Ferc wind power export charging may set precedent

US: Fears are growing that a decision by the Federal Energy Regulatory Commission (Ferc) to accept a utility's proposal to apply extra balancing charges on wind power exported out of Kansas could set a dangerous precent.

Westar, the largest utility in the state, is to impose a charge of roughly $5.80/MWh. The fees are seen by critics as well above the actual cost of balancing and will add millions of dollars to the costs of wind generators that connect to Westar's system.

The American Wind Energy Association (AWEA) will ask Ferc to reconsider the policy before it sets a nationwide precedent.

"There's concern that this could be a growing phenomenon," says Michael Goggin, AWEA's manager of transmission policy. "We are planning to file for a rehearing in the case."

Westar controls much of the state's electricity grid and balances the systems of several transmission owners that feed into the Southwest Power Pool grid. The utility already imposes balancing charges, and argues that the variability of wind necessitates paying for backup power. It says that Westar ratepayers have been shouldering the cost for electricity that leaves the state. The new charges would be applied retrospectively to last autumn.

AWEA says Westar could easily upgrade its wind forecasting capabilities and expand balancing. It believes that Ferc made judgment without an adequate evidentiary hearing.

"Advanced wind forecasting and other operational reforms, like creating larger balancing areas, are greatly reducing wind generation costs," Goggin says. "Even in their own filings, they say that these charges will disappear when they become fully integrated with a consolidated balancing area within the next couple of years."

Last summer, in the Northwest, the Bonneville Power Administration (BPA) imposed a $5.70/MWh balancing charge, but this did not threaten a precedent like Westar's action because BPA is not governed by Ferc.