165 FERC ¶ 61,094
UNITED STATES OF AMERICA
FEDERAL ENERGY REGULATORY COMMISSION
Before Commissioners: Neil Chatterjee, Chairman;
Cheryl A. LaFleur and Richard Glick.
Alcoa Power Generating Inc.―Long Sault Division Alcoa Power Generating Inc.―Tapoco Division
Alcoa Power Generating Inc.
Black Hills/Colorado Electric Utility Company, LP
Cube Yadkin Transmission LLC
Essential Power Rock Springs, LLC
PJM Interconnection, L.L.C.
Essential Power Rock Springs, LLC
Monongahela Power Company Potomac Edison Company
West Penn Power Company
PJM Interconnection, L.L.C. Monongahela Power Company Potomac Edison Company
West Penn Power Company
Nevada Power Company
Sierra Pacific Power Company
Nevada Power Company
New York State Electric & Gas Corporation
Docket Nos. EL18-72-000
EL18-73-000
ER18-1600-000
ER18-1601-000
EL18-76-000
ER18-1580-000
EL18-90-000
ER18-1602-000
EL18-97-000
ER18-1566-000
EL18-101-000
ER18-1595-000
EL18-102-000
ER18-1603-000
EL18-103-000
Docket No. EL18-72-000, et al.- 2 -
Rochester Gas and Electric CorporationEL18-110-000
New York Independent System Operator, Inc.ER18-1588-000
New York State Electric & Gas Corporation
Rochester Gas and Electric Corporation
Ohio Valley Electric CorporationEL18-105-000
ER18-1599-000
ER18-1599-001
The Dayton Power & Light CompanyEL18-117-000
PJM Interconnection, L.L.C.ER18-1547-000
The Dayton Power & Light Company(not consolidated)
ORDER ACCEPTING REVISIONS TO STATED TRANSMISSION RATES IN
RESPONSE TO THE COMMISSION’S ORDER TO SHOW CAUSE AND
TERMINATING SECTION 206 PROCEEDINGS
(Issued November 15, 2018)
In this order, we accept the proposed revisions, filed in “ER” dockets, to the stated transmission rates of the public utilities named as respondents in the above-captioned “EL” dockets (collectively, Respondents) in response to the Commission’s tax rate-
related order to show cause,1 and therefore terminate the proceedings instituted under section 206 of the Federal Power Act (FPA)2 in those “EL” dockets.
I.Background
On March 15, 2018, the Commission issued several orders to address the effects of the Tax Cuts and Jobs Act of 2017 (Tax Cuts and Jobs Act),3 which, among other things, reduced the federal corporate income tax rate from 35 percent to 21 percent. Of
1 Alcoa Power Generating Inc.―Long Sault Division, 162 FERC ¶ 61,224 (2018) (Stated Rate Order to Show Cause). This order does not address all of the proceedings initiated by the Stated Rate Order to Show Cause, and other proceedings will be
addressed in other orders.
2 16 U.S.C. § 824e (2012).
3 Tax Cuts and Jobs Act, Pub. L. No. 115-97, 131 Stat. 2054 (2017).
Docket No. EL18-72-000, et al.- 3 -
relevance here, pursuant to section 206 of the FPA, the Commission issued the Stated Rate Order to Show Cause to public utilities that use stated transmission rates under an open access transmission tariff or transmission owner tariff.
The Commission stated that the reduced tax rate results in lower income tax
expenses for public utilities going forward. The Commission explained that public
utilities recover federal corporate income tax expenses in their transmission rates, and that when tax expenses decrease, so does the cost of service. The Commission continued that it has allowed transmission rates to be established through, among other things,
stated rates, which include a fixed income tax component.4
The Commission stated that it identified Respondents as having such arrangements in effect, and that absent a change to Respondents’ stated transmission rates,
Respondents’ stated transmission rates may not accurately reflect their cost of service. Accordingly, the Commission found that Respondents’ stated transmission rates appear to be unjust, unreasonable, and unduly discriminatory or preferential, or otherwise
unlawful. As such, the Commission directed each Respondent to either (1) propose
revisions to its stated transmission rate under its tariff on file with the Commission to reflect the reduced tax rate and describe the methodology used for making those
revisions, or (2) show cause why it should not be required to do so.5
The Commission noted that it generally does not permit single-issue ratemaking.
