Co-op begins next phase to refine proposals for projects: new BESS, substations, power lines, Healy 2 debt deal
A federal agency has selected Fairbanks-based Golden Valley Electric Association for a program that could provide more than $270 million dollars in grants and zero-interest loans to boost the co-op’s capacity to generate electricity with wind power.
Golden Valley announced Thursday that a package of projects it’s proposed to upgrade its system qualifies for funding through a federal program that helps rural electric cooperatives generate more electricity with renewable energy.
It's really a significant accomplishment for GVEA and for the entities that worked on this application with us to secure this funding,” said Golden Valley spokesperson Ashley Bradish. She says the co-op wanted to get the word out right away about being selected for the Empowering Rural America program, that’s being administered by the U.S. Department of Agriculture.
Golden Valley among 16 co-op prospective recipients of ERA program
“We were just notified a few days ago, really, by the USDA that we would be awarded from this program,” she said. “The announcement came today, September 5th.”
The Biden-Harris administration said in a news release that GVEA is one of 16 electric cooperatives around the nation that’ve been selected for the $7.3 billion program. It’s intended to help the co-ops pay for projects to increase the amount of electricity they generate from renewable energy sources like wind and solar. The news release says it’s the biggest investment in rural electrification since the Depression-era New Deal.
Bradish says Golden Valley must complete studies and other program requirements to qualify for its share of the pie -- $206 million in zero-interest loans and $67 million dollars in grants.
“We still have many different studies, interconnection and system-impact studies to do, analysis of how these projects will affect rates,” she said.
If GVEA gains final approval, she added, the projects it’s proposed would benefit both co-op members and the environment.
“That’s the aim of these projects, to stabilize rates and reduce carbon emissions, Bradish said. "We're not going to move forward on any project that is not going to be a benefit to the membership.”
Golden Valley listed three major projects in its application. They include replacing the Battery Energy Storage System with a new 47-megawatt unit that has nearly twice as much capacity as the old BESS.
Also, construction of two substations and 64 miles of transmission line to connect a wind-power facility that would generate up to 150 megawatts of electricity for GVEA’s system. That’s more than five times the amount Golden Valley now generates and buys from a Delta Junction-area wind farm developer. Bradish says co-op officials had an Anchorage-based startup’s proposed Shovel Creek project, near Murphy Dome, in mind for that proposal, but that’s not a done deal.
'Negotiations are ongoing'
“I'll emphasize that those negotiations are ongoing,” she said. “Nothing's been finalized there.”
The third proposed project would be to shut down the problem-plagued Healy Unit 2 power plant and declare it a stranded asset. Golden Valley requested $104 million of that debt to be refinanced with a zero-interest loan through the federal program.
“Which would provide significant cost savings” she added, “and then those would be used to reinvest in other projects.”
But Bradish reiterated that all proposals and related plans like power-purchase agreements must be analyzed and vetted in the next phase of the process that’ll begin soon.
“I certainly don't want this to be considered an announcement that we are officially retiring Healy 2.”
She says Golden Valley board and management will carefully consider all the projects and studies and engage with the public before they move ahead to pursue a final award of the interest-free loan and grants. She added that likely will be in about four years.
Editor's note: This story has been revised to clarify that the new Battery Energy Storage System that Golden Valley hopes to build would supplement, not replace, the existing BESS.
