Tuesday, September 16, 2014
Readers may recall reading about the various $900 million in recommended transmission improvements in a report from the Alaska Energy Authority. It didn't include proposed trucked natural gas in its projections, but is still draft.
And with all the spare capacity in the railbelt, there doesn't appear to be any crying need for Susitna.
So many moving parts.
Monday, September 15, 2014
Our supply is: Baseload resources
Load following (i.e. flexible on/off and capacity adjusting)
The look above, once we have Healy 2 on line, is that except in the deep winter, we won't be taking much natural gas from Anchorage as it runs about the same price as Healy 2 is expected to.
All this being said, there are other reasons to have a notification system.
One of the challenges and opportunities is that GVEA's contact info on members is way out of date, especially as far as cell phones and email. This would be an opportunity to get updated. Perhaps this could be a MAC job?
GVEA might consider an inexpensive notification system such as FNSB Air Quality Dept is now rolling out (3rd party alertmedia.com , a Nixle like service) with an in-house Google form to sign up. Notifications could be for a variety of reasons: outages, price signaling, board and annual membership meetings, RCA hearings, etc.
I was told that GVEA is anticipating spending $300,000 in a future budget to upgrade their outage notification system with lots of bells and whistles. Maybe this is way too much? As it is now, it appears that Facebook offers more information about outages in progress than any other form of communication.
So we will see where this goes.
Thursday, June 12, 2014
Friday, June 06, 2014
Saturday, May 10, 2014
People around town have commented on the lack of quorum for the recent annual meeting. I don't see this on the agenda, but perhaps it will be discussed under board member comments.
Thursday, May 01, 2014
It seems to many that the elimination of the registration bonus $15 in 2013 was the most likely culprit. It was also an attempt to save money on the production of the meeting, costing about $18,000 last year. GVEA wisely announced this in advance to avoid unhappy people in the line and it would appear that their marketing effort was successful in a perverse way. Even with reduced number of cookies and no fruit-vegetable platters, there were trays full of cookies left over. Here's board Chairman Bill Nordmark at the leftover table following the meeting.
If reduced attendance is expected to continue, it might be considered to have it in a smaller and more affordable venue next year. The meeting used to be held at Hering Auditorium.
In a positive vein, the reduced attendance meant that the odds of winning the 9 drawings for $250, $500, and $1,000 were up. Two next-door-neighbors on Chena Hot Springs Road each won one.
The meeting was not video'd this year as in the past few years, but meeting audio and the Powerpoint presentation was promised to be on line soon.
A final thought is that it is important for members to be involved in their co-op, thus show up. Member feedback in the past couple years was to do away with the frills of the annual meeting production and concentrate on business. I think this goal was accomplished. That being said, it appears that carrots are still needed to garner a quorum.
Monday, April 28, 2014
With investments of over $320 million prior to this, I believe this might be the most expensive coal fired power plant for the 50 mw it is intended to produce. Here is No comments:
Sunday, April 27, 2014
The summary of the report says:
The recommended transmission system improves reliability, mitigates future cost increases to Railbelt rate payers, allows unconstrained energy transfers and the use of peaking capacity from the Bradley Lake hydroelectric project, provides improved and increased energy transfers between all areas of the Railbelt, and facilitates the addition of the Watana large hydro project.
It was originally scheduled as an executive session except for member comments at the beginning. However, when I showed up as a member to make a comment at the beginning, the board chair kindly opened the meeting for the educational session, closing it a few hours later when it came time for the board to discuss what to do moving into the future with a new Integrated Resource Plan for GVEA, proposed to be contracted to Black and Veatch. The latter is scheduled to come up at the executive session for the regular board meeting on April 28, 2014. The Integrated Resource Study typically precedes a Rate Study that will be required once Healy 2 in on line for a year or so. That will be a subject of other blogs in the future.
High points were:
- Anticipated growth (flat*).
- Age and condition of current generation facilities.
- Age and condition of current transmission facilities, including substations
- Challenges in dispatch and balancing generation with demand, optimizing efficiencies with cost of various sources of power (I have great respect for dispatchers).
- Some discussion about what Ft. Knox and Pogo's commitments were and likely future. In the mix: Flint Hills substantially reduced, Ft. Knox reduced, Pogo expanded, Clear AFB added.
- Other large customers and generation folks in the Fairbanks area: Pump 9 in Delta, Ft. Wainwright, Eielson.
- Other generation and transmission in the Railbelt
- Homer Electric (HEA) now on its own generation instead of buying from Chugach.
- Matanuska Electric (MEA) now on its own generation instead of buying from Chugach, and with surplus power available for sale to other utilities.
- Anchorage Munipal Light and Power new generation.
- Opportunities and limitations for GVEA buying natural gas generated electricity from Chugach and in the future from MEA across the intertie.
- Challenges in the Kenai with transmission costs for getting electricity from Bradley Lake.
Some of my observations:
- GVEA has the most diverse fuel-mix generation facilities of any utility in the Railbelt - coal, oil, natural gas from Southcentral, wind, and future trucked natural gas by 2015-16.
- We will have way more generation available to us than needed - out peak load in 2013 was 211 mw with about double that inf capacity.
