May 14, 2018
The Honorable Kimberly D. Bose, Secretary Federal Energy Regulatory Commission
888 First Street, NE
Washington, DC 20426
Justin Atkins
Counsel, Avangrid Networks
Re: New York State Electric & Gas Corporation and Rochester Gas and
Electric Corporation
Docket Nos. EL18-103-000, EL18-110-000
Compliance Filing Responding to Order to Show Cause
Dear Secretary Bose:
Pursuant to the Federal Energy Regulatory Commission’s (“FERC” or
“Commission”) March 15, 2018 order in the above-referenced proceedings (the “Order”),
New York State Electric & Gas Corporation (“NYSEG”) and Rochester Gas and Electric
Corporation (“RG&E,” and collectively “the Companies”), each of which are subsidiaries
of Avangrid, Inc. and Transmission Owners under the New York Independent System
Operator, Inc.’s (“NYISO”) Open Access Transmission Tariff (the “OATT”), hereby file
proposed revisions to the revenue requirement of their respective wholesale transmission
service charge (“TSC”) on file with the Commission and set forth in Table 1 of Section
14.1.4 of Attachment H of the OATT to reflect the recent change in the federal corporate income tax rate from the Tax Cuts and Jobs Act of 2017 (“Tax Cuts and Jobs Act”).1 For the reasons set forth below, the Companies respectfully request that the Commission
accept the proposed revisions to the Companies’ wholesale TSCs under Attachment H of the NYISO OATT for filing effective as of January 1, 2018.2
1 Tax Cuts and Jobs Act, Pub. L. No. 115-97, 131 Stat. 2054 (2017). The NYISO submits this filing on behalf of the Companies solely in its role as Tariff Administrator. The burden of
demonstrating that the proposed tariff amendments are just and reasonable rests with the Companies, the sponsoring parties. The NYISO takes no position on any substantive aspect of this filing at this time.
2 Though the Refund Effective Date in these proceedings is March, 21, 2018, the date of
publication by the Commission of its notice of intention to initiate the proceedings in the
Federal Register, the Companies desire to provide the benefits of the Tax Cut and Jobs Act to customers upon its effective date, January 1, 2018.
One City Center 5th Floor Portland, Maine 04101
Telephone 207.629.1293
www.avangrid.com, Justin.Atkins@avangrid.com
An equal opportunity employer
I.PROCEDURAL BACKGROUND
On December 22, 2017, the President signed into law the Tax Cuts and Jobs Act.
The Tax Cuts and Jobs Act modified the federal corporate income tax rate from a
maximum 35 percent to a flat 21 percent rate, effective January 1, 2018. This tax rate
reduction will result in lower income tax expense going forward on the books of certain
rate-regulated companies, including NYSEG and RG&E. Accordingly, on March 15,
2018, the Commission ordered that, within 60 days of the Order, a number of companies,
including NYSEG and RG&E, either (1) submit proposed revisions to their stated
transmission rates to reflect the change in the federal corporate income tax rate and
describe the methodology used for making those revisions, or (2) show cause why they
should not be required to do so.
By this filing, the Companies are submitting proposed revisions to Section 14.1.4
of Attachment H of the NYISO OATT to revise their stated transmission rates to reflect
the change in the federal corporate income tax rate in accordance with the Order.3
II.COMPLIANCE FILING
NYSEG and RG&E’s annual revenue requirement (“RR”) and resulting
transmission rates that currently appear in Table 1 of Section 14.1.4 of Attachment H to
the NYISO OATT are as follows:
TransmissionRevenueSchedulingTotal TSCAnnualRate
OwnerRequirementSystem(RR +CCC)Billing($/MWh)
(“RR”)Control andUnites
Dispatch Costs(“BU”)
(“CCC”)(MWh)
NYSEG$94,143,899$1,633,000$95,776,89914,817,111$6.4639
RG&E$25,795,509$583,577$26,379,0866,967,556$3.7860
3 The filing does not include the impacts of amortizing so-called Excess Accumulated Deferred
Income Taxes, which treatment FERC is expected to determine in its Inquiry Regarding the
Effect of the Tax Cuts and Jobs Act on Commission-Jurisdictional Rates, Docket RM18-12-000.
One City Center 5th Floor Portland, Maine 04101
Telephone 207.629.1293
www.avangrid.com, Justin.Atkins@avangrid.com
An equal opportunity employer
In response to the Order, the Companies propose the following changes to their respective annual revenue requirements and the resulting transmission rates:
TransmissionRRCCCTotal TSCBU (MWh)Rate
Owner(RR+CCC)($/MWh)
NYSEG$90,149,075$1,633,000$91,782,07514,817,111$6.1943
RG&E$24,242,747$583,577$24,826,3246,967,556$3.5631
NYSEG’s current stated wholesale TSC was set by the Commission in Docket ER97-
2353 (Opinion 447),4 using data from a 1997 test year, and later amended in a settlement
approved by the Commission in Docket No. EL04-56.5 In order to reflect the impact of
the change in the federal income tax rate, NYSEG changed the federal income tax rate
included in the previously approved rate determination from 35% to 21%, as described
and supported by the Affidavit of Dr. Dumais. See Attachment A. This results in a
reduction of approximately $4.0 million in the NYSEG annual transmission revenue
requirement which, in turn, reduces NYSEG’s transmission by $0.2696 per MWh.
