Maine Asks FERC to End the 0.5 Percent RTO Incentive After Four States Made Grid Membership Mandatory

The half-point return-on-equity adder that FERC grants transmission owners for joining a regional grid operator added roughly $6 million to New England transmission charges in 2024 for Central Maine Power and Versant Power alone. About $700,000 of that landed on Maine ratepayers.

On September 1, Maine agencies filed a complaint at FERC asking that the adder be stripped from ISO New England, CMP, Versant and MEPCO. On September 21, other New England states filed comments supporting the complaint.

The incentive. The RTO participation adder gives transmission owners a 0.5 percentage point addition to their authorized return on equity in exchange for voluntarily placing their facilities under the control of a regional transmission organization or independent system operator. The payment is conditioned on the voluntary character of that choice.

Four mandates. Connecticut, Maine, Maryland and New Jersey each passed laws in 2026 requiring transmission owners to participate in their regional grid operators. That legislative fact is the substance of the complaint: the incentive rewards a voluntary act, and in those four states the act is no longer voluntary.

Four legislatures converted a discretionary decision into a statutory obligation. The complaint does not argue that the adder is too generous or poorly calibrated. It argues that the conduct the adder was designed to purchase is now compelled by law, which removes the thing being bought.

The jurisdictional question. FERC now has to decide whether a state statute can extinguish the predicate for a federal rate incentive, or whether the answer lies elsewhere, given that wholesale transmission rates sit within exclusive federal jurisdiction. Whichever way the Commission rules, the answer travels. If state mandates can eliminate the adder, the four existing statutes become a template that costs a legislature nothing to copy. If they cannot, the four states will have confirmed that the incentive survives compulsory membership, which is a durable answer in the opposite direction.

The base rate. New England transmission rates are forecast to climb 33 percent by 2031, driven by planned capital investment. Against that trajectory, the roughly $6 million at issue for two Maine utilities is a rounding item. The complaint contests an incentive payment while the rate it attaches to is scheduled to grow by a third over five years. Winning removes a small premium from a rapidly growing number.

How it reaches commercial customers. Regional transmission charges are denominated in dollars per kilowatt-year, and utilities generally recover them from commercial and industrial customers through the demand component of the bill rather than the volumetric one. A 33 percent increase in that rate flows to the kilowatt side of a C&I statement, where peak demand rather than consumption sets the charge. The dollars being litigated are billed on demand, the base they attach to is billed on demand, and the base is growing faster than any plausible outcome of the complaint can offset.

A second bill-reform push. On September 22, Marc Brown of the Consumer Energy Alliance published a call to move renewable portfolio standards, cap-and-trade costs, efficiency spending and net metering costs off utility bills and onto state general budgets. His estimate is that as much as 25 percent of a bill traces to public policy initiatives embedded in supply or distribution charges rather than to the cost of delivering electricity.

The two efforts come from opposite political directions and target opposite ends of the bill. Brown’s list sits largely in charges recovered volumetrically. Maine’s complaint sits in transmission, recovered on demand. Neither addresses the capital investment driving the transmission forecast.

PJM. Maryland and New Jersey are PJM states, and both passed mandatory participation laws this year. The same adder attaches to transmission owners there. A FERC ruling in the Maine docket that accepts the state-mandate theory would establish the argument on a record built in New England, with application in a second organized market waiting behind it.

What FERC does here is unlikely to change a commercial electric bill by a measurable amount. The procedural finding is the larger one. States have now demonstrated a method for contesting federal transmission incentives that requires only a state statute and a complaint, and four of them have already passed the statute.

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