The California Independent System Operator Corp. (ISO) Board of Governors has approved making changes to its federal tariff that spell out how a new financing tool will work to remove barriers for renewable power trying to access the power grid. If approved formally by the Federal Energy Regulatory Commission (FERC), the new financing mechanism will make it feasible for smaller green power developers to hook up to the transmission system and gain entry into the competitive market for energy.
The appropriate participating transmission owner would build the trunk lines to the renewable-rich areas, initially recovering its costs through the FERC-approved transmission revenue requirement (TRR). As individual generation projects are built and connected to the grid, each generator would pay its pro rata share of the annual TRR payments.
This financing arrangement would continue until the entire capacity of the project is subscribed, at which time the remaining revenue requirement for the end-state transmission facility is completely supported by the project developers.