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APPA, others urge court to set aside FERC orders on BPA environmental redispatch policy


From the December 12, 2013 issue of Public Power Daily

Originally published December 12, 2013

By Robert Varela
Editorial Director
The Federal Energy Regulatory Commission acted arbitrarily when it ordered the Bonneville Power Administration to revise its environmental redispatch policy for oversupply conditions, a coalition of public power and cooperative utilities told a federal appeals court. Bonneville did not unduly discriminate against wind power generators in providing transmission service, the coalition said in a Dec. 2 brief filed with the U.S. Court of Appeals for the Ninth Circuit in Northwest Requirements Utilities, et al v. FERC.

At issue in the case is BPA’s environmental redispatch policy, which called for curtailing generators (including wind) so Bonneville could generate hydro power at federal dams when necessary to protect endangered fish during oversupply conditions. 

Bonneville did not discriminate unduly against non-hydro resources because it made appropriate distinctions among generating facilities based on different operational and statutory characteristics, APPA and the others said. "All resources that were not federal hydroelectric resources were treated the same under the [environmental redispatch] policy, except that variable energy resources received preferential treatment by being the last to be redispatched."

The commission "inexplicably found that federal hydroelectric resources and other resources on Bonneville’s system are similarly situated solely because they both take firm transmission service," the coalition said. The commission failed to consider that, unlike other resources, federal hydroelectric facilities "are subject to numerous statutory obligations and constraints to protect endangered fish." Bonneville’s hydroelectric resources "must generate in order to protect endangered fish as required by the relevant statutes and other resources need not do so," the coalition said.

That FERC’s orders on the environmental redispatch policy are arbitrary and capricious is shown by the commission’s approval of BPA’s oversupply management protocol (OMP), APPA and the others said. Under the OMP, Bonneville proposed to retain its practice of unilaterally directing certain generators to reduce their output and replacing that output with federal hydro generation when necessary for environmental and reliability reasons, but to provide some limited compensation to the displaced generators.

The facts were the same, but the commission reached an entirely different result, the coalition said. In its order on the environmental redispatch policy, the commission essentially declared unlawful Bonneville’s practice of replacing certain generation with federal hydro generation—but that practice "suddenly became lawful" in FERC's order approving the oversupply management protocol, the coalition said. That demonstrates that there "is no rational connection between the facts the commission found and the choice the commission made with regard to the [environmental redispatch] policy."

Joining in the brief were APPA, Northwest Requirements Utilities, Public Power Council, Pacific Northwest Generating Cooperative, Public Utility District No. 1 of Snohomish County, the city of Seattle and the National Rural Electric Cooperative Association.
 

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Senior Vice President, Publishing 
Jeanne Wickline LaBella
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