Item E-16: Commissioner Allison Clements Concurrence Regarding NextEra Energy Transmission, LLC

Commissioner Allison Clements Statement
March 18, 2021
Docket No. EC21-10-000
Order:  E-16

I agree with the Commission’s determination that the Proposed Transaction is consistent with the public interest, along with most other points in today’s order.  I do not agree, however, with the ruling on Applicants’[1] transmission rate mitigation proposal.  The order accepts Applicants’ proposal to mitigate a rate increase caused by the Proposed Transaction by pushing down, from NEET – the holding company – to GridLiance West and GridLiance HP, a portion of the tax amortization from goodwill created by the Proposed Transaction in an amount sufficient to fully offset the rate increase (Mitigation Proposal).[2]

I am concerned that this proposal is inconsistent with the Commission’s general policy against including goodwill (as a non-operating item) in rates.[3]   I understand that Applicants’ Mitigation Proposal pushes down the tax amortization of the goodwill created by the Proposed Transaction, and not the actual goodwill; however, the two clearly are intrinsically linked as the former would not exist without the latter. 

I concur because the Mitigation Proposal serves the purpose of protecting transmission customers from the potential rate impacts of the Proposed Transaction.  However, I believe the Commission should have accepted the Proposed Transaction on the condition that the Applicants propose an alternative mitigation method that does not incorporate non-operating items in cost of service.  To my mind, Applicants failed to provide compelling justification for the inability to provide an alternative rate mitigation proposal.

For these reasons, I respectfully concur.