore, reject it.

**B. [Substantive Matters]{.underline}**

40. We find that the cost increases NECPUC has identified do not change
    the circumstances underlying the Commission's decision to authorize
    the ROE incentive and do not render the cost of the incentive unjust
    and unreasonable. We also find that NECPUC's attempt to restrict
    application of the ROE incentive to the originally estimated costs
    of incentive-eligible projects should have been raised in the
    Opinion No. 489 proceeding. Accordingly, we deny the complaint and
    reject NECPUC's argument as a collateral attack on Opinion No. 489.

41. At the outset, we note that the Commission's authority to encourage
    investment in infrastructure through the application of incentive
    pricing preceded section 219 and Order No. 679. Even prior to
    section 219, the Commission exercised its authority under section
    205 for the purpose of encouraging new investment to meet
    demonstrated

    needs.[^40] In *Maine Public Utilities Commission v*. *FERC*, which
    involved an incentive authorized under section 205, before enactment
    of section 219, the Court of Appeals for the D.C. Circuit reviewed
    the Commission's authority to approve incentive rates and affirmed
    that the Commission has significant discretion within its ratemaking
    authority to consider both cost-related factors and policy-related
    factors (e.g., the need for new transmission investment), holding
    that the Commission's determinations "involve matters of rate design
    . . . \[and\] policy judgments \[that go to\] the core of \[the
    Commission's\] regulatory responsibilities."[^41]

42. In Opinion No. 489 the Commission authorized the ROE incentive under
    its section 205 authority without reliance on section 219, and
    employed a standard of review that is consistent with, but different
    from, the standard of review under Order No. 679.[^42] In the
    Opinion No. 489 Rehearing Order, the Commission explained that an
    evidentiary record that focused on the RTEP process "in its broadest
    contours," rather than on the specific projects themselves, was
    sufficient to show the required nexus between the ROE incentive and
    the RTEP projects.[^43]

43. NECPUC's complaint rests on the theory that increases in specific
    cost estimates represent a change in the core circumstances
    underlying the Commission's finding that there is a sufficient link
    between the cost of the ROE incentive and its benefits, and that
    applying the incentive to these cost increases is unjust and
    unreasonable because it renders the cost of the incentive "decidedly
    larger" than previously expected. We disagree and find that NECPUC's
    theory incorrectly presumes that the Commission authorized the ROE
    incentive after a cost-benefit analysis that generated roughly equal
    results, such that any increase in the cost of the incentive would
    tip the scale against its benefits. We agree with UI and the
    Transmission Owners that this theory is flawed because it
    mischaracterizes the basis on which the Commission granted the
    incentive. Moreover, we note that NECPUC's complaint is incomplete
    in its own premise, for while it makes a general assertion that
    costs may exceed benefits, it fails to present evidence regarding
    the benefits and whether they do or do not outweigh the costs, even
    with the cost overruns.

44. Nevertheless and contrary to NECPUC's complaint, in authorizing the
    ROE incentive for all RTEP projects the Commission did not rely on
    the estimated costs of the projects or the estimated costs of any
    particular project (from RTEP-04 or from any other year); instead,
    it relied on an evidentiary record that focused on the broadest
    contours of the RTEP process,[^44] which the Commission found
    trustworthy because its independence and objectivity place the
    necessity and region-wide benefits of RTEP-approved projects beyond
    dispute.[^45] Rather than weigh the cost of the incentive against
    its benefits, the Commission found that the necessary link between
    the incentive and the projects was supplied by their inclusion in
    the RTEP, the effect the incentive would have in encouraging
    investment in the projects, and the incentive's role in assisting
    ISO New England in bringing the projects on line in a timely
    fashion. In fact, when presented with evidence quantifying the cost
    and benefits of the incentive, the Commission expressly declined to
    parse the numbers, finding it sufficient to note that on balance,
    and based on the specific evidence in the record, the timely,
    successful completion of the additions to the grid would inure to
    the benefit of ratepayers.[^46] In other words, the Commission
    authorized the incentive in Opinion No. 489 without reference to the
    cost estimates of specific projects and not on the basis of any
    criteria apart from their RTEP status; it found a sufficient link
    between the incentive and the projects without considering cost
    estimates for specific projects or for the projects as a whole.[^47]
    Consequently, NECPUC's attempt to restrict the incentive when a
    project exceeds its cost estimate---that is, its attempt to limit
    the incentive based on a project-specific factor distinct from its
    inclusion in the RTEP---is incompatible with the basis on which the
    project is eligible for incentives in the first place and
    erroneously creates the impression that cost estimates in a specific
    year had a determinative effect in the Commission's analysis. Since
    the Commission did not rely on cost estimates in authorizing the ROE
    incentive, NECPUC's claim that increases in these estimates
    constitute changes in the circumstances underlying Opinion No. 489
    is mistaken.

