AWEA CEO Denise Bode released the following statement in response to today's announcement from the Federal Energy Regulatory Commission (FERC) that it has clarified how needed transmission lines will be planned and paid for.
"AWEA applauds FERC for its leadership in finalizing reforms that could serve to cut the Gordian knot that is blocking investment in our aging power grid. This is an important step toward removing the main hurdle: how to make sure all users pay their fair share of new lines. Preventing free-riding will help improve grid reliability, and reduce electricity bills by facilitating access to lower cost resources, including wind energy."
The current system for determining how new power lines are paid for is flawed. The plans too narrowly define who should pay for new projects and stifle investment, resulting in inadequate expansion of the grid. The agency's new policy requires transmission providers to file regional plans for transmission lines that ensure that consumers who do not benefit do not pay, and conversely, those who do benefit do pay. FERC has clear authority and responsibility to decide fair cost allocation. Plans must also account for public policy goals set by state or federal laws or regulations, placing renewable energy laws on par with the goals of increasing reliability and curbing power congestion.
AWEA Senior Vice President for Public Policy Rob Gramlich said, "Allocating costs is a core responsibility of FERC and this initiative is well founded on a large body of law. There is really no alternative to this policy other than letting the grid continue to weaken and deteriorate—an outcome that many companies profit from but which is not in the public interest. In addition to a more reliable electric grid, consumers will also benefit from access to long-term lower energy prices when transmission barriers to competition are removed."
For more information of FERC's announcement, visit: http://www.ferc.gov/EventCalendar/Files/20110721111136-Fact-Sheet-E-6.pdf