NGG - FERC rejects National Grid cost recovery plan for $1.2B New York power line

The Federal Energy Regulatory Commission on Friday rejected a request by National Grid ( NYSE: NGG ) subsidiary Niagara Mohawk Power that it could recover its share of a planned $1.2B transmission line in New York as well as an extra 0.5% return on equity to reflect the alleged risks of building the project.

According to Utility Dive , FERC said Niagara Mohawk's requested 11.5% return on equity in its proposed rate schedule was inconsistent with a settlement agreement that established its current transmission rate structure, which includes a 10.3% ROE limit.

FERC had previously granted Niagara Mohawk's request for authorization to recover all of its prudently incurred costs for the project if it is canceled or abandoned for reasons beyond the utility's control, but in its most recent decision refuesed other proposed incentives, including a performance-based ROE, as well as Niagara Mohawk's cost-recovery plan.

National Grid ( NGG ) is a "solid utility but [with] limited upside," Retirement Pot writes in a bearish analysis posted on Seeking Alpha .

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