ISO New England Inc.

One Sullivan Road, Holyoke, MA 01040-2841

www.iso-ne.com

Gordon van Welie

President and CEO

July 21, 2015

The Honorable Maura Healey Attorney General The Commonwealth of Massachusetts One Ashburn Place, 18th Floor Boston, MA 02108

Dear Attorney General Healey:

Thank you for your recent letter regarding the transparency, inputs and calculation of the Regional Network Service (“RNS”) and Local Network Service (“LNS”) rates. ISO New England (“ISO”) supports transparency regarding rate matters, and looks forward to helping foster a productive discussion about what information is currently available and what you believe may be lacking.

It is important to state at the outset that the ISO does not develop the inputs for, calculate or file the RNS or LNS rates, nor does the ISO have legal rights to change the RNS or LNS rates or the process associated with those rates. The RNS and LNS rates and inputs are developed by the Participating Transmission Owners (“PTOs”) in the region. The regional RNS rate process is set out in Attachment F to the ISO New England Tariff, over which the PTOs have filing rights. Matters regarding the LNS are covered by Schedule 21 to the ISO Tariff. Each PTO has their own schedule.

While the ISO is not in a position to change the process leading to filings of the RNS or LNS rates, or the content of the filings themselves, we look forward to working with you and the PTOs to help address the concerns raised in your letter. To that end, I suggest that we schedule a full discussion at a stakeholder meeting in the near future at which your Office and the other signatories to the letter can more fully explain precisely what information you seek and the PTOs can share information about their rate development process as it exists today, the content of what the PTOs post to the ISO website 45 days ahead of their annual RNS filing, and what information they ultimately file with the Federal Energy Regulatory Commission. Following that discussion, concerns can be better identified regarding where gaps may exist in process or content regarding the transmission rates.

A member of my staff will follow up with more information about scheduling a meeting. Sincerely, Gordon van Welie President and CEO

cc: See Following Page

The Honorable Maura Healey July 21, 2015 Page 2 of 3

ISO New England Inc.

One Sullivan Road, Holyoke, MA 01040-2841

www.iso-ne.com

Timothy Martin, Chair Pool Transmission Owners Administrative Committee c/o National Grid 40 Sylvan Road Waltham, MA 02451 timothy.martin@nationalgrid.com

Cynthia Arcate President PowerOptions 129 South Street, 5th FL Boston, MA 02111 (617) 428-4258 CArcate@poweroptions.org

Roger Borghesani Chairman The Energy Consortium, Inc. 24 Hastings Road Lexington, MA 02421-6807 (781) 862-0888 rogerborghesani@gmail.com

Susan W. Chamberlin Consumer Advocate State of New Hampshire 21 South Fruit Street, Suite 18 Concord, NH 03301-2429 (603) 271-1172 Susan.Chamberlin@oca.nh.gov

August Fromuth Managing Director Freedom Energy Logistics, LLC 816 Elm Street Manchester, NH 03101 (603) 625-2244 august.fromuth@felpower.com

Elin Swanson Katz Connecticut Consumer Counsel Ten Franklin Square New Britain, CT 06051-2605 (860) 827-2901 elin.katz@ct.gov

Ed McNamara Regional Policy Director Vermont Department of Public Service 112 State Street Montpelier, VT 05620-2601 (802) 828-4007 ed.mcnamara@state.vt.us

Timothy Schneider Public Advocate State of Maine Public Advocate Office 112 State House Station Augusta, ME 04333-0112 (207) 287-2445 tim.schneider@maine.gov

Donald J. Sipe Industrial Energy Consumer Group PretiFlaherty Beliveau & Pachios One City Center P.O. Box 9546 Portland, ME 04112-9546 (207) 623-5300 dsipe@preti.com

Peter F. Kilmartin Attorney General for the State of Rhode Island Leo J. Wold Assistant Attorney General, Rhode Island Division of Public Utilities and Carriers 150 South Main Street Providence, RI 02903 401-274-4400, ext. 2218 lwold@riag.ri.gov

The Honorable Maura Healey July 21, 2015 Page 3 of 3

ISO New England Inc.

