The Bonneville Power Administration (BPA) has released a new proposal that addresses the oversupply issues that caused the curtailment of 350 MW of wind energy generation last spring.
BPA says its new plan, which has been submitted to the Federal Energy Regulatory Commission (FERC), aims to “balance multiple competing interests by equitably sharing oversupply costs and limiting total cost exposure.”
Under the new proposal, BPA would first work with the U.S. Army Corps of Engineers and the U.S. Bureau of Reclamation to manage federal hydroelectric generation and spill water up to dissolved gas limits.
Then, BPA would provide what it says would be “low-cost or free” hydropower to replace the output of other power plants. Under this scenario, BPA expects that generators would voluntarily reduce their generation in order to save money.
After those measures are taken, if electricity supply still surpasses demand, BPA would reduce the output of the remaining generation on the grid – including wind energy – in order of least cost. BPA says it would also pay wind generators for lost revenues, including renewable energy credits and production tax credits. This procedure would be subject to review by a third party, BPA said.
In December, FERC ruled that BPA had discriminated against wind energy and gave preferential treatment to hydropower, and required BPA to submit a revised open-access transmission tariff (OATT).
BPA released a proposal in February that would compensate wind energy producers within its section of the grid for periodically reducing their output during periods of oversupply in order to keep supply from exceeding demand during high river flows. Read the changes from the February to the March proposal (PDF).
However, wind energy developers claimed that the current plan still violated federal energy law and was unfair to consumers. In a letter to FERC, several energy companies - including Iberdrola Renewables, Pacific Power, EDF Renewables North America, Invenergy Wind North America and NextEra Energy Resources - wrote that they would continue to insist that BPA comply with the FERC order and file a binding OATT.
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