FERC’s Proposed Accounting Policy in the Emera Maine Remand: Challenges and Opportunities for Clean Energy Advocacy
November 15, 2018 by Alexander Pappas
By Michelle Endo, Staff Contributor
As eyes in the Capitol were fixated on the contentious midterm races, the Federal Energy Regulatory Commission (“FERC”) quietly handed down an order proposing a new policy for establishing transmission rates for electric utilities. Although the Coakley v. Bangor Hydro-Electric Company order escaped the spotlight of news media and usual ire of environmentalists, FERC’s proposed policy may present challenges, and potential opportunities, for climate advocates.
On October 16, 2018, the Federal Energy Regulatory Commission (“FERC”) issued Coakley v. Bangor Hydro-Electric Company, a long-awaited order in proceedings that were vacated and remanded to FERC by a 2017 decision of the U.S. Court of Appeals for the District of Columbia Circuit. Although the D.C. Circuit did not direct FERC to alter its existing policy, FERC took the opportunity on remand to not only address the court’s concerns, but to develop a new policy for setting the electric utility’s return-on-equity (“ROE”) included in its transmission rates. The approach that FERC ultimately adopted will likely result in higher ROEs for transmission owners (“TOs”), with important implications for climate and clean energy policy that remain to be seen. This Article attempts to demystify the implications of particular ROE-setting policies and FERC’s ratemaking discretion on clean energy, and to provide a starting point for climate activists to identify additional opportunities for clean energy advocacy at FERC. Part I of this Article summarizes FERC’s ROE authority and Part II discusses its pre-existing policy as set out in Opinion No. 531. Next, Part III explains the D.C. Circuit’s decision to vacate and remand Opinion No. 531. Part IV of the Article summarize FERC’s new order. Finally, Part V raises potential implications of the new policy for the future of clean energy and warns against its exportation to other utilities beyond the transmission sector.
I. Background on FERC’s ROE Authority and Environmental Policy Role
FERC is an independent federal agency created in 1920 (initially as the Federal Power Commission) to license the construction of hydroelectric dams. Over the years, Congress has delegated additional authority over the energy sector to FERC.
Under its jurisdiction granted by the Federal Power Act (FPA), FERC may regulate the rates, terms, and conditions of interstate electric transmission and wholesale electrical sales by public utilities. FERC generally approves transmission rates based on cost-of-service principles, in which the regulator determines an entity’s revenue requirement. Under the FPA, FERC may evaluate TOs’ and electricity generators’ ROEs to ensure that those ROEs result in rates and rules that are consistent with the public interest, in that they are “just and reasonable” and not “unduly preferential.” In addition to public utilities, FERC may regulate rates, terms, and conditions of service for interstate natural gas pipelines to ensure that they, too, are just, reasonable, and not unduly preferential pursuant to its Natural Gas Act authority.
It is important to note that although the FPA does not grant FERC the authority to regulate environmental matters related to public utilities, decisions made pursuant to FERC’s public utility discretion have a measurable impact on the environment, primarily through the effects of FERC decisions on greenhouse gas emissions from the electricity sector. Although FERC legally has the discretion to define “just and reasonable” rates and could interpret that phrase in order to account for the environmental effects of particular energy practices, it has never done so and would likely face significant legal challenges.
In transmission rate cases like Coakley v. Bangor-Hydro Electric Company, the central issue is the appropriate ROE. As to the question of the “just and reasonable” ROE, TOs and consumer advocates are diametrically opposed, as TOs seek the highest ROEs and consumer advocates demand lower ones. While ROE determinations are not direct environmental decisions, ROEs serve as important market signals to investors. A steadily increasing ROE can direct capital to particular investments, and thus, often determines which types of facilities are built and maintained.
Also, under the Energy Policy Act of 2005, FERC has the power to award incentive ROE “adders” to encourage investments aligned with Commission policy. FERC could use incentive adders to encourage the development of projects that interconnect renewable energy generators.
