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BPA Responds, PUC Weighs in on Wind Complaint by Christina Williams Sustainable Business Oregon, July 19, 2011

Bonneville Power Administration responded to the complaint filed against it by five wind energy-related companies Tuesday, saying that the companies' demand for payment and complaints of discrimination are without merit.

The response, filed this week to meet a July 19 deadline set by the Federal Energy Regulatory Commission, highlights BPA's commitment to protecting endangered Columbia River fish and inability to sell wind-generated electricity during times of low demand.

Meanwhile, the Oregon Public Utilities Commission filed its own comments on the complaint, weighing in with support for the wind generators.

Both responses were filed to answer to the original complaint filed with FERC in June by Iberdrola Renewables, PacifiCorp, NextEra Energy Resources, Horizon Wind Energy and Invenergy Wind North America.

That complaint sought relief from BPA's decision to require wind farms to shut down during times of excess power generation. Excess generation became a problem this spring when a robust Northwest snow pack led to high water levels coursing through the BPA-managed Federal Columbia River Power System.

The wind companies, with the PUC's agreement, argue that Bonneville Power is violating the Federal Power Act by requiring wind operators to shut down generation.

In its response, the BPA maintains that no violation has taken place and that FERC has no authority to rule on the contract dispute.

FERC has not yet responded to the complaint, pending the answer filed this week from BPA.

BPA is no longer curtailing, or requesting wind power shut-downs, this year. BPA's Michael Milstein, a spokesman, told the Associated Press that total wind cutailments this season amounted to just more than 6 percent of wind farms' potential output since mid-May.

Press Release: BPA replies to FERC complaint on environmental redispatch

July 19, 2011

BPA's reply explains that it supports wind energy and adopted the policy as a last resort to meet its environmental and statutory mandates. It notes that the Ninth Circuit Court of Appeals, not FERC, is the appropriate forum for the complaint. It explains that, where the complaint strays far beyond the issues of environmental redispatch, its requested remedies would exceed FERC's congressionally directed authority. Due to the intense interest in these issues, many national and regional entities as well as BPA customers and customer groups also filed replies with FERC.

Background

BPA adopted its interim environmental redispatch policy May 13 as a last resort to help manage the highest runoff since 1997. High flows through federal dams necessitated high levels of federal generation, creating a temporary oversupply of electricity during low load hours such as the middle of the night. The high levels of generation were required to avoid high amounts of spill that can produce levels of dissolved gas in the water that are harmful to fish, including fish listed under the Endangered Species Act.

Environmental redispatch gave BPA a final tool to temporarily curtail wind and other generation and replace it with free federal hydropower when necessary to protect fish and maintain reliable power delivery. BPA was unwilling to pay others to take federal hydropower, because doing so would inappropriately shift costs to BPA's customers. BPA took many steps to avoid environmental redispatch. For instance, BPA offered free hydropower to encourage thermal power plants to shut down and serve their load with hydropower instead.

BPA is participating in ongoing "settlement" discussions with a number of parties including complainants. We cannot discuss the substance of those now. However, we are continuing to discuss wind integration issues in many forums, such as at the June 6 meeting of the Wind Integration Forum Steering Committee, attended by many parties on both sides of the FERC filing.

BPA believes most, if not all, use of environmental redispatch is behind us for the season. Some wind generation has been curtailed on a few nights over the last few weeks but flows are receding, making the likelihood of further curtailments minimal. We will be initiating a public "lessons-learned" process to help the region develop solutions for next season. As we have noted, the Record of Decision that is under challenge here is an interim policy that may be revised by next spring.

About 6 percent of scheduled wind generation has been curtailed since BPA began environmental redispatch May 18; roughly 100,000 MW-hours total. 94 percent of scheduled wind energy continued unaffected. Since this all took place over two months, the percentage of wind energy affected over the course of the whole year will be far smaller, probably less than 1 % of total wind generation.

Environmental redispatch applies to all generators in BPA's balancing authority area. BPA curtails thermal generation first to the minimum required for safety and reliability. Only if further redispatch is needed does BPA then redispatch wind generators with free federal hydropower. BPA also requested that the nuclear plant that produces about 10 percent of BPA's firm power shut down ahead of schedule to help reduce the likelihood of environmental redispatch.

BPA gets no direct financial benefit from environmental redispatch. Any curtailed generation is replaced by hydropower free of charge at a time when BPA has already marketed its hydropower at low or no cost to find other customers for it. The complainants argue that BPA should pay some compensation or negative prices to wind generators that are curtailed. However, if BPA paid wind generators to shut down, the region's thermal projects, which have accepted low-cost or free federal hydropower and shut down their for decades during high-water periods, would naturally want to be paid for their displaced power. Since weather and streamflow forecasts suggest when environmental redispatch will be necessary, generators could continue generation to force higher payment to shut down.

The complaint filed with FERC challenges a BPA final action over which the Ninth Circuit Court of Appeals has exclusive jurisdiction. More importantly, the Northwest must address the challenges of integrating rising amounts of wind and other variable energy resources in ways that work for the region and address the unique circumstances that exist in the Northwest. Direct discussions are more likely to produce constructive solutions. The complaint requests FERC to take actions beyond its statutory jurisdiction. BPA has a public process underway to address issues involving its Open Access Transmission Tariff, and complainants should be participating in those discussions.

The complainants have an opportunity to file a response to BPA's reply. There is no set deadline for FERC to rule.