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RNP Press Release
July 15, 2002

Wind Supporters Applaud Bonneville Power Administration Decision

Portland, OR – The Renewable Northwest Project (RNP) today applauded an important decision for wind power development in the Northwest issued by the Bonneville Power Administration (BPA). In a final decision, BPA Administrator Stephen Wright exempted wind power resources from a penalty rate applicable to users of BPA’s transmission system in the Transmission Generation Imbalance Service Rate Proposal (GI-02-A-01).

 
Under its Generation Imbalance Service Rate (GIS Rate), BPA’s Transmission Business Line (TBL) charges a $.1 (100 mills) per kilowatt hour minimum penalty rate when generation falls short of what the generator scheduled and TBL is required to make-up the difference. The rate is charged by the TBL to encourage accurate scheduling by generators and constitutes a penalty in that it is not based on the cost of providing the service.
 
"This penalty has been one of the most significant deterrents to the development of wind in our region," commented Ann Gravatt, Senior Policy Associate at RNP. Given the current state of technology and the costs associated with developing wind power, the 100 mill charge has a significant potential to make otherwise viable wind projects uneconomic.
Wind generation depends on intermittent natural forces to create power. As a result, it is difficult for wind generators to schedule their power output at the level of precision necessary to avoid the penalty rate.
 
In proposing the revised rate, TBL recognized this difficulty faced by wind generators. The final decision notes that "[w]ind generators, unlike other generators, are uniquely situated, cannot respond to the intent of the 100-mill penalty rate, and should be exempt from the 100-mill penalty."
 
Jim Caldwell, Policy Director of the American Wind Energy Association (AWEA) commented: "Without this decision, wind development in Bonneville’s service territory would have ground to a halt. It is commercially unfeasible for a wind project to take service under the current BPA transmission tariff – not because wind imposes excessive costs on the system, but because the tariff imposes severe non-cost based penalties on the variable output of wind projects. This timely decision by Bonneville removes the worst of these non-cost based penalties."
 
Upon approval by the Federal Energy Regulatory Commission, the revised rate will be in effect October 1, 2002 through September 30, 2003. RNP believes this decision is a critical step for additional wind development in the Pacific Northwest and looks forward to continuing to work with BPA during the next General Transmission Rate Case. Caldwell notes that this decision, "gives regional stakeholders time and space to craft a more comprehensive proposal for the next General Rate Case that treats wind fairly and benefits customers."
 
RNP joined in the case with a broad coalition of parties known as the Joint Wind Energy Group. The coalition included: RNP, American Wind Energy Association, BPA Power Business Line, FPL Energy, LLC, Last Mile Electric Cooperative, Northwest Wind, LLC, Oregon Office of Energy, PacifiCorp, PacifiCorp Power Marketing, Portland General Electric Company, SeaWest Windpower, Inc., and the City of Seattle, through its City Light Department.
 
The Renewable Northwest Project is a regional, non-profit organization promoting solar, geothermal, and wind energy projects, programs and policies in Idaho, Montana, Oregon and Washington.
 
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For more information contact:
Rachel Shimshak, Director
Renewable Northwest Project
503-223-4544
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