II. FERC’s Pre-Existing Policy for Selecting ROEs: Opinion No. 531
The 2018 Coakley decision replaced FERC’s existing methodology for setting ROEs in transmission rate cases set forth in Opinion No. 531, the original FERC Coakley v. Bangor-Hydro Electric Company order that was vacated by the D.C. Circuit in 2017. The 2014 proceedings commenced when consumers filed a complaint pursuant to section 206 of the FPA in which they challenged New England TOs’ base ROE as no longer just and reasonable.
Opinion No. 531 adopted the two-step discounted cash flow (DCF) analysis as the accepted ROE methodology for transmission cases, importing the same policy from its natural gas and oil pipeline precedent. The two-step DCF methodology considers both short-term and long-term growth projections, which FERC believed better reflect the real stream of future dividends throughout the indefinite life of a corporation. FERC then used this new methodology to both show that the existing ROE was no longer just or reasonable and to select a new, lower ROE.
Using the two-step DCF methodology, one is able to ascertain a “zone of reasonableness,” a range that reflects the “substantial spread between what is unreasonable because it is too low and what is unreasonable because it is too high,” and from which a just and reasonable ROE is selected. FERC is bound by the Supreme Court’s construction of a “just and reasonable” ROE in FPC v. Hope Natural Gas Co. and Bluefield Water Work & Improvement Co. v. Public Service Commission, which must be sufficient for the corporation to maintain its credit and to attract capital. Typically, FERC sets the ROE at the midpoint of the zone of reasonableness. But in Opinion No. 531, FERC concluded: “based on the record in this case, including the capital market conditions present,” the just and reasonable base ROE is halfway between the midpoint and the top of the zone of reasonableness.
While stating that it would not depart from its DCF methodology, FERC nevertheless “considered” three alternatives to the DCF methodology offered by the transmissions owners, stating that those benchmark alternatives were “informative” to the analysis. Although FERC would continue to apply the Opinion No. 531 methodology to determine ROEs in transmission rate cases, both the TOs and the consumers petitioned for review in federal court.
III. The D.C. Circuit’s Emera Maine Remand
The D.C. Circuit’s review of FERC’s Opinion No. 531 resulted in a mixed decision for the parties: in some parts ruling for the consumers, and in others, ruling for the TOs. For the TOs, the court found that FERC misinterpreted its statutory obligations under section 206 of the FPA, and thus failed to satisfy its statutory burdens. In particular, FERC failed to make a separate finding that the TOs’ existing ROE was unjust and unreasonable before selecting a new ROE. For consumers, the court agreed that FERC had not sufficiently shown why it selected the ROE at the midpoint of the upper end of the zone of reasonableness, as opposed to a point anywhere else within the zone. Demanding that FERC establish a “rational connection” between the record evidence and its decision, the D.C. Circuit ultimately vacated and remanded Opinion No. 531 to provide FERC the opportunity to clarify its reasoning and thus fulfill its burden under the FPA.
IV. FERC’s Proposed Policy in Coakley (2018)
While the Emera Maine remand did not specifically overrule FERC’s two-step DCF methodology, the decision opened up an opportunity for stakeholders to push their new ROE theories. After over a year of hearing a diverse array of theories for establishing a TO’s ROE, FERC finally proposed a new policy in October 2018.
This new policy presents yet another shift in FERC’s ROE methodology for transmission utilities. Swiftly abandoning the two-step DCF methodology that it had issued in Opinion No. 531, FERC proposes to abandon its exclusive reliance on the two-step DCF analysis and instead will average the DCF analysis result with the CAPM, risk premium model, and expected earnings model, giving each equal weight. FERC explained this change was made in order to better capture investor expectations.
FERC preserved its previous use of the midpoints/medians of the resulting lower and upper halves of the zone of reasonableness when it is shown that a utility is either below or above the average risk of comparable utilities. In addition, FERC raised the burden of proof for a section 206 finding of unjustness and unreasonableness. Deciding that it will dismiss any complaints if the existing ROE falls anywhere within the zone of reasonableness, FERC characterized the zone of reasonableness as a range of “presumptively just and reasonable ROEs” that would not be invalidated unless that presumption was sufficiently rebutted with additional evidence. FERC then reached a preliminary finding of 11.4 percent as the TO’s ROE and established a paper hearing as to the application of the new methodology in pending cases.
