Item E-4: Commissioner James Danly Concurrence Regarding Constellation Mystic Power, LLC

Commissioner James Danly Statement
November 18, 2021
Docket No. ER18-1639-010

I concur with the Commission’s application of its revised Return on Equity (ROE) methodology, announced in Opinion No. 569, as modified by Opinion Nos. 569-A and 569-B,[1] to Constellation Mystic Power, LLC (Mystic), and the consequent reduction of Mystic’s ROE from 9.33%[2] to 9.19%.[3]  I agree that 9.19% is within the zone of reasonableness.  I further agree that 9.19% appears to be a plausible outcome under our revised ROE methodology and is thus consistent with precedent. 

I also support the finding that Opinion No. 569’s natural break analysis[4] warrants exclusion of Otter Tail Corp. as an outlier from the proxy group, as discussed in the order.[5]  I remain concerned with the continued exclusion of Avangrid, Inc. (Avangrid) from the proxy group[6] as I have previously explained,[7] but the exclusion of Avangrid does not render the resulting ROE unjust or unreasonable and does not require me to dissent from today’s order.

I write separately to state that our revised ROE methodology, like its predecessors, is too complicated and threatens to cause great uncertainty going forward.  The inevitable consequence will be the chilling of investment in transmission development.  I would likely not have voted in favor of our revised ROE methodology had it come before me in the first instance, but I also have not seen the kind of evidence that would be necessary to justify jettisoning it for yet another revised methodology.

For these reasons, I respectfully concur.