NW Utilities Get Wind of Integration Chargeby Charles Redell
Sustainable Industries, August 14, 2009
Bonneville Power Administration's 2009 rate case is all but closed and wind generators are facing a new charge over the next two years.
Pending likely approval by the Federal Energy Regulatory Commission this fall, a new wind integration charge will be levied on all wind generators at a rate of $5.70 per megawatt hour (MWh). In the past, Bonneville (BPA) charged some of its utility customers for conventional power reserves to back up intermittent wind power; but the amount of wind on BPA's system has ballooned (PDF) recently, increasing both the need for reserves and risks to system reliability.
Currently, BPA holds power reserves that it can call on if a wind generator is unavailable when needed. As the manager of most of the region's transmission lines and much of its power resources, BPA must balance electricity generation with demand in the Pacific Northwest on an almost minute-by-minute basis. It must also deal with a constrained transmission system and manage its hydro system while limiting its impacts on salmon.
BPA is required to work on pre-operational improvements such as allowing generators to adjust their schedules every 10 minutes instead of once an hour, as is currently the case. Such efforts are expected to lower the cost of adding wind to its system and will likely result in a lower wind integration charge during the next rate case, according to Stephen Hall, a partner at Stoel Reeves in Portland, which represented the Northwest Wind Group on BPA's 2010 rate case. Allowing generators to purchase their reserves on the open market, which will start in 2010, will help as well, he says.
The new charge will increase costs for new and existing generators alike, but is not an undue burden, Hall says. "The end result here is a very positive signal not just for the wind industry, but for wind development across the country," says Hall. "If Bonneville could do this, it is easy for other utilities in the country to do this."
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