45. We also find that the place to argue that the incentive should be
    restricted based on project-specific factors---that is, to challenge
    the Commission's reliance on the projects\' RTEP status in granting
    the incentive or to argue that the incentive should apply only to
    estimated costs---was Opinion No. 489; thus, we reject the complaint
    as a collateral attack on Opinion No. 489 and the Opinion No. 489
    Rehearing Order. We further note that our decision here is
    consistent with our decision in Order No. 679 to reject a request to
    limit recovery of CWIP incentives to the amount originally
    budgeted.[^48] Although the Commission authorized the ROE incentive
    in Opinion No. 489 without reliance on Order No. 679, its reasons in
    Order No. 679 for declining to limit CWIP to the amount originally
    budgeted---namely, the practical difficulty in holding to original
    cost estimates over the potentially long period between when a
    project is proposed and when it is built and the incentive such an
    approach would give to utilities to overestimate costs or to avoid
    the risky projects incentives are intended to encourage---apply
    here.[^49]

46. Additionally, we are not persuaded by NECPUC's arguments that
    granting its complaint is necessary to prevent the ROE incentive
    from applying without limit. We agree with CT DPUC and the
    Transmission Owners that the incentive applies only to costs that
    are prudently incurred and that the Commission has an established
    procedure for ensuring that only prudently incurred costs are
    recovered under FPA section 205. As CT DPUC observes, prudence
    determinations are based on the facts of each project. NECPUC has
    presented no evidence suggesting that the cost increases it has
    identified were not prudently incurred. If it has such evidence, it
    is free to challenge application of the incentive to such
    imprudently incurred costs on a case-by-case basis. It is well
    established that the Commission has the authority to disallow the
    recoupment in rates of higher costs incurred as a result of
    negligence, mismanagement, or imprudence.[^50] However, parties
    seeking to challenge the expenditures must first create a serious
    doubt as to the prudence of the expenditures before the burden
    shifts to the filing utility.[^51] Absent a showing of negligence,
    mismanagement, or imprudence, the Commission presumes that the
    utility operations were conducted in good faith consistent with
    principles of "efficient and economical management." [^52] The
    Commission and the courts have long recognized that a protester has
    a burden to do more than make mere unsubstantiated allegations.[^53]
    NECPUC has not made a showing sufficient to call into question
    whether costs associated with these projects are imprudently
    incurred.

47. Similarly, we reject NECPUC's assertion that even if the cost
    increases are supported by valid reasons, such as increased labor
    and material costs, applying the ROE incentive to a rate base
    increased by uncontrollable costs serves no public purpose. As we
    have stated, application of the incentive is restricted to
    prudently-incurred costs. Thus, NECPUC's argument amounts to the
    claim that there is no public purpose served by applying the ROE
    incentive to prudently incurred costs above the original cost
    estimates of the projects, before the costs are even considered in
    rates. As the Transmission Owners correctly observe, adopting this
    policy would send the wrong message to investors because it would
    create uncertainty about whether an approved incentive could be
    collected on costs that are unavoidable (but prudently incurred).
    Since investors and transmission owners might be reluctant to pursue
    needed projects in the face of such uncertainty, a public purpose is
    served by applying an approved incentive to prudently-incurred
    costs. This supports the Commission's earlier finding of a public
    purpose in authorizing an incentive to encourage construction for
    these projects in the first place.

48. Aside from its generic claim that the Commission should restrict the
    incentive because costs have increased since Opinion No. 489, NECPUC
    makes no showing that applying the incentive to these cost increases
    is unjust and unreasonable. As we have explained, it relies on the
    incorrect theory that the Commission granted the incentive based on
    a cost-benefit analysis. Accordingly, we find that NECPUC has failed
    to meet its burden under section 206 and deny the complaint.

[The Commission orders]{.underline}:

NECPUC's complaint is hereby denied.

By the Commission. Commissioner Kelly concurring with a separate
statement attached.

