Wind-farm developer assails GVEA’s refusal to buy more power

Alaska Environmental Power’s wind farm near Delta Junction produces about 2 megawatts with its two 900-kilowatt and one 100-kilowatt wind generators. (KUAC file photo)

Lawyers representing the Delta Wind Farm are asking state regulators to deny a tariff filed by Golden Valley Electric Association that argues the utility should not be required to buy more power from the wind farm. GVEA said it should be exempt from state and federal regulations intended to promote use of renewable energy, because it can’t integrate more wind power now without incurring costs that would be passed along to ratepayers.

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GVEA President and CEO Cory Borgeson said the utility’s leadership turned down Delta Wind Farm owner Mike Craft’s offer to produce an additional 13.5 megawatts because, Borgeson said, it would cost ratepayers more money.

GVEA’s 24.5-megawatt Eva Creek wind farm near Healy began producing power in October 2012. (Credit GVEA)

“Right now, we are unable to accommodate any more wind power, because of the cost – significant cost – of backing up wind,” Borgeson said.

Utilities must “back up” wind power with conventional sources to replace the power lost when winds die down. In GVEA’s case, it’s a couple of diesel-fired generators in North Pole that are kept idling – and are throttled up quickly, when needed.

“So, when you have to have other sources of generation prepared and ready to go for when wind cuts out, we have to have these turbines running at very slow speeds,” Borgeson said. “And it’s just not very economical, at all.”

Borgeson said that inflicts a lot of wear and tear on the aging generators, and it increases Golden Valley’s fuel costs by about 15 percent, or some $20 million, according to a GVEA study. He says the offer was declined to keep those costs from showing up in ratepayers’ monthly bills.

“We told them that because of the significant cost of backing up their wind, that the financial harm to our members would be too great,” Borgeson said, “And (that) we’d be unable to purchase any of their power.”

That’s the basis of a tariff GVEA filed March 15 with the Regulatory Commission of Alaska, or RCA, that explains why Golden Valley should be exempted from state and federal regulations and policies requiring utilities to buy renewable power, whenever possible.

Craft and his attorney, Teresa Clemmer, say GVEA has failed to make that case.

“We think the assumptions that they use to kind of shoehorn that conclusion are totally without merit,” Clemmer said.

Clemmer and Craft say Golden Valley’s tariff is unlawful and “riddled with outlandish assumptions and false statements.” Clemmer argued in a 527-page response she filed with the RCA last week that the utility’s leadership misinterprets and disregards state regulations that were established to help promote renewable-energy sources such as wind.

“It was really just a complete rejection of everything the regulations required,” Clemmer said.

Clemmer zeroed in on Golden Valley’s claim that it can only use the older diesel-burning generators to back-up the wind power that’s produced by the two-megawatt facility Craft presently operates in Delta, along with GVEA’s own 25-megawatt Eva Creek Wind farm, near Healy.

“We just think they are misleading the public by trying to say that it’s only the diesel-fired power that’s going to be backing up the wind,” Clemmer said. “It’s just ridiculous.”

Clemmer and Craft argue that GVEA can back-up intermittent wind power with facilities that burn, quote, “reasonably priced power,” such as coal. She says the system should have even more capacity when the 50-megawatt coal-fired Healy 2 plant comes online sometime this year.

“They already have enough of their reasonably-priced power on the system to integrate the wind,” Clemmer said. “But even if they didn’t, they’re bringing on a brand-new coal-fired power plant that will free up a lot of that reasonably priced power to back up wind.”

Craft said the decision by GVEA’s board members to buy Healy 2 in 2013 and their failure to get the problem-plagued facility up and running after sinking some $175 million in to it, discredits their claim to be protecting members from rate hikes.

“That power plant has cost this community an incredible amount of money,” Craft said. “And we got nothing out of it.”

Craft said the 13.5 megawatts his expanded facility would produce would enable GVEA to reduce use of its diesel- and coal-fired generators around Fairbanks, which would help improve the area’s air quality.

The RCA commissioners must rule on GVEA’s tariff by May 1.