Van Ness Feldman attorneys assisted Puget Sound Energy, Inc. (PSE) in developing an ancillary service rate schedule under PSE’s FERC-jurisdictional open access transmission tariff (OATT) to recover the generation capacity-related costs of responding to the in-hour deviations in third party-owned wind generation interconnected with PSE’s transmission system. PSE proposed a higher generator regulation charge for third-party wind generators than dispatchable generators due to the greater variability of wind generator output and resulting higher integration costs for the PSE as the transmission provider and balancing authority. Van Ness Feldman assisted with the preparation of testimony supporting unique formulas developed by PSE and its consultants to quantify the cost of integrating wind generation based on a year-long study of wind generator output variability. The innovative proposal was met with considerable objections from the wind community, and was referred to a FERC administrative law judge for settlement proceedings, and the parties filed a settlement with FERC in September 2012. FERC approved the settlement in January, 2013. The settlement authorized PSE to assess the first differentiated generator regulation charge accepted by FERC since the issuance of a Final Rule in the Integration of Variable Energy Resources rulemaking proceeding, and authorizes PSE to charge wind generators approximately fifteen times more than dispatchable generators for regulation service. Under the terms of the settlement, PSE will also offer wind generators discounted regulation service in exchange for intra-hour scheduling commitments.