On January 31, 2011, several parties submitted formal protest to the Federal Energy Regulatory Commission (“FERC” or “Commission”) opposing the Atlantic Wind Connection (“AWC”) project request for incentive rate treatment which included a 13.58 percent return on equity (“ROE”).  Notably a large group of PJM Interconnection, L.L.C (“PJM”) transmission owners (“PJM Transmission Owners”) asked FERC to reject the AWC petition and direct the project to follow the Regional Transmission Expansion Plan (“RTEP”) for PJM. 

On October 12, 2010, Google, Trans-Elect Development Company, LLC (“Trans-Elect”), Good Energies, and Marubeni Corporation (“Marubeni”), announced a partnership to create the AWC project (see October 12, 2010 edition of the WER).  The transmission project would connect up to 6,000 MW of offshore wind and would run from Virginia to New Jersey.   The project is estimated to cost $5 billion.  Recent debates at FERC over cost-allocation have been put on hold until Commission issues an order in its ongoing Transmission Planning and Cost Allocation proceeding (see June 18, 2010 edition of the WER). 

The PJM Transmission Owners’ and several utilities scrutinized the AWC application for rate incentives by stating the new project fails to meet the requirements of section 219 of the Federal Power Act and Order No. 679, Promoting Transmission Investment Through Pricing Reform.  Thus, the protests stated the project would not ensure reliability or eliminate congestion, and the studies submitted by AWC do not show the transmission project are needed to maintain reliability or decrease congestion.  If AWC is required to go through the RTEP process, and if the project is designated a baseline project, then the project would receive the rebuttable presumption that AWC is necessary to ensure reliability and reduce congestion.  AWC has stated that passing the RTEP process would be most difficult.  Without the rebuttable presumption, AWC will need to show their proposed rates, including the ROE, are just and reasonable.

A link to the protest is available here.