Member-owners at Interior Alaska’s electric co-op are urging the utility to act fast before Inflation Reduction Act (IRA) energy funds disappear.
The pressure comes after Congress approved the budget reconciliation bill in early July, moving up the deadline for Biden-era solar and wind tax credits by multiple years.
It’s a pivotal moment, Golden Valley Electric Association (GVEA) member-owner Phil Wight told KUAC. He compares the amount of money on the line for Alaska utilities to the federal government funding construction of the Alaska Railroad in the early 20th century.
“This isn’t just a once in a lifetime opportunity. This is probably a once in two or three generation opportunity,” he said.
Wight is an energy historian and associate professor at the University of Alaska Fairbanks. But he said he’s speaking out of personal concern.
He said whether the federal investment in Golden Valley is justified through carbon reduction – like it was under the Biden administration – or some other priority doesn’t change the underlying, immediate issue.
“I don’t really care whether you’re talking about carbon or climate,” Wight said. “We’re at a place where we just need new generation. And this is the best plan and opportunity we have to do that.”
In 2022, Golden Valley’s board of directors set a course for retiring the less-reliable of the utility’s two coal power plants in Healy. But last year, they changed plans, choosing to keep the plant online because options for energy generation had grown too thin.
Months later, in January, the board’s anxieties became a little more tangible for the general public. That’s when the electric co-op warned its members of possible – though not imminent – rolling blackouts in the event of a cold snap or similar event that burdens the grid.
Mixed in with those developments were announcements in 2024 that Golden Valley had received not one but two awards through U.S. Department of Agriculture (USDA) programs funded by the Inflation Reduction Act. It was the only utility in the country to see federal investment through both of the programs.
The awards totaled hundreds of millions of dollars in grants and low or no interest loans for GVEA. The money was aimed at building out battery energy storage systems as well as constructing new transmission lines and substations to help the utility add more renewable energy generation.
Wight said that diversification is an important goal.
According to GVEA data, in 2024, coal contributed about 44% of the utility’s power generation, with oil coming in around 39%. The remainder is a mix of natural gas at 8%, hydro at 6%, wind at 3% and a very small amount of solar – 0.03%.
That distribution marks a notable shift from 2017, when natural gas made up about 30% of the co-op’s energy generation.
“If we can’t bring on these projects, we are going to be relying on old, expensive diesel generation that is really volatile,” Wight said.
At a meeting on Tuesday, Golden Valley took a step forward on one of the federal awards, which came from the Powering Affordable Clean Energy (PACE) program.
The board had dropped some items from their PACE proposal in April that the utility had been intending to use to bring on a solar project in Nenana. That’s in part because the private firm backing the project, Renewable IPP, decided to pull out.
But on Tuesday, the board moved to advance Golden Valley’s final application and start putting the $100 million award toward two new battery energy storage systems.
That development is something Wight, GVEA leadership and the board of directors all frame as good news. Golden Valley CEO Travis Million said Tuesday the systems can help regulate power from existing and future renewable energy projects – and that they offer quick backup.
“If there’s an outage – you know, generators take time to start up – the batteries can then pick up that additional load for a period of time, instantaneously, keeping the lights on until you can bring up other generation to meet that need,” he said.
But Golden Valley is still waiting for clarity from the Trump administration and Alaska’s congressional delegation on its proposal for the other program, called Empowering Rural America (New ERA), according to Million. That award gave GVEA a “budget authority” of just over $206 million, but Golden Valley Chief Administrative Officer Abby Dillard said by email Wednesday that “based on how the project package is configured the actual value is higher.”
She said the total value is more than $380 million: $71 million in grants and $315 million in loans. Those funds are slated for infrastructure upgrades the electric co-op says it needs to enter into an agreement to purchase power from major wind projects.
“We really need clarity from our federal delegation on this program,” Wight said. “We really need Sen. Dan Sullivan ensuring we can use New ERA and keep the lights on.”
Amanda Coyne, a spokesperson for Sen. Sullivan, said by email that he “supports programs that reduce the cost of energy for Alaskans” and is meeting with GVEA next week.
“If there’s a problem with either of these grants, Senator Sullivan’s office will engage USDA to try to resolve the issue,” Coyne wrote.
Waiting for a go-ahead from the federal government for the IRA money is just one side of the coin, though. The other is that, under the new budget bill, the wind power producers must start construction on new projects before next July to qualify for tax credits from the Biden-era legislation. That deadline had been in the early 2030s.
And Wight said that matters because whatever tax benefits such a producer realizes would, in turn, likely be reflected in any agreements with Golden Valley.
“No matter how you slice it, you’re talking about a half billion dollar opportunity here,” he said.
Public pressure is mounting for GVEA. More than a dozen co-op member-owners spoke at the Tuesday meeting, voicing their concerns about the potential for the opportunity to slip by.
Wight is right there with them. He attended the meeting, though he decided not to comment. But Wight did pen an op-ed published in the Fairbanks Daily News-Miner Sunday, titled, “Are the lights going out on GVEA's generational opportunity?”
The question isn’t lost on GVEA. At the meeting, Million said the utility understands what the compressed timeline means.
“We’re not sitting back. We’re not waiting. We’re moving as fast as we can to try to work this political football the best we can,” he said.
Can the utility’s board and staff make it happen? Yes, Wight says, but not because doing so is an easy feat.
“Really, GVEA is an economic powerhouse in our community,” he said. “And we don’t have any choice but for them to succeed, so I think they’re going to meet this moment.”
This story has been updated with comments from Sen. Dan Sullivan spokesperson Amanda Coyne.