FERC, Texas and Florida Regulators Set New Utility ROEs
Recent authorizations include a 9.98% base ROE for MISO transmission owners and a 7.76% return for Water Oak.
Federal and state regulators have issued a series of return on equity (ROE) determinations for electric and water utilities. FERC accepted a 9.98% base ROE for both Big Rivers Electric Corporation and Invenergy Grid Midwest LLC, aligning both with the currently authorized base ROE for transmission-owning members of MISO.
In other FERC actions, American Electric Power Service Corporation received an authorized ROE of 9.88%. El Paso Electric Company saw a 9.32% ROE authorized for its proposed cost-based rate schedule for wholesale electricity sales.
Texas regulators authorized a 9.4% ROE for El Paso Electric Company. This determination accompanies an overall rate of return of 7.41%, supported by a 51% equity ratio and a cost of debt of 5.34%.
Florida regulators approved a 7.76% ROE for Water Oak. The commission imposed a 75 basis point reduction to the ROE due to unsatisfactory quality of service, resulting in an overall rate of return of 7.76% for a capital structure consisting of 100% common equity.