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Wind-farm Developer Asks Court to Overturn State Agency's Approval of ‘lllegal’ GVEA Tariff

Alaska Environmental Power

Delta Wind Farm President and CEO Mike Craft is taking the Regulatory Commission of Alaska to court. Craft is asking a judge to overturn the commission’s approval of a Golden Valley Electric Association tariff filed last summer. He claims the tariff violates new state regulations intended to help renewable-energy projects like his access the grid.

In a brief filed earlier this month in Anchorage Superior Court, Mike Craft says the Regulatory Commission of Alaska’s approval of a tariff filed last summer by GVEA should be overturned. Because, he says, the tariff does not comply with regulations adopted by the state in February that were supposed to help small, independent power producers like his Delta Wind Farm get access to the grid and sell electricity.

“They accepted the filing that Golden Valley made. It was an illegal filing. It violates all the new regulations,” Craft said.

Attorney Teresa Clemmer is representing Alaska Environmental Power, the company that owns the Delta Wind Farm. Craft is the company’s managing partner.

“The RCA, Regulatory Commission of Alaska, approved its tariff and certain tariff sheets that were expected to implement the new rules,” Clemmer said. But what we found was they really didn’t apply the new rules at all. They just kind of did something completely different.”

Craft says GVEA’s tariff among other things discriminates against independent power producers like him. He also says it includes unfair and excessive fees for integrating into the grid the power that his 2-megawatt wind farm near Delta Junction generates. And he says the tariff would enable GVEA to continue paying him an unfairly low price for his electricity.

“I was asking for 12-and-a-half cents (per kilowatt hour),” Craft said. That’s about a third more than what GVEA is paying the company now – “a little over 8 and-a-half cents per kilowatt hour,” says Golden Valley President and CEO Cory Borgeson.

Borgeson stands by the tariff, which he says is fair and helps keep costs down for GVEA ratepayers. He says the utility supports renewable sources of power such as wind, and he says that’s why GVEA built its Eva Creek wind farm near Healy. But, he adds, Alaska Environmental Power’s price just don’t pencil out in a way that benefits ratepayers.

“It has to be at a good cost, and one that is reasonable,” Borgeson said. “And we have not found Alaska Environmental Power willing to come to us with a proposal that makes economic sense.”

Craft says the brief his attorneys filed with the court Nov. 2 lays out the case that 12-and-a-half cents per kilowatt hour is fair. He says GVEA has underpaid his company since the Delta Wind Farm went online in 2010 and that since then, the co-op’s management and board of directors have shown a “stubborn unwillingness” to deal with him fairly. He says that’s handicapped his plan to invest another $54 million to boost the Delta Wind Farm’s capacity to 24 megawatts.

“I can’t give my electricity away,” Craft said, “because I’ve got to finance $54 million over 20 years, and I’ve got to maintain those turbines over 20 years and I’ve got to pay people to do it.”

Craft says taking his appeal to the Superior Court will add to the $100,000 he’s paid over the past four years to argue the company's case before the Regulatory Commission for fair treatment. The commission finally agreed with him a year ago, and issued a ruling that led to the new regulations that went into effect in February.

The ruling was hailed by a state renewable-energy industry group, and Clemmer says the Independent Power Producers of Alaska have filed a friend of the court brief backing Craft’s argument.

“Essentially,” she said, “they’re explaining why this is really a significant case before the court. Because it’s the first implementation of these new rules, and it has the potential to be the precedent for how the RCA is going to implement the new rules.”

A Regulatory Commission spokesperson was not available last week to comment on the case. Clemmer says courtroom arguments before Judge Erin Marston may begin in a couple months.

Tim has worked in the news business for over three decades, mainly as a newspaper reporter and editor in southern Arizona. Tim first came to Alaska with his family in 1967, and grew up in Delta Junction before emigrating to the Lower 48 in 1977 to get a college education and see the world.