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United States

Favourable ruling on imbalance

The US Federal Energy Regulatory Commission (FERC) has approved California's plan to remove imbalance penalties from intermittent electricity resources, thereby ensuring fair treatment of wind on California's transmission system.

In January, the California Independent System Operator (ISO) filed a proposal with FERC to schedule wind on the transmission system using a wind energy forecasting model. The purpose is to average imbalances in supply and demand over a month and to waive generation imbalance penalties for wind. FERC, which regulates the nation's transmission systems, approved the proposal March 27. The California ISO implemented the plan April 1.

"It's hard to overstate the importance of this to the wind energy industry," says Jim Caldwell of the American Wind Energy Association. "We are greatly encouraged by the vision the commission has shown."

Energy imbalance charges were designed to prevent "gaming" of the scheduling system, but wind advocates contend that charges act as a barrier to development because wind resources are not able to control the variability of their output. Under the California ISO plan, wind plant owners will develop a wind forecasting system and the ISO will operate it. If wind generators pay a forecasting fee of $0.10/MWh and schedule according to the forecast, then generation imbalance penalties will be waived.

The ruling also clears the way for similar treatment in other areas, such as the Northwest. In April, the Bonneville Power Administration took steps to eliminate imbalance penalties for wind until 2003, when it expects to implement a plan to average imbalances over a month instead of hourly. As in California, Northwest wind farm operators would then have to develop an hourly wind forecasting system for more accurate scheduling.

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