Local renewables being hit with a hidden transmission fee

The Clean Coalition isofficially launching a campaignto remedy an unfair charge on local renewable energy in California.

Transmission Access Charges (TAC) are fees designed to pay for the state’s transmission grid. TAC are applied to every kilowatt-hour (kWh) of metered customer electric usage. When levelized over 20 years, TAC are about $0.03/kWh.

While TAC make sense for energy delivered through the transmission system, theyare currently being misapplied to distributed generation (DG) facilities that serve local load and never actually utilize transmission.

For any utility withinCalifornia that owns transmission under agreement with the California Independent System Operator (CAISO), which includes all major investor-owned utilities as well as most public utilities, CAISO levies TAC based on total metered customer usage within a utility’s service area each month. Utilities pass these costs on through the transmission and distribution (T&D) components of customer bills. The result is that customers are unfairly being charged $0.03/kWh on power they are receiving from DG systems, which never touches the transmission grid and so should not have a TAC applied. This improperly discourages development of distributed generation while encouraging unnecessary growth in costly transmission infrastructure.

Through this campaign, the Clean Coalition seeks to ensure proper valuation of local renewable generation. DG that serves local load must be recognized for avoiding TAC, which at $0.03/kWh comprise around 30% of the wholesale value of energy in California. Use of local energy should not continue to subsidize transmission infrastructure when these resources are actually reducing the need for future investments into the transmission system.

Individuals and organizations interested in learning more about our TAC Nexus Campaign should contact Josh Valentine at josh@clean-coalition.org.