Bonneville Power offers to pay wind producers for oversupply
By Christina Williams
Sustainable Business Oregon editor
Bonneville Power Administration said Tuesday it would pay wind energy generators to shut down during times of electricity oversupply.
In a bid to move toward a policy solution for last spring's wind-vs.-water controversy, the Bonneville Power Administration offered Tuesday to pay Northwest wind power generators when wind farm shutdowns are required during high river flows.
The proposal, a result of ongoing talks between members of the wind energy industry and BPA, is up for public review and comment. If it is approved, the agency will incorporate the compensation policy in a March 6 filing with the Federal Energy Regulatory Commission.
If approved, the terms of the policy would run through 2015.
"This is the product of a lot of the settlement talks that have been ongoing," said Doug Johnson, a BPA spokesman.
On average BPA expects to compensate wind producers about $12 million per year for lost revenues related to reduced electricity generation, although the total could range from nothing to more than $50 million in extreme conditions.
BPA would recover that cost through by developing a new rate cast that would ultimately share the cost of the compensation, about equally, between BPA's users and the wind energy producers that would also see a change in their rates.
Initial reaction from the wind energy camp was less than enthusiastic.
Erin Greeson, spokeswoman for Renewable Northwest Project, a nonprofit that has been active in the dispute, called BPA's proposal "deficient."
Greeson said that while wind energy generators are willing to share costs, BPA's proposal doesn't address the core problem.
"It focuses on wind generators and on money," Greeson said. "We feel it should focus on long-term solutions that will actually solve the over-generation issue and increase flexibility in the system and ensure that the Northwest will be a good place do business in renewable energy."
BPA's compensation proposal would come into play when high water, driven last year by a heavy snowpack, drives up the output of hydropower and creates a situation of electricity oversupply on BPA's grid. Last year, BPA cut off generation from wind farms supplying its grid for a total of 97,557 megawatt hours of wind power over 53 days.
The move led to losses by wind farm operators in the form of forgone production tax credits of more than $2 million and led to a legal dispute that lasted throughout the year.
In December, FERC released a decision favoring wind energy generators and asking BPA to find a better policy for dealing with times of overgeneration. Tuesday's compensation proposal is the heart of that new policy.
The BPA will accept comment on the proposal through Feb. 21.
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