The board of directors for Interior Alaska’s electric co-op decided last week it wasn’t ready to cement early terms for buying power from a massive, proposed wind project near Fairbanks.
The developers had sought a deadline of July 31 for the term sheet, as power producers nationwide scramble to qualify for fading federal wind and solar tax credits.
But Golden Valley Electric Association said in a Friday press release that it’s still continuing to assess the Shovel Creek Wind Project’s viability.
That means the delay puts a wrinkle in the utility’s quest to purchase electricity from a large-scale wind resource, though it doesn’t appear to be a decisive blow. It's not an all-out denial, and GVEA Chief Administrative Officer Abby Dillard said in an interview the term sheet is more preliminary in nature – a step along the way to a power purchase agreement.
“A term sheet would be kind of like an initial document before a full agreement was signed that lays out some of the basic or big principles of a larger agreement,” she said, citing a non-disclosure agreement that prevented her from going into more detail.
The proposed Shovel Creek project in the Murphy Dome area stands to generate between 100 and 210 megawatts via 25 to 55 turbines, according to its local developer, Alaska Renewables. Anything within those ranges would dwarf the Golden Valley-owned, 25-megawatt Eva Creek Wind Farm – the largest wind project in Alaska that’s currently online.
Alaska Renewables is also behind the Little Mount Susitna Wind Project northwest of Anchorage. Boston-based Longroad Energy purchased the projects last year, but the Alaska firm continues as a development partner.
Precisely what the term sheet delay entails for the Shovel Creek project’s timeline isn’t clear. Reached by phone Friday, Alaska Renewables CEO Matt Perkins declined to comment. But Dillard said the co-op’s relationship with the project’s developers remains intact.
“We continue to communicate with them on a regular basis,” she said. “And we’re still committed to looking at this project. We just, unfortunately, could not sign onto a term sheet by the date they were hoping for.”
In the Friday press release announcing the decision, Golden Valley’s board cited “uncertainty” about whether Shovel Creek will qualify for federal tax credits from Biden-era legislation. The board says those credits are a big piece of the puzzle – with a financial risk of up to 50% of the project’s total cost if not received.
The unknowns come after Congress approved the One Big Beautiful Bill Act earlier this summer. That drastically narrowed the window in which wind and solar developers could get the credits, moving up the deadline for beginning construction from the early 2030s to next July.
And President Donald Trump has further sought to stamp out federal support for prospective wind and solar projects through an executive order and other directives.
The term sheet delay arrives shortly after Golden Valley member-owners ramped up pressure on the utility to lock in new energy generation before the federal investments in wind and solar disappear. Phil Wight, an energy historian and GVEA member-owner, said in an interview that he finds part of the board’s rationale for the delay confusing.
“Every day that we delay is a higher likelihood that we’re not going to get the tax credits, so, in that regard, it’s a self-fulfilling prophecy,” he said. “Cause if you say, ‘We can’t move forward with this project because we’re not 100% sure we are going to get the tax credits,’ that is, in and of itself, ensuring that you aren’t going to get the tax credits.”
But the Golden Valley board also says the utility is still working on Production Cost Models for Shovel Creek. Those analyses help determine the long-term effectiveness of the project both with and without the tax credits, and Dillard said the co-op won’t complete the models until the end of October at the earliest.
In the news release, Golden Valley Board Chair Tom DeLong said, in part, “While we recognize that some are frustrated by the pace of GVEA’s efforts, these studies are critical to ensuring that we do not negatively impact the reliability of our system.”
The statements fill in some blanks left after a July 28 special board meeting, when the board moved to approve a direction they’d discussed in executive session without describing what that direction was.
But during the meeting, board members expressed a mix of disappointment and understanding about the speed at which GVEA leadership had been moving.
“I think that we need to be moving forward faster than we have been with properly analyzing, vetting and coming to consensus on opportunities for lower cost power for our members,” GVEA Board Treasurer David Messier said during the meeting.
That perspective was quickly countered by Board Director Rick Solie, who was “not as frustrated as other directors are.”
“I’m probably more inclined to be skeptical of the projects and the numbers, and so I need to see the real data,” he said.
Wight said the risk-averse mentality is understandable. But he said inaction on the wind power term sheet carries financial risks of its own, with, he estimates, at least $200 million on the line that could translate to savings for Golden Valley members.
“I have some sympathy for what they have to go through. But it’s really hard to watch this as a member-owner – because we’re watching that money be squandered in real time,” Wight said.
The decision to delay the term sheet marks the latest development in a multi-year effort to diversify Golden Valley’s energy generation with more wind power.
Since 2022, three iterations of the utility’s Strategic Generation Plan have called for steps to help Golden Valley execute a power purchase agreement with a major wind producer. GVEA issued the related request for proposals in 2023.
In 2024, the utility was picked to receive more than $380 million in grants and low- or no-interest loans through the U.S. Department of Agriculture’s Empowering Rural America program (New ERA), funded by the Inflation Reduction Act. That award was aimed at building out infrastructure to bring a major wind project, like Shovel Creek, online.
At a regular board meeting last month, GVEA leadership said they were still looking for clarity about the future of the New ERA award from the Trump administration and Alaska’s congressional delegation. Dillard said Friday that GVEA has since met with USDA officials and Alaska’s lawmakers in D.C.
“Those discussions are ongoing, but they were some pretty positive meetings that we had,” she said.