According to some, there is no indication that the new approach will be used in pipeline cases. Nevertheless, many stakeholders in the pipeline industry have already begun to consider its application to pipeline ROE determinations. Regardless of the likelihood that the policy is in fact adopted, the application of the new methodology to pipeline ROEs may have more implications for climate that advocates should be alert to.
V. Implications for Clean Energy
Applied to TOs, the Proposal’s Impact on Clean Energy is Generally Positive.
While the true impact of FERC’s new ROE methodology remains to be seen, it is certain that the Coakley 2018 order represents a substantial policy shift. The proposed policy aligns with earlier demands and suggestions from the transmission side, which had lamented that the two-step DCF methodology was not appropriate in today’s post-recession market conditions. The new ROE methodology appears to address the TOs’ complaints about abnormally low interest rates by integrating financial benchmarks that tend to raise the overall ROE.
Raising the recoverable ROE for transmission utilities presents both challenges and potential opportunities for advocates of clean energy. Generally, one can assume that end-user consumers will pay more as a result. And although one normally expects that higher prices of a service will lead to decreased demand that lowers generation and thus greenhouse gas emissions in turn, in reality, electricity consumer demand curves are generally not very responsive to short-term price changes because electricity needs are relatively fixed. And even if consumers adopt some efficiency and conservation measures in response to long-term price increases, there is the possibility that a “rebound effect” for gains in energy efficiency may result in extra energy consumption and thus, additional greenhouse gas emissions that counteract any efficiency gains. Therefore, the impact of the new policy on demand may be “wash,” with no clear effect on emissions.
FERC’s new policy is premised on the hope that raising TOs’ ROEs will encourage badly needed investment that responds to changes in the transmission business environment. Transmission expansion is indeed necessary to interconnect new renewable energy generation and may affect “how particular resources provide services to the grid and the relative competitiveness of various types of generators.” Both TOs and climate advocates affirm the importance of transmission improvements for bringing renewable power onto the grid, and it seems fair to conclude that FERC’s new ROE methodology can facilitate this outcome.
Application of the Proposal to Other Utilities is Nevertheless a Step in the Wrong Direction.
Although some observers doubt that the proposal will be applied to natural gas and oil pipeline ROEs, there is no question that FERC will at least be presented with arguments in favor of this cross-application in the future. Commissioner Cheryl LaFleur made comments during the October 18th open meeting suggesting that FERC intends to apply the policy broadly. Stakeholders are already considering the possibility that the new ROE methodology will also apply to pipelines. Noting that FERC had coordinated its approaches to determining transmission and pipeline ROEs under the one-step DCF methodology in the past, it is entirely plausible that FERC will synchronize its ROE methodology for pipelines with the Coakley 2018 proposal soon. In addition to the dissimilar market challenges and realities that pipelines face as compared to transmission utilities, applying the Coakley 2018 proposal to pipelines will likely undermine the transition to renewable energy.
Unlike investment in transmission infrastructure, which can help bring renewable energy generation on to the grid, investment in natural gas infrastructure will result in the construction of new facilities that may “lock in” greenhouse gas emitting energy sources that contribute to climate change. The adoption of a pro-investment ROE approach like the Coakley 2018 proposal is more problematic given FERC’s broad discretion and substantial judicial deference to its decisions over natural gas pipeline approval. For example, even challenges on strong legal ground such as those brought by the New Jersey Conservation Fund against FERC’s approval of the PennEast Pipeline siting, experts warn that these challenges rarely “kill” a pipeline project. Clean energy advocates thus have a small window of opportunity to advocate for a different ROE approach in pending NGA section 4 and 5 proceedings, where they may find more success, if at least, more opportunities, than they would in challenges to pipelines approvals alone. In addition, climate advocates have an opportunity to encourage FERC to undertake rulemaking and should be prepared to participate in the Notice of Proposed Rulemaking proceedings, at least as it relates to natural gas pipelines.
