United States: Miso ruling seen to be retrograde

The US wind industry is up in arms over a recent ruling from the Federal Energy Regulatory Commission (Ferc) that is set to increase costs for wind operators.

The new ruling approves a change proposed by the Midwest Independent System Operator (Miso) that almost all of the cost of transmission improvements be assigned to the power generators, such as wind plants that require wire upgrades. Miso coordinates a wholesale power market in some of the US's richest wind resources in the Midwest and a Canadian province.

"The acceptance of (the Miso proposal) appears to create a hurdle that could easily delay or fundamentally change the course for the development of wind in the Dakotas," says Frank Bristol, transmission director for Acciona Energy, a wind turbine manufacturer and project developer. "We'll need to see whether this change causes capital investment and associated green jobs to be diverted away."

At a time when US regional grid operators move towards wind-friendly transmission funding models, spreading the cost among ratepayers and generators, the Miso policy is seen as a backwards step.

"It is analogous to requiring the next car entering a congested highway to pay the full cost of adding a new lane - a policy that the American Wind Energy Association (Awea) contends is unworkable and will strongly discourage new transmission investment," says Rob Gramlich, Awea senior vice-president for public policy.

"This decision is baffling," he adds. "How did we go from a problem for two small utilities to a region-wide policy that hinders the transmission investment and renewable energy development that all four (Ferc) commissioners say they want?"

Utilities threat

The utilities Otter Tail Power and Montana Dakota Utilities threatened to leave Miso over the previous cost allocation formula, which shared the cost of essential upgrades 50-50 between regional utilities and generators (Windpower Monthly, October 2009).

The new order would allow costs for lines 345 kV and below triggered by generators to be paid 100% by the generators. Lines above 345 kV would require 90% payment from the generators. Gramlich says there remains hope that Ferc will adjust the policy more favourably for wind when a final order is filed next year. Ferc does not comment on ongoing proceedings.