FERC upholds order restricting BPA wind curtailment in favor of excess hydro

The Federal Energy Regulatory Commission has upheld its ruling that transmission operator Bonneville Power Administration must restrict its practice of curtailing wind generators to make room on the grid for free excess federal hydropower resulting from high river flows in the Pacific Northwest.

In rulings Dec. 20, FERC also conditionally accepted BPA’s filing of an Oversupply Management Protocol under which BPA proposes to partially compensate wind generators if it should be forced to curtail their generation. FERC also ordered BPA to submit an additional compliance filing that allocates curtailment costs in a manner that ensures that non-federal generators receive comparable transmission service to the service BPA provides itself.

FERC ruled in December 2011 (EL11-44) that the federal transmission operator must stop curtailing wind generators in favor of its own hydropower without compensating the wind projects for lost production tax credits, renewable energy credits, and revenue from power purchase agreements. Under its original Environmental Redispatch Protocol, BPA had traditionally curtailed thermal power generators who, although not generating, did experience a saving in fuel costs.

The wind generators, who have no fuel costs, filed a complaint with FERC in June 2011 urging it to stop BPA from using its transmission monopoly power to curtail competing generators in an “unduly discriminatory manner.” BPA began limiting the output of non-hydroelectric energy in May 2011 due to high flows creating an oversupply of hydropower.

The agency said it acted to protect salmon and steelhead from high dissolved gas concentrations in spilled water that bypasses turbines. It said the action also maintained the reliability of the power grid and avoided shifting costs to BPA customers.

Under its new Oversupply Management Protocol, submitted to FERC in March, BPA first would work with the U.S. Army Corps of Engineers and the Bureau of Reclamation to manage federal hydroelectric generation and spill water up to dissolved gas limits. BPA then would offer low-cost or free hydropower to replace the output of thermal and other power plants, with the expectation that many would voluntarily reduce generation to save fuel costs.

If hydropower supply still exceeds demand, BPA would then reduce the output of remaining generation within its system, including wind energy, in order of least cost, BPA said. It said it would compensate the affected generation for lost revenues, including renewable energy credits and production tax credits.

FERC said Dec. 20 that it would conditionally accept the Oversupply Management Protocol as a balanced interim measure subject to BPA submitting an additional compliance filing.

“We will direct Bonneville to submit a compliance filing under (Federal Power Act) Section 211A within 90 days of the date of this order setting forth a methodology to allocate displacement costs in a manner that equitably allocates such costs to all firm transmission customers based on their respective transmission usage during oversupply situations,” the commission said.

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