FERC risks going overboard in easing penalties for generation imbalances.
Bruce W. Radford is editor-in-chief for Public Utilities Fortnightly.
Take an actual wind farm, this one with a capacity of 102 megawatts (MW), developed and brought on line by FPL Energy. Now consider what happened next with the Oklahoma Municipal Power Authority (OMPA), which owned a 50 percent share in the facility during its first full year of operation, beginning Sept. 29, 2003.
According to records assembled and analyzed by the Transmission Access Policy Study Group (TAPS), an association of municipal and other transmission-dependent utilities (TDUs), the wind farm did just about as good a job of incurring penalties for imbalances as producing profits from actual power sales.
Over the first 12 months, from October 2003 through September 2004, OMPA's share of the wind farm produced more than 154,000 MWh, at an average unit cost of $16.33/MWh. So far so good.
But wind is fickle. Wind turbine output often failed to match the schedules that OMPA would have filed with the control area operator (now also known as the balancing authority). In fact, over the full year, OMPA recorded some 14,000 MWh of excess power deliveries. Shortfalls ran higher—at 40,688 MWh—and that's the problem of most interest here.