Texas is Considering a Wind-Energy-Only Fee for Transmission Lines

by Henry Kaplan | Jul 09, 2014 |

(Offices of the Texas Public Utilities Commission.)

The Texas Public Utilities Commission is considering raising the costs to wind generation companies for energy transmission. Right now, those costs are built into the rates paid by consumers.

The PUC Chair Donna Nelson has asked for a study, questioning whether wind companies ought to be paying more than they are now. From the Houston Chronicle:

The question - which Nelson raised in a May memo and at commission meetings since then - is whether power consumers statewide should bear the costs of such upgrades, as historically has been the case, or whether the bill should go to wind power generators that profit from the new capacity.

"I would like to explore the costs of system upgrades, the costs to maintain and operate the current system, and the allocation of those costs specifically related to renewable resources," Nelson wrote in May.

Wind advocates say that changing the system to charge wind generators more would put them at a competitive disadvantage, and would subject them to costs that other forms of energy generation don’t pay. The Chronicle quotes Michael Goggin at AWEA:

"When the state has added coal generation, customers paid for that, and when new gas plants come online, there's always a transmission cost for that as well," Goggin said. "This is just the policy Texas has had. We're just continuing the way things have always been done, and it works well."

But Nelson at the PUC suggests that wind should be treated differently, due to its “unique characteristics and often-remote locations,” and suggested that new transmission lines were built largely to accommodate wind power.

This debate is playing out against a backdrop of uncertainty about the wind production tax credit. The Chronicle points out that “Nelson has criticized the credit as unnecessary, given the maturity of the wind industry, and argues that it distorts the state's power market.”

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