However, given the limited scope of the revisions needed to reflect the change in the
federal corporate income tax rate, the Commission would consider proposals to review
Respondents’ revisions on a single-issue basis.6 The Commission also noted that, under
the show cause option, Respondents may explain how the reduced tax rate is being
addressed in another proceeding pending before the Commission.7 Finally, consistent
with providing maximum protection to customers, the Commission set the refund
effective date at the earliest date possible, March 21, 2018, which is the publication date
of the Commission’s notice of its investigation in the Federal Register.8
4 Stated Rate Order to Show Cause, 162 FERC ¶ 61,224 at PP 2-3.
5 Id. P 4.
6 Id. P 4 n.6.
7 Id. P 4 n.7.
8 Id. P 5.
Docket No. EL18-72-000, et al.- 4 -
II.Responses
A.Alcoa Power
On May 14, 2018, in Docket Nos. ER18-1600-000 and ER18-1601-000, Alcoa
Power Generating Inc. (Alcoa Power) submitted revisions to the stated transmission rates
under the separate open access transmission tariffs (Alcoa Power Tariffs) for its Long
Sault Division (Long Sault) and its Tapoco Division (Tapoco). Alcoa Power states that
the proposed revisions decrease the Annual Transmission Revenue Requirements
(Revenue Requirements) from $3,301,354 to $3,231,406 for Long Sault, and from
$2,016,428 to $1,981,267 for Tapoco.9 Alcoa Power states that it followed the
Commission’s formula set forth in Order No. 47510 to revise the currently effective stated
transmission rates and Revenue Requirements for Long Sault and Tapoco in the Alcoa
Power Tariffs.11 Alcoa Power states that following a Commission order accepting the
proposed rates, it proposes to refund to its customers the amount of charges recovered by
Long Sault and Tapoco beginning on March 21, 2018 that exceed the charges calculated
according to the rates accepted by the Commission in this proceeding.
B.Black Hills Colorado
On May 11, 2018, in Docket No. ER18-1580-000, Black Hills/Colorado Electric
Utility Company, LP (Black Hills Colorado) submitted revisions to its stated transmission
rates under Schedules 7 and 8 of its open access transmission tariff. Black Hills Colorado
states that the revisions reduce its transmission revenue requirement from $12,452,172 to
$11,615,863 (a reduction of $836,309).12 Black Hills Colorado requests an effective date
of March 21, 2018. Black Hills Colorado states that it commits to comply with any
refund requirement ordered by the Commission in this proceeding.
9 Alcoa Power Responses at 3.
10 Rates Changes Relating to Federal Corporate Income Tax Rate for Public
Utilities, Order No. 475, FERC Stats. & Regs. ¶ 30,752, order on reh’g, 41 FERC
¶ 61,029 (1987) (allowing public utilities to use a voluntary, abbreviated rate filing
procedure to reduce their rates to reflect a reduction in the federal corporate income tax
rate on a single-issue basis, and adopting a formula to calculate this rate reduction).
11 Alcoa Power Responses, Attachment E - Matthew J. Fullerton Affidavit at 2-5.
12 Black Hills Colorado Response at 3.
Docket No. EL18-72-000, et al.- 5 -
C.Cube Yadkin
On May 14, 2018, in Docket No. ER18-1602-000, Cube Yadkin Transmission
LLC (Cube Yadkin) submitted revisions to the stated rates for transmission service in
Cube Yadkin’s transmission open access transmission tariff. Using the methodology in
Order No. 475, along with cost data from its 1996 rate filing, Cube Yadkin states that its
rate for point-to-point transmission service would decrease from $1.91/kW-month to
$1.82/kW-month.13 Cube Yadkin states that it has proposed corresponding revisions to
its rates for other increments of point-to-point service offered under Schedules 7 and 8 of
its tariff, and to the transmission revenue requirement listed in Attachment H that is
applicable to network transmission customers. Cube Yadkin requests that the
Commission accept the proposed changes to its tariff effective March 21, 2018.14
D.EPRS
On May 10, 2018, in Docket No. ER18-1566-000, Essential Power Rock Springs,
LLC (EPRS) filed revisions to reduce its stated transmission rate in Attachment H-23 to
the PJM Interconnection, L.L.C. (PJM) open access transmission tariff from $225,000
to $224,031.15 EPRS states that it calculated this reduction using as a guide the
methodology the Commission adopted in Order No. 475.16 EPRS explains that this
reduction may seem modest compared to those proposed by other public utilities in this
proceeding because the EPRS rate was only designed to recover a modest amount of
operating expenses, there was only a very small rate base, and taxes are not paid or
recovered in rates for operating expenses.17 EPRS requests an effective date of June 1,
