Eversource's $385M Project: Misclassification Exposed

When a utility mislabels a major infrastructure project as routine maintenance, it’s more than just a paperwork decision; it’s a financial strategy.

That’s the allegation at the heart of a complaint filed on May 12, 2026, with the Federal Energy Regulatory Commission — one that accuses Eversource Energy of deliberately misclassifying a roughly $385 million transmission project in northern New Hampshire to sidestep the kind of regulatory scrutiny that might have challenged whether the project was necessary, appropriately scoped, or fairly priced.

Five New England states are now asking FERC to take action.

A $385 Million Project Hidden in Plain Sight

The project in question — internally designated X-178 — runs 49 miles through northern New Hampshire and involves 594 structures. Eversource classified it as an "asset condition management project," a category under ISO New England's rules specifically reserved for infrastructure that has been "damaged or destroyed" and can only be used to restore those facilities to "substantially the same condition, character, or use."

Asset condition projects move through a much lighter review process than regional transmission projects. An advisory committee reviews them, but there’s minimal scrutiny of costs or project drivers. For a utility, the difference between the two classifications isn’t just bureaucratic — it’s the difference between a project that gets stress-tested and one that largely doesn’t.

What makes the Eversource complaint so pointed is that, according to ratepayer advocates, fewer than 10% of the 594 structures along the X-178 line show anything more than "minimal defects." That data comes from Eversource's own February 2024 presentation. If that figure is accurate, calling this a damage-recovery project strains credibility.

Eversource pushed back, stating through spokeswoman Olessa Stepanova that the complaint is based on "outdated information" and represents a misreading of ISO-NE's asset management rules — and that the company will formally respond at FERC. That response will matter. But the ratepayer advocates aren’t filing on a hunch; they’re citing the utility's own internal data.

What the Complaint Actually Argues

The complaint was filed jointly by five state-level consumer protection offices: Maine's Office of the Public Advocate, the Connecticut Office of Consumer Counsel, Rhode Island's Division of Public Utilities and Carriers, New Hampshire's Office of the Consumer Advocate, and the Vermont Department of Public Service. That’s a coordinated, multi-state action — not a lone dissenter.

Their core argument is straightforward. X-178 doesn’t meet the threshold for asset condition classification under ISO-NE's rules, which means it should have gone through the regional transmission planning process — a more rigorous vetting that examines whether the project is actually the right solution, at the right cost, for the right reasons.

The complaint also raises a structural concern that goes beyond this single project. "Economists have long noted that, because of their market power, utilities will have the incentive to goldplate their facilities as a way to increase rate base," the advocates wrote in their FERC filing. Rate base is the foundation on which utilities earn their regulated return — so every dollar added to it, whether justified or not, translates into higher allowed profits, which consumers pay for through their rates.

The filing asks FERC to do one of two things: either find that Eversource overstepped by self-classifying X-178 as an asset condition project, or — if FERC determines the Transmission Operating Agreement gives utilities sole discretion to make that call — declare that arrangement "unjust and unreasonable" and order it changed. Either outcome would have significant implications for how transmission projects get approved across the region.

The Real Cost to Ratepayers

Zoom out from X-178, and the numbers get uncomfortable fast.

According to a March 2026 ISO-NE presentation, roughly $6.6 billion in asset condition projects have already been installed across New England, with another $5.2 billion expected by 2033. That’s nearly $12 billion in projects flowing through a review process that the ratepayer advocates describe as providing "little to no scrutiny over their costs and drivers."

Compare that to the regional transmission planning track, where projects face more rigorous evaluation: $13.1 billion built, with just $282 million in additional projects planned through 2033. The math tells a story. Utilities have strong financial incentives to route projects through the lighter-touch process, and the volume of asset condition spending suggests they’re doing exactly that.

For consumers, this isn’t abstract. New England already has some of the highest electricity rates in the continental United States. Every billion dollars in transmission infrastructure that bypasses serious cost scrutiny ends up somewhere — and that somewhere is the rate base, then the monthly bill. The Eversource controversy lands at a moment when electric affordability is a live political issue across the country, making the stakes of this regulatory debate much higher than they might appear on the surface.

Where Utility Regulation in New England Goes From Here

There’s an important wrinkle worth understanding: ISO-NE is already aware this system is broken.

The grid operator is actively working with stakeholders to develop a formal review process for asset management projects — one that would be conducted by ISO-NE itself rather than left to utilities' self-reporting. That process is expected to be in place by 2027. The ratepayer advocates' complaint explicitly acknowledges this ongoing work, suggesting part of their strategy is to apply pressure that shapes how that new framework gets designed, not just to win a ruling on X-178 specifically.

That’s a sophisticated play. Rather than simply asking FERC to penalize Eversource, the advocates are trying to establish a precedent and create momentum for structural reform before the new review process is finalized. If FERC rules in their favor — or even issues a finding that the current Transmission Operating Agreement is problematic — it hands ISO-NE's stakeholder process a mandate it currently lacks.

For utilities across PJM and beyond, this will be worth watching closely. The "local project" classification in PJM serves a parallel function to ISO-NE's asset condition category, and regulators in other regions are paying attention to how FERC handles this case.

What Comes Next

Eversource will file its formal response to the complaint at FERC. That response will need to do more than assert the complaint is wrong — it will need to explain, with specifics, how a line where fewer than 1 in 10 structures shows more than minimal damage qualifies for a classification meant for facilities that have been damaged or destroyed.

FERC's decision will either affirm that utilities have broad self-classification authority — essentially the status quo — or signal that the commission intends to close the loophole before ISO-NE's 2027 reforms do it at the regional level.

For developers, landowners, and investors tracking infrastructure buildout in New England, the X-178 dispute is a leading indicator. If regulatory scrutiny of asset condition projects tightens, the pace of transmission investment may shift — some projects will face harder questions, longer timelines, and pressure to justify scope and cost before shovels go in the ground.

That’s not necessarily bad for the grid. It might just mean the projects that get built are the ones that genuinely need to be.

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