By Amanda Durish Cook
In rejecting a rehearing request on the issue, the commission affirmed its decision last year rejecting the company’s attempt to recover $639,780 from Vermont ratepayers to cover property transfer taxes, closing fees and advisory fees related to its acquisition of shares in the Highgate Transmission Facility near Quebec (ER18-1259-001).
Vermont Transco first filed the request for recovery in March 2018, and FERC rejected it in May.
In a 2017 filing seeking FERC approval to acquire Green Mountain Power’s stake in Highgate — which was eventually granted — Vermont Transco acknowledged that “there is no mechanism in [ISO-NE’s] cost-based transmission formula rate that allows the automatic pass-through” of transaction-related costs. The company promised to make a separate filing if it intended to seek any transaction-related costs that would also demonstrate “specific, measurable and substantial benefits to ratepayers.”
But the company’s 2018 cost-recovery request contended that the requirement to show ratepayer benefits didn’t apply because the company was not seeking to recover an acquisition premium. The company also contended it could recover the expenses from customers because service over Highgate is provided under ISO-NE’s Regional Network Service rate, which relies on cost causation and beneficiary pays principles. It also noted that it never made a hold-harmless commitment on such recovery.
In denying the request, FERC pointed to Vermont Transco’s previous commitment — set out in the transfer application — to demonstrate ratepayer benefits. The commission also said the company couldn’t simply bypass ISO-NE’s restriction on an automatic pass-through of the transaction-related costs and reminded it of its earlier promise that the transaction would not have an adverse effect on rates.
The commission added that Vermont Transco was free to file again for cost recovery provided it detailed how the recovery would benefit ratepayers.