Fossil Fuel Producers Ramps Up Fight Against Alternative Energy Sources

by: Oilprice

A fight brewing over the allocation of costs for transmission lines to connect wind and solar power plants to end users is the latest sign that fossil-fuel electricity producers are stepping up the fight against renewable energy sources.

A coalition of 10 big utilities this week announced it would oppose provisions in Senate bill 1462 that gives the Federal Energy Regulatory Commission authority to broadly allocate costs for long-distance transmission lines linking power sources to power users.

The industry coalition maintains that only those who benefit from the new lines should be obliged to pay for them. Or, putting it another way, a line connecting North Dakota wind farms to Chicago electricity consumers should be built across three intervening states only if those states also benefit from the power.

Ralph Izzo, CEO of coalition member PSEG, said in statement:

Socializing the cost to transport clean energy from some regions will hurt clean energy developers in other regions, and will ultimately result in higher energy prices for everyone. But if all developers have to include all their costs of delivering clean energy to customers, then they will seek to provide best overall value to customers.

FERC has lobbied for this authority in order to promote renewable energy nationwide and to overcome the transmission bottlenecks arising from the regional decision-making in the industry. The Senate bill, known as the American Clean Energy Leadership Act, passed out of committee last June with bipartisan support.

As wind and other forms of renewable energy become a bigger factor in the nation’s electricity markets, traditional producers are fighting back against what they claim are unfair advantages.

In a front-page story this week, The Wall Street Journal described a feud in Texas where operators of natural gas-fired plants are trying to remove the exemption wind power producers have from paying a penalty when they fail to deliver their promised amount of electricity into the state’s grid because the wind did not blow as forecast.

Every producer commits a certain amount each day and all producers except wind power must pay a penalty if they don’t meet that commitment. For now, state authorities have rejected a penalty for wind producers, but alternative energy now faces stiffer opposition in Texas.

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