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Bonneville Power Asks for Rethink on FERC Wind Power Ruling by Staff Environmental Finance, January 11, 2012

The Bonneville Power Administration (BPA) has asked federal regulators to clarify and reconsider a December ruling siding with wind developers over the agency's dumping of wind power generation in favour of extra electricity generated by hydropower dams.

The Portland, Oregon-based federal agency, which is housed within the US Department of Energy, said it is pursuing a settlement with other power producers in the region as the best option to address electricity oversupply issues.

But the BPA filed the petition on Friday to meet a procedural deadline for a rehearing of the Federal Energy Regulatory Commission (FERC) order on BPA's interim environmental redispatch policy, which was instituted last year to help manage high water flows from the largest snowpack in years.

BPA markets power from federal hydro projects in the Pacific Northwest and controls 75% of the region's transmission. In 2011, the agency implemented a highly contentious policy to allow it to limit fossil fuel and wind energy generation connected to its power transmission system and replace that with free hydropower from its federal dams when there is insufficient demand in the system to take on the additional hydropower.

"We support the continuation and acceleration of ongoing informal settlement discussions with affected parties," said BPA Administrator Steve Wright.

Even without a settlement, BPA must adopt a new policy before the spring snowmelt season and the 30 March expiration of the interim policy, the agency said.

"A regional settlement provides a far better foundation for continued integration of renewable resources than continued litigation," the agency said. "Absent a settlement, any new policy seems likely to lead to even more litigation that may stretch for many years."

The agency expressed surprise and disappointment over the December ruling by FERC, which granted a petition by wind developers that called BPA's actions discriminatory. The commission recognised the agency's dilemma in navigating many competing obligations, but found that its policy significantly diminishes open access to transmission.

FERC gave BPA 90 days to file revised tariffs that provide for transmission service comparable to what the agency provides to itself and are not unduly discriminatory or preferential, an order that was considered a significant victory by the wind sector.