NEET MidAtlantic - Transmission formual rate and Transaction Costs

​On October 15, 2029, in Docket No. ER20-1783, FERC approved a request by NEET MidAtlantic Indiana for a formula rate that accommodates its acquisition of certain transmission facilities from Commonwealth Edison Company of Indiana, Inc. (ComEd) and rejected its request to establish a regulatory asset for transaction costs related to the acquisition.  FERC approved the tariff changes to become effective upon the date NEET MidAtlantic Indiana becomes a transmission-owning member in PJM.  FERC denied NEET MidAtlantic Indiana’s request for pre-approval to record the transaction costs as regulatory assets as the transaction costs at issue here are not the type of incentives, such as formation and pre-commercial costs related to competition for transmission enhancements as part of the RTEP process, that the Commission has previously found further the policy goal of facilitating the participation of nonincumbent transmission developers in transmission planning processes, thereby encouraging competition.  Rather these costs are associated with the acquisition of existing transmission assets.  FERC’s policy is to accept acquisition adjustments in rate base, and thus allow their recovery, only if utility can show that “the investment decision is prudent and if it can demonstrate that the acquisition provides measurable benefits to ratepayers.”  To recover such acquisition adjustments, the utility must show specific, tangible, non-speculative, quantifiable benefits in monetary terms, which NEET MidAtlantic Indiana did not do.