New England States Challenged Utility ROE Incentives

States have petitioned federal regulators to eliminate a specific return on equity bonus for regional utility providers.

Updated on Sept. 22, 2026 in Utilities

Bold flat-color editorial illustration of a geometric electrical transformer and transmission lines, symbolizing the regulatory debate over utility rate incentives. — State utility regulators in New England have petitioned federal authorities to eliminate a controversial return on equity bonus for regional energy providers. AI Illustration. Upload story photo >

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Should utility companies receive extra financial incentives for joining mandatory regional power grids?

The Maine Public Utilities Commission and other regional agencies have filed a complaint with the Federal Energy Regulatory Commission (FERC) to block a 0.5% return on equity (ROE) incentive for utilities. This bonus is currently awarded to companies that participate in regional transmission organizations.

Why it matters

State officials argue that these incentives are unnecessary because participation in regional transmission organizations is already mandated by state law. Eliminating the bonus is intended to lower electricity costs for consumers across the region.

The ROE incentive added $6 million to New England regional charges in 2024, with Maine ratepayers accounting for $700,000 of that total. Regulators are considering a proposal to limit this bonus to a three-year term or end the practice.

The players

Federal Energy Regulatory Commission

This independent federal agency regulates the interstate transmission of natural gas, oil, and electricity in the United States.

Maine Public Utilities Commission

This state regulatory body is responsible for ensuring that Maine residents have access to safe, reliable, and affordable utility services.

ISO New England

This private, non-profit corporation oversees the operation of the power grid and the wholesale electricity markets in the New England region.

Central Maine Power

This is a major electricity transmission and distribution utility company serving a significant portion of Maine.

Versant Power

This regulated electric utility provides transmission and distribution services to customers in northern and eastern Maine.

The details

The Maine Public Utilities Commission, supported by the New England States Committee on Electricity, claims the incentive is an undue burden on ratepayers. Conversely, Central Maine Power, Versant Power, and Maine Electric Power Co. argue the complaint interferes with established federal authority under the Federal Power Act.

In 2024, the ROE incentive added $6 million in regional charges.
On September 1, 2026, Maine agencies filed a formal complaint at FERC.
On September 21, 2026, New England states filed a motion in support of the complaint.

Market Landscape

This dispute highlights an escalating tension between state-mandated utility participation and federal compensation frameworks. It challenges the established practice of rewarding utilities for regional grid cooperation, setting the stage for a potential shift in national utility ratemaking policy.

If the complaint is successful, customers in the affected region could see a reduction in the transmission-related portion of their monthly electric bills. The outcome will dictate whether utility companies can continue to collect bonus returns for activities that state laws already require them to perform.

The takeaway

The petition underscores a broader effort by states to exert more control over how regulated utilities are compensated for regional infrastructure. Consumers should watch for future FERC rulings, as these will establish whether these specific financial incentives remain a standard part of utility revenue models.