Conn., states reach oversight deal with electric grid operator

Connecticut and its fellow New England states would – for the first time – have a say in the annual budget of the entity that operates the region’s electric grid under a May 13 agreement.

The agreement, which has been filed with the Federal Energy Regulatory Commission (FERC) for approval, would establish new procedures to allow Connecticut’s Public Utilities Regulatory Authority and its five New England counterparts to review and provide feedback when the Independent System Operator-New England (ISO-NE) proposes its annual budget.

Under the agreement, the 2013 administrative and capital budgets for ISO-NE would be reduced by a combined $2.85 million.

ISO-NE operates New England’s regional transmission grid and electricity markets. However, none of the region’s public utility commissions have any formal oversight role over ISO-NE’s budget, even though the organization is funded in part by New England consumers.

Arthur House, chairman of Connecticut’s Public Utilities Regulatory Authority, said the financial impact of the settlement on monthly electric bills would be small, but said “there is an important principle at stake here.”

“The principle is that costs borne by ratepayers – including the ISO budget – must be subject to careful scrutiny and review,” House said in a prepared statement. “Our legal responsibility and fiscal obligation to everyone who pays an electric bill demand this.”

The settlement came about as the result of a complaint filed last November by multiple New England agencies with the FERC against ISO-NE’s proposal to increase its combined 2013 administrative and capital budgets by nearly 10 percent.