FERC Finds for Wind Generators in BPA Curtailment Dispute

The Federal Energy Regulatory Commission (FERC) last week ruled that the Bonneville Power Administration (BPA) discriminated against wind generators when it used its transmission market power to curtail wind power after high river flows and high wind last May and June caused generation on the BPA system to exceed power demand.

FERC said in an order last week  that granted a petition filed by a group of owners of wind facilities in the Pacific Northwest that the 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, FPA) to revise its curtailment practices and to file a revised open access transmission tariff (OATT) with the commissions within 90 days.

The dispute stemmed from high seasonal river flows and hydro generation this summer that had prompted the BPA to temporarily limit output from nonhydropower resources—including wind. The BPA said it was forced to make that decision  because it would “safeguard protected fish and assure reliable energy delivery without shifting extra costs to BPA electric customers.” But the decision made by the agency—which 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—was “wrongheaded,” the wind industry said, claiming it could cost wind companies tens of millions of dollars.

The group of wind generation owners filed a complaint with FERC in June 2011, protesting the BPA’s “discriminatory management” of access to its transmission system to favor its own generation.

According to energy law firm Van Ness Feldman, this order could make waves for several reasons: “This is the first exercise of FERC’s authority under Section 211A to impose comparability requirements on transmission services offered by a government-owned transmission provider,” it said.

“Recognizing that this will be viewed as a significant development by non-jurisdictional transmitting utilities, the order notes that FERC does not take the use of Section 211A lightly, and that it expects the need to use this authority will be rare.  In addition, FERC’s findings in this order may well affect proceedings pending in the Ninth Circuit with respect to other aspects of BPA’s Environmental Redispatch Policy.”

Sources: POWERnews, FERC, BPA, AWEA, Van Ness Feldman