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United States. Federal Energy Regulatory Commission

Federal Energy Regulatory Commission Issues Order on Transmission Incentives, Tariff Filing, and Hearings

Strategic Insights

— 1 min read

The Federal Energy Regulatory Commission has issued an order on transmission incentives, tariff filing, and hearings regarding the Valley Link transmission project. The commission has accepted the tariff records to be effective May 14, 2025, and instituted a proceeding under the Federal Power Act section 206 to examine the proposed formula rate for the Valley Link project. The commission has granted the requested transmission incentives, effective May 14, 2025, for various components of the project.

Key Takeaways:

  • The Federal Energy Regulatory Commission has accepted the tariff records to be effective May 14, 2025, and instituted a proceeding under the Federal Power Act section 206 to examine the proposed formula rate for the Valley Link project.
  • The commission has granted the requested transmission incentives, effective May 14, 2025, for various components of the project, including recovery of prudently incurred costs in the event of abandonment, inclusion of construction work in progress in rate base, and recovery of prudently incurred pre-commercial costs.
  • The commission has rejected the requested 60% equity and 40% debt hypothetical capital structure incentive, but granted a 50-basis point ROE adder for Valley Link's participation in a Regional Transmission Organization.
  • The commission has authorized Valley Link to assign the approved incentives to any subsidiary of Valley Link Transmission Company, LLC created to pursue and complete the Project Portfolio.
  • The commission has also granted Valley Link's request for authorization to replicate its Formula Rate and certain incentives granted in this docket for future affiliates formed to operate in PJM.

Statistics:

  • Estimated cost of the Project Portfolio: $3 billion
  • Total length of new transmission facilities: approximately 417 miles
  • PJM-mandated construction timeline: all components of the Project Portfolio must be in-service by December 2029.

Sources:

  • Federal Energy Regulatory Commission document, "Concurrence by the Commissioner: Document Accession #: 20250513-3083 Filed Date: 05/13/2025 191 FERC P 61,113"
  • Valley Link transmission project documents and filings, including the PJM Regional Transmission Expansion Plan (RTEP) Window 1 and the PJM Operating Agreement

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