Renewables Transmission Cost Allocation Battle Continues

Fourteen power companies and utilities from California and the Pacific Northwest have joined industry players from other regions in calling for the cost of transmission expansion related to renewables projects to be borne by those projects’ developers and their customers.

The call from western players was made, according to the New York Times, in a letter sent in February to Senate Majority Leader Sen. Harry Reid (D-Nev.) and Minority Leader Sen. Mitch McConnell (R-Ky.).

Partly at issue is Senate Bill 1492, which passed out of committee in June with bipartisan support, which outlined new policy for transmission planning and siting as well as cost allocation. Just before that bill moved out of committee, Sen. Bob Corker (R.-Tenn.) attached an amendment to it that could restrict the FERC’s authority to allocate costs of national transmission projects.

The letter said that national energy policy should not focus exclusively on the construction of remote renewables facilities and the transmission they will require to deliver power to population centers but should also aim to meet clean-energy targets with efficiency and demand-side management as well as local generation like wind and rooftop solar.

The Department of Energy’s National Renewable Energy Laboratory recently said that wind power could supply 20 to 30 percent of capacity in the East by 2024 if massive transmission projects could be in place to deliver that power: 10 direct-current lines spanning a total of 22,700 miles.

The notion that renewables projects should be paid for locally has also received the support of the Industrial Energy Consumers of America, which represents manufacturing interests.

Allocating the costs of such large-scale transmission projects more widely also has plenty of support, however. Lobbyists with the WIRES coalition, who represent power companies favorable to grid expansion, have sent letters to senators urging the protection of FERC’s discretion over regional transmission and cost allocation.

And supporters of transmission buildout have pointed out that existing power producers arguably have little incentive to support the allocation of costs to bring potential competitors’ power to market.

Return to March 2010 Western Energy News

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