Final Opinion- Alternate Treatment of New Transmission for Interconnection of Renewable Generation
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Summary:
Final Opinion on "Alternative Treatment of New Transmission for Interconnection of Renewable Generation" by Frank A. Wolak, Chairman; James Bushnell, Member ; Benjamin F. Hobbs, Member (Market Surveillance Committee of the California ISO), dated October 3, 2006
Extract:
1. Background
The California ISO recently issued a white paper proposing a third category of transmission expansions specifically for renewable generation projects. Currently the ISO has two types of transmission expansion projects: (1) network facilities and (2) generation intertie (gen-tie) facilities. Network facilities are part of the looped transmission network and typically benefit more than one generation owner and are therefore paid for by the Participating Transmission Owner (PTO) and recovered through the ISO's Transmission Access Charge (TAC). Gen-tie facilities serve one generation unit owner, are typically less than 5 miles long, and power flows over them in one direction. For these reasons gen-tie facilties only benefit the generation unit owner interconnecting to the ISO control area so they are paid for by that entity. The ISO's white paper proposes to establish a new category of transmission facilities to interconnect renewable generation resources. However, a portion of the annual costs of this new category of transmission facilities will initially be paid for by the TAC. Renewable generation unit owners will take over paying a share of the annual cost of these interconnection facilities when they begin operating. The ISO argues that this proposal is designed to address a "market failure that imposes barriers to efficient development of renewable generation facilities." Removing any barriers to the development of renewable generation in California is essential to achieving the state's ambitious renewables portfolio standard (RPS) of 20% percent of retail sales in California produced by renewable sources by 2010.
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