BPA Files Revised Plan to Manage Power Oversupply in Pacific Northwest
The Bonneville Power Administration (BPA) on Tuesday submitted a revised open access transmission tariff to the Federal Energy Regulatory Commission (FERC), addressing situations that occur mostly in the springtime when the Columbia River surges and there is too much power available for delivery.
The filing stems from a FERC decision on Dec. 7, which found that the Pacific Northwest–based federal agency discriminated against wind generators after BPA curtailed wind power when high river flows hit the region in May and June 2011. FERC ruled that BPA used its market power to “protect its preferred power customer base from costs it does not consider socially optimal.” FERC also directed the BPA (under authority granted to it in Section 211A of the Federal Power Act) to revise its curtailment practices—its so-called “Interim Environmental Redispatch” policy—and to file a revised open access transmission tariff with the commissions within 90 days.
The new revised plan allows for “displacing generators after all other reasonable actions are taken,” BPA said. While BPA operates the transmission grid, it also is responsible for generation units, but in times of high water, federal system operators must run the federal hydroelectric plants in order to comply with environmental regulations to protect fish.
The new plan is “based on input from regional stakeholders. In formulating this plan, BPA sought to balance multiple competing interests by equitably sharing oversupply costs and limiting total cost exposure. BPA’s objective was to create a set of rules that is fair to all parties and that can help to avoid protracted litigation,” it said.
Under the new protocol filed on Tuesday, BPA would first work with the U.S. Army Corps of Engineers and Bureau of Reclamation to manage federal hydroelectric generation, sending water through dam spillways until dissolved gas levels that can harm fish are reached. BPA would then offer low-cost or free hydropower to replace the output of thermal and other power plants, with the expectation that many would voluntarily reduce their generation to save fuel costs.
If electricity supply still exceeds demand, BPA would then reduce the output of remaining generation within its system, including wind energy, in order of least cost. BPA would then compensate the affected generation for lost revenues, including renewable energy credits and production tax credits, subject to verification by an independent evaluator.
Under the new protocol, BPA would cover costs of compensating generators this spring from its transmission reserve account until a rate can be established to recover the costs. BPA will initiate a new rate case in which it will propose dividing compensation costs roughly equally between users of BPA’s federal base system and generators eligible for compensation from BPA.
Among a number of key changes in the final version compared to the draft version of the filing released on Feb. 7—to which BPA said it received about 90 comments—are that the BPA requires all costs and supporting data be sent to an independent evaluator. The evaluator will then create a cost curve and be responsible for flagging any cost submissions that are inaccurate.
BPA also set an expiration date of March 30, 2013, instead of the previously proposed expiration date of Sept. 30, 2015, responding to concerns that the term of the policy should be curtailed to allow the region to continue working on a long-term solution.
The protocol would be part of BPA’s transmission tariff. BPA said it has been working with customers and other stakeholders for almost a year to update its transmission tariff covering all terms and conditions for transmission service from BPA. BPA intends to file the broader tariff with FERC later this month.
“The Northwest River Forecast Center’s runoff projection for January to July 2012 is currently 92 percent of average. Lower runoff reduces the likelihood of an oversupply of electricity this spring, but conditions can change rapidly,” BPA added. “For instance, as recently as Feb. 5, the runoff for January to July 2012 was forecast at 85 percent of average.”
Sources: POWERnews, BPA