Wednesday, May 27, 2015

Upcoming issues for the GVEA board

Here are a few substantive upcoming issues for GVEA. Rate changes upcoming in 2016 will set the bar for years and the result needs to be fair to every class of service. With 100 mw of inexpensive coal and up to 24 mw of wind, we shouldn’t be using our oil fired generation or buying economy natural gas fired energy from Southcentral utilities much except in winter. this is a time when Southcentral utilities ALL have excess generation capacity and likely willing to sell power relatively cheap to help pay the debt on their expansions, much as we are doing the same with ours. The naptha fuel that GVEA gets from PetroStar Refinery for use in its 60 mw co-fired generation unit (LM 6000)is very inexpensive, less than what natural gas would likely be purchased for. Whether it stays low is anyone's guess, certainly not in GVEA's control (see Economist article) Debt is always on my mind, but the die has been cast with $71 mm for Eva Creek Wind Farm and $183 mm for Healy 2. Long term debt has been down to as low as $280 million before. While it builds equity as we pay it off, that's about $50 million a year in debt service. How to absorb additional renewably generated electricity from independent power producers is out there as well. Can the newer battery bank (50%) of BESS (big-ass battery storage) be reconfigured to be used as storage for these forms of energy for the betterment of the system and producer?