Editorial

Who pays for the infrastructure?

In the rush to legislate renewable energy mandates, state legislators failed to consider needed infrastructure. Onshore wind plants are typically built hundreds of miles from load centers in areas with little or no transmission. Now states are scrambling to socialize the cost of transmission, a cost normally borne by the generators. Burdening ratepayers with this is contrary to the rules and recommendations held by utility commissioners as recently as a few years ago. Comments to FERC by the New England Conference of Public Utilities Commissioners and the Vermont Department of Public Service ( http://www.windaction.org/documents/11629 ) make the point this way:

"If a generator is not required to pay for transmission upgrades and the cost is instead to be socialized across all load, then generators will choose their location based on other factors, such as where land is cheaper or emissions permitting is easier, rather than where good transmission planning or market economics would dictate. On the other hand, if the cost of transmission associated with locating in these other areas were borne by the generators themselves, these economic tradeoffs would be internalized and economic location would be more likely to occur. As currently proposed, the costs are not borne by generators, which could lead to uneconomic grid expansion."

Further skewing the economics, in the case of wind, 70% of the costly transmission line's capacity will be un-utilized.

SEP 4 2007
http://www.windaction.org/posts/11085-who-pays-for-the-infrastructure
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