BPA Submits Compliance Filing in FERC Environmental Redispatch Proceeding

The Bonneville Power Administration (BPA) is gearing up for spring with its revised Oversupply Management Protocol (OMP), submitted last week as a compliance filing in the Federal Energy Regulatory Commission (FERC) proceeding on BPA’s “Environmental Redispatch” policy. BPA’s compliance filing was submitted in response to FERC’s December 7, 2011 order holding that BPA’s Environmental Redispatch policy of curtailing wind generation without compensation during periods of high water was unduly discriminatory and preferential. FERC directed BPA to file a revised Open Access Transmission Tariff (OATT) addressing the comparability concerns raised in the proceeding.  

Under the OMP, BPA would curtail wind generation during periods of high water in order to deliver federal hydropower in place of the curtailed generation, but would provide “compensation” for the curtailments based on the wind generators’ submitted displacement costs. The “compensation” would come in part from the wind generators themselves, who would be allocated a portion of the displacement costs through a new rate.   

 

BPA’s compliance filing is conceptually similar to the draft OMP it circulated for comment in February, although there are some changes of note. First, the OMP will now be in place for only one year, instead of the original 2015 end date. Second, wind generation with power sales contracts signed after March 6, 2012 will be compensated differently than wind generation with power sales contracts signed before then. Though both will receive compensation for lost production tax credits and lost renewable energy credits, the level of compensation for wind generation with post-March 6 contracts is not entirely clear. Third, wind generators can opt out of receiving compensation in exchange for not being allocated a share of the displacement costs; however, those opting out will be given a displacement cost of $0/MWh and thus be the first wind generators curtailed. Fourth, instead of submitting displacement costs to BPA, generators must now submit their displacement costs to a third-party evaluator.  BPA will no longer impose a penalty for inaccurate costs, but may ask FERC to investigate inaccuracies (or perceived inaccuracies) in the displacement cost submissions. 

 

FERC is accepting comments on BPA’s compliance filing through 5 pm EST Tuesday, March 27, 2012. In addition, BPA is seeking comments on its OMP Business Practice, which contains information on how BPA plans to implement the OMP. Comments on the OMP Business Practice are due by close of business on Monday, March 26, 2012. 

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