• Renewable Energy Transmission Costs Fuel Debate between Utilities
  • April 16, 2010 | Authors: William "Bill" R. Derasmo; Kevin C. Fitzgerald; Peter S. Glaser
  • Law Firm: Troutman Sanders LLP - Washington Office
  • In July 2009, Senate Energy and Natural Resources Committee Chairman Jeff Bingaman, (D-NM), introduced a bill, the “American Clean Energy Leadership Act,” which would allocate costs for new transmission and bar FERC from assigning the cost of a transmission project to a region or “sub-region” unless FERC can prove the costs are “reasonably proportionate to measureable economic and reliability benefits.”

    In November 2009, a group of 62 utility companies, independent power developers and other advocacy groups wrote a letter to Senate Majority Leader Henry Reid (D-NV) and Minority Leader Mitch McConnell, (R-KY), objecting to the bill.  This group expressed concerns that measuring benefits would result in lengthy cost-benefit analyses and costly litigation.

    In February of this year, a group of 28 companies wrote a letter in support of the bill, stating that national policy should not be “biased towards promoting remote generation resources.”  These companies also expressed concern that without cost allocation, consumers will have to pay for transmission costs when they do not receive any benefit.  Ten of the 28 companies formed a coalition called Coalition for Fair Transmission Policy.  This group supports legislation that allocates transmission costs to those who directly benefit from transmission lines.  On March 3, at a Transmission Summit Conference put on by Infocast Inc., FERC Commissioner Philip D. Moeller referred to the formation of Coalition for Fair Transmission Policy as evidence of the growing conflict over electric transmission.