Federal energy regulators have decided to cut the amount of guaranteed profits electric utilities in New England receive for building transmission lines — but not as much as consumer advocates had hoped.
Under the preliminary decision, released late last week, New England electric customers stand to save more than $50 million a year, according to Massachusetts Attorney General Martha Coakley, the state’s ratepayer advocate. That’s less than half the savings her office originally estimated when Coakley first challenged the base return that utilities receive on transmission investments in 2011. She argued that profits made on the base return rate — then 11.14 percent — were “excessive” and cutting them could save the region’s ratepayers roughly $115 million.
The Federal Energy Regulatory Commission, which oversees the transmission of power supplies, must still finalize its ruling. It would lower the New England utilities’ return rate on transmission projects roughly 5 percent, to 10.57 percent. Coakley wanted it dropped to 9.2 percent; environmental and consumer advocacy groups proposed that it fall to 8.7 percent.
Christopher Loh, a spokesman for Coakley, said the attorney general was happy to see that Masshusetts ratepayers would save millions of dollars under the initial decision. Still she is reviewing her options to push federal regulators further.
“We maintain that the rate is still too high,” Loh said in a statement.
Tyson Slocum, direct of the energy program at Public Citizen, a consumer advocacy organization, agreed.
“Consumers lose,” Slocum said in a statement,“and transmission owners win with this flawed ruling.”