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A battle in the making
Eco Green challenges RCA order to grant stay on GVEA’s need to prepare tariff
Alan Bailey Petroleum News
A Regulatory Commission of Alaska order granting a temporary stay of Fairbanks utility Golden Valley Electric Association’s obligation to prepare a tariff for Eco Green Generation LLC for a proposed new power supply system for the Fairbanks area has evoked a strident response from Eco Green. The developer has accused both the commission and GVEA of illegal actions and has demanded cancellation of the stay and recommended penalties against GVEA.
Eco Green has proposed to construct a wind farm and propane-fueled cogeneration system for Fairbanks, as a means of making maximum use of renewable wind energy and hence reduce air pollution in the region. However, GVEA has asked the RCA for the temporary stay on the utility’s obligation to prepare a tariff for the proposed system until the Federal Energy Regulatory Commission has decided on whether to certify the proposed system as a qualifying facility under the terms of the Public Utilities Regulatory Act, or PURPA.
In a March 15 order, the commission said that it is unlikely to be possible to give GVEA and interested parties an opportunity to provide testimony in the case and for the commission to reach a decision prior to a PURPA 60-day deadline for the required tariff filing. Consequently, RCA is deferring GVEA’s obligation to prepare a tariff until the commission issues an order, adjudicating over GVEA’s request.
At stake is the question of whether GVEA may have to purchase power from Eco Green’s system, if the cost of obtaining and using that power would be less than the cost of GVEA’s existing power that the system would displace.
In response to the March 15 order Eco Green filed a petition and motion, slamming both GVEA and the commission for what Eco Green argues are illegal actions, and accusing GVEA of unethical and fraudulent behavior in that the utility filed its request for a stay on the tariff preparation without notifying Eco Green of the filing. Among issues raised in the filing, Eco Green accused GVEA of overstating the nameplate capacity of the planned system. The company also said that the stay granted by the commission was illegal, in that, in effect, it changed the state law requiring GVEA to prepare a tariff within 60 days of receiving Eco Green’s tariff request.
Eco Green has asked the commission to vacate its temporary stay order and to require a bond in compensation for any resulting delay to Eco Green’s ability to proceed with its project. Eco Green has also recommended that the commission should sanction GVEA by imposing a fine on the utility and temporarily suspending the utility’s certificate until the hearing over the tariff requirement is completed.
Wind power at Delta Junction Eco Green is working with Alaska Environmental Power on the project. Alaska Environmental Power is managed by Mike Craft, who operates a small wind farm at Delta Junction. Craft has long wished to build a larger wind farm at the same location, a location that he says is particularly favorable for wind generation. However, Craft’s plans to build the new farm have in the past been stymied by the cost that GVEA has estimated would be incurred as a consequence of having to accommodate the varying wind power in GVEA’s electricity network.
So, instead, Eco Green and Alaska Environmental Power have proposed combining a wind farm with multiple propane-fueled power generation units, varying the propane-fueled power output to counterbalance the variations in wind power and, hence, deliver firm, constant power to the grid. In a cogeneration arrangement, the propane units would be located next to buildings that could use the heat output from the engines for space heating.
The system, as envisaged, could deliver 100 megawatts of power to the grid. Cheap propane to fuel the system would be shipped by barge and rail from western Canada. Eco Green has said that the complete system would constitute a qualifying facility under PURPA: The company has requested a tariff from GVEA and meanwhile has filed with FERC for confirmation of qualifying facility certification.
In requesting a stay on tariff preparation from RCA, GVEA questioned whether Eco Green’s proposed system is a single qualifying facility or a set of multiple facilities - the system would involve 21 project components spread over 170 miles, the utility said. The utility has expressed concern that the scale of the proposed system would have a dramatic and disruptive impact on the utility’s operations. GVEA has also argued that, to be certified as a qualifying facility, the system would need to sell power to specific electricity consumers, rather than to a utility such as GVEA.
Eco Green argues that its integrated system would be considered a single qualifying facility, that FERC places no upper limit on the amount of power that a qualifying cogeneration system can supply. The company says that the system would make a major contribution to addressing Fairbanks air quality issues, although GVEA has challenged this claim.
Doyon Utilities Eco Green has also applied for a tariff from Doyon Utilities, the company that provides utility services for the Department of Defense for Fort Greely and Fort Wainwright, near Fairbanks. Doyon Utilities has filed a request with the RCA for a waiver from the need to prepare a tariff. The utility told the commission that it does not purchase power from the electricity grid. Nor does it have a customer to sell power to. At Fort Wainwright, for example, the utility operates a coal-fired power station that acts as a cogeneration unit, supplying both heat and electricity to the base. But the coal for the plant is purchased by the federal government, and not by Doyon Utilities.
Thus, Doyon Utilities lacks a customer for the sale of power from Eco Green and lacks the authority allow an interconnection with Eco Green’s proposed system, the utility told the commission.
Eco Green response In its response to Doyon Utilities’ filing, Eco Green said that, although, for example, the government purchases the coal for the Fort Wainwright plant, Doyon Utilities, as owner and operator of the plant, sells power generation services to the army. Moreover, as a regulated electricity utility connected to the regional electricity grid, Doyon Utilities is legally obliged to respond to Eco Green’s tariff request, Eco Green told the commission. And that legal obligation overrides any contractual arrangement limiting Doyon Utility’s ability to allow a third-party interconnection with its electrical system, Eco Green argued.
Eco Green also claimed that, as the oldest continuously operated coal-fired power generation facility in the United States, the Fort Wainwright facility has been experiencing reliability issues. The company also argued that its proposed combination of wind and propane-fueled power would help address severe air quality problems in the Fairbanks region.
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