BPA Plans to Curtail Wind in High Water

20 May 2011

As California utilities face a mandate to increase renewable energy to 33 percent, a growing conflict between wind power and fish protections in the Pacific Northwest is threatening to curtail the availability of renewable power to the Golden State.

The tension between hydropower and wind already is having a “somewhat dramatic” impact on the power market, said Alan Haymes, Federal Energy Regulatory Commission economist. Federal officials said the fallout could grow unless new transmission capacity is built to move more wind and hydropower to California.

Facing a huge snowpack and high water in Northwest rivers, the Bonneville Power Administration announced May 17 that through next spring it plans to curtail non-hydropower generation as needed to protect fish. If the dams don’t generate power, the excess flow is spilled over the dams, introducing nitrogen into rivers that can kill fish. BPA noted it faces a legal duty to protect fish populations on rivers under both the Clean Water and Endangered Species Acts.

The policy had an immediate effect.

The next day, BPA curtailed, for five hours, 280 MW of wind power--much of it destined for California--according to David Andrejcak, FERC acting deputy director of engineering, planning, and operations.

“This problem is not going away anytime soon,” said Haymes.

Wind power capacity in the Pacific Northwest region is expected to double by 2013. Much of the increase is in response to California’s 33 percent renewable energy standard. Renewable power may be sent into the state and counted towards meeting California’s renewable mandate.

“This was an extremely difficult decision,” stated BPA administrator Steve Wright announcing the curtailment policy. Bonneville operates hydropower dams along the Columbia River system and bulk power transmission lines throughout the Northwest that link with California.

Under its policy, BPA plans to curtail coal, natural gas, and other thermal plants first to prevent spilling water at its dams.

Wind power companies--many of which supply power to California--would have to idle their turbines only as a last resort.

The conflict has California utilities on alert.

“We’re going to keep an eye out,” said Denny Boyles, Pacific Gas & Electric spokesperson. He said the utility has contracts for wind power in the Pacific Northwest to help meet its state renewable energy requirement.

The American Wind Energy Association quickly dubbed the policy as “anti-environmental redispatch,” “anti-competitive,” and in potential violation of the Federal Power Act.

AWEA chief executive officer Denise Bode added BPA’s move “flies in the face of the agency’s obligation under the Northwest Power Act to promote renewable energy in the region.”

The policy drew the association’s ire in large part because BPA does not plan to compensate wind generators for their loss of production tax credits and other revenue when they are curtailed. The production tax credits--for which about 30 percent of Northwest wind generators are eligible--are valued at $22/MWh of power, according to BPA. Wind generators also would lose revenue from selling renewable energy credits.

BPA said it would be unfair to compensate the wind producers for the losses because it would have to pass along the resulting costs to Northwest electricity ratepayers.

When curtailment occurs, BPA said it would provide free replacement hydropower to utilities. The free hydropower is expected to help drive the cost of power lower in California this summer, according to FERC officials (see related story on page 9).

BPA spokesperson Michael Milstein said the cost impact of curtailment to generators could range up to $40 million under a worst-case high-water scenario. Yet, he said that if the snow melts gradually through spring and into summer--instead of all at once--BPA may not have to significantly curtail generators.

AWEA senior director of federal regulatory affairs Tom Vinson said the policy could “make the Northwest significantly less attractive in the future for wind energy development.”

Wind power generation in the region has grown from next to nothing in 2005 to nearly 3,400 MW of capacity, according to BPA. It is expected to double soon. Most of the power is exported out of BPA’s control area.

The ultimate solution to the plethora of generation resources in the Northwest is likely to be increasing transmission capacity into California’s population centers, acknowledged Milstein. That, however, would take years. BPA hopes to begin talks with utilities toward this end in summer, he said. The focus is intended to be on how to finance expanded transmission capacity.

FERC’s Andrejcak concurred that more transmission ultimately is needed to solve the growing conflict between hydro and wind power.

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