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GVEA files tariff in response to solar-wind power proposal

KUAC file photo
Delta Junction Renewable Resources has proposed to build a facility that would produce up to 38 megawatts of wind- and solar-generated electricity and sell 36 mW to Golden Valley Electric Association. The facility would be built next door to the 2-megawatt Alaska Environmental Power facility in Delta owned by Mike Craft, of Fairbanks.

Utility officials say Delta Junction Renewable Resources would initially have to pay to connect to GVEA's grid

Golden Valley Electric Association has responded to an offer by a Massachusetts-based company to generate up to 38 megawatts for the co-op, using wind and solar power. Golden Valley says in a filing with state regulators the company will first have to pay out for the first few years just to link-into the Golden Valley grid.

Delta Junction Renewable Resources proposed in March to build a facility to produce up to 38 megawatts of wind and solar-generated electricity and sell that power to Golden Valley. And the co-op outlined its response to the proposal in a tariff filed Monday with the Regulatory Commission of Alaska.

Golden Valley officials say state and federal rules require the co-op to set a price for the electricity that would be the same or less than it would cost the co-op to generate the power itself. The price also would have to pay for the cost of integrating that renewable power into Golden Valley’s grid, and to maintain its safety and reliability.

That’s why the tariff proposes that instead of getting paid for the power, Delta Renewable Resources would pay Golden Valley 3.8 cents per kilowatt-hour during the first year of a 20-year power-purchase agreement. Over the next several years, Golden Valley would eventually begin paying for the power, up to a rate just over 6 cents per kilowatt hour by 2042.

The tariff also separately would charge Delta Renewable Resources a one-time interconnection fee of more than $3.6 million. That would cover the costs associated with connecting a power line that the company would build from its proposed facility in Delta Junction to a Golden Valley substation just south of town.

KUAC file photo
Golden Valley's tariff was based on assumptions that include the closure of the 55-year-old Healy 1 power plant, shown here to the right of the larger and newer Healy 2 plant. The co-op's board of directors must decide by the end of the year whether to pay up to $50 million for an emissions-control system, or shut it down.

According to a cover letter submitted with the tariff, the power-purchase price was calculated based on assumptions that include the shutdown of Healy 1 by the end of 2024. The 28 megawatts generated by the 55-year-old coal-fired power plant is one of Golden Valley’s cheapest source of power, second only to the Bradley Lake Hydro Project. But the co-op board must decide by the end of this year whether to invest an estimated $30 million in the plant for an emissions-control system, or shut it down.

There's been no response to Golden Valley's tariff from the company that owns Delta Junction Renewable Resources. A spokesperson for Massachusetts-based Ameresco said in an email today that company officials decline to comment on the tariff. The company’s local representative, Fairbanks wind farm developer Mike Craft, also declined comment.

Correction — this story has been revised to correct an earlier version that stated the Healy 1 power plant is Golden Valley's cheapest power source. That incorrect; it's the co-op's second-cheapest source of electricity.