ISO-NE filed a FERC proposal to tighten regulatory oversight on transmission projects categorized as 'asset condition' replacements.

Across much of the United States, utilities construct local transmission projects—primarily to replace aging infrastructure—with relatively little oversight. This practice has long drawn criticism from state regulators and consumer advocates. In New England, such “asset condition” projects account for 73% of all annual capital investments by transmission owners, according to Blumenthal.

These projects carry significant financial implications amid growing national concerns over electricity affordability and the impact of transmission construction on consumer rates. Transmission rates comprise approximately 15% of an electricity bill in Connecticut, Blumenthal noted. Looking ahead, New England transmission owners anticipate adding roughly $5 billion in asset condition projects by 2034, including about $1.3 billion scheduled for next year, based on a June ISO-NE presentation.

Regulators and advocates are increasingly calling for stricter oversight. In May, New England ratepayer advocates filed a formal complaint with FERC regarding a nearly $360 million asset condition project proposed by Eversource Energy in New Hampshire. “Eversource mischaracterized its X-178 transmission project, thereby subjecting it to a lesser level of scrutiny than it should have received while receiving a higher rate of return on these expenditures than those provided for costs of other capital projects and operating expenses,” Blumenthal said. In a letter to the agency, he added that “FERC must provide greater oversight over asset condition projects, including at a minimum, the establishment of an independent review mechanism.”

To address these concerns, ISO-NE filed a proposal with FERC on Monday to assume the role of an “asset condition reviewer” beginning Jan. 1. Under the plan, ISO-NE will evaluate and report its findings on both individual asset condition projects and broader utility programs. ISO-NE stated that the asset condition review process will have three main goals. The reviewers’ role would remain strictly advisory; the grid operator clarified that it “will not make decisions about whether to proceed with specific asset condition projects, nor will it be the petitioning party in any local, state or federal regulatory or siting proceeding concerning an asset condition project.”

The proposed framework aims to balance oversight with regional coordination. “The [asset condition review] changes reflect the New England region’s consensus approach to address the New England states’ and stakeholders’ requests for independent oversight and scrutiny of [transmission owner] capital projects to replace or reconstruct aging, deteriorating, or obsolete transmission elements,” ISO-NE said in its filing at FERC. Implementing the review process next year will also align with broader regional planning initiatives, such as project right-sizing—a measure stakeholders describe as “essential to maximizing efficiency and reducing long-term costs,” according to ISO-NE.