Wind Wars Episode I-PNW Energy Companies v. BPA
Does the Responsible Developer avoid conflicts in Renewable Energy Production that could lead to litigation? Apparently not all of the time.
At the end of last month we reported the Bonneville Power Administration's ("BPA") decisions to allow more water to be spilled over dams and to shut down many wind turbines. We speculated that the decision would create conflicts that could lead to litigation. And so it has, the Wind Wars have begun.
A coalition of five PNW energy companies (Iberdrola Renewables, PacifiCorp, NextEra Energy Resources, Horizon Wind Energy and Invenergy have filed a one hundred and thirteen page complaint with the Federal Energy Regulatory Commission ("FERC"). The coalition claims to have invested $6 billion in renewable energy generation in the region. The coalition is howling mad and alleges that BPA violated the Federal Power Act by using its control of the region's power grid to breach its contracts and seize transmission rights.
The American Wind Energy Association ("AWEA") also filed a motion to intervene with comments in support of the coalition, decrying BPA's alleged acts as discriminatory in favor of its own interests, and further voicing its support for the energy companies' allegations.
"BPA is using its control of the region's transmission system and exploiting unusually high water levels to break contracts," said Rob Gramlich, senior vice president for public policy at the AWEA and former FERC policy advisor. "Contracts cannot be broken for wind or anything else. BPA, a government-owned monopoly, cannot play by different rules and shred contracts with private companies. FERC can rise above the politics and adjudicate based on facts and the law".
According to BPA's newsroom it was aghast that the complaint had been filed. BPA spokesman Mike Hansen stated "We are disappointed that this filing has proceeded as we are participating in mediation sponsored by FERC that we believe is worthy of effort".
BPA also argues the complaint is overblown because the BPA already has authority to limit wind generation, particularly during periods of overgeneration. “We have the legal authority to implement the Environmental Redispatch policy and, in addition to that, we believe our transmission contracts also give us the legal authority to limit generation,” stated Hansen.
BPA's position is unlikely to keep it out of the courts or away from an expensive and protracted battle at FERC. Other Northwest energy companies are expected to blast these and other BPA policies in the Ninth District Circuit Court of Appeals by alleging BPA actions are in violation of the Northwest Power Act. Individual companies and utilities may also file actions to recover losses from BPA for its actions this spring in the U.S. Court of Federal Claims.
Stay tuned, this is a major, reoccurring conflict with very high stakes. Anticipate it may take a long time for the wind wars to blow over.
