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Chugach board decides to proceed with Fire Island wind project

The Chugach Electric Association board of directors has blessed a plan approved earlier this week by the Regulatory Commission of Alaska (RCA) to add Fire Island wind to its menu of power sources.

Crucial for the Chugach board members was a provision in the RCA decision allowing the association to recoup the costs of adding wind power by raising rates. Chugach must file a plan by March detailing how much customers will pay.

“A lot remains to be done in a short time,” Chugach chairwoman Janet Reiser said in a press release, “. . . before wind power from Fire Island flows to the grid.”

The RCA order also calls for Chugach to control the effect of variable wind speeds on the interconnected grid, including for other utilities. A report on how Chugach will do that is due to the commission next month.

Fire Island Wind – a subsidiary of Cook Inlet Region, Inc. – plans to construct 11 wind turbines on CIRI-owned land on Fire Island as well as a transmission line to a substation at Chugach headquarters near Minnesota Drive and International Airport Road. Before Fire Island Wind can start producing power, it must secure financing, construct the wind farm and put in a transmission line to get that power to the grid.

While the Commission order permitted Chugach to recover its costs, exactly how that will happen remains to be seen. Commissioners worried that under a flat-pricing scenario, today’s customers would pay more while future customers would realize greater benefits. Consequently, Chugach is evaluating its rate options.

Currently Chugach generates about 90 percent of its power with natural gas, with the other 10 percent coming from hydro projects. The utility expects the wind farm to contribute less than 5 percent.