FERC Determines ROE for Mystic Cost of Service agreement

​In Docket No. ER18-1639, FERC applied the revised ROE methodology from Opinion 569 et. seq. and determined the just and reasonable ROE for a single utility, Mystic Generation in New England, by using the average of: (1) the median result of the DCF model; (2) the median result of the CAPM; and (3) the point estimate of the Risk Premium.  FERC found that the just and reasonable base ROE for the Mystic Agreement is 9.33%.  The Mystic Agreement is a cost-of-service agreement between Mystic and ISO-NE to provide for continued operation of units 8 and 9 through June 2022.  FERC found the Mystic facility to be of average risk.  The median DCF ROE estimate is 8.12%, the median CAPM ROE estimate is 10.01%, and the Risk Premium point estimate is 9.85%.  The average of those values is 9.33%.