6.1. ERMUSR 01-14-2014 - Laserfiche WebLink

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When they invest, municipal utilities or their power supply agencies often require hypothetical capital structures to achieve comparable equity returns to those of privately owned utilities. Such hypothetical capital structures have been allowed MMTG or its members in Central Minnesota Municipal Power Agency and Midwest Municipal Transmission Group, 134 FERC¶61,115 (2011) PP 30-33, and Midcontinent Independent System Operator, Inc., 145 FERC It 61,263, P 25. Without such abilities to earn comparable returns, in most cases municipals simply could not participate in grid expansion. The Energy Policy Act of 2005, the Commission and the Federal Power Act recognize the importance of smaller entity participation in transmission ownership. Thus, in Order No. 679,3 PP 354, 356, the Commission said: We agree with comments that public power participation can play an important role in the expansion of the transmission system. . . .. Encouraging public power participation in such projects is consistent with the goals of section 219 by encouraging a deep pool of participants. . . . .[T]o the extent allowed under our jurisdiction, a public power entity should have the same opportunity afforded to jurisdictional entities to recover costs related to new transmission investment. Accord, Federal Power Act §§ 205 and 206, 16 U.S.C. §§ 824d, and 824e, (undue preference and discrimination illegal); Section 219 of the Federal Power Act, 16 U.S.C. § 824s, states that incentive-based rate treatments to "promote reliable and economically efficient transmission"are to be applied"regardless of the ownership of the facilities." 3 Promoting Transmission Investment though Pricing Reform, Order No. 679,71 Fed. Reg.43,294(July 31, 2006),FERC Stats. &Regs.¶31,222(2006),on reh'g,Order No. 679-A,72 Fed. Reg. 1152(Jan. 10,2007), FERC Stats. &Regs.¶31,236(2006), clarified, 119 FERC¶61,062(2007). 4 112