FERC acts to remove barriers to renewable energy development in California

 

May 2, 2007—The Federal Energy Regulatory Commission (FERC) recently approved the California Independent System Operator's (CAISO) proposed mechanism for financing facilities to interconnect location-constrained renewable resources such as wind, geothermal and solar generation to the CAISO's transmission grid.

The Commission found that the CAISO's proposal strikes a reasonable balance that addresses barriers impeding the development of location-constrained resources while at the same time including appropriate ratepayer protections so as to ensure that rates are just and reasonable and not unduly discriminatory, according to FERC. Electric generation resources become location-constrained because of location, relative size and immobility of their fuel source.

Commission Chairman Joseph T. Kelliher said: "This order will encourage greater fuel diversity in our electricity supply and help California meet its renewable energy targets. We recognize unique characteristics of renewable energy projects, but have been careful not to grant an undue preference. A large and growing number of states have established renewable portfolio standards and National Energy Policy promotes renewable energy. Our action today is fully consistent with both federal and state policy."

The Commission also found that the CAISO's proposal includes several mechanisms that protect ratepayers. These include a rate impact cap and a requirement that before a facility could be constructed, the sponsoring Participating Transmission Owner must demonstrate a sufficient level of interest from location-constrained generators in the facility’s capacity.

For more information, see the CAISO Web site.