While environmental and climate impacts are excluded from proceedings initiated pursuant to section 4 or 5 of the NGA, there are compelling economic arguments that clean energy advocates can adopt to bolster their position. First, unlike transmission utilities, pipelines have had little trouble attracting capital investment, especially throughout the Northeast, Midwest, and Southeast. As the “Shale Revolution,” facilitated by advances in extraction technology (e.g., hydraulic fracturing) has driven the price of natural gas down to a few dollars per MMBtu, the sector has recently ramped-up plans for several of the largest natural gas infrastructure projects in history.
In addition, demand for cleaner fuels throughout the world (and in Asia in particular) has generated significant interest in expanding infrastructure for liquid natural gas (LNG) that can be exported abroad to be burned in place of coal. Thus, the argument that higher ROEs are required to attract necessary investment to transmission utilities is much less compelling in the natural gas pipeline milieu. Further, the falling cost of U.S. LNG and U.S.–Russian sanctions have further encouraged speculation and investment as the industry prepares to compete in previously-uneconomical markets such as Europe. While the current deregulatory administrative environment and slight economic upturn have encouraged speculation in natural gas investment, importing the Coakley 2018 proposal to pipeline ROE proceedings will send the wrong market signals. As previously mentioned, the ROE selected from the composite zone of reasonableness derived that is from the four financial benchmarks identified in Coakley 2018, on average, result in higher ROEs than under FERC’s previous policy. Awarding a higher ROE to pipelines may send unrealistic or overly optimistic signals. These risky investments not only impose unnecessary costs on investors, consumers, and the environment, but also present opportunity costs as direly-needed capital that could be put into more diverse, cleaner energy investments is sunk into fossil fuel facilities.
While the full impact of the Coakley 2018 order is far from clear, climate advocates should be on alert to the ways that FERC’s ratemaking policies shape the material future of clean energy. FERC’s decisions on issues such as the approved methodology for setting a utility’s ROE and other accounting and financial questions can both hamper and catalyze greenhouse gas reduction efforts. In addition, as the economic viability and technological feasibility of renewable energy improves relative to fossil fuel generation, there is a margin of opportunity for climate activists to encourage the clean energy transition through these accounting methodologies. FERC’s discretion to encourage and incentivize investment in particular facilities may prove to be as powerful of a tool for clean energy advocates in shaping capital markets as they have been for the fossil fuel industry. But, it will require a dialogue shift from the exclusive discussion of environmental impacts and greenhouse gas emissions to the language of finance and economics.
 Coakley v. Bangor Hydro-Electric Co., 165 FERC ¶ 61,030 (2018) [hereinafter Coakley 2018].
 Emera Maine v. FERC, 854 F.3d 9 (D.C. Cir. 2017).
 Return-on-equity the ratio of net income (profits) to equity (or net assets less liabilities). ROEs are often used as a profitability indicator or investment measure. James Early, Profitability Indicator Ratios: Return On Equity, Investopedia https://www.investopedia.com/university/ratios/profitability-indicator/ratio4.asp (last visited Oct. 31, 2018).
 Federal Power Act, 16 U.S.C. §§ 824, 824d, 824h (2018).
 Ari Peskoe and Kate Konschnik, Climate Implications of FERC Proceedings 20 (Harvard L. School: Envtl. L. Program Pol’y Initiative 2017), available at http://environment.law.harvard.edu/wp-content/uploads/2017/11/Climate-and-FERC-Proceedings.pdf.
 16 U.S.C. § 824(a) (2018).
 16 U.S.C. § 824d (2018).
 Natural Gas Act, 15 U.S.C. §§ 717c, 717d (2018). See also FERC: Natural Gas – Cost-of-Service Rate Filings, FERC – Natural Gas: General Information, https://www.ferc.gov/industries/gas/gen-info/rate-filings.asp (last updated Jan. 19, 2017) (“Setting just and reasonable rates requires a balancing of equities between the interests of the pipeline and its ratepayers.”).
