Washington, DC (May 16, 2011) – Wind power generators in the Pacific Northwest could see the Bonneville Power Administration (BPA) break its contracts with them any day, under a wrongheaded decision announced last Friday, May 13. BPA signed an "Environmental Redispatch" Record of Decision, a policy which, during times of high hydropower generation, lower electric demand, and high wind generation, could lead wind generation to be curtailed without any compensation to wind project owners. This will potentially cost wind companies tens of millions of dollars and stifle new investment in the Pacific Northwest.
The American Wind Energy Association (AWEA) disagrees with this decision and expresses its disappointment that a federal agency would choose to ignore the President's commitment to renewable energy and break contractual commitments rather than operate the grid more efficiently – as is done in much of the rest of the country. That could alleviate some of Bonneville's concerns that led to the decision late Friday.
"BPA really ought to call this the 'Anti-Environmental Redispatch,' since it makes no sense environmentally and flies in the face of the agency's obligation under the Northwest Power Act to promote renewable electricity in the region," commented AWEA CEO Denise Bode. "Yet the agency chose to ignore its statutory duties and Obama administration policies, and instead to illegally promote its own narrow economic interest over meeting its contractual obligations with private renewable energy companies."
Tom Vinson, senior director of federal regulatory affairs at AWEA, said, "This policy creates significant uncertainty, discriminates against wind energy, and will result in existing projects in the Northwest being seriously harmed economically. It will also make the Northwest significantly less attractive in the future for wind energy development and the associated jobs, economic development and tax and rental payments."
BPA tries to claim it would curtail wind generation instead of spilling water over its hydroelectric dams for environmental reasons. According to BPA, spilling even a bit more water over the dams will create dissolved nitrogen levels that harm the region's salmon population. However, Save our Wild Salmon, the leading conservation group focused on protecting fish in the Northwest, asserts that this is false, saying that BPA can spill more water and still meet its salmon obligations. The State of Oregon takes the same position with respect to additional spilled water. In fact, spilling water to Oregon's standard would be MORE beneficial for salmon than BPA's current strategy.
"Rather than being an environmental issue, the policy is a classic case of anti-competitive and discriminatory behavior by a utility with a conflict of interest," said Rob Gramlich, senior vice president of public policy at AWEA. "BPA as the 'air traffic controller' for the Northwestern grid is allowing some generators to operate while blocking others. Such anti-competitive behavior violates contract sanctity and the Federal Power Act's anti-discrimination provisions. BPA has not sufficiently pursued other measures before curtailing wind, despite its claim that curtailment is a last resort."