United States

United States

More stoppage and compensation woes

UNITED STATES: The latest curtailment feud between Pacific Northwest wind farm operators and transmission operator the Bonneville Power Administration (BPA) kicked off at the end of April as wind turbines were shut down on four consecutive early mornings because of excess hydropower caused by low springtime demand for electricity and melting mountain snow.

BPA insists it can dump only a limited amount of water over the dams because excess spillage creates dangerous levels of nitrogen that are harmful to salmon and other fish. The curtailments may defy an order from the Federal Energy Regulatory Commission (Ferc), which ruled in December that BPA, as operator of 31 federal dams and much of the regional grid, cannot discriminate against wind power by forcing unilateral shutdowns. Several factors have changed since last year, but wind generators still stand to lose millions of dollars.

"It's pretty unfortunate, given that there's been a full year to plan ahead," said Cameron Yourkowski, senior policy manager at regional advocacy group Renewable Northwest Project. "We obviously have not seen things solved in any meaningful way."

The 2011 curtailments began in May and totalled roughly 97GWh over a 53-day period. BPA compensated for some losses by offering free hydropower to affected customers. But wind generators lost significant income from federal production tax credits (PTCs) and renewable energy credits (RECs), which are accrued only when power is produced.

Compensation

This year, BPA believes it adequately addressed Ferc's concerns with a modified policy that compensates wind generators for 50% of lost PTC and REC value. Wind advocates, however, want BPA to pay customers for absorbing excess hydropower.

"Other parts of the country, including the Western Area Power Administration, have historically paid negative prices," said Kevin Lynch, head of public policy and regulation at Iberdrola, which operates roughly 1.3GW of wind power on the BPA system. "That's typical in a situation where there is more supply than demand and the supply is not manageable."

Wind generators still hope to recover last year's PTC and REC income via an upcoming case filed in the US Court of Federal Claims. The broader issue should be resolved this summer, when Ferc makes a determination on BPA's 50% compensation plan.

"BPA is obviously ignoring Ferc's order on this issue and continuing to do much the same policy without their blessing," said Yourkowski. "But the larger point ... is long-term policy about BPA's commitment to open-access transmission and treating all generators equally."

With almost 1GW of capacity added to BPA's grid since last year, total wind generation approaches 5GW. Also, the Columbia generating station, a 1.1GW nuclear plant, came back online this spring after being shut down for refuelling a year ago - meaning much more power to balance.

Meanwhile, different schools of thought relating to salmon protection further complicate matters. Fish advocates believe dumping water over the dams to decrease hydropower production may actually help the fish, while BPA points to a National Oceanic and Atmospheric Administration study that limits the amount of water they can safely spill.

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