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Bonneville Defends Wind Curtailment in FERC Filing by Eileen O'Grady Reuters, July 20, 2011

BPA curtailed wind generators for nearly eight weeks.
FERC has little authority over agency, BPA filing said.

The Bonneville Power Administration urged federal regulators to dismiss a complaint filed by wind farm owners in the U.S. Pacific Northwest, saying that the agency's policy to cut wind generation without compensation is needed to maintain grid reliability, according to a filing made late on Tuesday.

The largest snowpack since 1997 boosted Northwest river levels this spring, complicating competition between hydro and wind interests in the region where Bonneville (BPA) operates the lion's share of the high-voltage power network.

In its response to a complaint filed at the Federal Energy Regulatory Commission (FERC) last month, BPA said it adopted its "environmental redispatch" policy to balance surplus hydro power while dealing with "a myriad of statutory responsibilities."

"This policy has effectively maintained the reliability of the transmission system and reduced harm to endangered species," BPA said. "The commission should not take action that could remove this critical tool from the agency."

From mid-May until early July, BPA curtailed wind generation nearly every day to increase its hydro output to protect salmon and other fish, the agency said.

In the complaint, a coalition of owners of nearly 2,000 megawatts of wind generation said BPA's policy was an unfair use of the grid, costing generators lost income and discouraging development of renewable power resources in the region.

While BPA offered to replace wind farm output with hydropower so that wind generators still get paid by their customers, they can lose money in other ways, including lost production tax credits and renewable energy credits (RECs).

The complaint was filed by Iberdrola Renewables (IBE.MC), an affiliate of Spain's largest utility; PacifiCorp, a unit of MidAmerican Energy Holdings Co, the electric unit of Warren Buffett's Berkshire Hathaway Inc (BRKa.N); Horizon Wind Energy, a unit of EDP Renewables (EDP.LS) which is part of Portugal's largest utility; NextEra Energy (NEE.N) and privately owned Invenergy.

It has attracted dozens of intervenors, including supporters like the Oregon Public Utility Commission and an environmental coalition that said BPA's policy did not benefit fish.

However, a majority of parties that want to be heard are public power utilities in the Northwest.

The American Public Power Association and the National Rural Electric Cooperative Association sided with Bonneville, asking FERC to reject the complaint due to FERC's limited legal authority over BPA.

"It's an important regional issue and should be treated like that," said BPA spokesman Doug Johnson. "We all are committed to reliability and to meeting our environmental requirements. We can't abandon that, but we are willing to explore solutions and would like to get back to the work of doing that."

Daily wind curtailments ended this month as high water conditions subsided, Johnson said. From mid-May to July 10, BPA cut 97,557 megawatt-hours of wind generation, according to the agency's website.

Wind generators said the curtailments which occurred in the overnight hours when power demand and prices were low were made for economic reasons and violated BPA's contracts with generators.

"We tried for over a year to come to some agreement," said Don Furman, a senior vice president for Iberdrola Renewables. "They were not willing to refrain from curtailing us for economic reasons."