 Lawrence R. Greenfield, An Overview of the Federal Energy Regulatory Commission and the Federal Regulation of Public Utilities15 (FERC: Office of the General Counsel, May 2017), https://www.ferc.gov/about/ferc-does/ferc101.pdf.
 Peskoe and Konschnik, supra note 5, at 2.
 Id. at 4 and fn. 8 (citing Grand Council of Crees v. FERC, 198 F.3d 950, 956 (D.C. Cir. 2000).
 Coakley, supra note 1.
 Peskoe and Konschnik, supra note 5, at 20.
 See id. at 2, 20.
 See James Early, supra note 3. (“ROE is a true bottom-line profitability metric, comparing the profit available to shareholders to the capital provided or owned by shareholders. In a conceptual sense, it’s the profitability measure that equity investors care most about.”).
 See Ben McClure, How Return On Equity Can Help You Find Profitable Stocks, Investopedia (Aug. 22, 2017), https://www.investopedia.com/articles/fundamental/03/100103.asp (“ROE offers a useful signal of financial success since it might indicate whether the company is growing profits without pouring new equity capital into the business. A steadily increasing ROE is a hint that management is giving shareholders more for their money, which is represented by shareholders’ equity. Simply put, ROE indicates know how well management is employing the investors’ capital invested in the company.”).
 “Interconnection” describes the physical system of the grid that allows electricity produced by power plants to move from one location to another. See Sara Hoff, U.S. electric system is made up of interconnections and balancing authorities, U.S Energy Info. Admin. (July 20, 2016), https://www.eia.gov/todayinenergy/detail.php?id=27152.
 Id. (discussing Order No. 679, 116 FERC ¶ 61,057 (2006), in which FERC awarded incentive ROEs to compensate for the “risks and challenges” of investments in reliability or congestion benefits).
 Opinion No. 531, Coakley v. Bangor-Hydro Elec. Co., 147 FERC ¶ 61,214 (2014), vacated by Emera Maine, 854 F.3d at 30.
 Id. at 62,434.
 Id. at 62,436.
 Id. at 62,440.
 Id. at 62,444.
 See FPC v. Hope Nat. Gas Co., 320 U.S. 591 (1944).
 See Bluefield Water Works & Improvement Co. v. Pub. Serv. Comm’n, 262 U.S. 679 (1923).
 Opinion No. 531, 147 FERC ¶ 61,214, at 62,444 (quoting Hope, 320 U.S. at 630) (ruling a just and reasonable ROE must be “commensurate with the returns on investments in other enterprises having corresponding risks… [and] sufficient to assure confidence in the financial integrity of the enterprise, so as to maintain its credit and to attract capital.”).
 Id. at 62,465.
 Id. at 62,464 (those alternative benchmarks are: the capital asset pricing model (CAPM), the risk premium analysis, and the expected earnings analysis).
 Emera Maine, 854 F.3d at 9.
 Id. at 15.
 Id. at 24-25 (“The FPA, by requiring FERC to show that an existing rate is unlawful before ordering a new rate under section 206, provides a form of “statutory protection” to a utility. Thus, while showing that the existing rate is entirely outside the zone of reasonableness may illustrate that the existing rate is unlawful, that is not the only way in which FERC can satisfy its burden under section 206. As the parties agree, section 206 required FERC to make an explicit finding that the Transmission Owners’ existing rate was unjust and unreasonable before proceeding to set a new rate.”) (citations omitted).
 Id. at 28.
 Id. at 30.
 See, e.g., Robert Mudge, Akarsh Sheilendranath, & Frank Graves, Resetting FERC ROE Policy: A Window of Opportunity, The Brattle Group (May 2018), available at http://files.brattle.com/files/13856_resetting_ferc_roe_policy_final.pdf.
 Coakley 2018, supra note 1.
 Id. at P 30.
 Id. at P 34-35 (“While some investors may give some weight to a DCF analysis, it is clear that other investors place greater weight on one or more of the other methods for estimating the expected returns from a utility investment, as well as taking other factors into account. Thus, cost of equity estimates based on all four of the methods described above are a reasonable measure of investor expectations, since they are among the information that investors rely upon when making investment decisions.”).
