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BPA, Utility Groups Request FERC Reconsider Ruling on Non-Hydro Energy Transmission Policy by Staff Columbia Basin Bulletin, January 13, 2012

The Bonneville Power Administration, and a host of organizations representing utility interests, late last week asked the Federal Energy Regulatory Commission to reconsider a Dec. 7 decision that declared a new BPA "redispatch and negative pricing" policy contrary to the law.

The FERC order said the new policy "results in non-comparable transmission service that is unduly discriminatory and preferential. Accordingly, Bonneville may not extend its current environmental redispatch policies or implement new environmental redispatch policies that result in noncomparable transmission service."

FERC said that Bonneville must file appropriate documents "within 90 days from the date of this order that satisfies our directive under section 211A to address the comparability concerns raised in this proceeding in a manner that provides comparable transmission service that is not unduly discriminatory or preferential." Section 211A of the Federal Power Act says the Commission can order "unregulated transmitting utility" such as Bonneville to provide transmission.

The filings last week ask that FERC schedule a new hearing on the issue and, ultimately, deny the petition from wind generation interests that led to the Dec. 7 order.

In addition to Bonneville, such filings were submitted by the American Public Power Association, "joint intervenors" - the Public Power Council, Northwest Requirements Utilities and the Pacific Northwest Generating Cooperative, the "joint public parties" - Clark, Cowlitz, Pend Oreille and Snohomish county public utility districts and the Eugene Water and Electric Board, the National Rural Electric Cooperative Association, the Mid-West Electric Consumers Association, the Western Public Agencies Group and the City of Seattle.

The strategy developed by BPA was employed this year to handle situations in which power generation outstrips demand.

The policy was implemented on an almost daily basis during May and June when near record flows swamped the Columbia-Snake river system, pushing the Federal Columbia River Power System's dams well past their generating capacity and forcing involuntary spill.

Access to the region's transmission system was partially and temporarily limited at times for producers of non-hydro energy, including fossil-fuel and other thermal generation, and wind energy.

The plan was to keep as much water flowing through the hydro turbines as possible to meet power demand and keep spill levels to a minimum. Plunging spilled water at the dams stirs up total dissolved gas in the rivers. TDG at elevated levels can be harmful to fish. Water flushing through the turbines creates little gas.

The fish traveling up and down the hydro system includes numerous salmon and steelhead stocks that are protected under the Endangered Species Act.

The new policy called for Bonneville to provide replacement hydro power to the wind and thermal power makers, but not to pay ‘negative prices," i.e. actually paying the wind and thermal generators to take the federal power. BPA markets much of the power generated in the federal hydro system at cost and owns and operates three-quarters of high-voltage transmission lines in the Pacific Northwest. It also funds one of the largest fish and wildlife protection and restoration programs in the world.

The Jan. 6 filings met a FERC procedural deadline. BPA asked for clarification of the FERC order and rehearing on the issue. But the federal power marketing agency insists that it would rather reach a regional settlement on the best option to address electricity oversupply issues.

"While BPA is meeting a regulatory deadline to respond to ongoing litigation, we continue to believe that a solution developed in the Northwest by regional parties is the best path forward," said BPA Administrator Steve Wright. "We support the continuation and acceleration of ongoing informal settlement discussions with affected parties."

Developing a regional solution is especially important before the spring snowmelt season and expiration of the interim policy on Environmental Redispatch on March 30. With or without a settlement BPA must adopt a new policy.

A regional settlement provides a far better foundation for continued integration of renewable resources, such as wind power, than continued litigation, BPA says. Absent a settlement, any new policy seems likely to lead to even more litigation that may stretch for many years.

On June 13 a group of owners of wind facilities in the Pacific Northwest filed a petition with FERC alleging that Bonneville was "using its transmission market power to curtail wind generators in an unduly discriminatory manner in order to protect its preferred power customer base from costs it does not consider socially optimal," the FERC order said.

Parties also petitioned the U.S. Court of Appeals for the Ninth Circuit to overturn BPA's record of decision regarding the redispatch and negative pricing policy. The two-pronged attack was intended to address the possibility that FERC might decide it didn't have jurisdiction in the matter.

On Dec. 21 the Ninth Circuit issued a notice saying petitions were stayed until April 4, or pending final action by FERC on any request for rehearing or clarification in the related matter, whichever occurs later.

The brief filed by BPA Jan. 6 with FERC says that:

• The Commission should clarify whether it determined that its section 211A authority must be harmonized with or overrides Bonneville's enabling and applicable environmental statutes. In the event the Commission determined that its section 211A authority overrides Bonneville's enabling and applicable environmental statutes, then the Commission erred and Bonneville seeks rehearing.

• The Commission should clarify whether it ordered Bonneville to file tariff revisions or an entire tariff. In the event the Commission has ordered Bonneville to file an entire tariff, the Commission erred and Bonneville seeks rehearing.

• The Commission should clarify that Federal hydroelectric resources are not similarly situated to non-Federal renewable resources for purposes of curtailments to produce power to reduce total dissolved gas and its impacts on listed fish in the Columbia River system. Bonneville also requests rehearing of the Commission's conclusion that Federal hydroelectric resources are similarly situated to non-Federal renewable resources in this situation.

• The Commission should clarify that section 211A does not authorize it to order Bonneville to provide transmission service at rates that are not unduly discriminatory. In the event the Commission has determined that section 211A authorizes it to order transmission service at rates that are not unduly discriminatory, the Commission erred and Bonneville seeks rehearing.

• The Commission's conclusion that it has jurisdiction to review the Environmental Redispatch policy is an error of law because jurisdiction over this final action is vested in the U.S. Court of Appeals for the Ninth Circuit.