One Sullivan Road, Holyoke, MA 01040-2841

www.iso-ne.com

Dean Seavers President and Executive Director National Grid USA 40 Sylvan Road Waltham, MA 02451

Thomas J. May President and Chief Executive Officer Eversource Energy 800 Boylston Street, P1700 Boston, MA 02199-8003

Sara Burns President and Chief Executive Officer Central Maine Power Company 83 Edison Drive Augusta, ME 04336

Gerry Chasse President and Chief Executive Officer Emera Maine PO Box 932 Bangor, ME 04402-0932

Matt Valle President New Hampshire Transmission LLC PO Box 300 Seabrook-GEX Seabrook, NH 03874

James P. Torgeson Chairman, President and Chief Executive Officer UIL Holdings 157 Church Street New Haven, CT 06510

Robert G. Schoenberger Chairman of the Board and Chief Executive Officer Unitil Corporation 6 Liberty Lane West Hampton, NH 03842-1720

Thomas Dunn President and Chief Executive Officer Vermont Electric Power Company 366 Pinnacle Ridge Road Rutland, VT 05701

THE COMMONWEALTH  OF MASSACHUSETTS 

OFFICE OF THE ATTORNEY GENERAL ONE ASHBURTON PLACE 

BOSTON, MASSACHUSETTS 02108 

TEL:(617)727­2200 www.mass. go v/ago 

June 30, 2015 

Mr. Gordon van Welie, President and Chief Executive Officer ISO New England, Inc. One Sullivan Road Holyoke, MA 01040­2841 

Mr. Tim Martin, Chair Pool Transmission Owners Administrative Committee c/o National Grid 40 Sylvan Road Waltham, MA 02451 

Dear Messrs. van Welie and Martin: 

The undersigned write to request that ISO New England and the New England Transmission Owners commence a collaborative process to improve the transparency of calculations and inputs into Regional Network Service ("RNS") and Local Network Service ("LNS") rates pursuant to Section 11.21.1 (RNS rates) and Schedules 21 (LNS Rates) of the ISO­NE Open Access Transmission Tariff. 

MAURA HEALEY ATTORNEY GENERAL 

We propose that stakeholders revise this protocol to allow interested parties to fully and meaningfully participate in the formula rate information exchange and review process by (1) increasing the availability and scope of the information provided to the public; and (2) providing interested parties with the opportunity to review, question, and, if necessary, challenge the implementation of the formula rates. 

Increasing availability and scope of information

Currently, transmission owners post the annual RNS and LNS rate calculations on the ISO­NE web site prior to the annual information filing update under FERC Dockets RT­04­02 and ER09­1532. Under a revised protocol, transmission owners would also deliver these calculations to all New England interested parties, including state regulatory commissions, attorneys general, and consumer advocacy agencies. The transmission owners also should broaden the scope of the publicly available information regarding the proposed RNS and LNS rates to include: 

•  All  revenue requirements, inputs, calculations and other information in the form of live spreadsheets as well as in PDF format; 

m 

MW SE'JJ

Letter to ISO-NE and PTO AC re: RNS and LNS Rate Transparency June 30, 2015 Page 2

•   Information and explanation of sufficient detail to demonstrate that each input is consistent with the requirements of the formula; 

•  Any accounting changes affecting the formula calculations, and their impact; •  Cross­references to the corresponding FERC Form 1 accounts, or explanations as to why 

the inputs deviate from FERC Form 1 accounts, including reconciling mechanisms from FERC accounts to the data input to the formulae; and 

®  Any study costs that explicitly indicate the area of study, and show that such costs are consistent with the ISO­NE tariff. 

Providing parties opportunity for review, and challenge

A revised protocol should also allow interested parties a meaningful opportunity to question the transmission owners and ISO New England regarding the proposed formula rates and provide a well­defined process to challenge the inclusion of costs within the RNS and LNS rates. This could include an informal process, as additional alternative to interested parties' existing rights to utilize FERC's enforcement hotline, engage in alternative dispute resolution services, or, if necessary, file a Section 206 complaint. 

