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Sorting contenders from pretenders -- Pay to play in the Northwest

A down payment equal to the purchase price of one year of transmission capacity -- at $1.56 million for each 100 MW -- is being demanded of wind power producers in the Pacific Northwest before they can enter the queue for access to the wires.

The new policy has been introduced by the Bonneville Power Administration (BPA) in an effort to better manage transmission traffic for nearly 1500 MW of existing wind power and more than 3200 MW of planned projects.

BPA acts as transmission gatekeeper for the region and its network delivers power to customers in Oregon, Washington, California and Idaho. It expects its new approach will help separate contenders from pretenders. "They'll basically have to put up a fairly substantial amount to say that they are very serious about their project," says BPA's Doug Johnson. "So, along with the transmission service agreement that they sign and send back to us, they also have to provide the equivalent of one year of transmission service in security to back that request."

The approach is similar to the User Commitment agreements used in Britain by National Grid, partly to prevent early stage projects from blocking the way for those further ahead in the development process (Windpower Monthly, February 2007). BPA's queue management system comes out of what it calls Network Open Season, an effort launched earlier this year to ensure sufficient transmission infrastructure as wind project developments flourish in and around the Columbia River Gorge and beyond. The intent is to discourage speculative requests for transmission by halting the first-come, first-served basis for processing requests, while aligning new wind resource development with the addition of new transmission lines.

The first eight-week Network Open Season began on April 15 and revealed 4716 MW lined up for completion within five years. The system could facilitate 2000 MW of online wind power by the end of this year.

Second chance

Wind projects that are not ready to make the financial commitment get removed from the queue but can still make a new request at a later date. Once precedent agreements are signed, BPA will cluster the requests to determine how much available transmission can be offered and what new facilities will be required. BPA intends to hold open seasons at least annually.

"Now our network planners are studying all of these requests," explains Johnson. "We'll look at them with regard to our network and determine what work needs to be done by way of infrastructure -- transmission projects -- to actually bring this stuff online and ensure that the network can handle what's coming in."

Beyond the down payment, customers will not be required to fund the cost of needed transmission facilities in advance. BPA will make financial arrangements through its borrowing authority, third-party financing or other arrangements. "Then we'll move forward to the next step," Johnson says. "That's where we do environmental assessments and those kinds of things for the projects we know we're going to have to build."

Oregon law requires 15% of its electricity to come from renewable energy by 2015, while Washington calls for the same percentage by 2020. Meanwhile, BPA's assessment suggests that as much as 1350 MW of the 4716 MW total will be sent south to California, which requires its utilities to get 20% from green sources by 2010.

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