"Greening the Grid" in California

[jpak]

http://www.renewableaccess.com/rea/news/story?id=50321

The California Independent System Operator Corporation (California ISO) Board of Governors last week approved making changes to its federal tariff that spell out how a new financing tool will work to remove barriers for renewable power trying to access the power grid.

If approved formally by the Federal Energy Regulatory Commission (FERC), the new financing mechanism will make it feasible for smaller renewable power developers to hook up to the transmission system and gain entry into the competitive market for energy.

While "location-constrained" renewable resources can help California meet its Renewable Portfolio Standard, their development is often hampered by a lack of adequate transmission capacity. It can be difficult to find financing for transmission projects to reach generation that has not been built yet—hence the chicken or egg dilemma. Which should come first, generation or the transmission capacity needed to get the power to the grid?

Under the process approved last week, the appropriate Participating Transmission Owner (PTO) would build the "trunk lines" out to the renewable-rich areas, initially recovering its costs through the FERC-approved Transmission Revenue Requirement (TRR). As individual generation projects are built and connected to the grid, each generator would pay its pro-rata share of the annual TRR payments.

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