2018, in order to ease PJM’s implementation of this de minimis rate reduction.18
13 Cube Yadkin May 14, 2018 Transmittal at 1-2.
14 Id. at 2.
15 EPRS Response at 4.
16 Id.
17 Id.
18 Id. at 5.
Docket No. EL18-72-000, et al.- 6 -
E.Allegheny Power
On May 14, 2018, in Docket No. ER18-1595-000, Monongahela Power Company,
Potomac Edison Company, and West Penn Power Company (collectively, Allegheny
Power) submitted revisions to their stated Network Integration Transmission Service
(NITS) rates in Attachment H-11 of the PJM open access transmission tariff.19
Allegheny Power explains that it calculated its proposed NITS rates reductions using a
methodology based on the formula established by the Commission in Order No. 475,
with certain adjustments. Allegheny Power states that it has reduced all NITS rates
specified in Attachment H-11 by 6.7 percent. Allegheny Power requests an effective date
of March 21, 2018. Allegheny Power states that the amounts collected in excess of the
new rate that reflects the tax adjustment will be refunded with interest.20
F.Nevada Power and Sierra Pacific
On May 14, 2018, in Docket No. ER18-1603-000, Nevada Power Company
(Nevada Power) and Sierra Pacific Power Company (Sierra Pacific) (collectively,
NV Energy) proposed revisions to the stated transmission and ancillary service rates in
the Nevada Power open access transmission tariff. Based on the methodology in Order
No. 475, NV Energy proposes to lower its settlement-derived energy and ancillary
services rates to implement the tax rate change. Specifically, NV Energy proposes to
lower its transmission and ancillary services rates as follows: (1) Network Service
reduced from $2.65/kW/month to $2.47/kW/month; (2) Point-to-Point Service reduced
from $2.65/kW/month to $2.47/kW/month; (3) Hourly Peak Point-to-Point Service
reduced from $6.25/MW/hour to $5.94/MW/hour; (4) Hourly off-peak Point-to-Point
Service reduced from $3.75/MW/hour to $3.33/MW/hour; (5) Scheduling System
Control and Dispatch rates remain the same at $85/MW/month; (6) Reactive and
Voltage Control reduced from $300/MW/month to $298.62/MW/month; (7) Regulation
and Frequency Response reduced from $7,500/MW/month to $6,974/MW/month;
(8) Spinning Reserves reduced from $7,500/MW/month to $6,974/MW/month; and
(9) Supplemental Reserves reduced from $6,600/MW/month to $6,130/MW/month.21 NV Energy requests an effective date of March 21, 2018.22
19 Allegheny Power Response at 1.
20 Id. at 10-11.
21 Id. at 4-5.
22 NV Energy Response at 2.
Docket No. EL18-72-000, et al.- 7 -
G. NYSEG and RG&E
On May 14, 2018, in Docket No. ER18-1588-000, New York State Electric &
Gas Corporation (NYSEG) and Rochester Gas and Electric Corporation (RG&E)
submitted revisions to their respective wholesale transmission service charges under the
New York Independent System Operator, Inc. (NYISO) open access transmission tariff.23
NYSEG proposes reducing its transmission revenue requirement by approximately
$4.0 million, which results in a rate reduction of $0.2696 per MWh.24 RG&E proposes
reducing its transmission revenue requirement by approximately $1.6 million, which
results in a rate reduction of $0.2229 per MWh.25 NYSEG and RG&E request an
effective date of January 1, 2018, which the companies state enables their customers to
benefit from the federal income tax rate reduction beginning on the first day the Tax Cuts
and Jobs Act went into effect.26
H. OVEC
On May 14, 2018, as amended on May 15, 2018, in Docket Nos. ER18-1599-000
and ER18-1599-001, respectively, Ohio Valley Electric Corporation (OVEC) proposed
revisions to its stated transmission service rates contained in its open access transmission
tariff. OVEC states that the reduced federal corporate income tax rate creates a minor
decrease in a few, but not all, of its stated transmission service rates. OVEC requests an
effective date of March 21, 2018. OVEC also states that it is presently an affiliate
member of PJM and is pursuing full integration into PJM, and that it will conform the
rates in the PJM tariff sheet to its proposed updated rates at the time of integration.27
