Providing coverage of Alaska and northern Canada's oil and gas industry
December 2017

Vol. 22, No. 49 Week of December 03, 2017

CIRI Wind requests new connection

CIRI Wind LLC, a subsidiary of Cook Inlet Region Inc., has requested interconnection with Chugach Electric Association for a proposed addition to a CIRI-operated wind farm on Fire Island, offshore Anchorage, Chugach Electric told the Regulatory Commission of Alaska in a Nov. 14 filing. The existing wind farm, with 11 wind turbines and an output capacity of 17.6 megawatts, went online in September 2012, supplying power to Chugach Electric. For several years CIRI has been promoting its concept of a phase two expansion of the farm, but thus far has not succeeded in signing up any customers for the increased power output.

Chugach Electric told the commission that CIRI Wind has proposed two alternative options for new wind facilities on Fire Island: an 11 turbine system with a 20.35 megawatt nameplate capacity, or a five turbine system with a 9.25 megawatt capacity. In either case the new system would connect to Chugach Electric’s power transmission system at an existing connection point on Fire Island. In its connection request CIRI Wind said that it anticipates commercial operation of the new system to begin in September 2018, with an expected project life of 25 years.

Commercial challenges

Although appealing as a non-polluting, renewable form of energy with a predictable and stable cost profile, the Fire Island wind farm has to compete on cost with alternative sources of power, in particular power from natural gas fueled power stations. A key cost factor is the variable nature of wind power output, given the natural variability of the strength of the wind that drives the wind turbines. Alaska Railbelt electric utilities have said that their provision of power generation that can offset the varying wind power would cost money, thus adding to the wind power cost. Chugach Electric has also said that it has had to curtail some of the peak output from the existing Fire Island farm, because the electric utility’s power generation facilities cannot always accommodate the fluctuating power.

The fragmented ownership by multiple utilities of the Railbelt power transmission grid also presents a challenge for independent power producers such as CIRI Wind, given the manner in which fees charged for shipping power across the grid can stack up, as power crosses grid segments owned by different operators. On the other hand, the Fire Island wind farm sits adjacent to Chugach Electric’s sector of the grid, thus enabling the direct feed of the wind power into Chugach Electric’s system.

Qualifying facility

Chugach Electric told the commission that CIRI Wind has requested interconnection for the proposed additional wind power as what is referred to as a “qualifying facility,” under the terms of state regulations driven by the federal Public Utilities Regulatory Policies Act, or PURPA. Under PURPA, a statute designed to encourage use of renewable energy sources, electricity utilities are required to purchase power under reasonable terms from qualifying, independent renewable power facilities. The regulations determining what may be considered reasonable terms are complex and require a utility to calculate both the cost of integrating a varying renewable power source into its system and the benefit to be gained from the use of the renewable energy.

Two tariffs requested

CIRI Wind has requested a tariff for each of its two wind farm expansion options and has asked for the tariffs within 60 days of its request, a request submitted to Chugach Electric on Nov. 6. Chugach Electric has told the commission that it will file a tariff specific to the 20.35 megawatt facility by Jan. 5 and, if possible in the time available, will also supplement the tariff with information pertinent to the 9.25-megawatt concept.

In a Nov. 23 letter to CIRI Wind, Chugach Electric said that, under the terms of the utility’s tariff, CIRI Wind would need to cover Chugach Electric’s cost of responding to the interconnection request. That cost is estimated at $94,000, including $49,000 for an engineering firm to prepare a conceptual design and cost estimate for expanding the capacity of the submarine power transmission cables between Fire Island and the mainland - the existing cables do not have the capacity or life expectancy to handle the proposed new usage, Chugach Electric said.


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