GVEA asks state, US regulators to OK halt to tariff for ‘hybrid’ renewable-energy proposal

A Colorado-based company’s proposal to generate and sell 100 megawatts to Golden Valley Electric Association has devolved into a dispute involving state and federal energy agencies.

Golden Valley officials say they’ve got concerns about Eco Green Generation’s hybrid renewable-energy proposal, so they’ve halted work on a tariff they’re required to file in response. State regulators have OK’d GVEA’s request to suspend the tariff until federal regulators rule on the utility’s request to declare Eco Green is unqualified to submit the proposal.

Golden Valley President and CEO Cory Borgeson says Eco Green’s initial proposal submitted in December raised a few eyebrows, because it was submitted under a federal program that was established to encourage greater use of renewable power, from such sources as wind and solar.

Borgeson says Golden Valley didn’t have much experience with the program and the agency that administers it – the Federal Energy Regulatory Commission, or FERC.

“Our experience with FERC is limited,” Borgeson said. “And Golden Valley doesn’t receive too many of these requests.”

Borgeson says Golden Valley began working on a tariff in response to the proposal, as required by law. The document would outline the price the utility would pay for the power, along with other details, such as how it would be uploaded onto the grid.

Borgeson says the utility invested a lot of time and expense studying the complex proposal, which called for generating 55 megawatts with both wind and power from 11 propane-fired backup generators in Fairbanks and North Pole.

“As you might image, our members have to incur the cost of the analysts and consultants that we utilize,” he said in a March 11 interview.

But Golden Valley halted work on the tariff last month, after it was unable to confirm that Eco Green had been certified by FERC as a qualifying facility, or QF. A company officials says a mixup led FERC delayed certifying Eco Green after the company had submitted an initial so-called “self-certification” application in early January.

“It caused some confusion on their side, as to which forms we should be using and how the self-certification should be handled,” Craft said. “So, that was the initial issue.”

Mike Craft is a Fairbanks-based wind-power developer and a partner in the Eco Green venture.

“And so what FERC recommended was that we fill out three different forms – one for the wind farm, one for the generators and one with them both combined,” he said.

Craft is referring to a 25-megawatt wind farm the proposal called for building in Delta Junction, next door to a 2-megawatt wind farm that he and his Alaska Environmental Power partners own and operate. Craft says when he and his Eco Green partners reapplied with FERC, they modified the plan by proposing to build a larger wind farm and increasing the hybrid system’s total output to 100 megawatts.

They also proposed locating two more of the 5-megawatt propane generators near Clear Air Force Station to provide both power and heat – which were produced by a small coal-fired power plant on base until Air Force officials shut it down in three years ago.

“So they’re using oil boilers now – very expensive for them, in comparison to what they were doing before,” Craft said in an interview last week.

Craft says Eco Green’s proposal also would provide heat produced by the propane-fired cogenerating units for adjacent government- and privately owned buildings. He says that would cut their fuel costs and reduce Golden Valley’s use of coal and other fossil fuels, which would in turn help reduce the Fairbanks area’s serious air pollution problems. Borgeson says Eco Green’s modified proposal raised more questions, which led Golden Valley to petition the Regulatory Commission of Alaska to allow the utility to stop work altogether on the tariff.

“We’ve made the decision to hold off on doing any further work,” he said.

The commission granted Golden Valley a temporary stay on March 15 while it reviews the petition in the lead-up to an April 3 hearing. The commission is expected to make a decision before September. Golden Valley also petitioned FERC to declare that Eco Green’s project does not qualify as a QF. Meanwhile, the federal commission will accept public comments on the matter until April 5 and will issue a ruling later.

Tim Ellis is a reporter at KUAC in Fairbanks.

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