I.Dayton Power
On May 8, 2018, in Docket No. ER18-1547-000, The Dayton Power and Light
Company (Dayton Power) submitted revisions to Attachment H-15 of the PJM open
23 NYSEG and RG&E Response at 2 (citing NYISO, Open Access Transmission Tariff, Attachment H § 14.1, Table 1).
24 Id. at 3.
25 Id.
26 Id. at 4.
27 OVEC Response at 1-4 & n.5.
Docket No. EL18-72-000, et al.- 8 -
access transmission tariff to reduce the NITS stated rate applicable to transmission
service within the Dayton Zone. Dayton Power states that it calculated the revised NITS
stated rate using the formula in Order No. 475 and reduced the federal corporate tax rate
input from 35 percent to 21 percent. Dayton Power states that the revised tariff sheets
reflect a reduction of $61.19 per megawatt per month (approximately 5.5 percent) to the
stated NITS rate, resulting in a new rate of $1,046.79 per megawatt per month and an
annual revenue requirement amount of $37,885,336.28 Dayton Power requests an
effective date of March 21, 2018 for the proposed tariff revisions.
III. Notice and Responsive Pleadings
Notice of the Stated Rate Order to Show Cause was published in the Federal
Register, 83 Fed. Reg. 12,378 (2018), with interventions and protests due on or
before April 5, 2018. The following entities filed timely motions to intervene:
American Municipal Power, Inc. (AMP), and West Virginia Consumer Advocate in
Docket No. EL18-101-000; Truckee Donner Public Utility District (Truckee Utility),
Los Angeles Department of Water and Power (LA Water and Power), Utah Associated
Municipal Power Systems (Utah Power Systems), Overton Power District No. 5
(Overton), and Southern Nevada Water Authority (NV Water Authority) in Docket
No. EL18-102-000; Truckee Utility, LA Water and Power, Utah Power Systems,
Overton, and NV Water Authority in Docket No. EL18-102-000; New York Association
of Public Power in Docket No. EL18-103-000; AMP in Docket No. EL18-105-000; and
AMP and Buckeye Power, Inc. in Docket No. EL18-117-000. The Maryland Public
Service Commission and Colorado River Commission of Nevada filed notices of
intervention in Docket No. EL18-101-000 and Docket No. EL18-102-000, respectively.
The following entities filed out of time motions to intervene: Maryland Office of
People’s Counsel (MD Counsel) and Old Dominion Electric Cooperative (ODEC) in
Docket No. EL18-101-000; and ODEC in Docket Nos. EL18-105-000, EL18-117-000,
and EL18-97-000.
Notice of Alcoa’s responses for Long Sault and Tapoco, in Docket Nos. ER18-
1600-000 and ER17-1601-000 respectively, were published in the Federal Register,
83 Fed. Reg. 23,447 (2018), with interventions and protests due on or before June 4, 2018. None was filed.
28 Dayton Power Response at 7. Although Dayton Power states in its Response
that it proposes to change the annual revenue requirement to $37,885,386, the tariff sheet attached to the Response shows that the proposed annual revenue requirement is
$37,885,336.
Docket No. EL18-72-000, et al.- 9 -
Notice of Black Hills Colorado’s response in Docket No. ER18-1580-000 was published in the Federal Register, 83 Fed. Reg. 23,447 (2018), with interventions and protests due on or before June 4, 2018. None was filed.
Notice of Cube Yadkin’s response in Docket No. ER18-1602-000 was published in the Federal Register, 83 Fed. Reg. 23,447 (2018), with interventions and protests due on or before June 4, 2018. None was filed.
Notice of EPRS’ response was published in the Federal Register, 83 Fed.
Reg. 22,667 (2018), with interventions and protests due on or before May 31, 2018. ODEC filed a timely motion to intervene. FirstEnergy Service Company filed a late motion to intervene.
Notice of Allegheny Power’s response in Docket No. ER18-1595-000 was
published in the Federal Register, 83 Fed. Reg. 23,447 (2018), with interventions and
protests due on or before June 4, 2018. AMP, MD Counsel, and ODEC each filed timely motions to intervene.
