Cook Inlet Region Incorporated has put the second phase of its Fire Island wind farm on hold because of a lack of customers.
A plan that once envisioned 33 turbines on the island west of Anchorage has stalled at 11.
CIRI’s only customer is the Chugach Electric Association. Chugach says it’s taking all the wind power it can under present conditions.
The other utilities have turned CIRI down. The Municipal Light and Power company says it’s not interested; the Matanuska Electric Association says it doesn’t pencil out for them, and the Golden Valley Electric Association is so far away that the cost of power balloons by the time it gets there.
So Suzanne Gibson, vice president of Fire Island Wind, says that for now, phase two of the wind farm is off. She says the state lacks the regulatory framework to deal with the situation.
“In the Lower 48, there’s no question that we would be construction the second phase of Fire Island next year – or actually this year, it’s 2015 already,” Gibson said. “But, unfortunately there’s just not the right regulatory and legislative framework here in Alaska to allow us to do it.”
The Regulatory Commission of Alaska is beginning to look at how utilities should deal with independent power producers, and Gibson welcomes that development because, unlike Lower 48 power companies, Alaska utilities are not federally regulated. One issue is what are known as “wheeling charges” – the money that utilities charge to move power through their grids. Gibson says that’s why a tentative deal for CIRI to sell wind farm power to Golden Valley has apparently collapsed.
“We were working with them and we thought that we were going to get an agreement with them. And what we offered them 6.3 cents a kilowatt hour to a utility that generates half of its power at 13.6 cents – so this is like less than half of the cost to generate their own power,” Gibson said. “But, they couldn’t see their way through it by the time they transport the power across another utility system to get it up to Fairbanks, they turned it into something they estimated was 20 cents a kilowatt. They didn’t see the benefit for it.”
The Regulatory Commission has set a date of February 11th to take up the issue of independent power producers.