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The Bonneville Power Administration punches back in wind versus water fight

The Bonneville Power Administration told federal energy regulators this week that it has the right to pull the plug on wind farms during times when too much hydropower is already being generated in the region.

The federal power marketing agency is asking the Federal Energy Regulatory Commission to throw out a complaint filed by wind farm owners last month that would force BPA to honor its transmission contracts.

Wind farm owners say FERC is only the first stop, regardless. A lawsuit to recover economic damages is a likely next step.

BPA controls three-quarters of the region’s electric grid and sells power from 31 hydroelectric dams to utilities around the west. It adopted a policy this spring that effectively turns off the switch for wind farms connected to its grid when hydroelectric generation already exceeds demand.

BPA has been canceling wind farms’ scheduled transmission and substituting free hydropower to meet energy deliveries. And it is unwilling to undertake so-called “negative pricing” by paying utilities outside the region to shut down their own generation and take all the Northwest’s excess power.

Wind farm owners, led by Portland-based Iberdrola Renewables, are seeking an expedited decision to end the policy, which was brought on by an unusually high spring runoff that created a surge in hydroelectric generation. The agency maintains that it has bent over backward to accommodate the wind boom on the Columbia Plateau, which has outstripped any forecast or demand growth.

During high runoff, it says surplus generation threatens grid reliability, and after reducing generation at thermal plants in the region, it needs to curtail wind. It says it can’t dial back hydrogeneration or spill more water to accommodate wind energy because the resulting dissolved gases in the river are harmful to endangered salmon.

Wind farm developers and renewable energy advocates say those excuses are a red herring, and what BPA is doing is seizing the wind farms’ transmission rights to get rid of its own electricity without paying negative prices.

“BPA is a federal agency that is choosing not to play by the rules of the federal power act,” said Jan Johnson, a spokeswoman for Iberdrola.

Paying negative prices would reduce BPA’s surplus power sales, which would ultimately increase its own customers’ rates. BPA contends its customers shouldn’t have to subsidize California ratepayers, since most wind power is sold out of state.

BPA has curtailed some 100,000 megawatt hours of electricity from wind farms so far this year. Actual damages are likely in the millions of dollars, but depend on purchase prices and delivery requirements in varying customer contracts. A chief complaint of wind farms is that BPA’s curtailment stops the flow of tax and renewable energy credits that are only generated when they are sending power to the grid.

The agency says its overgeneration crisis has largely passed for this year, and hopes all parties can get back to solving the problem, which could get worse with added wind farms. BPA maintains the appropriate venue for any dispute over its transmission policies is the U.S. Ninth Circuit Court, not FERC.

Johnson of Iberdrola said the 9th Circuit could be the next stop after FERC renders a decision. She said regional discussion to come up with solutions is satisfactory as far as it goes. “All these things are helpful, but none of them address the oversupply issue we had this spring.”