A deal that would allow Cook Inlet Region Inc. to build an electricity-generating wind turbine farm on Fire Island is in the final stages.
The board of Chugach Electric Association, the biggest power utility in Alaska, is scheduled to consider today a proposed contract to buy wind power from CIRI.
“I don’t see any problem,” Chugach board member Jim Nordlund said Tuesday. The board last week unanimously agreed to terms that make up the deal, he said.
The agreement calls for CIRI to deliver electricity from 11 wind turbines capable of producing a maximum of 17.6 megawatts of power – about enough to provide electricity to 6,000 households, said Jim Jager, spokesman for CIRI.
The nest of turbines would sit on the southern end of Fire Island, visible from parts of the Anchorage coast, such as in Kincaid Park. Each turbine would rise some 260 feet with 130-foot blades, according to information on CIRI’s website. The Atwood state office building downtown is just over 260 feet tall.
The 11-turbine wind farm is one-third the size that CIRI hopes to build eventually.
But at this point, Chugach is the only utility to sign on to buy Fire Island power, so CIRI created a scaled-back first phase, Jager said.
The city-owned Municipal Light and Power made an offer to CIRI earlier this year, but CIRI executives said it was so low that it was unworkable.
The Anchorage Assembly passed a resolution in favor of the city getting in on the project, and created a committee to look into it. But Assemblyman Ernie Hall said the committee hasn’t met yet because when he contacted CIRI officials, they asked him to wait until Chugach negotiations were completed.
Chugach serves about 80,000 homes and businesses in Southcentral Alaska directly, including Anchorage residents south of Tudor Road and east of Boniface Parkway. It also sells power to other utilities.
ML&P has 30,000 customers.
The price Chugach and CIRI agreed to for wind-generated electricity is $97 per megawatt hour.
That’s higher than the average cost of power now, said Jager, but “this is 25 years at a fixed price. As energy prices go up it will look more and more attractive.”
Chugach expects electric rates for its customers to rise slightly in the short term, by about $20 per year for an average household that uses 700 kilowatt hours of electricity per month, said Nordlund.
The wind farm will provide about 4 percent of Chugach’s power.
It’s a modest amount but a significant move, said Chris Rose, executive director of the Renewable Energy Alaska Project. “Now we’ll be able to see the benefits of wind power close to home.”
Using renewable energy like wind power that doesn’t have fuel costs is a way to lessen the blow when natural gas prices rise, Rose said.
There’s a looming shortage of Cook Inlet gas.
“The natural gas prices utilities are paying right now will go up after current contracts expire,” Rose said.
While Chugach and CIRI executives have reached agreement, there are more steps before the wind project becomes reality.
Here’s what happens next:
• The Chugach board meets at 3 p.m. Wednesday to consider the contract.
• The CIRI board meets Monday to do the same, said Jager.
• The Regulatory Commission of Alaska also has to OK the deal.
CIRI will ask for expedited approval by Sept. 15 so the company can do enough construction work this fall to qualify for a federal stimulus grant, said Jager.
CIRI doesn’t know how much federal money it will be eligible for. But that money will go directly to pay for construction costs, he said.
The company does not yet have a cost estimate for the 11-turbine project, he said.
It would have cost $162.2 million to build the project as CIRI initially proposed it, with 33 turbines, he said.
In addition to the federal money, a state grant of $25 million is available to build the underwater transmission line to get electricity from Fire Island to Anchorage.
CIRI would build the transmission line, then Chugach would be responsible for operating and maintaining it.
CIRI’s goal is to build the 11 turbines and get the transmission cable laid between Fire Island and the mainland all by late 2012, said Jager.
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