Lindsey O'Brien//March 8, 2012//
In an effort to resolve a heated dispute with renewable energy producers that began last spring, the on Tuesday released a new plan to manage the region’s electric grid when supply exceeds demand.
But regional wind advocates say the plan is inadequate, despite changes made since a draft was released in February.
When heavy rains and snowmelt runoff created a huge surge in hydropower last spring, the BPA faced an oversupply of electricity that could have overwhelmed the grid. The federal agency, which owns about 75 percent of the region’s high-voltage transmission system, resorted to unplugging wind turbines because spilling excess water around its dams could have harmed salmon in the Columbia River.
But in December, the ruled that the BPA erred when it cut off wind production. This week, the BPA proposed a monetary settlement with the wind producers in an effort to meet FERC’s nondiscriminatory transmission tariff requirements.
The BPA proposes to cover half the cost of damages incurred by wind producers. When turbines are turned off, they lose the value of production as well as federal production tax credits that accrue only when the wind farms are generating electricity.
The immediate losses to hit wind companies last year amounted to approximately $10 million, according to data compiled by the .
Under the new plan, the BPA’s first course of action during periods of excessive power generation would be to divert water through dams’ spillways rather than power-producing turbines. But environmental rules restrict excessive use of spillways.
The agency would then offer low-cost or free hydropower to replace the output of thermal and other power plants. If supply still exceeds demand, the BPA would again unplug wind farms and other generators; but now it would pay for lost revenue.
The agency expects that amount to be approximately $12 million a year. Depending on weather, that amount could jump to $50 million or drop to nearly nothing, according to BPA spokesman Doug Johnson.
Wind advocates contend that the plan sidesteps what they see as a deeper problem: The BPA doesn’t treat power from other generators as it treats its own hydropower.
鈥淭he concept they’re suggesting does not ensure fair treatment in the future,鈥 said Cameron Yourkowski, senior policy manager covering transmission for the Renewable Northwest Project. 鈥淭he issue goes beyond this high-flow, spring oversupply re-dispatch situation. We want to know the basic principles established for fairness on the transmission system are being followed.鈥
The BPA tweaked its plan based on comments it received before Tuesday’s deadline. If FERC were to accept the plan, known as the Oversupply Management Protocol, it would be in place for one year instead of three years, as proposed initially. The BPA also would hire someone from outside the agency to review the amount of money it would offer to curtailed wind producers.
Kevin Lynch, vice president of external affairs for , said the revised plan includes only marginal improvements.
鈥淭he filing really misses the mark,鈥 he said. 鈥(The BPA) has a commercial interest in the way power markets react to supply and demand, and that vested interest in the outcome colors their decisions on curtailment.鈥
And the problem of oversupply is not likely to go away, according to a new analysis issued by the . Between April and June, the Pacific Northwest could exceed the market demand for electricity by 300,000 megawatt-hours, or enough to power approximately 100,000 homes during the same three month period.
While the problem has many industry stakeholders calling for long-term solutions, the BPA is standing behind its one-year proposal.
鈥淔or the time being, this is the best way forward,鈥 Johnson said.
But significant spring over-generation could occur about once every four years, according to the council’s analysis, and in some years the excess could soar to 1.2 million megawatt-hours. That worries wind interests.
鈥淲e’re not convinced that (the BPA) will make decisions in a nondiscriminatory manner this year (because) they discriminated against us last year,鈥 Lynch said. 鈥淲e would be much more reassured if the federal regulator were overseeing those decisions.鈥