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Transmission Access Charges (TAC): A Massive Market Distortion That Harms Local Renewables and California Ratepayers

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Transmission Access Charges (TAC) are fees designed to pay for the state’s transmission system, including operations and maintenance, amortization of capital, and return-on-equity. TAC add about $0.03 per kilowatt-hour (kWh) to the levelized cost of energy over a 20-year contract, which is about 30% of the wholesale value of energy in California. To align costs and benefits, TAC should only apply to energy that is delivered through the transmission system. Therefore, TAC should be calculated based on the metered Transmission Energy own flow as measured at the transmission substation and distribution substation, where energy down-converts from transmission grid voltages to distribution grid voltages.