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Golden Valley rate hike increases monthly bills by average of $29

In addition to approving a rate hike, Golden Valley's board on Tuesday reversed its 2022 decision to shut down the Healy Unit 2 power plant, left. The board cited the need to keep the 60-megawatt coal-fired plant online because of steep cutbacks in the availability of Southcentral utilities' natural gas-generated electricity and maintenance work on the co-op's other fossil-fueled power plants.
KUAC file photo
Golden Valley's board on Tuesday to continue operating 60-megawatt coal-fired plant online, left, beyond an aspirational end-of-the-year deadline. The board also affirmed its earlier decision to install a pollution-control system on the smaller 57-year-old Healy 1 power plant, right.

‘Circumstances have really changed’ Board decides against 2022 goal of shutting down Healy 2 power plant

Golden Valley Electric Association customers’ monthly bill will increase by an average of $29, starting Friday, due to a Fuel and Purchased Power rate hike caused largely by the loss of access to cheaper natural gas-generated electricity.

A combination of factors led to the rate hike, says Golden Valley spokesperson Ashley Bradish. They include the loss of a source of lower-cost power the co-op’s been buying from utilities in Anchorage and the Mat-Su and transmitted up the interties to Fairbanks.

“That is due to the unavailability of natural gas-generated electricity up the Intertie from Southcentral utilities, due to the constraints of natural gas in the Cook Inlet,” she said.

Those constraints are in response to concerns over dwindling supplies of natural gas in the Cook Inlet.

The loss of that energy source has required Golden Valley to generate more electricity with more expensive fuels, Bradish said.

Changes to the Fuel and Purchased power rate occur through what she says is an established methodology based on costs incurred over the previous three months and anticipated costs over the coming three months. She said Golden Valley staff gave a presentation about that methodology during Tuesday’s monthly board of directors meeting.

Bradish says another factor leading to the rate hike was boiler problems that kept the coal-fired Healy Unit 2 power plant offline for a total of 38 days during December and January. Bradish said that “prolonged outage” required the co-op to pay more for alternate sources of power.

“And then that outage resulted in GVEA having to generate electricity using our more-expensive fuel-oil generation,” she said.

The 60-megawatt Healy 2 went back online February 1st. And it’ll remain in operation, at least for the foreseeable future, because the co-op’s board decided Tuesday to change course on a 2022 pledge to shut down the problem-plagued plant by the end of this year.

Bradish in an email Thursday that the board, quote, “eliminated the deadline of December 31, 2024.” She said a provision in Golden Valley’s Strategic Generation Plan enables the board to, quote, “Continue operating Healy Unit 2 until such time as alternative sources of reliable, lower cost energy are available.”

“(The) reality is that circumstances have really changed since the original Strategic Generation Plan was adopted by the board,” she said. “And we can’t economically close down Healy Unit 2, because we don’t have reliable alternative replacement power.”

Also Tuesday, the board affirmed its earlier decision to install a pollution-control system on the co-op’s Healy Unit 1 power plant. The retrofit is required by a 2012 consent decree that settled a lawsuit filed by the federal Environmental Protection Agency over the plant’s excessive emissions, which violated the Clean Air Act.

The 28-megawatt coal-fired Healy 1, built in 1967, and Healy 2, completed in 1998 alongside the old plant, are sometimes referred to as the Healy Power Generation Station.

Correction: this story has been revised to correct an error in the earlier version that states the Golden Valley board voted to raise the Fuel and Purchased Power rate. The increase was triggered by an established methodology based on costs incurred over the previous three months and anticipated costs over the coming three months.

Editor's note: This story has been updated.

Tim Ellis has been working as a KUAC reporter/producer since 2010. He has more than 30 years experience in broadcast, print and online journalism.