Notice of NV Energy’s response in Docket No. ER18-1603-000 was published in the Federal Register, 83 Fed. Reg. 23,447 (2018), with interventions and protests due on or before June 4, 2018. Truckee Donner Public Utility District, City of Fallon, City of Los Angeles Department of Water and Power, and FirstEnergy Service Company each filed timely motions to intervene.
Notice of the joint response of NYSEG and RG&E in Docket No. ER18-1588-000
was published in the Federal Register, 83 Fed. Reg. 23,447 (2018), with interventions
and protests due on or before June 4, 2018. New York State Public Service Commission
filed a notice of intervention. FirstEnergy Service Company filed a timely motion to
intervene.
Notice of OVEC’s response in Docket No. ER18-1599-000 was published in the Federal Register, 83 Fed. Reg. 23,447 (2018), with interventions and protests due on or before June 4, 2018. ODEC filed a timely motion to intervene.
Notice of Dayton Power’s response in Docket No. ER18-1547-000 was published in the Federal Register, 83 Fed. Reg. 22,261 (2018), with interventions and protests due on or before May 29, 2018. AMP, Buckeye, and ODEC each filed timely motions to intervene. FirstEnergy Service Company filed a late motion to intervene.
IV. Commission Determination
A.Procedural Matters
Pursuant to Rule 214 of the Commission’s Rules of Practice and Procedure,
18 C.F.R. § 385.214 (2018), the notices of intervention and timely, unopposed motions to
Docket No. EL18-72-000, et al.- 10 -
intervene serve to make the entities that filed them parties to the proceedings in which they were filed.
Pursuant to Rule 214(d) of the Commission’s Rules of Practice and Procedure,
18 C.F.R. § 385.214(d) (2018), we grant the late-filed motions to intervene given the
interests of MD Counsel, ODEC, and FirstEnergy Service Company in the proceedings, the early stage of the proceedings, and the absence of undue prejudice or delay.
B.Substantive Matters
As described above, Respondents propose revisions to their stated transmission
rates to reflect the new 21 percent federal corporate income tax rate, which results in rate
reductions for customers. Absent a change to Respondents’ stated transmission rates,
customers would not receive the benefits of the reduced federal corporate income tax
rate. We therefore accept Respondents’ proposed revisions to their stated transmission
rates, effective on the dates requested.29 Because Respondents proposed revisions to
their stated rates reflecting the reduced tax rate, we terminate the section 206 proceedings
in Docket Nos. EL18-72-00, EL18-73-000, EL18-76-000, EL18-90-000, EL18-97-000,
EL18-101-000, EL18-102-000, EL18-103-000, EL18-105-000, EL18-110-000, and
EL18-117-000. Respondents are directed to make refunds of all amounts collected from
customers for periods after the requested effective dates in excess of the revised rates.
The Commission orders:
(A) Respondents’ proposed revisions to their stated transmission rates in
Docket Nos. ER18-1547-000, ER18-1566-000, ER18-1580-000, ER18-1588-000, ER18-
1595-000, ER18-1599-000, ER18-1599-001, ER18-1600-000, ER18-1601-000, ER18-
1602-000, and ER18-1603-000 are hereby accepted, effective March 21, 2018, except for NYSEG and RG&E in Docket No. ER18-1588-000, which is effective January 1, 2018, and for EPRS in Docket No. ER18-1566-000, which is effective June 1, 2018, as
discussed in the body of this order.
(B) Respondents are hereby directed to provide refunds, with interest calculated pursuant to 18 C.F.R. § 35.19a (2018), within 30 days of the date of this order, as
discussed in the body of this order.
29 We grant waiver of the 60-day prior notice requirement so that the proposed
stated rate reductions of NYSEG and RG&E take effect on January 1, 2018, as
requested. See Central Hudson Gas & Electric Corp., 60 FERC ¶ 61,106, reh’g denied,
61 FERC ¶ 61,089 (1992).
Docket No. EL18-72-000, et al.- 11 -
(C) The proceedings in Docket Nos. EL18-72-000, EL18-73-000, EL18-76-
000, EL18-90-000, EL18-97-000, EL18-101-000, EL18-102-000, EL18-103-000, EL18-
110-000, EL18-105-000, and EL18-117-000 are hereby terminated, as discussed in the body of this order.
By the Commission. Commissioner McIntyre is not voting on this order. ( S E A L )
Nathaniel J. Davis, Sr.,
Deputy Secretary.
