PUC Backs Charges for Carrying ‘Green’ Energy

California’s investor-owned utilities will be allowed to pass on to customers the costs of building lines to transmit renewable power from sources such as wind farms, the California Public Utilities Commission ruled Thursday.

The wind farm being developed at Tehachapi will cost an estimated $1 billion to connect to the grid, and the commission’s ruling will allow utilities to make the deals needed to recover power-line costs when several companies share lines and costs.

The Tehachapi area, with the potential for about 4,000 megawatts of wind power, is key for investor-owned utilities in California trying to meet a state requirement that renewable sources generate 20% of their power portfolio by 2010.

The utilities are Edison International’s Southern California Edison Co., PG&E; Corp.’s Pacific Gas & Electric Co. and Sempra Energy’s San Diego Gas & Electric Co.

“Today’s decision provides a breakthrough in development of new renewables by giving utilities the assurance that investments in new transmission facilities to access areas of known renewable resources, such as the Tehachapi area, will be recovered in customer rates,” the commission said in a statement after Thursday’s meeting in San Francisco.

“Absent such assurances, utilities have been hesitant to take the steps necessary to develop new renewable resources,” the commission said. “Customers are protected under today’s decision by careful guidelines to ensure that cost recovery will be available only in clearly defined circumstances that demonstrate that proposed transmission facilities are necessary for renewable development.”