Submitted to the Federal Energy Regulatory Commission on Transmission Cost Allocation Proposal

Introduction This comment addresses the recently proposed rules for transmission investment and transmission cost allocation (TCA) as offered for the restructured electricity market in New England. The basic theme is that the TCA proposal is both inconsistent with the new market design in New England and not supported by the TCA proposal’s own analysis. Rather, the TCA proposal reflects an earlier market design not consistent with open access or market-driven incentives. The principles and policies embodied in the TCA proposal would have far-reaching effects that would compromise the Federal Energy Regulatory Commission’s efforts to improve electricity market design. The result would place growing pressure on regulators to manage markets in an effort to counteract the unintended consequences.