CAISO Tries Financing Transmission for Wind

By Published On: October 20, 2006

The California Independent System Operator, utilities, and power plant developers all appear sanguine that a fresh batch of federal regulators will approve a new method of financing transmission lines. The CAISO board voted October 18 to petition the Federal Energy Regulatory Commission for a declaratory order that allows the agency to create financing for transmission lines – ones that would be used specifically to access renewable power. “It improves on the [former] Edison proposal on principals of cost allocation,” said Wes Williams, Southern California Edison manager of ISO/FERC regulation. “It creates a financing mechanism, not a funding mechanism,” said attorney Chris Ellison, representing the American Wind Energy Association. He explained that the earlier Edison proposal would have rolled all charges into the grid operator’s transmission charge. This proposal, he said, caps the transmission charge, calls for cost-effectiveness in a new transmission line, and requires enough commercial interest in a line to take the risk of building it. Last year, Edison petitioned federal regulators to allow a new method of paying for transmission lines that was aimed at building lines to tap into wind energy in the Tehachapis (Circuit, July 8, 2005). FERC, however, denied the crucial part of the utility’s plan. This time, representatives from all stakeholder groups agreed that CAISO’s plan stands a better chance with federal regulators given the three new commission members, all of whom hail from Western states. If federal regulators issue a declaratory order, then CAISO and stakeholders have to pin down details to file a tariff with FERC. “This is all about seeking guidance,” said CAISO board member Elizabeth Lowe. In other wind industry-related policy, the grid operator board voted to send a tariff to federal regulators for approval that would put wind power on a more equal footing with fossil-fuel-fired plants by not charging wind generators for deviations from forecasts. Wind power cannot be controlled as fossil-fueled power plants can – wind blows when it blows, while natural gas-fired plants can be started up or ramped down at any time. “If we have no control over forecasts and deviations, then it’s unfair to charge for those deviations,” said Mark Smith, FPL regulatory affairs director. – J.A. Savage

Share this story

Not a member yet?

Subscribe Now