The Bonneville Power Administration (BPA), a federal nonprofit agency that markets wholesale power from 31 federal hydro projects in the Columbia River Basin in the Pacific Northwest, on Friday said that high seasonal river flows and hydroelectric generation had prompted it to temporarily limit output from non-hydropower resources—including wind. A wind industry group has criticized the decision as “wrongheaded” and says it could cost wind companies tens of millions of dollars.
The decision would “safeguard protected fish and assure reliable energy delivery without shifting extra costs to BPA electric customers,” said the agency that also operates and maintains about three-fourths of the high-voltage transmission in a service territory that includes Idaho, Oregon, Washington, western Montana, and small parts of eastern Montana, California, Nevada, Utah, and Wyoming.
BPA said it finalized its interim Environmental Redispatch policy to help cope with runoff from the largest snowpack in years. According to the BPA, the Northwest River Forecast Center predicts this year will bring the highest Columbia Basin runoff volume since 1999. “The conditions could temporarily push generation of hydroelectric power beyond the region’s limited spring electricity needs,” it said. “The interim policy gives BPA the tools to match power generation to demand, which is necessary for dependable operation of the power grid.”
The interim policy, which will remain in place until March 30, 2012, first limits generation at coal, natural gas, and other thermal power plants to keep the supply of power from exceeding demand. As a last resort, BPA’s policy could temporarily limit wind energy generation connected to its power transmission system. Under the policy, BPA will replace any reduced thermal and wind generation with free hydropower from federal dams on the Columbia River system.
Making a Hard Decision
"This was an extremely difficult decision for me. Despite months of searching through a robust public process, there was no good choice here," said BPA Administrator Steve Wright. "I believe we have adopted the option that best preserves reliability, protects salmon and avoids increased costs on average to Northwest ratepayers."
Wright said the BPA took several earlier steps to avoid the necessity of implementing the interim policy, including working with other agencies and utilities to maximize available reservoir space to manage river flows and control hydroelectric generation and offering low-cost or free hydropower to help create a market incentive for power producers to substitute it for fossil-fueled generation.
“Reducing hydroelectric generation in high water conditions sends additional water through dam spillways,” the BPA said. “While some spill of water can help young salmon and steelhead migrate downstream, too much can cause potentially harmful levels of dissolved gases in the river. State water quality standards are geared to provide safe conditions in the river for fish and federal dams are operated with these standards in mind.”
A Wind Industry Backlash
The decision could cause wind energy producers to lose tax credits and other revenues, because their wind turbines do not actively generate power, the BPA admitted, but it said it would not reimburse wind energy producers for lost tax credits or other revenues because that would shift costs to Northwest ratepayers who do not receive the wind power.
The American Wind Industry Association (AWEA) in a statement on Tuesday called the decision “wrongheaded” and said the interim policy could potentially cost wind companies “tens of millions of dollars and stifle new investment in the Pacific Northwest.”
AWEA said it was disappointed that a federal agency would “choose to ignore the President’s commitment to renewable energy and break contractual commitments rather than operate the grid more efficiently—as is done in much of the rest of the country. That could alleviate some of Bonneville’s concerns that led to the decision late Friday.”
“BPA really ought to call this the ‘Anti-Environmental Redispatch,’ since it makes no sense environmentally and flies in the face of the agency’s obligation under the Northwest Power Act to promote renewable electricity in the region,” commented AWEA CEO Denise Bode. “Yet the agency chose to ignore its statutory duties and Obama administration policies, and instead to illegally promote its own narrow economic interest over meeting its contractual obligations with private renewable energy companies.”
The group moreover contested the BPA’s reasons for curtailing wind generation over spilling water over its dams for environmental reasons. “According to BPA, spilling even a bit more water over the dams will create dissolved nitrogen levels that harm the region’s salmon population,” it said. “However, Save our Wild Salmon, the leading conservation group focused on protecting fish in the Northwest, asserts that this is false, saying that BPA can spill more water and still meet its salmon obligations. The State of Oregon takes the same position with respect to additional spilled water. In fact, spilling water to Oregon’s standard would be MORE beneficial for salmon than BPA’s current strategy.”
AWEA pointedly called the policy a “classic case of anti-competitive and discriminatory behavior by a utility with a conflict of interest.”
“BPA as the ‘air traffic controller’ for the Northwestern grid is allowing some generators to operate while blocking others,” said Rob Gramlich, senior vice president of public policy at AWEA. “Such anti-competitive behavior violates contract sanctity and the Federal Power Act’s anti-discrimination provisions. BPA has not sufficiently pursued other measures before curtailing wind, despite its claim that curtailment is a last resort.”
Sources: POWERnews, BPA, AWEA