Commissioner Wellinghoff concurring and dissenting with a

separate statement attached.

( S E A L )

Kimberly D. Bose,

Secretary.

UNITED STATES OF AMERICA

FEDERAL ENERGY REGULATORY COMMISSION

+--------------------------------------------+----------+-------------+
| New England Conference of Public Utilities | Docket   | EL08-69-000 |
| Commissioners, Inc.                        | No.      |             |
|                                            |          |             |
| v\.                                        |          |             |
|                                            |          |             |
| Bangor Hydro-Electric Company              |          |             |
|                                            |          |             |
| Central Maine Power Company                |          |             |
|                                            |          |             |
| National Grid, USA                         |          |             |
|                                            |          |             |
| NSTAR Electric & Gas Corporation           |          |             |
|                                            |          |             |
| Northeast Utilities Service Company        |          |             |
|                                            |          |             |
| The United Illuminating Company            |          |             |
|                                            |          |             |
| Vermont Electric Power Company             |          |             |
+--------------------------------------------+----------+-------------+

(Issued September 25, 2008)

KELLY, Commissioner, *concurring*:

This order addresses a complaint filed by the New England Conference of
Public Utilities Commissioners, Inc. (NECPUC) against the New England
Transmission Owners. NECPUC argues that it unjust and unreasonable to
apply a return on equity (ROE) incentive authorized in Opinion No.
489[^54] to project costs in excess of those estimated at the time the
Commission granted the incentive.

Given the direct connection between this order and Opinion No. 489, I
note that I do not believe that Opinion No. 489 was consistent with the
Commission's general policy on incentive rates. Opinion No. 489 granted
ROE incentive treatment without requiring a showing that such treatment
would affect barriers to transmission investment, which, this order
confirms when it states that the necessary link between the incentive
and the projects was supplied by their inclusion in the RTEP.

For this reason, I respectfully concur with this order.

\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

Suedeen G. Kelly

UNITED STATES OF AMERICA

FEDERAL ENERGY REGULATORY COMMISSION

New England Conference of Public Docket No. EL08-69-000

Utilities Commissioners, Inc.

v\.

Bangor Hydro-Electric Company

Central Maine Power Company

National Grid, USA

NSTAR Electric & Gas Corporation

Northeast Utilities Service Company

The United Illuminating Company

Vermont Electric Power Company

(Issued September 25, 2008)

WELLINGHOFF, Commissioner, [concurring in part and dissenting in
part]{.underline}:

This proceeding is closely related to the majority's decision in Opinion
No. 489 to grant a 100 basis point incentive ROE adder for all
transmission projects approved through ISO New England's RTEP
process.[^55]

I dissented in part from Opinion No. 489 because I concluded that the
proponents of the incentive ROE adder had not satisfied their
evidentiary burden. In today's order, the majority summarizes its
holding to the contrary, stating: "\[T\]he Commission authorized the
incentive in Opinion No. 489 without reference to the cost estimates of
specific projects and [not on the basis of any criteria apart from their
RTEP status]{.underline} ...."[^56] That statement highlights the
inadequacy of the majority's rationale in Opinion No. 489. In and of
itself, the projects' RTEP status did not warrant an incentive ROE adder
under the Commission's FPA section 205 authority applied in Opinion No.
489. Similarly, a project's RTEP status alone would not warrant an
incentive ROE adder pursuant to the Commission's FPA section 219
authority and Order No. 679. Indeed, in contrast to its statement here
of the holding in Opinion No. 489, the majority recently found that
approval through another region's transmission planning process does not
mean that a project automatically qualifies for incentives under Order
No. 679.[^57]

Thus, I agree with NECPUC that the majority erred in Opinion No. 489 by
granting an unsupported incentive ROE adder to virtually all new
transmission projects in the ISO New England footprint.[^58] To prevent
such errors, the Commission must apply a more rigorous test in
determining whether a project warrants an incentive ROE adder. As I
stated in my dissent to Opinion No. 489, incentive ROE adders should
focus on encouraging investment decisions beyond the upgrades required
by a utility's service obligations or good utility practice. Elaborating
on that point, I stated that incentive ROE adders should be more
narrowly targeted to types of investment that provide incremental
benefits, such as increased energy efficiency.[^59] I have also stated
that applying the nexus requirement of Order No. 679 with sufficient
rigor is essential to ensuring that rates including an incentive ROE
adder are just and reasonable.[^60]