- We are still paying on quite a bit of this generation facilities - principal, interest and depreciation.
- GVEA still has more debt to be taken on with the restart of Healy 2 - over $190 million that has not impacted our utility charges yet.
- * growth is expected to be flat (except if large projects come on line, such as Tower Hill Gold Mine in Livengood for to 100 mw). GVEA expanded their territory to include up to Livengood in 2013, but I hope that any generation needed is built on-site as, for this large load, it doesn't make sense to incur line loss. Actually, I hope that Tower Hill builds their own generation. Tom Irwin, former GVEA VP, is the local guy in charge of Tower Hill development so he should be aware of the impacts.
- There is a long term objective to see if utilities can pool their interconnecting transmission facilities to provide for a more efficient system for all. A couple of attempts have already been made without bearing fruit. See the Regional Integrated Resource Plan mentioned above. Also, reference the tariff arguments
now in progress before the RCA between HEA and other utilities with HEA now generating their own.
Sunday, April 06, 2014
GVEA wisely seeks to dispatch the cheapest energy first to meet demand. Conservation is the cheapest source, electricity not used. Natural gas from southcentral is the next cheapest, but is limited to about 80mw across the tieline. GVEA's Healy 1 is the next cheapest, followed by the Co-gen plant at North Pole, then the two older oil fired generation then a few smaller units, including one in Delta. They also have the Eva Creek Wind Farm and a smaller Delta privately owned wind farm from which they buy discount power. Eva Creek, being free power, should be cheaper than coal, but harder to dispatch due to the variability.
I have been advocating a voluntary notification system to the board for over 2 years whereby, when they are about to need the costlier generation of oil, let folks know and see if short term reductions can be accomplished. The CEO says the ball is in his court. Lots of models out there, such as Nixle, the FNSB school notification, air quality alert system in progress, and a handful of utilities around the country. No re-inventing needed for the wheel. See my blog from last month.
We aren't in control of the Koch Brothers refinery decision. They had a chance to participate in the trucked natural gas project, but backed out of it because they didn't want to work with anyone.
Related, GVEA's rate structure is such that, when the cost causer-cost payer principle that guides rate design is used, it has typically penalized those with the variable use (residential, small commercial) vs. the steady and interruptible rates paid by large industrial consumers. When Healy 2 comes on, there will be another rate case and this should be part of the discussion.
Finally, while Healy 2 will be cheaper generation than North Pole on oil, we'll still have an increase in our utility charge to pay the loans and depreciation. We are now beginning to see a bit of an increase from the $71 million invested in Eva Creek. GVEA utility charge goes up 3.4% July 1. Add to that almost $200 million from Healy 2 over the next few years. That's a lot of debt, all told, almost double of what was allowable until we members allowed the board, in a bylaws vote, to exceed the $450 million book value of loans a few years ago.
So, will the Flint Hills Closure cost GVEA? Yes. Are there other ways of addressing the impacts? Yes, again. Is the there a larger picture to consider? Most certainly yes?
We know a little more about the Flint Hills impact, as the Fairbanks Daily News Miner had an article last week about how and why energy costs were expected to increase.
My understanding is that the trucked natural gas project is likely to result in more expensive gas than hoped, around$17/mcf instead of the $10-$12/mcf previously bandied about. If $12 is equivalent to $2/gal for fuel oil, then you can do the math.
As an aside, there will be an Interior Energy Open House Wedgewood hosted by state agencies AIDEA and AEA. Also, the FNSB granted a $7.5 million revolving loan to the Interior Gas Utility Board (IGU) with lots of fiscal controls on expediture. This $7.5 million was part of the settlement over valuation and back taxes that Alyeska Pipeline owed the FNSB, pending appeals. And the governor is trying to stack the deck against the next assessment, but that's another story.
Other issues included:
Approval of a 3.4% increase in the utility rate, effective I believe June 1. This was attributed to the debt interest on Eva Creek. While this expected increase, it is also hoped that the energy charge would go down at least equal based upon the free wind energy.
Ft. Knox, asking what GVEA would charge to transmit Matanuska Electric power across GVEA's lines. Apparently, Ft. Knox thinks they might get cheaper power than from GVEA directly.
The board did approve the Early Capital credit Retirement proposal you can see on the agenda. First come, first serve is the policy, but the board (and myself, here) would like to see some outreach so it isn't just those in the know that take advantage of it.
GVEA is also getting prepped for the annual meeting April 30. This year, there will be no freebies for registration to save $. In many respects, the CEO is heading an effort to cut the fluff within the company. There will probably be fewer cookies at the meeting too. OK with me. There will still be must-be-present-to-win raffles.
This was the first meeting where a board member was actually 2 way audio and video from a remote location. While not ideal, it makes it possible to attend meetings that have either been unsatisfyingly audio only or have a board member be a no-show. Most board members don't miss meetings, a good thing of course. Eventually, we might be able to get them live-streamed, but some on the board are currently not at all receptive.
The GVEA board changed their May meeting as the one calendared fell on Memorial Day that comes early this year. So the May meeting will be May 19 instead.