Healy Unit 2 Plant project breaks ground

Friday, June 27, 2014

Today, Golden Valley Electric Association and local officials held a ground breaking ceremony for the restart of the Healy 2 power plant.

Healy 2 will put fifty megawatts of coal-fired power into GVEA’s grid. Adding more coal will help stabilize electric rates in the Interior, which have risen with the oil market over the past decade. The restart will also boost the Healy economy by creating at least 20 permanent jobs over the next 40 years.

GVEA will begin test-firing the plant with oil in the spring of 2015, according to Lynn Thompson, Golden Valley’s Vice President for Power Supply. We anticipate the first fire on coal will be next June. Additional environmental controls will be added within 18 months.

The total cost of the restart and environmental controls is expected to approach $187 million – but the plant is expected to save about $21 million a year in fuel costs. 

Work has already begun inside the plant. Obsolete electronics have been removed and existing systems are being checked. Foundation work has begun for a new building that will house the emission control system.

The plant operated briefly in 1999 and has been kept in warm layup status ever since. Golden Valley purchased the plant from the Alaska Industrial Development and Export Authority (AIDEA) December 4, 2013.

Attending the restart ceremony were the Hon. Clay Walker, Mayor of the Denali Borough; Cory Borgeson, President and CEO of GVEA, and Joe Usibelli, Jr. President of Usibelli Coal Mine, which will supply fuel for the plant; Steve Stark, Project Director and Mark Chapin, Project Manager for Black & Veatch Energy who is the contractor providing engineering, procurement and construction for this project.

GV Healy2 Groundbreaking 6-27-14

Pictured from left to right: Joe Usibelli, Jr., President Usibelli Coal Mine; Bill Nordmark, GVEA Board Chairman;
Cory Borgeson, GVEA President & CEO; Clay Walker, Denali Borough Mayor; Lynn Thompson, GVEA VP of
Power Supply; Steve Stark, Project Director Black & Veatch Energy; Mark Chapin, Project Manager Black & Veatch Energy.



GVEA anticipates no disruption of power

February 4, 2014

Golden Valley Electric Association assured members there would be no power shortages as a result of the pending closure of the Flint Hills Refinery in May. “We anticipate no disruptions of any kind,” said Cory Borgeson, President and CEO of Golden Valley. “The lights will stay on.”

Flint Hills supplies three different fuels to GVEA: diesel, HAGO and Naphtha. All three are refined from Alaska North Slope crude oil. The cooperative burns these fuels in its generators to produce electricity.

“With the shutdown three months away, GVEA will have adequate time to meet with other potential suppliers and secure a supply of fuel for its power plants,” said Lynn Thompson, Vice President for Power Supply at the co-op.

In 2013, GVEA derived 29% of its power from oil, down from 43% in 2012. Golden Valley has been actively involved in the development of a natural gas trucking operation from the North Slope, which would also lessen the co-op’s need for oil.

“We have been working our way off oil for a long time,” said Bill Nordmark, chairman of the GVEA board. “This just gives us more motivation to complete the projects we’ve started.”

GVEA does not know how the refinery closing will impact the price of electricity. The cost of power is directly based on our cost of fuel and we will be working diligently to obtain another long-term source of fuel for our North Pole units at the lowest cost possible.

In addition, GVEA has a contingency plan in place should the co-op suddenly lose one of its fuel sources. The plan identifies both in-state and out-of-state fuel sources.

Flint Hills Refinery is located next to GVEA’s North Pole Units 1 & 2, and the North Pole Expansion Power Plant.

Golden Valley has one of the most diverse fuel mixes in Alaska. The co-op derives power from coal, natural gas, wind, hydro and oil.

Electric bills to dip slightly

December 1, 2013

Electric consumers can anticipate a slight decrease in their bills as they ring in the New Year. The average household that consumes 660 kWh will see its monthly bill drop by about $4.

As of December 1, Golden Valley Electric Association’s Fuel and Purchased Power Charge will decrease almost nine percent, from 10.5 cents to 9.6 cents per kilowatt-hour. Since January 2012, this charge has dropped 24 percent.

The decrease in the Fuel and Purchased Power Charge will more than offset a slight increase of 0.3 cents to the Utility Charge effective January 1, 2014.

Utility officials are pleasantly surprised to be offering a price reduction midwinter, a time when strong demand typically means higher costs.

“We are seeing continued positive effects of the natural gas contract we negotiated with the Anchorage utilities,” said Cory Borgeson, GVEA president and CEO. The worldwide slide in oil prices also contributed to the decline in fuel costs.

GVEA is working to stabilize rates that have fluctuated wildly in the past seven years, driven by the volatile cost of oil.

Regulators Back GVEA in Wind Power Case

The Regulatory Commission of Alaska sided with Golden Valley Electric Association in a dispute with the owners of the Delta Wind Farm.

"We found no violation of statues, regulations or GVEA’s tariff provisions,” the regulators wrote in a letter issued October 17.

Alaska Environmental Power approached Golden Valley in February about purchasing additional wind power. AEP is seeking to expand its wind farm from 2 megawatts to 25 megawatts. Golden Valley already purchases every megawatt AEP produces.

The parties entered into discussions in March. Golden Valley spent thousands of dollars and hundreds of hours evaluating the proposal and negotiating with AEP. AEP withdrew from negotiations in July and filed an informal complaint in August, accusing the co-op of negotiating in bad faith.

"This decision confirms that GVEA has complied with the regulations and has dealt fairly with AEP,” said Golden Valley President and CEO Cory Borgeson.

AEP is pressing Golden Valley to buy its wind power at a price higher than the average of its other fuel sources. The co-op is concerned that this would raise rates.

“We want more wind power, but only if it doesn’t lower our reliability or raise our members’ rates,” Borgeson said.

Read the letter from RCA's Consumer Protection Officer.

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