Federal Energy Regulatory Commission rejects Washington state's Puget Sound Energy's proposal to create new charge on wind generation in its service territory, saying they do not reflect utility's actual wind-to-grid costs
August 20, 2010
– The Federal Energy Regulatory Commission (FERC) has announced the rejection of a Puget Sound Energy proposal to levy a new charge on wind generation in its service territory. Advocates including the Renewable Northwest Project (RNP) and the American Wind Energy Association (AWEA) argued that the charges proposed by Puget were discriminatory and did not reflect the actual costs of accommodating wind power on the grid.
“We applaud FERC’s choice to reject the proposed wind generation charge,” said Rachel Shimshak, executive director at Renewable Northwest Project. “This decision will help ensure that renewable energy is delivered to Northwest consumers fairly and at cost.” RNP and AWEA argued that the charge was largely a product of outdated grid operating practices that discriminate against the natural variability of wind.
FERC found that the proposed charges were not reflective of the utility’s actual costs and were therefore not justified, stating that “the Commission must ensure that ratepayers are protected from rate proposals —such as the one proposed by Puget here—that are not shown to be related to the actual, demonstrable costs incurred in providing service.”
Shimshak added, “Wind advocates believe that utilities must act to minimize costs through optimal coordination and trading practices that are common in other regions but have yet to be fully adopted in the Northwest. Our priority is to work with Puget, Bonneville Power Administration and the region to implement grid operating reforms that will provide for a clean and affordable energy future.”