The Federal Energy Regulatory Commission (FERC) has approved a settlement permitting potential refunds or surcharges by New England Power Co. (NEP) and Northeast Utilities Service Co. (NU) on deferred rate issues relating to transmission services provided on facilities collectively known as the "New Hampshire corridor" (Docket Nos. ER92-764-000 and ER92-766-000).
When NU merged with Public Service Co. of New Hampshire (PSNH), the FERC authorized PSNH to dispose of its jurisdictional facilities. NU and NEP subsequently entered a settlement incorporating the New Hampshire corridor plan: NU and NEP would provide each other and other utilities with transmission service across a corridor extending from eastern Massachusetts and Rhode Island to New Hampshire's border with Maine. With access to the PSNH and NEP systems, buyers in southern New England would be able to reach power suppliers in Canada and Maine, and vice versa. The Massachusetts, Maine and Vermont public utility commissions (PUCs) objected strongly, arguing that the surcharge provision violates the prohibition against retroactive ratemaking. They also claimed that the "filed rate doctrine" bars surcharges that keep customers in the dark as to the rate consequences of their purchasing decisions at the time they are made.
The FERC found the PUCs' reliance on the filed rate doctrine misplaced. It said the doctrine does not prohibit retroactive adjustment of a settlement rate level as a result of a final order when 1) the settlement rate is clearly premised on the outcome of 8other proceedings, and 2) no retroactive rate increase exceeds the original rate levels. The FERC added that settlements are analagous to the filing of interim rates.