In its complaint in this proceeding, NECPUC raises another issue related
to the incentive ROE adder granted in Opinion No. 489. Specifically,
NECPUC seeks to limit application of that incentive ROE adder to no more
than the estimated cost that was presented at hearing for each
qualifying project. NECPUC argues that "\[a\]llowing an ROE adder to
apply without limit to project costs no matter how much they exceed the
project's earlier-estimated costs is not required to spur project
construction and provides no discernible benefit to customers."[^61]

I agree with the majority's statement in response to this argument that
granting NECPUC's complaint is not necessary to prevent the incentive
ROE order granted in Opinion No. 489 from applying without limit. The
majority states correctly that this incentive ROE adder applies only to
costs that are prudently incurred, that prudence determinations are
based on the facts of each project, and that the Commission has an
established procedure for ensuring that only prudently incurred costs
are recovered under FPA section 205. Interested entities such as NECPUC
will have the opportunity to inform the Commission on a case-by-case
basis if they are concerned that costs associated with particular
projects were imprudently incurred.

For these reasons, I concur in part and dissent in part on today's
order.

\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

Jon Wellinghoff

Commissioner

[^1]: The Transmission Owners responding to the complaint are Bangor
    Hydro-Electric Co., Central Maine Power Co., Florida Power & Light
    Co., New England Power Co. d/b/a National Grid (NEPCO), NSTAR
    Electric Co. (NSTAR), Northeast Utilities Service Co. (on behalf of
    The Connecticut Light and Power Co., Public Service Co. of New
    Hampshire, Western Massachusetts Electric Co, Holyoke Water Power
    Co., and Holyoke Power and Electric Co.), The United Illuminating
    Co. (UI), and Vermont Transco LLC.

[^2]: 16 U.S.C. § 824e (2006).

[^3]: *Bangor Hydro-Electric Co*., Opinion No. 489, 117 FERC ¶ 61,129
    (2006), *order* *on reh'g*, 122 FERC ¶ 61,265 (2008) (Opinion No.
    489 Rehearing Order).

[^4]: The RTEP is now known as the Regional System Plan (RSP). For
    continuity with Opinion No. 489, we will maintain the RTEP
    designation in this order.

[^5]: 16 U.S.C. § 824d(a) (2006).

[^6]: *ISO New England Inc*., 106 FERC ¶ 61,280, *order on reh'g and
    compliance*, 109 FERC ¶ 61,147 (2004), *order on reh'g and
    compliance*, 110 FERC ¶ 61,111, *order on reh'g and compliance,* 110
    FERC ¶ 61,335, *order on reh'g*, 111 FERC ¶ 61,344 (2005).

[^7]: *Bangor Hydro-Electric Co*., 111 FERC ¶ 63,048 (2005) (Initial
    Decision).

[^8]: Opinion No. 489, 117 FERC ¶ 61,129 at P 105.

[^9]:
    > *Id*. P 107-108 ("\[T\]here is an undisputed need for the projects
    > to which the proposed adjustment will apply, as evidenced by ISO
    > New England's regional planning process and the analyses made
    > pursuant to this process . . . .The 2004 \[RTEP\] (RTEP-04). . .
    > has identified specific projects necessary to satisfy the needs of
    > the region. Based on this independent analysis and the process
    > pursuant to which it was conducted, we can conclude here that the
    > proposed incentive will apply only to projects that are: (i)
    > constructed and brought on line; and (ii) meet a demonstrated
    > need.") (internal citations omitted).

[^10]: *Id*. n.100.

[^11]: 16 U.S.C. § 824s (2006).

[^12]: *Promoting Transmission Investment through Pricing Reform*, Order
    No. 679, FERC Stats. & Regs. ¶ 31,222, *order on reh'g*, Order No.
    679-A, FERC Stats. & Regs. ¶ 31,236 (2006), *order on reh'g*, 119
    FERC ¶ 61,062 (2007).

[^13]: Opinion No. 489 Rehearing Order at P 67.

[^14]: *Id*. P 63.

[^15]: *Id*. P 54-60.

[^16]: NECPUC Complaint at 9 (Complaint).

[^17]: *Id*.

[^18]: NECPUC states that the estimated cost of this project increased
    from \$217 million to slightly over \$283 million.

[^19]: Complaint at 11.

