LOS ANGELES California's innovative financing
plan to help relatively small renewable energy firms get their
power to market over high-voltage transmission lines won
approval from federal regulators on Thursday.
Developers of new power plants generally pay the cost for
building high-voltage "trunklines" to connect their plants to
utilities that deliver the power to consumers.
But most renewable energy companies are smaller firms that
develop wind, solar or geothermal resources in remote locations
that need new lines, which they often cannot afford to build.
The U.S. Federal Energy Regulatory Commission gave the OK
for the California Independent System Operator to spread the
cost of building the new lines among the utilities that receive
The wind and solar developers will pay their share of the
cost once plants begin operating instead of before they produce
The California plan is the first of its kind for U.S.
utilities, the Cal ISO said.
FERC Commissioner Suedeen Kelly said that California's
financing method "will become a model for others in the
The American Wind Energy Association, an industry group,
applauded FERC's unanimous approval of the Cal ISO plan.
Wind development has faced a "chicken or egg
problem...where no wind farms are built unless there is
transmission, and no transmission is built unless there are
wind farms already in place," the AWEA said in a press
Texas, Colorado and Minnesota are also considering such
Texas has the most wind power and California is a close
second among U.S. states and Minnesota is fourth, 2006 AWEA
California has set a "portfolio standard" calling for each
investor-owned utility in the state to have 20 percent of the
power it delivers generated by renewable sources.
More than 4,000 megawatts of new renewable generation is
proposed in California, the Cal ISO said.
California Public Utility Commission President Michael
Peevey said the commission was pleased with the FERC ruling.
"One of the challenges we face in achieving our RPS goals
is developing the transmission required to access remote
concentrations of renewable resources," Peevey said.
"With this change, FERC has effectively harmonized its cost
recovery rules with the realities of renewable energy
development in the state."
Cal ISO will now work with stakeholders -- mainly the big
three investor-owned utilities in California -- on a detailed
plan that incorporates Thursday's FERC ruling.
Those utilities are Pacific Gas & Electric Co., a
subsidiary of PG&E Corp., Southern California Edison, a
subsidiary of Edison International, and San Diego Gas &
Electric Co., a subsidiary of Sempra Energy.