NEWS
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              *             from the               *
              *  AMERICAN WIND ENERGY ASSOCIATION  *
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WIND GROUP CALLS FOR EFFICIENT
PRICING FOR TRANSMISSION OF POWER

• It is economically efficient because it is simple and avoids administrative overhead. A rate that is instead based on distance sensitivity will be complex and difficult to administer. Distance sensitivity rests on the fallacious notion that electrons actually flow from the generating plant to the customer. In fact, in a single regional transmission system that is based on efficient dispatch, there are no location- or distance-sensitive differences in transmission cost or loading. Since methods of pricing based on distance with in the system have no basis in engineering reality, they cannot and do not serve a useful economic purpose.

• It is beneficial to the environment because it provides equitable transmission pricing for renewable energy systems, which produce little or no net greenhouse gas emissions and whose environmental impacts are generally less than those of conventional power plants. Unlike fossil-fuel projects, new renewable energy projects are location dependent (and therefore dependent on transmission to carry the power generated to load centers). Additionally, the existing transmission system, which represents a very large investment, was built to serve fossil-fuel plants that are already in place, rather than fostering a portfolio that includes renewable energy generating plants.

It is our conviction that the economy and the environment will best be served by a pricing policy under which all of the users of a regional transmission system, including the owners themselves, are charged on an equal basis. Distance-sensitive rates will impose an extra overhead burden on electric power prices and will unfairly discriminate against new, clean, renewable electric generation facilities.