[^20]: In April 2006, NEPCO project ID 170 was estimated to cost \$6.4
    million. It went into service at \$13.4 million, an increase of more
    than 109 percent. Similarly, in 2005, NSTAR project ID 305 was
    estimated to cost \$1.2 million. It went into service at \$2.5
    million, an increase of more than 108 percent. *Id*. at 10.

[^21]: These are project IDs 149, 154, 320 and 322. The estimated cost
    of project ID 149 increased more than 127 percent (from \$3.3
    million to \$7.5 million). The estimated cost of project ID 154
    increased 150 percent (from \$1.2 million to \$3 million). The
    estimated cost of project ID 320 increased 100 percent (from \$2
    million to \$4 million). In April 2008, the estimated cost of
    project ID 320 increased to \$4.85 million. The estimated costs of
    project ID 322 increased 100 percent (from \$1.5 million to \$3
    million). *Id*. at 9-10.

[^22]: *Id*. at 11.

[^23]: *Id*. at 12.

[^24]: *Id*.

[^25]: *Id*. at 4.

[^26]: *Baltimore Gas and Electric Co*., 122 FERC ¶ 61,034 (2008)
    (*BG&E*).

[^27]: Complaint at 13.

[^28]: NECPUC provides the following example:

    > Assume that the expected cost of a project was \$100 million
    > dollars. If the project is completed at that cost the transmission
    > owner would earn an incentive adder of \$1 million. Now assume
    > that the project is completed for \$75 million. In that case,
    > without an adjustment, the transmission owner's incentive adder
    > would be worth \$750,000. The adjustment proposed here would
    > increase the adder from 100 basis points to 133 basis points so
    > that the transmission owner would still have the ability to earn
    > \$1 million in adder-related revenues.

    *Id*. at n.9.

[^29]: 73 Fed. Reg. 35,385 (2008).

[^30]: The Allegheny Energy Transmission Owners are: Monongahela Power
    Company, The Potomac Edison Company and West Penn Power Company, all
    doing business as Allegheny Power, Trans-Allegheny Interstate Line
    Company, and PATH Allegheny Transmission Company, LLC.

[^31]: On behalf of it operating companies: AEP Texas Central Company,
    AEP North Texas Company, Appalachian Power Company, Columbus
    Southern Power Company, Indiana Michigan Power Company, Kentucky
    Power Company, Kingsport Power Company, Ohio Power Company, Public
    Service Company of Oklahoma, Inc., Southwestern Electric Power
    Company and Wheeling Power Company (collectively, AEP)

[^32]: On behalf of Virginia Electric and Power Company d/b/a Dominion
    Virginia Power .

[^33]: PSEG, PSEG Power LLC, PSEG Energy Resources & Trade LLC, and PSEG
    Power Connecticut LLC.

[^34]: The Vermont Department of Public Service filed its motion to
    intervene jointly with the Vermont Public Service Board's notice of
    intervention.

[^35]: Boston Generating, LLC, Mystic I, LLC, Mystic Development, LLC,
    and Fore River Development, LLC.

[^36]: *The United Illuminating Co*., 119 FERC ¶ 61,182 (2007).

[^37]: 18 C.F.R. § 385.214 (2008).

[^38]: *Id*. § 385.214(d).

[^39]: *Id*. § 385.213(a)(2).

[^40]: *See*, *e*.*g*., *Western Area Power Administration*, 99 FERC ¶
    61,306, *reh'g denied*, 100 FERC ¶ 61,331 (2002), *aff'd sub nom*.
    *Public Utilities Commission of the State of California v*. *FERC*,
    367 F.3d 925 (D.C. Cir. 2004); *Michigan Electric Transmission Co*.,
    *LLC*, 105 FERC ¶ 61,214 (2003); *American Transmission Co*., 105
    FERC ¶ 61,388 (2003), *order approving settlement*, 107 FERC ¶
    61,117 (2004); *ITC Holdings Corp*., 102 FERC ¶ 61,182, *reh'g
    denied*, 104 FERC ¶ 61,033 (2003); *Trans-Bay Cable LLC*, 112 FERC ¶
    61,095 (2005), *order granting clarification*, 114 FERC ¶ 61,104
    (2006).

[^41]: 454 F.3d 278, 288 (D.C. Cir. 2006); *see also Permian Basin Area
    Rate Cases*, 390 U.S. 747 (1968).

[^42]: Opinion No. 489, 117 FERC ¶ 61,129 at P 113; Opinion No. 489
    Rehearing Order, 122 FERC ¶ 61,265 at P 52- 53.

