Wind Wins: FERC Rules BPA Curtailment of Wind Power "Discriminatory"

The federal energy regulatory commission agency issued a ruling this week stating that Bonneville Power Association's decision last spring to curtail wind power in favor of hydropower was "discriminatory."

Jennifer Runyon, Managing Editor, RenewableEnergyWorld.com
December 08, 2011 | 4 Comments

In May 2011, after record snowmelt caused a surge in cheap hydropower for Bonneville Power Association (BPA), the utility made a bold move and decided that it would not accept wind power from wind farms with which it had signed power purchase agreements.

The decision, which came down through an Environmental Redispatch Record of Decision, allowed BPA to curtail wind generation during times of high hydropower generation, lower electric demand, and high wind generation without any compensation to wind project owners. The curtailments took place thoughout the spring.

The American Wind Energy Association (AWEA) and other members of the wind industry at the time said that the action could cost wind companies tens of millions of dollars and stifle new investment in the Pacific Northwest. When wind farms are curtailed, not only do owners not receive payments for power but they also cannot collect production tax credits, an essential element in wind power financing.

Iberdrola Renewables, PacifiCorp, NextEra Energy Resources, Invenergy Wind North America and Horizon Wind Energy filed a petition against BPA with the federal energy regulatory commission (FERC) on June 13.

Wind farm owners contended that BPA could have sold the excess power to neighboring utilities under a “negative pricing” situation in which BPA would pay California utilities to shut down their own generating assets. BPA had opted not to do that.

On December 7th, FERC ruled in favor of the wind power developers, stating that BPA's policy “diminishes open access to transmission and results in Bonneville providing transmission service to others on terms and conditions that are not comparable to those it provides itself.”

BPA is now tasked with revising its policy and its tariff structure.

In the ruling, FERC acknowledged the difficulties facing both sides of the dispute. BPA had contended that it was forced to curtail the wind power in order to meet environmental regulations for the protection of salmon. FERC also noted that had more transmission been in place for BPA, it could have pushed out some of the excess electricity to neighboring utilities.

Renewable Northwest, an advocacy group that supports wind energy among other renewables said that it is "confident that today’s FERC ruling will precipitate new levels of collaboration and clean energy advancement as BPA and diverse concerned businesses, environmental and non-profit organizations work together to replace the controversial policy with more appropriate measures."

The ball is now in Bonneville's court. According to wind energy experts, it could choose to file an appeal or it could take several other actions to comply with the FERC ruling.

The wind farm owners also reportedly filed another suit in the Ninth Circuit Court in June that could result in BPA having to pay damages for lost revenue.

4 Comments

ANONYMOUS
July 31, 2012

I just read about this in this month's Hydropower paper edition Aug 2012. The investors of wind power are filing suit because a power company(BPA) is not buying their power and thus the wind farm is not getting generation revenue and tax credits? (BPA) should not have to buy more expensive wind power when it has excess capacity of hydro generation from snow melt! Why should (BPA) and their energy customers have to pay to install more transmission lines or storage assets for wind power? Wind power producers filing suit demanding (BPA) which ultimately is their customers pay for more expensive form of power is not fair. The Wind power company's investment in equipment is already subsidized by the Feds, now you want the citizen customers of (BPA) to pay too? I'm not against wind power, just making others pay for your investment. No, the grid is not a level playing field. The investment for the(BPA) and others is huge. Setting up where wind can efficiently operate generation also requires long transmission lines. That infrastructure cost and overhead for related maintenance also needs to be calculated into the cost per KWH. The citizens should not have to bail-out wind power or pay higher prices for less cost efficient methods of power generation.

Will Deliver
December 18, 2011

'BPA had contended that it was forced to curtail the wind power in order to meet environmental regulations for the protection of salmon.'
The snow-pack this past Winter was about 200% of normal. All of the Columbia River system dam/reservoirs were dumping water this Spring to make room for the melting snow. Only so much water can be sent through the electrical turbines. The rest of the flow had to just be dumped over the spillways. This year we had plenty of water for hydropower...Apparently, we did not have plenty of transmission lines to export the excess electricity. BPA should make more of an effort to increase transmission and distribution assets to send the power from where it is in excess to where it is needed.
In my opinion we need more high voltage direct current transmission lines built. American energy should not be wasted. Does the BPA have any electrical storage assets? Just wondering.

Mark Simpson
December 15, 2011

"negative pricing situation in which BPA would pay California utilities"

Should anyone really be subsidizing generation when the price of power is negative? and if so who should pay for the subsidy?

Not only is it wrong in the first place to encourage additional generation during hours when additional power is worthless, this ruling now transfers the burden for the subsidy payment from the state to the BPA rate payers.

Dennis Houghton
December 8, 2011

"It's a major victory for wind companies. They got everything they asked for."

Careful what you wish for! I would not want to be the next Big Wind developer knocking on BPA's door for a generous interconnection contract. good luck

California also has reduced its commitment to renewable energy produced outside the state (BPA hydro and wind). The HVDC intertie from BPA to Southern Cal does not operate at capacity now.

Wind development in the BPA service region will likely drop off considerably over the next few years. BPA has far more important and federally mandated river management obligations, which should not be compromised by bending to Big Wind with inflexible contracts which interfere with those river management processes.

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Jennifer Runyon

Jennifer Runyon is managing editor of RenewableEnergyWorld.com coordinating, writing and/or editing columns, features, news stories and blogs for the publications. She also serves as conference chair of Solar Power-Gen Conference and Exhibition...