LOS ANGELES - Investor-owned electric utilities in California will be allowed to pass on to customers the costs of building lines to transmit renewable power from sources such as wind farms, the California Public Utilities Commission ruled Thursday.
The wind farm being developed at Tehachapi in Southern California will cost an estimated $1 billion to connect to the grid, and the commission's ruling will allow utilities to make the deals needed to recover power line costs when several companies share lines and the costs.
The Tehachapi area, with the potential for about 4,000 megawatts of wind power, is key for investor-owned utilities in California trying to meet a state requirement that renewable sources generate 20 percent of their power portfolio by 2010.
Among investor-owned utilities in California are Pacific Gas & Electric Co, a subsidiary of PG&E, Southern California Edison, a subsidiary of Edison International , and San Diego Gas & Electric, a subsidiary of Sempra Energy.
"Today's decision provides a breakthrough in development of new renewables by giving utilities the assurance that investments in new transmission facilities to access areas of known renewable resources, such as the Tehachapi area, will be recovered in customer rates," the California PUC said in a statement after Thursday's meeting in San Francisco.
"Absent such assurances, utilities have been hesitant to take the steps necessary to develop new renewable resources.
Customers are protected under today's decision by careful guidelines to ensure that cost recovery will be available only in clearly defined circumstances that demonstrate that proposed transmission facilities are necessary for renewable development."
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