BPA Wind Curtailment Update
Posted on May 4, 2012 by Sommer Moser
Tags, Generation, Transmission, Distribution
It’s that time of year again—spring! Spring means of a lot of things here in the Northwest—blooming flowers, planting gardens, a little less rain, and (most important to this native Texan) a little more sunshine. Warmer temperatures mean that the snowpack in the Cascades and Rockies is melting. That water makes its way to the streams, rivers, and lakes that ultimately flow into the Federal Columbia River Power System (FCRPS). Combine that with the rain that we already get during the spring and early summer here, and you’ve got a lot of water on your hands. Or rather, the Bonneville Power Administration (BPA), the federal agency charged with selling and delivering the power produced from the FCRPS, has a lot of water on its proverbial hands.
You may recall that around this time last year, CUB blogged about spring runoff and its effect on the wind production in BPA’s service territory in a post entitled Fishing for Wind in High Water. In that post, CUB talked about wind generation during high water periods, the federal power system, and the positions of various stakeholders with regard to solving wind curtailment problems under BPA’s Interim Environmental Redispatch and Negative Pricing Policies. As a quick re-cap, BPA has chosen to “curtail” wind generation when certain periods of low electricity demand (think late night/early morning) coincide with periods of strong winds and high water (think spring/early summer here in the Northwest). This happened during a period last summer and again just this week. Wind curtailment is the result of effort to balance the various interests that BPA must promote (including encouraging development of renewable energy in its service area; providing federal power to certain “preference” customers, including residential customers; and mitigating the effect of the FCRPS on fish and wildlife) during times when there is more power on the grid than the system needs.
Earlier this week (Sunday morning and Monday morning, specifically) marked the first times that BPA has curtailed wind generation this year. As such, CUB thought it was the perfect time to update everyone about what’s been going on with this issue over the past twelve months.
And a lot has happened! In response to BPA’s wind curtailment practices, several stakeholders filed a petition against BPA with the Federal Energy Regulatory Commission (FERC) on June 13, 2011, claiming that BPA could have chosen to sell the excess power to other neighboring utilities at negative prices rather than shutting down wind. “Negative pricing” means that BPA would pay a neighboring utility to ramp down its own generation assets in order to allow the grid to absorb the excess wind and hydro. Letting wind energy make its way to the grid is important to generators so that they can claim certain tax incentives and encourage additional wind development. BPA claimed that it was forced to curtail wind in order to meet environmental regulations for the protection of fish populations, and could not pay negative prices because of market concerns and because shifting costs to BPA’s fish and wildlife programs and ratepayers, rather than to generators who can still profitably operate during times of negative pricing, was unreasonable.
On December 7, 2011, FERC ruled that BPA’s wind curtailment policy was discriminatory in favor of hydropower and required BPA to file tariff revisions that are not unduly discriminatory or preferential within 90 days of the order. In its order, FERC also acknowledged that both sides faced difficulties in this dispute.
In accordance with FERC’s order, BPA filed its new protocol with FERC earlier this year. Unlike last year, BPA’s new interim policy includes a provision that mandates wind energy operators will receive some compensation for the revenue that they would have otherwise gotten had their power made it to the grid. According to BPA, the current policy treats wind energy operators fairly, as they are being made financially whole through the reimbursement provision which is required to include lost revenue from renewable energy production credits.
However, advocates for wind energy are not sold on the policy and continue to engage with BPA about the best policies moving forward. Though they agree that compensation for curtailed wind is an improvement over last year, critics still argue that BPA is not doing all that it can to prevent wind curtailment.
With wind curtailments starting even earlier this year, it will certainly be interesting to see what happens over the next few months. Though CUB takes no position on this contentious issue, we will certainly continue to monitor the situation and keep you updated.
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03/29/17 | 2 Comments | BPA Wind Curtailment Update