As you are aware, the Federal Energy Regulatory Commission has determined in other jurisdictions that protocols of the type outlined above are necessary to ensure just and reasonable rates.1  Given our region's long history of cooperation and collaboration, I am confident that working together, we can develop an ISO­NE protocol that is appropriately inclusive, thorough and transparent. The ISO's Transmission Committee, where the RNS and LNS rates are currently presented, would offer an effective forum for stakeholder participation in developing this protocol. 

We look forward to discussing this matter with you in more detail. 

With kindest regards, 

/s/ Maura Healey Maura Healey Massachusetts Attorney General 

jth One Ashburton Place, 18 Boston, MA 02108 (617) 963­2200 Maura.Healey@state.ma.us 

FL 

/s/ Cynthia Arcate Cynthia Arcate President PowerOptions 

­th FL 129 South Street, 51 

Boston, MA 02111 (617) 428­4258 CArcate@poweroptions.org 

1 See, e.g., Empire District Electric Co., 148 FERC ̂  61,030 (2014); Midwest Independent Transmission System Operator, Inc., 143 FERC ̂  61,149 (2013). 

Letter to ISO-NE and PTO AC re: RNS and LNS Rate Transparency June 30, 2015 Page 3

/s/ Roger Borshesani Roger Borghesani Chairman The Energy Consortium, Inc. 24 Hastings Road Lexington, MA 02421­6807 (781) 862­0888 rogerborghesani@gmail. com 

/s/Ausust Fromulh August Fromuth Managing Director Freedom Energy Logistics, LLC 816 Elm Street Manchester, NH 03101 (603) 625­2244 august.fromuth@felpower.com 

/s/ Ed McNamara Ed McNamara Regional Policy Director Vermont Department of Public Service 112 State Street Montpelier, VT 05620­2601 (802) 828­4007 ed.mcnamara@state.vt.us 

/s/ Donald J. Sine, ESQ.

Donald J, Sipe, Esquire Industrial Energy Consumer Group PretiFlaherty Beliveau & Pachios One City Center P.O. Box 9546 Portland, ME 04112­9546 (207) 623­5300 dsipe@preti.com 

/s/ Susan W. Chamberlin Susan W. Chamberlin Consumer Advocate State of New Hampshire 21 South Fruit Street, Suite 18 Concord, NH 03301­2429 (603) 271­1172 Susan.Chamberlin@oca.nh.gov 

/s/ Elin Swanson Katz Elin Swanson Katz Connecticut Consumer Counsel Ten Franklin Square New Britain, CT 06051­2605 (860) 827­2901 elin.katz@ct.gov 

/s/ Timothy Schneider Timothy Schneider Public Advocate State of Maine Public Advocate Office 112 State House Station Augusta, ME 04333­0112 (207) 287­2445 tim. schneider@maine. go v 

/S/ Leo J. Wold Peter F. Kilmartin Attorney General for the State of Rhode Island Leo J. Wold Assistant Attorney General, Rhode Island Division of Public Utilities and Carriers 150 South Main Street Providence, RI 02903 401­274­4400, ext. 2218 lwold@riag.ri.gov 

Letter to ISO-NE and PTO AC re: RNS and LNS Rate Transparency June 30, 2015 Page 4

cc: 

Ms. Sara Bums President and Chief Executive Officer Central Maine Power Company 83 Edison Drive Augusta, ME 04336 

Mr. Thomas J. May President and Chief Executive Officer Eversource Energy One Federal Street, Building 111­4 Springfield, MA 01105 

Mr. Matt Valle President New Hampshire Transmission LLC PO Box 300 Seabrook­GEX Seabrook, NH 03874 

Mr. Robert G. Schoenberger Chairman of the Board and Chief Executive Officer Unitil Corporation 6 Liberty Lane West Hampton, NH 03842­1720 

Mr. Gerry Chasse President and Chief Executive Officer Emera Maine PO Box 932 Bangor, ME 04402­0932 

Mr. Dean Seavers President and Executive Director National Grid USA 40 Sylvan Road Waltham, MA 02451 

Mr. James P. Torgeson Chairman, President and Chief Executive Officer UIL Holdings 157 Church Street New Haven, CT 06510 

Mr. Thomas Dunn President and Chief Executive Officer Vermont Electric Power Company 366 Pinnacle Ridge Road Rutland, VT 05701