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Senators' back eliminating imbalance penalties
1 April 2006
Twenty bipartisan US senators have signed off on a letter to the Federal Energy Regulatory Commission (FERC) in support of eliminating excessive imbalance penalties for weather-dependent energy resources. FERC's proposed rule for penalty relief was issued last April. It has been through a comment period and awaits finalisation. "A severe imbalance penalty applies if you schedule a certain amount of energy to be delivered from your project, then you deliver more because the wind was blowing harder than you expected," says Rob Gramlich of the American Wind Energy Association. "The situation seems to have reached a point where it got stuck in the FERC process." The aim of the penalty system is to ensure accurate scheduling of electricity deliveries so that demand can be balanced with supply, but not all generators are able to accurately forecast hourly transmission well in advance. Wind can realistically only make accurate forecasts in the hour or two preceding generation. While the costs that such imbalances impose on the grid are $2-$6 a MWh, current penalties are up to $100 per MWh. "An operator can have a month where revenues are wiped out because of a few hours worth of penalties," says Gramlich. "There are a lot of folks in Congress who want to do everything they can to see wind power developed. Now it's up to FERC and I expect that they're debating the issue internally. We'd like to see it resolved in the form of a stand-alone ruling," he adds.
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