RG&E’s current stated wholesale TSC was set by the Commission in Docket OA96-141,
using data from a 1995 test year.6 The rates approved by the Commission in that
proceeding remain in effect today. In order to reflect the impact of the change in the
federal income tax rate, RG&E changed the federal income tax rate included in the
previously approved rate determination from 35% to 21%, as described and supported by
the Affidavit of Dr. Dumais. See Attachment A. This results in a reduction of
approximately $1.6 million from RG&E’s currently effective annual transmission
revenue requirement, which, in turn, reduces RG&E’s transmission rate by $0.2229 per
MWh.
4 New York State Electric & Gas Corporation, 92 FERC ¶ 61,169 (2000).
5 New York Municipal Power Agency v. New York State Electric & Gas Corporation, 106 FERC ¶ 61,301 (2004); and Docket No. EL04-56-001, New York Municipal Power Agency v. New York State Electric & Gas Corporation, Letter Order (June 18, 2004).
6 Docket No. OA96-141-000, Rochester Gas and Electric Corporation, Letter Order (June 25,
1997).
One City Center 5th Floor Portland, Maine 04101 Telephone 207.629.1293
www.avangrid.com, Justin.Atkins@avangrid.com
An equal opportunity employer
The revenue requirement changes herein do not reflect any impacts from the amortization of any excess (or deficient) accumulated deferred income taxes, which is the subject of a separate Commission proceeding in Docket No. RM18-12-000.7
III. CONTENTS OF THE FILING
In addition to this transmittal letter, this filing consists of:
• Affidavit of Paul Dumais, Avangrid Networks Regulatory Strategy, and
two exhibits detailing how these proposed revisions are in compliance
with the Order (Attachment A).
• A clean version of the proposed revisions to Table 1 of Section 14.1.4 of
Attachment H to the NYISO OATT (Attachment B); and
• A blacklined version of the proposed revisions to Table 1 of Section
14.1.4 of Attachment H to the NYISO OATT (Attachment C).
IV. REQUESTED EFFECTIVE DATE AND WAIVER
Pursuant to Section 35.11 of the Commission’s regulations,8 the Companies
hereby request waiver of the prior notice requirement set forth in Section 35.3(a)(1).9
Good cause exists to grant this waiver. The Companies’ proposed revisions will decrease
the Companies’ wholesale transmission rates and benefit the Companies municipal and
cooperative customers and customers exporting through the Companies’ territories to
PJM. The Companies requested January 1, 2018 effective date for the proposed revisions
coincides with the effective date of the Tax Cuts and Jobs Act, thereby enabling the
Companies’ customers under the NYISO OATT to benefit from the reduction to the
federal corporate income tax rate beginning on the first day that the Tax Cuts and Jobs
Act went into effect.
To the extent necessary, the Companies request waiver of any Commission
regulation or requirement not otherwise satisfied by this compliance filing in order to
permit acceptance of the revisions to the Companies’ wholesale TSCs, effective as
requested.
7 Inquiry Regarding the Effect of the Tax Cuts and Jobs Act on Commission-Jurisdictional Rates, 162 FERC ¶ 61,223 (2018).
8 18 C.F.R. § 35.11.
9 Id. § 35.3(a)(1).
One City Center 5th Floor Portland, Maine 04101 Telephone 207.629.1293
www.avangrid.com, Justin.Atkins@avangrid.com
An equal opportunity employer
V.SERVICE
The Companies have served a copy of this filing, including attachments, to the
NYISO, the New York State Public Service Commission and the New York Association
of Public Power.
VI.COMMUNICATIONS
All communications and service related to this filing should be directed to:
Justin Atkins Counsel
Avangrid Networks, Inc.
One City Center 5th Floor
Portland, Maine 04101
Telephone 207.629.1293
Justin.Atkins@avangrid.com
VII. CONCLUSION
Paul Dumais
Regulatory Strategy
Avangrid Networks, Inc.
89 East Avenue
Rochester, NY 14649
Telephone 585.724.8542
Paul.Dumais@avangrid.com
For the foregoing reasons, the Companies respectfully request that the
Commission accept the proposed revisions to Table 1 of Section 14.1.4 of Attachment H of the NYISO OATT as fully compliant with the Order without modification or
condition, effective January 1, 2018.
Respectfully submitted,
/s/ Justin Atkins
Justin Atkins
Counsel to New York State Electric & Gas
Corporation and Rochester Gas and Electric Corporation
One City Center 5th Floor Portland, Maine 04101 Telephone 207.629.1293
www.avangrid.com, Justin.Atkins@avangrid.com
An equal opportunity employer