A complaint filed in mid-June with the Federal Energy Regulatory Commission that challenges the Bonneville Power Administration’s new “Environmental Redispatch and Negative Pricing” policies is misdirected, and legally misguided, according to a rebuttal filed Tuesday by the federal power marketing agency.
A coalition of energy utilities vested in wind generation seeks “remedies calculated to leave Bonneville with no alternative during high water/low load events other than to pay Complainants and others in order to meet Bonneville’s environmental, reliability, and other statutory responsibilities,” according to the BPA response filed this week with FERC along with dozens of comments and requests to intervene in the proceedings. Most of those weighing in on one side of the other are utility interests, though conservation groups also want to enter the fray.
“The Complaint challenges a Bonneville final action taken under the Northwest Power Act and is therefore within the exclusive jurisdiction of the U.S. Court of Appeals for the Ninth Circuit. Moreover, the relief sought exceeds the Commission’s authorities and, in any case, should not be granted,” the BPA filing says.
The complaint filed with FERC claims Bonneville is violating the Federal Power Act and other regulations by implementing the interim policies, which were adopted May 13.
The complaint says that the new policy “unilaterally curtails wind generators without compensation, and ‘substitutes’ its own generation for delivery to the wind generators’ customers, in violation of the wind generators’ interconnection contracts with Bonneville and the firm transmission rights associated with the delivery of the output of the wind generators’ facilities.”
The coalition initiating the action against BPA is composed of Iberdrola Renewables, PacifiCorp, NextEra Energy Resources, Horizon Wind Energy, and Invenergy. Collectively, the coalition says it has has invested more than $6 billion in new renewable generation in the Pacific Northwest.
BPA is a non-profit federal agency that markets renewable hydropower from federal Columbia River dams, operates three-quarters of high-voltage transmission lines in the Northwest and funds one of the largest wildlife protection and restoration programs in the world.
The complaint accuses BPA of using its “near monopoly control” of the region’s electrical grid to break its contracts to transmit scheduled power from wind farms and thermal generation plants. It asks FERC “to order Bonneville to provide transmission services on terms and conditions that are comparable to those under which Bonneville provides transmission services to itself and that are not unduly discriminatory or preferential.”
The new policy involves, during times when more power is being generated than is needed to meet demand, the curtailment wind and natural gas/coal plant power transmissions so that they can be replaced by hydro power. The agency estimates that about 97 megawatt hours of wind generation was displaced during high flow periods that stretched from May through June. That’s 6 percent of the wind generation that would have been delivered to customers via Bonneville’s transmission grid, according to BPA spokesman Doug Johnson.
The policy was implemented on a temporary basis given the prospect of a huge water volume gushing down from mountain snowpack. The latest forecast, issued Monday, from the Northwest River Forecast Center says that 136 million acre feet of water will flow past The Dalles Dam from April through September. That would be the third highest total in the past 41 years and 138 percent of average.
The May-June outpouring taxed the system’s ability to pass water downstream and forced large volumes to be flushed through spill gates. Involuntary spill of the water generates high levels of total dissolved gas, which can be harmful to migrating salmon and other aquatic species. BPA and other federal agencies such as the U.S. Army Corps of Engineers and Bureau of Reclamation, which operate mainstem Columbia-Snake river hydro projects, are responsible for implementation of operations that improve salmon survival up and down the system. There are 13 Columbia basin salmon and steelhead stocks that are listed under the Endangered Species Act.
The curtailments allow dam operators to send more water through turbines, which generate electricity and little TDG, and less through turbines.
The policy is scheduled to expire next March.
“We’re still at the table” with public utilities and other customers in hope of developing a policy to address such overgeneration situations, which on average occur in one out of three years, Johnson said.
Dealing with the curtailment of natural gas and other thermal power generation during times like this spring is basically an “economic redispatch” – the revenue expected from the power they would have generated is replaced by the revenue from the hydro power, Johnson said. In times of overgeneration, BPA sent hydro power as a replacement for the curtailed thermal generation.
It’s not so simple with wind power generators, who need to transmit their electricity to gain Production Tax Credits and Renewable Energy Tax Credits from federal and state entities.
“Faced with a difficult situation and the need to balance a myriad of statutory responsibilities, Bonneville explored a variety of options and ultimately adopted its Environmental Redispatch policy,” according to Tuesday’s BPA filing with FERC.
“This policy has effectively maintained the reliability of the transmission system and reduced the harm to endangered species. The Commission should not take action that could remove this critical tool from the agency as it continues its efforts to integrate wind generation into its system while meeting its statutory obligations consistent with its contractual rights and responsibilities.”
In what is an extremely high water year, BPA has said it wanted to run as much water as possible through the federal Columbia-Snake river hydro system turbines so that less water has to be flushed through spill gates. To do that, the agency shut off wind and thermal generation from its transmission during low demand period, such as in the middle of the night, and replaced it with hydro power.
“Under current circumstances, BPA believes it can continue to meet these various objectives by providing no-cost BPA hydropower when necessary to displace non-Federal generation in order to satisfy BPA’s environmental obligations, while at the same time ensuring load service,” the new redispatch policy says. BPA believes that its statutory responsibilities and the objectives of the Northwest Power Act would be blunted if BPA were required to pay negative prices – paying, as an example, wind generators for curtailed power -- in order to ensure compliance with BPA’s environmental responsibilities. That would drive up costs to BPA ratepayers.
“They portray such payments as incidental to Bonneville’s power operations rather than having been caused by their recent integration onto Bonneville’s system,” the Bonneville filing says.
“However, Bonneville has appropriately determined under its Negative Pricing Policy that payment of negative prices is unreasonable, as a matter of both law and policy. Bonneville and its public and private customers have incurred billions of dollars in costs to protect and enhance salmon and other species and should not have to pay any generators, including wind generators, to protect the region’s aquatic life, including ESA-listed fish.”
A Tuesday filing by the Northwest Wind Group says the new BPA policy has not served its advertised function and that FERC has the legal authority to negate the policy.
“In practice, this policy has almost exclusively affected wind generation. BPA has framed its ER Protocol as a last-resort response during a high water year to avoid excessive spill and Total Dissolved Gas ("TDG") levels at federal dams,” the group says. “Thus, it would be reasonable to expect that BPA would deploy the ER Protocol during times when TDG levels were high.
“Significantly, however, the data on TDG levels during the period in which BPA has been curtailing wind energy reveals no apparent relationship between the timing of BPA's wind curtailments pursuant to the ER Protocol and TDG percentage levels. Nor are BPA's curtailments due to a lack of transmission capacity or access to markets for energy.
“Instead, the purpose of the ER Protocol -- which BPA acknowledges -- is to allow BPA to avoid having to pay to dispose of excess federal energy when market prices are negative,” the group says.