Item E-2: Commissioner James Danly Concurrence Regarding Constellation Mystic Power, LLC

Commissioner James Danly Statement
July 15, 2021
Docket No. ER18-1639-000
Item E-2

I concur in today’s order setting the base return on equity (ROE) for Constellation Mystic Power, LLC (Mystic) at 9.33% as just and reasonable.

I am concerned, however, with that part of today’s order that excludes Avangrid, Inc. (Avangrid) from the proxy group used in the discounted cash flow and capital-asset pricing model analyses employed in part by the Commission to arrive at the 9.33% ROE.[1]  In my view, the fact that Iberdrola, S.A. (Iberdrola) owned 81.5% of Avangrid during the study period does not, in itself, justify Avangrid’s exclusion from the proxy group.  I believe that those considering investment in Avangrid were more likely to have considered Avangrid’s operations, revenues, expenses, and risk profile—which support the inclusion of Avangrid in the proxy group—than they were to have considered Iberdrola’s ownership interest in Avangrid.

This concern does not lead me to dissent from today’s order.  I do not believe, based on the specific facts of this case, that the exclusion of Avangrid from the proxy group rendered the resulting ROE unjust or unreasonable.  However, I can imagine future cases in which such an exclusion may well do so and reserve the right to object at that time, should the facts so require.

For these reasons, I respectfully concur.