TORONTO (S&P Global Ratings) April 21, 2021--On April 15, 2021, the U.S. Federal Energy Regulatory Commission (FERC) issued a supplemental Notice of Proposed Rulemaking (NOPR) to limit the existing 50-basis point (bp) return on equity (ROE) incentive (adder) granted to transmission utilities for participating in a regional transmission organization (RTO) to the first three years after they transfer operational control to the RTO. More importantly, the NOPR also proposes to immediately eliminate the adder for transmission utilities that have included it in their rates for more than three-years. Separately, the FERC is also proposing to eliminate the ROE adder for independent transmission ownership. Collectively, this would potentially result in up to a 75 bp reduction in the ROE of ITC
