Coops Challenge FERC’s New ROE Calculation
The Federal Energy Regulatory Commission has signaled that it intends to change the methodology with which it calculates utilities’ return on equity (ROE), eliciting concern from the electric cooperative community. In a June 19 order involving New Hampshire Electric Cooperative, FERC used a new “two-step” method to calculate the ROE for oil and gas pipelines, and the commission has suggested that the same method would be used in cases involving two other electric cooperatives, Tampa, Florida’s Seminole Electric Cooperative and Amarillo, Texas’ Gold Spread Electric Cooperative. FERC previously calculated ROE using a one-step discounted cash flow analysis. NRECA, along with the American Public Power Association, has filed to intervene in a New England FERC proceeding to challenge the new methodology. Click here for more.
