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The Bonneville Power Administration (BPA) has released a new proposal to address the oversupply issues that caused it to curtail 350 MW of wind energy generation last spring.

BPA says its new plan, which it has submitted to the Federal Energy Regulatory Commission (FERC), attempts to "balance multiple competing interests by equitably sharing oversupply costs and limiting total cost exposure." According to BPA, the proposal includes feedback from months of discussions with key stakeholders.

"We have heard and responded to the calls for a solution developed in the Northwest," BPA Administrator Steve Wright said in a statement. "While the time frame we had to deal with did not provide opportunity for a broad settlement, our filing today is based on extensive conversations with and comments from parties interested in achieving an equitable solution."

Under the new proposal, BPA would first work with the U.S. Army Corps of Engineers and the U.S. Bureau of Reclamation to manage federal hydroelectric generation and spill water up to dissolved gas limits.

Then, BPA would offer what it says would be “low-cost or free” hydropower to replace the output of other power plants. Under this scenario, the expectation would be that generators would voluntarily reduce their generation to save money.

After those measures are taken, if electricity supply still exceeds demand, BPA would reduce the output of the remaining generation on the grid - including wind energy - in order of least cost. Notably, BPA would compensate wind generators for lost revenues, including renewable energy credits and production tax credits.

This procedure would be subject to review by a third party, BPA notes, adding that it would cover the compensation costs until a rate is established to recover the costs.

In December, FERC ruled that BPA had unduly discriminated against wind energy and gave preferential treatment to hydropower, and required BPA to submit a revised open-access transmission tariff (OATT).

Last month, BPA released a proposal that would compensate wind energy producers within its section of the grid for periodically reducing their output during periods of oversupply in order to keep supply from exceeding demand during high river flows.

However, wind energy developers claimed that the plan still violated federal energy law and was unfair to consumers. In a letter to FERC, several energy companies - including Iberdrola Renewables, Pacific Power, EDF Renewables North America, Invenergy Wind North America and NextEra Energy Resources - wrote that they would continue to insist that BPA comply with the FERC order and file a binding OATT.

The group representing these companies - the Renewable Northwest Project - was similarly displeased with BPA’s new proposal.

“The proposal BPA filed today speaks to only half of what was addressed during regional discussions; it focuses on money and cost allocation but sidesteps the fundamental principle of treating others’ generation as it treats its own - the transmission ‘golden rule,’” the group said in a statement.

“Wind generators, several utilities and advocates will only support a two-part solution that includes an enforceable tariff to ensure that non-discriminatory practices and open-access transmission provisions are adhered to in the future, along with an equitable cost allocation proposal,” they continued. “This certainty is critical to attract long-term investments in clean energy.”

At the time, BPA claimed its curtailment decision was necessary to protect salmon and steelhead, maintain the reliability of the power grid and avoid shifting costs to customers. However, salmon industry group Save Our wild Salmon (SOS) says BPA lacks the scientific evidence to support those claims.

In fact, SOS actually supports the wind energy industry’s interests over BPA’s curtailment actions.

“BPA continues to illegitimately use ‘salmon protection’ as an excuse for its controversial policy,” Pat Ford, Save Our wild Salmon’s executive director, said in a statement. “But we and others have repeatedly proposed lawful solutions that are better for salmon and do not hurt the Northwest’s wind energy industry. We deeply regret that BPA has failed to embrace any of these solutions, and will oppose BPA’s policy at the Federal Energy Regulatory Commission.”

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