HOUSTON (Reuters) - The Bonneville Power Administration (BPA) has curtailed coal, natural gas and wind generation in the Pacific Northwest so it can increase hydropower output to protect salmon and other fish, the agency said on Thursday.
The largest Northwest snowpack since 1997 has boosted river levels and hydro output, complicating a growing battle between hydro and wind interests in the region.
The American Wind Energy Association (AWEA) called Bonneville's new rule to curtail wind generation without compensation during times of high hydro output "wrongheaded."
AWEA said BPA's "environmental redispatch" rule could cost wind companies tens of millions of dollars and stifle investment in wind farms.
BPA has more than 3,500 MW of wind generation in the region and more in development. Curtailing wind output could reduce wind farm revenue from production tax credits and renewable energy credits.
On Thursday, BPA said it limited electric output of generators for about six hours, affecting nearly 1,000 megawatts of wind.
A day earlier, BPA said it cut back all coal, gas and thermal generation to minimum levels due to low overnight power demand. As a last resort, BPA cut 200 to 350 MW of wind until about 5 a.m. Wednesday morning.
The U.S. Army Corps of Engineers has increased river flow to maintain space in upstream reservoirs for further runoff from melting snow, BPA said.
High hydropower output limits BPA's flexibility to serve as a back-up for wind power which fluctuates hour by hour.
Meanwhile, the region's hydro outlook keeps rising.
The U.S. Northwest River Forecast Center Thursday projected water runoff at the key Dalles Dam at 124 percent of normal through July, up from the previous forecast of 119 percent and much above 2010's actual runoff of 79 percent.
The region's power supply is already lower than normal because Energy Northwest's 1,131-MW Columbia nuclear power plant in Washington has been shut since early April.
Bonneville began looking at the competition between rising water and wind output last fall as weather patterns shifted and government forecasters projected the first significantly above-normal hydro conditions since 2006.
In a letter to market participants, BPA said it "has been aware for some time that a combination of high streamflows and high wind could pose new challenges."
Daily power prices at the Mid-Columbia slid $6 to an average of $15 per megawatt-hour on Thursday, down from the May 2010 average of $29. Off-peak power prices have traded in negative territory.
The need to curtail generation emerged last June when -- after several dry years -- heavy spring rain forced Bonneville to reduce nuclear and wind output for about two weeks.
BPA increases the amount of water moving through its hydro turbines, minimizing the amount of water spilled over dams to alleviate the danger of gas bubble disease for endangered fish.
This week, rising runoff pushed dissolved gas levels at most of the eight federal dams on the Lower Snake and Columbia rivers to levels that triggered action under state water quality standards, BPA said.
In recent weeks, the agency has provided surplus hydropower free or at low prices to encourage utilities to shut coal and natural gas plants. The Northwest normally receives about 65 percent of its power from hydroelectric dams.
(Reporting by Eileen O'Grady;editing by Sofina Mirza-Reid)