[^43]: Opinion No. 489 Rehearing Order, 122 FERC ¶ 61,265 at P 54-60,
    63.

[^44]: *Id*. P 63.

[^45]: Opinion No. 489, 117 FERC ¶ 61,129 at P 107-108.

[^46]: *Id*. n.100.

[^47]: Opinion No. 489 Rehearing Order, 122 FERC ¶ 61,265 at P 63.

[^48]: Order No. 679, FERC Stats. & Regs. ¶ 31,222 at n.81.

[^49]: *Id*.

[^50]: *Public Service Co*. *of New Hampshire,* Opinion No. 37, 6 FERC ¶
    61,299, *reh'g denied*, 9 FERC ¶ 61,202 (1979).

[^51]: *Midwest Independent Transmission System Operator*, *Inc.*, 115
    FERC ¶ 61,224, at P 28 (2006); (*citing* *Minnesota Power and Light
    Co.*, Opinion No. 86, 11 FERC ¶ 61,312 at 61,644-45 & n.45, *reh'g
    denied*, Opinion No. 86-A, 12 FERC ¶ 61,264 (1980) (generally, the
    party seeking to call the prudence of an expenditure into question
    must do so by adducing evidence or citing to material of which the
    Commission may take official notice); *Indiana Municipal Power
    Agency v*. *FERC*, 56 F.3d 247, 253 (1995) (complainant urging that
    utility's rate is unjust must present evidence)).

[^52]: *Bluefield Waterworks & Improvement Co. v*. *Public Service
    Commission*, 262 U.S. 679, 693, (1923); *West Ohio Gas Co. v. Public
    Utility Commission,* 294 U.S. 63, 73 (1934).

[^53]: *E.g.*, *Midwest Independent Transmission System Operator, Inc.*,
    117 FERC ¶ 61,108 at P 14 n.16; *PJM Interconnection, LLC*, 115 FERC
    ¶ 61,052, at P 12 n.10 (2006); *Duke Energy Corporation*, 87 FERC ¶
    61,249, at 61,966 n.4 (1999); *Central Maine Power Company*, 60 FERC
    ¶ 61,285, at 61,965 n.17 (1992); *Philadelphia Electric Company*, 58
    FERC ¶ 61,060, at 61,132 n.2 (1992); *Georgia Power Company*, 52
    FERC ¶ 61,321, at 62,278 n.5 (1990).

[^54]: **^1^** *Bangor Hydro-Electric Co*., Opinion No. 489, 117 FERC ¶
    61,129 (2006), *order* *on reh'g*, 122 FERC ¶ 61,265 (2008).

[^55]: **^1^** *Bangor Hydro-Electric Co.*, 117 FERC ¶ 61,129 (2006)
    (Opinion No. 489). On rehearing, the majority recognized that it was
    inappropriate to apply this incentive to all such projects in
    perpetuity. Therefore, the majority held that any such project that
    comes on line by December 31, 2008, will receive the incentive
    automatically, but that an entity seeking incentives for a project
    that will come on line after that date must demonstrate that its
    project satisfies the Commission's policy as set forth in Order No.
    679. *Bangor Hydro-Electric Co.*, 122 FERC ¶ 61,265 (2008) (Opinion
    No. 489 Rehearing Order).

[^56]: *New England Conference of Public Utilities Commissioners, Inc.,
    v. Bangor Hydro-Electric Co.*, 124 FERC ¶ 61,291, at P 44 (2008)
    (emphasis added).

[^57]: *Commonwealth Edison Co*., 124 FERC ¶ 61,231, at P 18 (2008)
    (discussing PJM's Regional Transmission Enhancement Plan).

[^58]: NECPUC states in its complaint in this proceeding that it has
    sought judicial review of Opinion No. 489. NECPUC further states
    that its acceptance of Opinion No. 489, as modified on rehearing,
    for purposes of this complaint "should not be interpreted as a
    retreat from NECPUC's position that the ROE adder is unjustified and
    unreasonable." Complaint at 2, n.2.

[^59]: Opinion No. 489 (dissent in part of Commissioner Wellinghoff at
    3).

[^60]: *See, e.g*., Opinion No. 489 Rehearing Order (concurrence in part
    and dissent in part of Commissioner Wellinghoff at 2-3).

[^61]: Complaint at 2-3.