Owners of wind farms in the Pacific Northwest objected to a cost-sharing proposal suggested by the Bonneville Power Administration to settle last year’s dispute over the curtailment of wind generation, according to a letter sent on Monday to U.S. Energy Secretary Steven Chu.
Executives with Iberdrola Renewables, PacifiCorp, NextEra Energy and others called BPA’s idea a “clear circumvention of the FERC order to file an open access transmission tariff,” in the letter to Chu.
In December, the Federal Energy Regulatory Commission ordered Bonneville to revise its “environmental redispatch” policy that curtailed electric output from wind farms last spring to keep electric supply from exceeding demand.
“BPA is positioning this cost-sharing proposal as fair – but in reality, everybody loses when BPA is allowed to discriminate against any particular energy source and not let the market set energy prices,” the coalition of wind generators said.
FERC said BPA must treat wind generators on equal footing with federally generated hydropower in the Pacific Northwest.
BPA said the policy, implemented between May and July of last year, resulted in the curtailment of 97,557 megawatt-hours of wind generation, or 5.4 percent of the total wind output connected to BPA’s grid, for a loss of $2.15 million in renewable energy credits (REC) and production tax credit (PTC) income.
The agency said redispatch was necessary to maintain grid reliability and to balance its many statutory requirements to protect fish. The policy will expire at the end of March.
This year’s Columbia River outlook currently calls for lower-than-normal runoff at the key Dalles Dam from January to July, versus 2011′s record snowfall and above-normal water runoff, according to a government agency, but BPA warned there is a one-in-three chance of high river flow on the Columbia in any year.
Under BPA’s draft proposal released last week for public comment, the agency said it would compensate curtailed generators for lost revenue, including renewable and production tax credits during periods of high water runoff and low demand.
BPA said compensation for lost revenue could range from $12 million to more than $50 per year.
The agency said it would cover costs of curtailing wind generation this spring, if needed, from a transmission reserve account. Then it would start a new rate case and seek to divide compensation costs equally between users of BPA’s Federal Base System and wind energy operators within its system.
BPA’s proposal “falls short of a binding commitment to open-access principles and non-discriminatory management of the region’s transmission grid,” said Rachel Shimshak, director of the Renewable Northwest Project, an advocacy group. “We will continue to insist that BPA comply with the FERC order and file a binding, comparable, open access tariff in addition to reaching resolution on an equitable cost allocation and other issues.”
Earlier this month, FERC agreed to BPA’s request to rehear parts of the December order.