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GVEA, CIRI working wind farm expansion
KRISTEN NELSON Petroleum News
Golden Valley Electric Association and Cook Inlet Region Inc. said Aug. 17 that they have re-started negotiations for GVEA to purchase wind power from CIRI’s planned Fire Island Wind, Phase 2, adding 11 windmills to the 11 already in place.
Phase 1 of the Fire Island wind farm began operation in August 2012, providing power to Chugach Electric Association from 11 windmills. CIRI initially planned another 11 windmills, phase 2 of the project, and was seeking customers for that power, hoping to qualify for a federal tax credit that expired at the end of 2013. Construction would have had to be complete by the end of 2015 for the project to qualify for the tax credit.
CIRI said in August 2014 that it was in discussions with Chugach Electric Association, Matanuska Electric Association and Golden Valley Electric Association for possible purchase of phase-two Fire Island power.
Renewable resources CIRI is now in the process of completing an agreement with one of those parties, GVEA.
“We at GVEA believe it is in all Railbelt utility customers’ best interests to keep up efforts to acquire economically competitive renewable resources to supplement conventional thermal resources and to build strong business relationships with independent power producers who bear the risk of developing, constructing and operating these projects,” Cory Borgeson, president and CEO of GVEA, said in the Aug. 17 joint statement.
“GVEA has been working closely with CIRI to negotiate an agreement that provides immediate and long-term benefits for GVEA’s customers. We are pleased to be working together with CIRI to bring this project to fruition,” Borgeson said.
The transaction would involve a 25-year purchase of energy that GVEA said would provide an effective hedge against fluctuating fossil fuel costs.
The purchase cost for power could be as low as $56 per megawatt hour, the companies said.
That is a reduction in price from the $62 per megawatt hour that CIRI was estimating for phase 2 in 2014.
Borgeson said that GVEA is prepared to take all the power from the project, but would also work collaboratively with other Railbelt utilities to share economic and environmental benefits.
The final agreement, under negotiation, would be subject to approval by the boards and by the Regulatory Commission of Alaska.
Lower the cost Ethan Schutt, CIRI senior vice president, land and energy development, said “CIRI is pleased to expand the Fire Island Wind Project - fueling local job growth and long-term economic activity at a time when Alaska needs it most, while lowering the cost of electricity for consumers and reducing the region’s carbon emissions. CIRI values its relationships with the Railbelt electric utilities and looks forward to working with GVEA.”
CIRI said it expects to close financing this fall and complete construction and begin commercial operations by October 2017.
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