On October 16, 2014 FERC issued an order accepting Bonneville Power Administration’s (“BPA”) revised Oversupply Management Protocol (“OMP”) and OS-14 Oversupply Rate (“OS-14 Rate”) as a compliance filing under FPA Section 211A standards. The Commission also issued an order approving the OS-14 rate under BPA’s Northwest Power Act rate standards. In making the approval, FERC stated that its acceptance of the BPA’s OMP remains an interim solution and that the Revised OMP expires on September 30, 2015. If BPA desired to extend the use of OMP beyond that date, it will be required to file a request to do so with FERC, explaining why the continued use of OMP is justified. FERC encouraged BPA to continue to work toward a “mutually agreeable long-term solution to manage oversupply conditions rather than continuing to rely on involuntary curtailment.”
In May 2011, Bonneville adopted its Environmental Redispatch Policies, under which it unilaterally curtailed generators and utilized their firm transmission rights without compensation to deliver federal hydropower during certain high water situations. Bonneville stated that this policy was a necessary to ensure that BPA fully comply with its organic statutory requirements, as well as other applicable environmental statutory requirements. In response, a coalition of wind energy facility owners filed with FERC a complaint and petition for order under Section 211A of the FPA, requesting that FERC order Bonneville to discontinue the curtailment practices that the complainants argued were discriminatory. FERC granted the complaint and directed BPA to file revisions to its Open Access Transmission Tariff (“OATT”) to provide for transmission service on terms and conditions that are comparable to those under which Bonneville provides service to itself and that are not unduly discriminatory or preferential (see December 12, 2011 edition of the WER).
Bonneville later proposed the OMP as a new protocol to govern during oversupply conditions,. Under the OMP, Bonneville proposed to displace certain non-Federal generation during oversupply events using a least-cost displacement curve. Generators that elected to be compensated for displacement in accordance with the least-cost displacement curve would be allocated back 50 percent of the total displacement costs through the proposed cost allocation methodology. Generators that did not elect to be compensated would be assigned a zero displacement cost and be displaced first, without receiving any compensation or cost allocation (see March 19, 2012 edition of the WER). FERC found that this protocol unnecessarily allocated costs in a noncomparable manner and directed BPA to make a compliance filing, “setting forth a methodology to allocate displacement costs in a manner that equitably allocates such costs (see January 8, 2013 edition of the WER). In response, BPA filed the current revised version of its OMP and separately filed the corresponding OS-14 Rate.
To view the OMP Order, click here.
To view the OS-14 Order, click here.
*Disclosure – Troutman Sanders LLP represented Iberdrola Renewables, LLC in this FERC proceeding