Proposed Energy Project Fails to Qualify Under Federal Regulations

A proposal to build a 100-megawatt (MW) propane-fired energy project in Interior Alaska has had its status as a qualifying facility (QF) revoked by the Federal Energy Regulatory Commission (FERC) because the proposed project failed to meet the requirements for a QF as laid out in federal regulations.

Colorado-based Eco Green Generation (EGG), together with Alaska Environmental Power of Delta Junction, approached Golden Valley Electric Association (GVEA) in February, and under the Federal Public Utility Regulatory Policies Act (PURPA), demanded that GVEA purchase the output from a proposed hybrid power project. The project consisted of a 37.8 MW wind farm that ‘has its power firmed’ by the integration of 100 MW of co-generation power produced by 20 separate 5-MW reciprocating engines that are duel fueled from 3% renewable diesel and 97% propane. EGG had self-certified its proposed project with FERC — meaning that EGG represented to FERC that the project met all of FERC’s regulatory requirements for QF status. Based on this, EGG claimed it was entitled to require GVEA to purchase the project’s output at non-market-based prices.

Because FERC does not independently verify the accuracy of QF self-certifications, like EGG’s, GVEA challenged EGG’s eligibility for QF status. GVEA pointed out that not only did the proposed project not meet FERC’s legal requirements for QF status, there were also many inconsistencies and omissions in EGG’s application. GVEA also had serious concerns regarding the cost and reliability impact of EGG’s proposed project. In response to GVEA’s filing, FERC issued an order agreeing with GVEA on all points and revoking EGG’s QF self-certification.

"We are pleased with the regulators’ decision," said Cory Borgeson, President and Chief Executive Officer of GVEA. "Golden Valley had argued from the beginning that EGG’s project failed to qualify as a QF under FERC regulations. FERC agreed with all of GVEA’s positions, thoroughly rejecting every one of EGG’s points."

EGG promoted its idea as a hybrid power project with wind and cogeneration components, but at times over 85% of its energy output would have come from fossil fuels. The EGG proposal was lacking in project-specific data, such as how the project would be financed or where the propane would come from. EGG is believed to have no experience constructing and operating a utility-scale project like the one it was proposing. With a capacity of 100 MW, the project would have effectively replaced much of GVEA’s existing generation on an average daily basis.

GVEA has also asked that the Regulatory Commission of Alaska (RCA) issue an order requiring EGG to seek formal certification as a QF from FERC before GVEA is required to file a facility-specific tariff for EGG in compliance with Alaska law. By granting GVEA’s request, the burden would be on EGG to prove to FERC that any future project meets the requirements to be eligible for QF status before GVEA is required to spend member resources.

"Responding to this proposal cost the co-op hundreds of hours of staff time and costs resulting in excess of hundreds of thousands of dollars," Borgeson said. "Those costs are borne by our members, so GVEA wants to make sure any future proposals are qualified before incurring additional costs. GVEA’s door is always open for additional efficient renewable generation resources, but the projects must have no long-term negative impact on reliability or rates."

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Links to previous GVEA posts on this topic:

(Posted to GVEA's Blog on June 11, 2019.)

Good¢ents Grants Awarded in May 2019

The Good¢ents Board of Trustees met in May. Thirteen applications were reviewed, and nine grants totaling $60,372 were awarded. Here’s a summary of these recent grants:

  • Athabascan Fiddlers Association:  $2,500 grant to be applied towards the purchase and installation of a backup radio transmitter.
  • Delta Junction Trails Association:  $5,000 grant to be applied to public trail upgrades and signage.
  • Fairbanks Shakespeare Theatre:  $10,000 grant to be applied towards the rebuilding of the outdoor theatre stage.
  • Farthest North Girl Scout Council:  $2,000 grant to be applied towards upgrades to their building’s parking lot and entrance.
  • Nenana Volunteer Fire EMS Dept:  $6,872 grant for the purchase of a snowbulance.
  • North Star Council on Aging:  $12,000 grant for bathroom upgrades, bringing them into ADA compliance.
  • North Star Dance Foundation:  $5,000 grant to assist with a lighting upgrade.
  • Santa’s Letters:  $2,000 grant to be applied towards the purchase of stationary and mailing supplies.
  • Tri Valley Volunteer Fire Dept:  $15,000 grant towards the purchase of an ambulance.

All grants from the Good¢ents Foundation are awarded to nonprofit organizations within GVEA’s service area. Applications are reviewed quarterly in February, May, August and November by a volunteer board of trustees. The next application deadline is July 31, 2019. Applications and more information about the program can be found online here.

Good¢ents is funded by the generous members of Golden Valley Electric Association. Since the program began in 2011, GVEA members have funded grants totaling $1,011,850.

Thank you to all of the members who voluntarily “round up” their monthly billing statement to the next dollar. The cents you contribute is greatly appreciated and really makes a difference within the communities GVEA serves.

(Posted on GVEA's Blog on June 3, 2019.)

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