AWEA Tackles Key Cost Allocation Issues in FERC Filings

In two separate filings on related transmission issues last week, AWEA addressed key cost-allocation developments and issues happening at the Federal Energy Regulatory Commission (FERC).

AWEA welcomed FERC’s recognition of the need for transmission pricing and planning reform and called for transmission cost allocation rules that address long-standing grid needs and remove barriers to renewable energy development. The trade association also requested that FERC reconsider its recent order on cost allocation, which it said threatens renewable energy development in the Upper Midwest.

“The time has come when FERC must recognize that reforming cost allocation is the single most important action it can take to address longstanding grid needs and support state, regional, and national energy objectives,” said AWEA Senior Vice President for Public Policy Rob Gramlich. “The wind energy industry calls on FERC to broadly spread costs of transmission to all beneficiaries, thereby unleashing the renewable energy investment potential that is waiting in the wings and ready to be deployed. We also ask that, consistent with this request, FERC reconsider its harmful and ill-informed decision to assign virtually all the costs of transmission upgrades in the Upper Midwest to generators.”

The first set of comments filed with FERC are in response to a request by FERC for views on whether its current transmission planning and pricing policies, under FERC rule 890, were in need of reform. The comments note that “many cost allocation methodologies, as they are applied today, are flawed . . . because they too narrowly define the beneficiaries to whom such costs should be assigned.” This, coupled with needed reforms to current transmission planning regimes, has stifled investment in the nation’s transmission network and led to inadequate expansion of the nation’s grid, threatening our country’s ability to achieve energy security, reliability, and environmental objectives.

To ensure that the needed transmission is to be constructed in the right amount and at the right time, AWEA, in its comments, asks FERC to initiate a rulemaking to require that regional planning be performed proactively (i.e., by projecting and planning for the region’s long-term needs), establish a record that would fully consider the many system-wide benefits that transmission expansions provide, and, in recognition of the multiple beneficiaries of these benefits, spread costs broadly across users.

In the second filing, AWEA and Wind on the Wires (WOW) ask FERC to rehear and reconsider its controversial October 23 ruling approving a transmission cost allocation method for the Midwest Independent System Operator (MISO) that discourages wind power development in the Midwest, one of the nation’s most wind-rich regions. AWEA and WOW find that the decision by FERC to place virtually all the costs for transmission upgrades on the projects requesting interconnection is discriminatory to renewable resources, lacks reasoned analysis, and departs from established Commission precedent.

“Reconsideration of this decision would reopen the way for wind power development—and for manufacturing investment and job creation—in what is one of the nation’s most wind-rich regions for wind energy development and manufacturing investment,” said AWEA Senior Vice President for Public Policy Rob Gramlich.

For more information please contact Trevor Sievert at ts@windfair.net