The Federal Energy Regulatory Commission has once again ruled in favor of wind developers over a regional electricity distributor.
FERC ruled last week that the Bonneville Power Administration discriminated against wind developers when it ordered shutdowns this spring during high river flows. BPA ordered the shutdowns, it said, to meet state laws aimed at protecting migrating salmon.
Earlier this year, the commission that oversees federal power distribution said the Idaho Public Utilities Commission was violating a federal law designed to offer access to the electricity market to renewable energy producers when it arbitrarily set a deadline for contracts.
The two actions underscore the tension that rapid development of renewable energy in the Northwest has created. In both decisions, the philosophical divide lies between placing the capital costs of new renewables on ratepayers now in exchange for stable rates without fuel costs in the future.
It is the same tradeoff Idaho made more than 50 years ago when it approved the building of Idaho Power Co.’s Hells Canyon dams. But today, the region’s relatively cheap power is an important economic resource in and of itself.
FERC said in its order that BPA’s decision last spring “significantly diminishes” open access to power transmission. The federal power marketing agency, which supplies 15 percent of Idaho’s electricity, has 90 days to write new rules that do not discriminate against wind producers.
“In this economy, we are concerned about whether the FERC ruling will lead to an unfair increase in costs to communities served with federal hydropower,” said Public Power Council Executive Director Scott Corwin.
BPA Administrator Steve Wright was facing difficult choices when he ordered wind power producers to shut down generation — in exchange for free hydroelectric power — in May. He knew the policy would leave the developers without the federal and state tax credits they get for every kilowatt they produce.
Those were credits that underwrote their financing, and they say would make future financing even harder. But Wright was facing Washington and Oregon state laws, which require federal dam operators to maintain low levels of dissolved nitrogen gas in the pools below the dams — lower than many scientists think is necessary.
High levels can affect migrating fish with a condition similar to the “bends” that deep-sea divers can get. Water spilled over the tops of the dams creates more of that nitrogen.
BPA can lessen the amount of spillover by running its turbines at maximum, producing more power that it can give away to utilities like Idaho Power Co. Utilities then can use less coal, which saves them fuel. But it’s hard for them to turn on and turn off the coal plants.
If BPA is forced to keep wind power generators running, it would be forced to pay utilities to take the power, passing the bill on to its customers, electrical cooperatives and public utilities.
BPA markets about one-third of the electricity consumed in the region. It sells the power produced from 31 federally owned dams on the Columbia River and its tributaries, and owns and operates 15,000 miles of high-voltage transmission lines.
Wind generation in the Pacific Northwest has grown from around 500 megawatts in 2006 to more than 6,000 megawatts today. When integrated with hydro or gas power that’s enough power for more than two cities the size of Seattle or two states of Idaho.
BPA’s Wright may ask FERC to reconsider. But BPA’s existing policy was set to expire at the end of March any way so it was going to have to address the issue even without the order.
But just as FERC’s decision gave wind developers in Idaho leverage, this decision puts them in a stronger negotiating position.
Rocky Barker: 377-6484
