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Alaska regulators rule in GVEA’s favor in dispute with Delta Wind Farm

FAIRBANKS—The Regulatory Commission of Alaska has again ruled against Delta Junction wind turbine operator Mike Kraft, this time concluding that the Golden Valley Electric Association doesn’t have to buy power from his proposed 13.5 megawatt Delta Wind Farm because it would cost Golden Valley ratepayers.

Kraft is a homebuilder who’s been in the wind energy business for about 10 years, much of it mired in conflicts with Golden Valley. He seeks to sell power under the Public Utility Regulatory Policies Act, a 1978 federal law designed to encourage small and renewable producers by requiring public utilities to buy their energy if it can be sold at a price that doesn’t hurt ratepayers.

But Golden Valley says electricity from Kraft’s turbines wouldn’t be affordable. The Fairbanks-based utility concluded it would cost money to add Delta Wind Farm’s power to the grid because wind power is sporadic and requires backup from fossil fuel power plants. Buying power from Kraft would mean having diesel plants in North Pole ready more often, and the diesel plants are among the most expensive plants in the Golden Valley network.

A ruling from a group of five regulatory commissioners on Feb. 6 agreed with Golden Valley’s analysis that the cooperative would lose 16 cents for every kilowatt hour of power that it would be required to buy from the wind farm. The loss would go up to 64 cents per kilowatt hour if the calculations are run with Golden Valley’s Healy 2 coal power plant online. After a few closures because of explosions in recent years, Golden Valley plans to have Healy 2 operational again in September.

“Under those conditions, unless DWF (Delta Wind Farm) agrees to pay GVEA 16 cents per kilowatt hour to take DWF power (which we do not expect it to do), GVEA’s ratepayers will be subjected to higher costs if GVEA takes power from DWF,” the regulatory commission ruling stated.

The ruling closes the issue before the commission, although the parties have the option to petition for reconsideration or to appeal in court.

“Further process will only add to the costs already borne by DWF and GVEA’s ratepayers in furtherance of a project that appears not to be workable under current or expected conditions,” the commission stated.

Golden Valley announced the Regulatory Commission ruling in a news release Tuesday.

“We are pleased with the commission’s ruling, particularly that GVEA acted in good faith in complying with the RCA’s regulations and the reasonableness of the modeling presented by the co-op in establishing the rate to be paid for energy from Delta Wind Farm’s proposed project,” Golden Valley CEO Cory Borgeson said in a written statement. “We will continue to work with independent power producers to integrate more renewable power into our system – as long as we can keep our members’ costs low and maintain system reliability,”

Kraft said in a telephone interview Wednesday that he plans to ask the Regulatory Commission to reconsider.

In a separate case, he’s also appealing a Regulatory Commission ruling on the rates Golden Valley pays for power from Kraft’s smaller, 2 megawatt, wind farm that’s already in operation.

“My hundred dollar question to the RCA (Regulatory Commission of Alaska) is, ‘Hey you goofballs, don’t you realize you’re in Alaska Superior Court right now for violating these rules already?'” Kraft said

Kraft said the Golden Valley model that shows adding his wind farm to the grid will cost ratepayers money is wrong. Among other problems, he said Golden Valley assumes that power from his wind farm will be as sporadic as the wind farm that Golden Valley built at Eva Creek northeast of Healy. Kraft said his wind farm would produce more-reliable power. He said he commissioned an engineering study in 2010 that showed wind in Delta Junction is more consistent.

“They’re implying that my wind farm reacts the same way that theirs does. That’s the first fallacy right there,” he said. “The report came back and said if you build Eva Creek, you’re going to swing the grid 24 megawatts in under 10 minutes on a regular basis. At Delta Wind Farm, the same size wind farm at the time – 24 megawatts – the biggest swing we could create at one time was 10 megawatts.”