In a decision that will reduce impediments for wind energy development in Iowa and Minnesota, the Federal Energy Regulatory Commission (FERC) has approved a cost allocation proposal from ITC Midwest LLC (ITC Midwest) for connecting generators to the electric grid. The decision makes it easier and reduces a cost barrier for generators -- including wind energy developers -- to connect to the high- voltage electric transmission system operated by ITC Midwest in Iowa and Minnesota.
In a joint application made with the Midwest Independent Transmission System Operator, Inc. (Midwest ISO) on April 4, 2008, ITC Midwest proposed that it provide 100 percent repayment to generators for the network upgrades needed to reliably interconnect the generators to the ITC Midwest transmission system. Connection to the grid is necessary for generators to sell energy to customers located on the system. Previously, generators interconnecting to the ITC Midwest system were required to ultimately bear half the costs of most network upgrades along with other costs of interconnection. Under the newly-approved policy, generators will be fully reimbursed for the costs of network upgrades necessary to enable their interconnection with the ITC Midwest system, provided the generators meet certain eligibility requirements.
FERC approved the application on August 7, 2008, giving it an effective date of December 20, 2007. That is the date that ITC Midwest acquired the electric transmission system from Alliant Energy's Interstate Power and Light Co. subsidiary.
"We are very pleased with the decision and FERC's continued support of competitive open markets," said Doug Collins, ITC Midwest executive director. "The decision is consistent with FERC's direction to invest in the nation's electric transmission system to improve reliability and encourage open access to the grid. Given our strong wind profile in Minnesota and Iowa, this decision further encourages development of renewable electricity sources in the ITC Midwest service area."