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Tilting to Windward

As if carbon control were a fait accompli, gen developers skew the queue toward renewable projects, driving new policy on transmission pricing.

Fortnightly Magazine - September 2007

developers to add a tax “gross-up” payment to any 50-percent funding contribution required under the MISO plan.

Second, ATC and ITC insist on running their own incentive programs because, as stand-alone transmission providers, they cannot recover grid upgrade costs through bundled retail energy rates approved by state regulators. Rather, they must recover their entire revenue requirements through transmission rates collected through the MISO market. To do so, they must remove any obstacles to expanding their own proprietary grid networks.

Regarding cost efficiency, ATC proposes in its tariff to reimburse wind developers for 100 percent of grid upgrade costs, but only if the upgrade comes in at or under a cost ceiling of $400/kW of the new generating capacity made possible by the upgrade. (See, FERC Docket No. ER07-1144, filed July 11, 2007.) Interestingly enough, however, ATC’s attempt to introduce cost discipline to any grid upgrade subsidy offered to wind developers has drawn a fair amount of criticism.

Thus, although Michigan Gov. Jennifer Granholm has praised the ATC proposal, the state Public Service Commission finds the $400/kW ceiling way too high. It suggests instead a much tighter market test, noting that according to ATC’s own data, the average peak per-kilowatt cost of grid upgrades performed to aid generation interconnections in ATC’s territory for all fuel types is only $64/kW. (See, Comments of Mich,. PSC, FERC Dcket No. ER07-1144, filed July 31, 2007.)

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