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BPA Ruling Could Reshape the US Windscape by Benjamin Romano Recharge News, December 15, 2011

A decision that could reshape the power landscape in the US Northwest leaves wind generators connected to the Bonneville Power Administration (BPA) grid more confident about their future and their position in negotiations.

Last week, the Federal Energy Regulatory Commission (FERC)ordered the BPA to revise its transmission tariffs for wind generators, which faced mandatory curtailment of about 97GWh or 5.4% of their generation last spring.

The BPA has been told to make the terms and conditions "comparable to those under which Bonneville provides transmission services to itself and that are not unduly discriminatory or preferential".

The BPA is the region's main electricity transmission provider and a major seller of power generated by federal dams on the Columbia and Snake rivers. It has not traditionally been regulated by the FERC.

Under the Federal Power Act, a transmission provider that also markets power is required to offer transmission to other generators at rates and under terms the provider imposes on itself.

Wind generators, including Iberdrola Renewables, NextEra Energy Resources and Invenergy Wind North America, petitioned the FERC after the curtailments, which came as high springtime river flows and high winds caused generation on the BPA system to exceed electricity demand.

At the heart of it all is a question of who pays for integrating variable renew able resources. Wind generation connected to the BPA system has risen hugely in the past four years, forcing the region to confront the issue sooner than expected.

BPA administrator Steve Wright calls the order surprising and disappointing, particularly given "settlement discussions are proceeding in good faith". Wright and his deputies may fight it to avoid establishing a precedent that could subject the BPA to future FERC oversight.

All parties are under pressure from the region's political establishment to reach an agreement on wind integration, rather than drag it out in a legal process that would increase risk and uncertainty.

If the order remains in force, Don Furman of Iber drola says the BPA would not be able to curtail wind generators for econo mic reasons. However, wind would still be subject to curtailment in order to maintain system reliability or where needed to operate the system in compliance with environmental regulations, Furman says.

Industry says BPA did not need to pull plug

The three reasons for curtailment -- economics, reliability and environment -- are intertwined.

The Bonneville Power Administration (BPA) curtailed wind last spring, ostensibly to protect salmon from injuries from elevated dissolved gas levels when water spilled over dams.

Increasing hydro generation leaves less room on the system for wind, particularly during overnight hours when electricity demand is low, thus the curtailments.

The wind industry says the BPA could have sent surplus generation to British Columbia or California. Or it could have paid "negative prices", which would have provided a financial incentive for wind producers to shut down voluntarily.

The agency says that negative pricing presents the potential for market distortions and shifts costs from wind generators to BPA customers. Wind generators were forced offline without compensation for lost tax and renewable energy credits that are only earned when turbines are spinning.

The BPA fulfilled the wind generators' energy delivery requirements by using surplus hydro power.

Meanwhile, rain has been sparse in the Northwest this winter, reducing the prospect of the high spring runoffs that contribute to over-generation.