WIND WILL CHALLENGE BPA

Wind generators to fight Bonneville policy at FERC
Eileen O’Grady (w/Dale Hudson and Lisa Shumaker), June 13, 2011 (Reuters)

"Frustrated owners of wind generation in the U.S. Pacific Northwest have complained to federal regulators about a Bonneville Power Administration policy that curtails their operations in times of low demand and low prices.

"The largest snowpack since 1997 has boosted Northwest river levels and hydro output, complicating growing competition between hydro and wind interests in the region where Bonneville operates the lion's share of the high-voltage power network…Since mid-May, BPA has curtailed wind and other generation most days so it can increase hydropower output to protect salmon and other fish…"

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"But wind generators say the practice of curtailing wind output without compensation is an unfair use of Bonneville's grid, costing generators lost income and discouraging future development of renewable power resources in the region…[The policy is] unduly discriminatory… a coalition of owners of nearly 2,000 megawatts of wind capacity said in a complaint filed…with the Federal Energy Regulatory Commission.

"Transmission contracts allow BPA to cut power output to avoid grid reliability problems…[but not] because the prevailing market price of power is, in Bonneville's opinion, too low…While Bonneville supplies hydro power to replace the curtailed power, wind generators can lose money in other ways, including the value of federal production tax credits (PTCs) and state renewable energy credits (RECs)…Since May 17, BPA has cut 74,100 megawatt-hours of wind generation and nearly 9,600 Mwh of fossil generation…Most of the curtailment occurs in the overnight hours when power demand is low, pushing market prices into negative territory…"

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"Iberdrola is joined in the FERC filing by PacifiCorp, a unit of MidAmerican Energy Holdings Co, the electric unit of Warren Buffett's Berkshire Hathaway Inc; Horizon Wind Energy, a unit of EDP Renewables, Portugal's largest utility; NextEra Energy Co, and Invenergy. [They insist BPA has better economic options, including open transmission access and competitive markets]…

"BPA spokesman Doug Johnson said the agency will continue to work with generators to find other solutions, noting that the redispatch policy implemented in May will expire next spring…Bonneville has said that compensating wind generators for lost PTC and REC income would shift those costs from taxpayers to its customers who don't benefit from the wind resources…High hydro output could continue…through September…"