The Federal Energy Regulatory Commission (FERC) has accepted a settlement agreement between Massachusetts Electric Co. (ME), the Massachusetts Bay Transportation Authority (MBTA), and Boston Edison Co., which decides stranded investment and wheeling issues arising from ME's loss of MBTA as a retail customer (Docket No. ER94-129-000). The case arose in 1991, when the Massachusetts legislature designated MBTA a "domestic electric utility," allowing MBTA to leave ME. MBTA then signed a wholesale supply agreement with Boston Edison. ME claimed that MBTA must pay a stranded cost charge equal to the amount MBTA would have paid had it remained an ME customer. ME argued that as a full-requirements customer of New England Power Co. (NEP), its stranded cost charge should reflect the purchased-power costs it pays to NEP and passes on to ratepayers under a purchased-power adjustment clause.
