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California ISO Rolls Out New Plan for Greening the Grid
The California Independent System Operator Corporation (CISO) filed a financing plan to get green power from multiple users onto the grid.
According to the filing with the Federal Energy Regulatory Commission (FERC), as more wind, solar and geothermal generation is developed in California, a new type of financing mechanism is needed to facilitate the development of transmission projects that reach remote locations where several companies are developing renewable energy resources.
Current financing methods are not a good fit for remotely-located, renewable generation, and the CISO proposal calls for the initial costs of multi-user resource trunk line transmission projects to be paid by the transmission owners and recouped through the CISO’s Transmission Access Charge (TAC). As generators connect to the new trunk line they will pay a pro-rated share of the costs based on their generating capacity. The generator payments will reduce the cost recovered through the TAC.
This new method of financing removes a significant barrier facing developers of renewable resources while encouraging the efficient sizing of the associated transmission facilities. Under this method, renewable generation developers would begin paying their fair share for efficiently sized transmission after their generation begins operating, as opposed to shouldering the costs up front, says CISO.
“Wind turbines, large solar power plants and geothermal resources all need to be built close to their natural fuel sources,” says California ISO President and CEO Yakout Mansour. “The California ISO is committed to removing barriers to these types of green resources and doing everything we can to help meet the State’s renewable standards and climate change policies in a timely and reliable manner.”
“We don’t have a choice as to where these natural resources are located,” says Rich Ferguson, research director for the Center for Energy Efficiency and Renewable Technologies. “If we’re going to use these assets to offset less environmentally friendly types of power generation, we need to be able to build the transmission lines that reach those remote locations.”
If the new payment mechanism is approved and implemented, it would be a first-of-its-kind means of removing financial barriers that can hinder development of wind, solar, geothermal and other renewable energy resources.
Fostering these resources can help California achieve its Renewable Portfolio Standard (RPS), which requires most utilities in the state to obtain 20 percent of the electricity they deliver from environmentally-friendly resources by 2010.