Wind-power Developer Takes GVEA to Court in 4-year Quest to Sell More Renewable Energy

Sep 1, 2017

Fairbanks wind-power developer Mike Craft took Golden Valley Electric Association to court this week, claiming the utility is violating state and federal law by refusing to buy more electricity generated by a Delta Junction-area wind farm. Craft turned to the courts after four years of fighting with Golden Valley and working with state regulators to adopt federal policies intended to promote greater use of renewable energy.


Anchorage Superior Court Judge Erin Marston is deliberating over arguments presented Tuesday by lawyers representing Golden Valley and Alaska Environmental Power, or AEP, which operates a 2-megawatt wind farm near Delta.

Alaska Environmental Power operates a wind farm near Delta Junction that produces up to 2 megawatts mainly with two 900-kilowatt wind generators, at left, and a 100kW turbine, right.
Credit Alaska Environmental Power

Teresa Clemmer argued the case for AEP.

“They have challenged the tariff filing by Golden Valley Electric Association that establishes the terms and conditions for interconnecting with these small renewable-energy companies,” she said in an interview last week.

AEP got its day in court to challenge Golden Valley’s terms and conditions after a four-year effort to get the Regulatory Commission of Alaska to adopt rules modeled after a 1978 federal law that seeks to promote greater use of renewable energy. It began when AEP petitioned the commission in August 2013 to develop state rules that align with the federal Public Utility Regulatory Policies Act, or PURPA.

“PURPA was designed to encourage private-sector development specifically with renewables, but (also) any kind of energy development,” he said.

Craft, a developer who made his money in Fairbanks before building his first wind farm in Delta in 2009, says PURPA also encourages innovation through competition.

“And that’s what’s been missing in all of this, is competition,” he said. “Y’know, if Golden Valley had had competition for the last 20 years I can bet they’d be doing a lot better job than they’re doing right now.”

From left, Cory Borgeson, Golden Valley president and CEO; Teresa Clemmer, AEP attorney; Mike Craft, AEP's managing partner.
Credit KUAC file photos

The commission agreed to consider the request, and after more than two years of numerous proceedings involving industry, interest groups and others, it adopted regulations that went into effect in March of 2016. The next month, Golden Valley filed a tariff it said complied with the new rules. But Craft and Clemmer disagreed, claiming they’re, quote, “grossly noncompliant,” and they filed objections to the tariff. Three months later, after some more back-and-forth over the issue, AEP appealed to the Superior Court.

“We think of it as judicial review of an administrative-agency decision,” she said. “That’s sort of the category of litigation that it is.”

Clemmer says most of Tuesday’s oral arguments concerned Golden Valley’s motions to dismiss the case or send it to a federal court. She’s not sure when Judge Marston will reach a decision, but she suspects it’ll take a while.

“The pace of this case has been quite slow,” she said. “It’s been over a year since the notice of appeal was originally filed and we’re just now having our first hearing.”

Meanwhile, AEP is pressing Golden Valley in another case before the regulatory commission, over Craft’s request in December to connect a second wind farm he proposes to build in Delta with the grid. Golden Valley filed a tariff in March in response to Craft’s request on behalf of the new company he formed to manage the project called Delta Wind Farm. Clemmer filed objections to that tariff and asked the commission to reject it. In April, the commission did just that, siding with Delta Wind Farm on among other things its objection to Golden Valley’s denial of the wind farm’s request to connect to grid.

Golden Valley President and CEO Cory Borgeson says that decision was based on the expense of having to back-up or “regulate” wind power with Golden Valley’s oil- and diesel-fired generators.

“Because our cost of regulation is so high, we wouldn’t be able to pay Delta Wind anything,” he said in an interview last month.

Borgeson says GVEA wants to get more renewable power on to the grid, but he says the co-op’s leadership also is focused on holding down increases in ratepayers’ monthly bills.

Delta Wind Farm’s interconnection request is now under review by Debra Brandwein, an administrative law judge who works for the commission.