 Id. (“The presumptively just and reasonable ROEs for below-average-, average-, and above-average-risk utilities will then be the quartile of the zone corresponding to the lower midpoint/median, midpoint/median, and upper midpoint/median, respectively.”).
 Id. at P 28 (“Pursuant to this framework, a finding that the existing ROE of an average risk utility falls within the applicable range of presumptively just and reasonable ROEs (in the case of an average risk utility, the middle quartile of the newly-calculated zone of reasonableness) will support a holding that the existing ROE has not been shown to be unjust and unreasonable under the first prong of FPA section 206, at least absent additional evidence to the contrary. By the same token, a finding that the existing ROE of an average risk utility falls outside that range may support a holding that that the ROE has become unjust and unreasonable.”) (footnotes omitted).
 Id. at P 18.
 William S. Scherman, Jeffrey M. Jakubiak, & Jennifer C. Mansh, FERC Issues Long-Awaited Order on Return on Equity for New England Electric Utilities, Gibson Dunn 1 (Oct. 18, 2018), https://www.gibsondunn.com/wp-content/uploads/2018/10/ferc-issues-long-awaited-order-on-return-on-equity-for-new-england-electric-utilities.pdf.
 See Michael Thompson and Ryan Collins, FERC’s Modifications to Electric Return on Equity May Have Implications for Pipelines, Wright & Talisman, https://www.wrightlaw.com/fercs-modifications-to-electric-return-on-equity-may-have-implications-for-pipelines (last visited Oct. 31, 2018).
 See Scherman et al., supra note 42, at 1 (“In Tuesday’s order, FERC charted a wholly new course for setting ROEs…”).
 Mudge et al., supra note 35, at 6 (“The NETOs [New England TOs] argue that anomalous conditions persist today, pointing out that interest rates remain well below historic averages and that ‘U.S. and global interest rates and financial markets remain subject to powerful and unprecedented monetary policy actions by the Federal Reserve Bank and other global central banks.’”) (quoting Initial Brief of the New England Transmission Owners, Docket No. EL 16-64-002, Jan. 19, 2018, at 22).
 See id. at 7; Scherman et al. supra note 42, at 3.
 Division of Market Oversight, Office of Enf’t, FERC, Energy Primer: A Handbook of Market Basics 41-42 (2015), https://www.ferc.gov/market-oversight/guide/energy-primer.pdf.
 E.g., Niels I. Meyer, Frede Hvelplund, & Jørgen S.Nørgård, Chapter 4: Equity, Economic Growth, and Lifestyle, Energy, Sustainability and the Environment: Technology, Incentives, Behavior 89, 101 (Perry Sioshansi and Fereidoon P. Sioshansi eds., 2011) (“Technical energy efficiency improvements are usually cost effective, which leads to an extra ‘income’ for those investing in energy savings. In an unsatiable economy, this will typically result in extra consumption or investment implying some extra energy consumption…”). But see, e.g., Kenneth Gillingham, Matthew J. Kotcchen, David S. Rapson, & Gernot Wagner, The rebound effect is overplayed, 493 Nature 475, 475-76 (2013).
 Mudge et al., supra note 35, at 8 (“[N]ew demands on transmission owners have proliferated, sometimes opposing ways to other industry developments that create new tensions. Drivers include: 1) heightened concerns about system reliability, flexibility, and resiliency; 2) increasing demand for congestion relief and economic efficiency; 3) supporting environmental policy by accessing remote renewable resources; and 4) accommodating diverse changes in flow patterns arising from the growing dominance of natural gas, the retirement of older power plants, and distributed energy resources.”).
 Peskoe and Konschnik, supra note 5, at 20-22.
 See Mudge et al., supra note 35, at 9, 11; Peskoe and Konschnik, supra note 5, at 20.
 Scherman et al., supra note 42, at 1.
