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Economic and dam related articles

BPA Plan Would Share Costs
of Wind-power Shutdown

by Hal Bernton
Seattle Times, April 17, 2013

The Bonneville Power Administration proposes to share the costs of shutting down wind turbines when energy production exceeds demand.

The Bonneville Power Administration (BPA) this week released a new proposal to share the "oversupply costs" that pile up when there is not enough demand for all the electricity produced by hydroelectric dams and wind-power producers.

During these oversupply periods, when wind-power producers may be asked to shut down, the plan would compensate them for lost revenue, according to Doug Johnson, a BPA spokesman.

This year, the BPA forecast a 50 percent chance there will be an oversupply of power. If that happens, the cost of the plan could be about $10 million, or up to $50 million if extreme conditions occur during the peak spring runoff period.

The BPA operates regional transmission lines used by wind-power producers, and also sells hydroelectric power from federal dams on the Columbia and Snake rivers.

Under the new proposal, Seattle City Light, Tacoma Power and other utilities that use BPA transmission lines would share in the costs of compensating wind-power producers. The plan calls for those producers, as they use the transmission lines, to share some of the costs, which could reduce their net compensation, according to Johnson.

Two years ago, the BPA offered no compensation to wind-power producers who were ordered to shut down when there was not enough demand.

They depend on the BPA to transmit their power, and the Federal Energy Regulatory Commission eventually ruled that the agency's actions unfairly discriminated against them.

In a statement released to The Seattle Times, Iberdrola Renewables, a major Northwest wind-power developer, said the BPA's proposal "is not there yet," and needs more work to find "a fair and lawful solution for the region."

The struggle to come up with a cost-sharing formula reflects broader strains in the regional power system as the BPA seeks to integrate wind power.

In recent years, the supply of wind power has dramatically expanded, spurred by federal tax incentives and state requirements to buy renewable electricity.

Scott Thomsen, a Seattle City Light spokesman, said the BPA provides about 40 percent of the utility's power. He said any added BPA costs from compensating wind-power producers would be passed on to ratepayers.

Since the costs would be shared among transmission-line users, Johnson expects the effects on ratepayers within the BPA region would be modest. He did not speculate on what they might be.

The new proposal, which would cover the period from March 31, 2012, through Sept. 20, 2015, still requires approval by the Federal Energy Regulatory Commission.

Hal Bernton
BPA Plan Would Share Costs of Wind-power Shutdown
Seattle Times, April 17, 2013

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