AWEA Lauds FERC Decision on Transmission

Applauds FERC Decision on Transmission Cost Allocation in Southwest Power Pool

June 19, 2009 -- Washington, DC – The American Wind Energy Association (AWEA) today applauded the Federal Energy Regulatory Commission’s (FERC) decision yesterday to update how the costs of building transmission to access wind resources are allocated in the Southwest Power Pool, an important step that will greatly facilitate the development of wind resources in the lower Great Plains.

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FERC’s decision more broadly spreads the cost of building new transmission to access wind resources to all users of the electric grid, an essential measure to ensure that transmission developers who would invest in the grid have an incentive to do so. The move also guarantees that the costs of building new transmission are more fairly distributed to those who also receive the even greater benefits of the transmission, such as greatly reduced electricity prices and increased reliability of the electric grid.

FERC’s move comes at a critical time for the wind industry: the need for new transmission infrastructure is now one of the largest obstacles to the continued growth of the industry. Currently, almost 300,000 MW of proposed wind projects, more than 10 times the current installed wind capacity in the U.S., are waiting in line to connect to the grid but are unable to proceed because of the inadequacy of the grid. The wind industry has been strongly pushing for state, regional, and federal policy solutions to more broadly distribute the costs of transmission investments, as FERC’s ruling does today. Unfortunately, other regions of the country are considering policies aimed in the opposite direction, moving backwards towards the obsolete model of requiring the next wind plant waiting in line to connect to the grid to pay for all of the cost of upgrading the grid. According to AWEA, such a policy is akin to requiring the next car entering a congested highway to pay the full cost of adding a new lane.

AWEA CEO Denise Bode expressed strong support for today’s decision:

"Today’s ruling is a major victory for the people of Oklahoma, Kansas, Nebraska, Missouri, Arkansas, Louisiana, Texas, and New Mexico, who will see lower electricity prices, more jobs, and a cleaner environment as a result of the wind energy development this decision will enable. We hope other regions and the federal government will follow their lead and institute similar reforms so that we can begin to put the world-class wind resources that are currently stranded in rural parts of this country to use."

Source: American Wind Energy Association (AWEA):