It's been a while since we've posted, however GVEA has been busy in 2013. Here are some of the highlights from my attendance at meetings as a member-owner.
Much of GVEA meetings are in executive session to which we member-owners are not privy. This being said, the board meeting books on line are becoming more complete for members. Anyone interested should browse the minutes and agendas. It is rare when more than a member or two comes to the board meetings. Slowly, GVEA high level activities are becoming more transparent to members, a good thing in my book.
Healy 2
GVEA purchased the Healy 2 (experimental) coal fired power plant from AIDEA and has committed gobs more money to restarting it. GVEA Healy 2 webpage This was approved at the Aug. 26, 2013 board meeting and glad to report the minutes are on line.
The board approved a $45 million loan and purchase of the plant from AIDEA and another loan for $87,800: $35 million for improvements, $50 million for emissions controls, and $2.8 million for an on-site warehouse. The April 17, 2013 minutes actually reflect a diffent amount than on the GVEA page referenced above. With about $380 million having been spent on the plant prior to this, the total cost of this relatively small 50 mw plant is over $500 million. The purchase and work to restart increases GVEA's debt substantially. As of the end of 2012, GVEA debt was in excess of $380 mm. This translates into an increase in our utility rate. GVEA hopes that the eventual operation of this will reduce the energy charge, as coal is cheaper than oil.
Energy Sense Program
This program lost the long term employee in Feb. 2014 and GVEA wasn't very proactive in replacing him, having only one energy auditor who only worked one-two audits each evening. GVEA contracted with the Cold Climate Housing Research Center (CCHRC) $30,000 to review and make recommendations. The recommendations saw the light of day at the Jan. 27, 2014 board meeting.
Inclement Weather
Interior residents experienced long electrical outages with icing of lines due to rain then freezing in Nov. 2013 and Jan. 2014. Trees fell over on the lines with high winds as well. I hope GVEA will consider burying high risk distribution lines where the ground is stable (i.e. not on permafrost or high water table areas). While it may cost more initially, the cost of the Nov. 2013 was perhaps $2 million.
Good Cents Program
By rounding up your electric bill (unless you have oped out), GVEA collects about $30,000 per month to give away to non-profits and charitable organizations and occasionally needy individuals. While their requirements for grants aren't conducive to other than professional organization (tax status, audits, etc.), this is quite a bit of money. If the word really gets out, there could be lots of competition for funds. At the moment, this is pretty much a voluntary effort to administer.
Wind
GVEA now has a year of data from the Eva Creek Wind Farm down by Healy. It's performed just about as well as expected, providing the equivalent of 6,800 homes' worth of electricity for a year. GVEA refused to buy additional wind from Mike Craft's Delta Wind farm because they indicated they couldn't figure out how to dispatch the additional electricity. It's complex to dispatch the cheapest electricity and wind being variable, makes it more difficult. Still, I hope this will become better understood and perhaps with addition of storage, we can use more wind.
Natural Gas Trucking
GVEA tried to work with Flint Hills on a joint project to truck liquified natural gas (LNG) from Prudhoe Bay. The legislature provided some grant and low interest loan money for this project. They met with the governor and Flint Hills, which stood to substantially reduce its energy operation cost, backed out of the project, unwilling to share any of its economics. With the Koch Brothers since deciding to shut down the refinery, it kind of mocks their excuse that the reason was the sulfolene contamination (even though they committed to continuing the mitigation), but that's a subject for a separate blog.
The shutdown of the Flint Hills refinery also affects GVEA in no longer being able to get naptha from the refinery and also a loss of income from the pipeline subsidiary that GVEA owns to distribute oil from the Trans Alaska Pipeline to the refinery. You'll no doubt be reading more about this.
As well, the Fairbanks Natural Gas (FNG) company and the Interior Alaska Natural Gas Utility (AGU) fought out service areas in greater Fairbanks and North Pole with the Regulatory Commision of Alaska, resulting in a split of territories. The trucked natural gas and legislative help in providing loans for storage puts the onus on both companies to start building out distribution lines to residents and companies. Thus far, FNG hadn't been building out to other than large consumers. AGU is contracting with the same company that is hired to build the liquificaiton plant in Prudhoe Bay to start distribution network in the concentrated North Pole area. GVEA will also be getting natural gas, converting North Pole oil fired plant(s) to use natural gas.
GVEA Rates
Energy rates have bounced up then down, helped by natural gas fired electricity across the Intertie from South Central Alaska (Chugach and for a short time, really cheap electricity from Homer Electric Association). Utility rate will continue to go up as depreciation, loan payments of principal and interest increase from Eva Creek ($70+ million) and soon Healy 2. Healy 2 is supposed to be operational within 2-3 years and reduce our need for high cost oil fired electricity about the same time as trucked natural gas will become available. I do expect our rates to not decline much if any In the medium term, they could actually increase. Cost of power rates adjust quarterly. Utility rates can be adjusted every 6 months up to 4%. When Healy 2 comes on line, there will be a need for a formal cost of power study (likely costing more than a million dollars).
Peak Notification Methods
As part of my 12 point transparency plan of several years ago presented to the Member Advisory Board (MAC) and the GVEA Board, I suggested that GVEA find simple way to notify consumers when demand was about to require high cost power be started. Ideas such as texting, email, phone, all automated at low cost. The board took the issue up and assigned it to the MAC. They in turn had an ad-hoc MAC task force look at it whereby the VP who ran the meetings wrote up that it made no sense and gave it back to the CEO. This of course made no sense and some members of the board weren't very happy. I heard rumors of another report being generated and will be chasing that down. The idea is very simple - if people would curtail incidental electric uses on occasion, we all could save. This particular VP has since retired and the board may be looking at the MAC functions, which are supposed to be an asset of the board and not a tool of GVEA executives. Making that clear to MAC members and getting them involved in a different manner may help. It has to be a two way street. I will report separately on progress on the 12 point plan hopefully soon.
Alasconnect
This was a subsidiary of GVEA and mixed employees. At the end of 2012, it was separated out, though GVEA contracts with them for computer services. It remains an asset of GVEA somehow, so it would be in the members' interest if it were anything other than nearly totally transparent to members. I've been working on this for about a decade. One improvement here is that the VP for computer-networking for GVEA and the president of Alasconnect, the same person, won't be getting a double salary. You can see how that worked out for him at on page 10, line (15) of GVEA IRS Form 990 for 2012 (and previous years 2010 and 2011, available on line).
Tri-Valley Electric Association
Members may recall the 2006 effort of GVEA to transfer all its generation and transmission assets to Tri-Valley Electric Association, something that came out of a national electric coop association discussion. GVEA members wisely turned it down. It turns out that GVEA realized it wasn't needed after all as in July, 2013, the board voted to dissolve the corporation.
There were of course other issues that came up. Again, do avail yourself of the minutes and agendas. Become an active member of our co-op!
