FERC approves incentive rates to accommodate renewable energy projects

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http://uaelp.pennnet.com/display_article/316279/22/ARTCL/none/none/1/FERC-approves-incentive-rates-to-accommodate-renewable-energy-projects/

FERC approves incentive rates to accommodate renewable energy projects

Washington, D.C., Jan. 7, 2008 -- The Federal Energy Regulatory Commission (FERC) granted Xcel Energy Services Inc.'s request for incentive transmission rates as part of its plan for six transmission upgrades to meet state renewable energy generation standards and serve increased power demand in the Upper Midwest.

Xcel, on behalf of Northern States Power Co. of Minnesota and Northern States Power Co. of Wisconsin (together, NSP Companies), filed proposed modifications to the NSP companies' transmission rate formula under the Midwest Independent Transmission System Operator Inc.'s (Midwest ISO) open access transmission and energy markets tariff. The proposed modifications permit two types of incentive rate treatments for the upgrades: recovery of return on 100 percent of prudently incurred construction work in progress (CWIP) and recovery of prudently incurred costs of transmission facilities that are canceled or abandoned for reasons beyond the NSP Companies' control.

The transmission upgrades will help serve renewable energy resources, particularly wind energy. Xcel is looking to build transmission to accommodate between 300 and 700 megawatts of wind power.

"There is a growing interest in, and the capability of developing, renewable resources in the Midwest," FERC chairman Joseph T. Kelliher said. "We carefully evaluate requests for incentives, and Xcel has met the standard. Xcel's proposal not only will help improve reliability and strengthen the nation's grid system, but provide the necessary links to the expanding renewable market in the region."

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