 Audio recording: Commission Open Meeting, held by FERC (Oct. 18, 2018), available at https://www.ferc.gov/EventCalendar/EventDetails.aspx?ID=8764&CalType=%20&CalendarID=101&Date=10/18/2018 (last accessed Nov. 15, 2018). See also Marcy Crane, FERC’s LaFleur signals intent to apply proposed new ROE policy more broadly, S&P Global (Oct. 19, 2018).
 See, e.g., Mona Tandon, Phil Mone, Michael Diamond, & Kelsey A. Bagot, Landmark FERC Order Adopts New Methods of ROE Determinations, The National Law Review (Oct. 17, 2018), https://www.natlawreview.com/article/landmark-ferc-order-adopts-new-method-roe-determinations; Michael Thompson and Ryan Collins, supra note 43 (“On October 16, 2018, the Federal Energy Regulatory Commission (FERC) issued an order in the Coakley v. Bangor Hydro-Electric Company proceeding that could have important implications for determinations of FERC-regulated pipelines’ rates of return on equity (ROEs) in pending and future rate proceedings.”); Mudge et al., supra note 35, at 1 (stating that the Emera Maine remand may have implications for oil and gas pipeline ROEs as well).
 E.g., Mudge et al., supra note 35, at 2.
 Peskoe and Konschnik, supra note 5, at 24.
 Christina Tatu, Nearly a year after federal approval, PennEast Pipeline still faces uphill battle, The Morning Call (Nov. 12, 2018), https://www.mcall.com/news/local/nazareth/mc-nws-penn-east-update-20181026-story.html (‘“Delay doesn’t really kill pipelines,’ said Carolyn Elefant, a Washington, D.C.-based attorney who formerly worked for the Federal Energy Regulatory Commission and now specializes in energy and eminent domain cases. ‘Most of these recent pipelines have a 14 percent return on equity, which is at least 3 to 4 percent higher than any other utility investment, and in fact, higher than most investments at all,’ she said.”).
 For other avenues through which clean energy advocates may influence FERC natural gas policy, see Peskoe and Konschnik, supra note 5, at 25-29.
 See, e.g., Jude Clemente, The Northeast Gas Pipeline Buildout Is Coming, Forbes (Jun. 25, 2017), https://www.forbes.com/sites/judeclemente/2017/06/25/the-northeast-natural-gas-pipeline-buildout-is-coming/#4fa18ebb7f74; Gavin Bade, ‘Eye wide open’: Despite climate risks, utilities bet big on natural gas, Utility Dive (Sept. 27, 2016), https://www.utilitydive.com/news/eyes-wide-open-despite-climate-risks-utilities-bet-big-on-natural-gas/426869/.
 See Clemente, supra note 60.
 See, e.g., Stuart Elliot, US LNG costs falling, fuel becoming more cost-competitive in Europe: officials, S&P Global: Platts (Nov. 8, 2018), https://www.spglobal.com/platts/en/market-insights/latest-news/natural-gas/110818-us-lng-costs-falling-fuel-becoming-more-cost-competitive-in-europe-officials; Mark Mills, American LNG will meet Europe’s urgent need for gas, Financial Times: Opinion (Oct. 22, 2018), https://www.ft.com/content/a4c7d5d4-d227-11e8-a9f2-7574db66bcd5.
 E.g., James K. Glasman, Betting on the Natural Gas Boom, Kiplinger’s Personal Finance (June 2013), https://www.kiplinger.com/article/investing/T052-C016-S002-investing-in-natural-gas-boom.html; Renzo Pipoli, Bullish on natural gas, Shell announces new North Sea investment, UPI: Energy News (Oct. 10, 2018), https://www.upi.com/Energy-News/2018/10/10/Bullish-on-natural-gas-Shell-announces-new-North-Sea-investment/8821539195723/.
 The four financial benchmarks are: the two-step DCF analysis, CAPM, risk premium model, and expected earnings model discussed in Coakley, 165 FERC ¶ 61,030, at P 16 (2018).
 To reiterate, the order only represents a proposed policy. The proceeding is still open to briefing by the parties as to its application to the case at hand in the paper hearing phase. See Coakley, 165 FERC ¶ 61,030 (2018).