On March 6, 2012, the Bonneville Power Administration (“Bonneville” or “BPA”) submitted an Oversupply Management Protocol (“OMP”) as part of its compliance filing in response to the Federal Energy Regulatory Commission’s (the “Commission” or “FERC”) December 7, 2011 Order which found that BPA engaged in unduly discriminatory curtailment practices and directed BPA to file an OATT pursuant to Federal Power Act Section 211A.  The December 7 Order found that:  “Bonneville must submit a revised OATT, pursuant to section 211A, that addresses the comparability concerns raised in this proceeding in a manner that provides comparable transmission service that is not unduly discriminatory or preferential.”

Under the OMP, Bonneville would continue to curtail generation during periods of high water, and would continue to deliver federal hydropower in place of the curtailed generation.  The OMP differs from BPA’s prior protocol, the Environmental Redispatch and Negative Pricing Policy, in that Bonneville states that it will propose a compensation scheme for generators to be implemented, if the proposal is adopted and approved, in a future rate proceeding. BPA proposes that the generators who suffered displacement losses in the form of energy and tax credits would be compensated by BPA.  Under the proposed compensation scheme, however, the compensation costs would be allocated in part to the purchasers of power from the Federal base system, and in part to the generators who suffered displacement and required reimbursement.  Additionally, the proposal posits that generators with power sales contracts signed after March 6, 2012 will be compensated differently than generators with power sales contracts in effect prior to that date.  BPA argues that parties to power sales contracts signed after March 6, 2012 were on notice of the possibility of curtailment. 

In its filing, Bonneville indicates that it intends to file a completed OATT for which it will request reciprocity approval by the end of March 2012.

The Commission has issued notice that it is accepting comments on Bonneville’s compliance filing through 5 pm EST Tuesday, March 27, 2012.  Bonneville is also seeking comments on its OMP Business Practice, which contains information on how Bonneville will actually implement the OMP.  Comments on the OMP Business Practice are due by close of business on Monday, March 26, 2012.
For a copy of Bonneville’s filing, click here.

For a copy of the Commission comment notice, click here.

For Bonneville’s OMP webpage, click here.