Paying Wind Generators Not To Produce Power

Nov 13, 2014

The first powerhouse of the Bonneville Dam, 40 miles east of Portland, on the Columbia River.
Credit Wikimedia Commons

Chances are your utility bill has gone up this year. One small part of the reason may be that you’re paying for electricity that was never generated. From Jefferson Public Radio, Liam Moriarty takes a look at how Northwest electricity customers got saddled with more than $2.5 million in payments for power they didn’t use.

The Bonneville Power Administration operates the federal hydropower dams in the Columbia Basin. In springtime, during snow melt, there can be so much water in the river that combined with the output of the dozens of wind farms that have cropped up in Oregon and Washington – there’s more electricity in the system than anyone can use. Dam operators could dump the extra water over the spillways. But as the BPA’s Doug Johnson explains, that causes problems for salmon and other fish.
“When there’s a lot of water coming down, what happens is you get a lot of dissolved gas in the water. This can be harmful to those fish,” Johnson said.

To avoid that, the excess water gets run through the turbines. This leaves BPA with lots of electricity and nowhere to put it. So, Johnson says, there’s really only one solution.

“What’s left is our ability in an orderly fashion to take wind off the system and serve the load with hydro,” Johnson said.

But, shutting down the wind generators has a cost. “Because we have to take them offline, we compensate them for the costs that they incur for not generating the electricity they could be generating at the time,” Johnson said.

Under the policy known as the Oversupply Management Protocol, so-called “oversupply events” mean the wind generators are entitled to compensation, not only for the value of the power they didn’t get to sell, but also for the tax credits and other income they would have received had they been allowed to make power. For the dozen oversupply events that happened in 2012, that compensation comes to about $2.7 million. Due to a combination of weather, river flow conditions and better management of power, there haven’t been any oversupply events since then. Still, that $2.7 million gets charged to BPA’s customers. And Scott Corwin says they’re not thrilled with that.
“Certainly, anytime you’ve got a new charge, that’s going to cause concern," Corwin said.

Corwin heads the Public Power Council, the Portland-based group that represents the Northwest’s public utilities, which buy their power from BPA. Corwin says when BPA charges public utilities, they turn around and pass those costs on to their ratepayers.

“All our members are consumer-owned utilities or public utilities, so their ratepayers are their owners, so there’s no other place for a charge to go," Corwin said.

Several large investor-owned utilities such as Pacific Power, PGE and Puget Sound Energy are BPA customers, as well. So, the odds are good that one way or the other, you’re on the hook … Now, you might think the wind generators would be tickled with this system that gives them money for not making power. But, you’d be wrong …
“The wind companies don’t support the Oversupply Management Protocol. They didn’t ask for it," Cameron Yourkowski said.

Yourkowski is with Renewable Northwest, a Portland-based non-profit that promotes clean energy. Wind power companies are among the group’s members. Yourkowski says wind generators would rather just be allowed to make power and sell it to their customers

“Wind companies, and us included, think BPA shouldn’t have these curtailment rights at all, and should look at other solutions to dealing with oversupply,” Yourkowski said.

The wind companies legally challenged the BPA over the protocol. But the Federal Energy Management Agency issued a ruling last month giving it final approval. That approval extends through 2015. So, while there haven’t been any oversupply events for the past two years, if there were another, the same process would be used to compensate wind generators for getting bumped off the transmission lines. That $2.7 million bill spread out among dozens of Northwest utilities is pretty much pocket change. Still BPA, utilities and wind companies are keeping their fingers crossed that won’t happen again.

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