Delta Wind Farm Developer Presses GVEA to Buy More Wind-generated Electricity

Mar 29, 2013

Delta Wind Farm developer Mike Craft is ratcheting up pressure on Golden Valley Electric Association’s board and management, threatening them with legal action to force them to buy more wind-generated power – which they say state law requires.


Alaska Environmental Power workers will erect a second 900-kilowatt wind generator this summer on this concrete foundation they built last fall at the Delta Wind Farm. Other turbines, including the first 900kW unit, are visible in the background.
Credit Alaska Environmental Power

It’s been more than two years since GVEA’s board of directors voted to build the co-op’s own Eva Creek Wind Project, near Healy. In the process, the board declined two other wind-power proposals, including one from Mike Craft, a Fairbanks entrepreneur and developer of the Delta Wind Farm.

Craft says he’s talked many times since then with members of GVEA’s board and management about the benefits of buying more electricity from his wind farm. Benefits that include jobs that would be created by expanding the privately-run facility near Delta Junction, and the savings to ratepayers for the cheaper and cleaner method of generating power, compared to the expensive fuels burned at some of GVEA’s generating stations.

“The Delta Wind Farm has an opportunity to put hundreds of people to work right away,” Craft said. “It has an opportunity to decrease our dependence on fossil fuels, specifically the higher-cost oils that GVEA uses in its energy portfolio. And it also has an opportunity to take out an incredible amount of diesel fumes out of the environment.”

An aerial view of the Delta Wind Farm shows some of the roads, structures and wind generators that have been built on the 320-acre facility near Delta Junction.
Credit Alaska Environmental Power

GVEA officials have consistently declined Craft’s offers, and have refused to buy more than 2 megawatts, as allowed under the present agreement with his company, Alaska Environmental Power. Craft wants to erect 16 more big turbines at the Delta Wind Farm, to produce up to 25.6 megawatts that he’d sell to GVEA at about 12-and-a-half cents per kilowatt hour.

So, Craft has hired an Anchorage law firm to argue his case – and if necessary, to litigate it, based on their assertion that state law requires GVEA to buy power from an established source like Alaska Environmental Power, which has been selling up to 1 megawatt of wind-generated power to GVEA since 2009.

“I was hoping that Golden Valley would look at this document, and consider some of the complaints that we’re making,” he said. “And realize that they do have not just a moral obligation to work with us, but they also have a legal obligation to work with us. And I wanted to make sure that they realize what’s at stake here.”

A March 21 letter by attorneys Peter Van Tuyn and Teresa Clemmer lays out Craft’s case, and states that unless they hear otherwise from GVEA, they’ll assume the co-op remains opposed to Craft’s proposals and will, quote, “proceed as appropriate to assert our rights under Alaska law.”

GVEA President and CEO Cory Borgeson says he and the board are willing to talk with Craft and explore possible deals.

“Golden Valley will work with Mike Craft’s request, and see what we can purchase from him,” Borgeson said.

Borgeson says GVEA is still adapting to integrating wind power into its system, since the co-op’s Eva Creek Wind Farm went into production in December, generating a maximum output of just under 25 megawatts. Borgeson says adding another 25 megawatts from an expanded Delta Wind Farm would present many engineering challenges.

And, Borgeson says, those challenges would have to be worked out while GVEA is undertaking two other major initiatives: getting the big, 50-megawatt Healy Unit No. 2 operational – the so-called Healy Clean Coal Plant – and launching the ambitious North Slope LNG gas-trucking program next year.

“These are all going to change what our cost structure of power is going to look like at Golden Valley,” he said. “And that’s going to change what price we’ll be able to pay Mike Craft for the wind (power) that he can produce in Delta.”

Borgeson says the biggest challenge for GVEA’s board and management will be making these changes all happen in a challenging fiscal environment – while keeping rates as low as possible.