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It's the Money, Not the Fish

Bonneville Power, wind curtailments and the bigger picture.

Fortnightly Magazine - July 2012

29, 2012.)

Still to come is BP-14, Bonneville’s planned new rate case for fiscal year 2014 and beyond, which BPA says will commence in late 2012. That case will develop and define a formula to allocate and recover the costs that Bonneville will incur in paying off wind project owners for the right to take them off the system. Until then, no one will know for sure who the real winners and losers might be in future years under Bonneville’s curtailment plan.

Up until now, industry reaction to Bonneville’s gambit has been overwhelmingly disapproving. Criticism has run so high, in fact, that when Bonneville filed its formal answer to the many protests on April 23, it chose to begin modestly, with a plea for indulgence:

“One would think,” wrote BPA, that “an overabundance of low-variable-cost, carbon-free electricity would be an easy problem to solve.”

Not Worth the Effort

FERC made the problem no easier by handing down a decision filled with ambiguity.

Whether accidental or by design, the commission’s December 2011 ruling did a poor job of telling Bonneville exactly how to fix its tariff, a point seized with relish by the NRECA, the National Rural Electric Co-op Association. NRECA defended BPA’s choice on March 29 to submit to FERC only a voluntary, safe-harbor reciprocity tariff, and to ask for a ruling declaring the tariff sufficient to comply with FERC’s comparable service mandate.

In one paragraph, FERC told BPA to file “a revised OATT.” In another, it asked only for “revisions,” and declined to specify “precise terms or conditions.” And in footnote 101 FERC drew a distinction between how it would go about reviewing a tariff filed in the “safe harbor context,” versus a tariff filed under FPA sec. 211A.

These sausage-making distinctions are crucial. According to the wind power complainants, they dictate whether FERC going forward may act directly and independently to cure PMAs such as Bonneville of allegedly discriminatory grid practices that don’t comport with FERC’s pro forma OATT, or whether FERC must wait until the PMA itself seeks reciprocal service from third-party transmission owners, as would be the case under a voluntary safe-harbor tariff.

The wind industry complainants warn that under Bonneville’s choice to submit only a safe harbor tariff, a wind owner could never challenge a PMA-ordered curtailment unless the wind owner already has itself denied grid service to the PMA—a decidedly unlikely circumstance:

“IPPs that do not own transmission facilities cannot deny Bonneville transmission service for failure to satisfy reciprocity.

“All the commission can do,” they add, “is to withdraw reciprocity status.” (See, Protest of Complainants, pp.24-25, filed March 27, 2012; Supplemental protest, pp.6-7 filed April 30, 2012.)

And the complainants see little comfort in that, as Bonneville stopped updating its voluntary reciprocity OATT after FERC issued Order 890 in 2007, leading FERC to rule in 2009 that BPA’s nonconforming OATT no longer qualified for safe harbor status. (Dkt. Nos. NJ09-1, NJ07-8, July 15, 2009, 128 FERC ¶61,057.)

The issue came to a head early last year when Bonneville opened a dialogue with stakeholders on the relative