ADN by Rosemary Shinohara. In months of trying, backers of the Fire Island wind farm haven't been able to sign up any utilities as customers. Jim Posey (NGP Photo), head of city-owned Municipal Light and Power, says ML&P can get a better deal elsewhere, even if it comes down to importing liquefied natural gas to spin its generator turbines. Chugach Electric Association is seriously negotiating for a wind contract, say officials of Cook Inlet Region Inc., sponsor of the Fire Island project. Chugach officials, saying their negotiations are confidential, declined to talk with the Daily News about the project.
Fairbanks News Miner. The owner of Delta Wind Farm isn’t giving up in his battle to form a partnership with Golden Valley Electric Association. Mike Craft said he’ll attend the utility’s annual meeting Tuesday, where he’ll challenge GVEA’s decision to pursue its own $93 million wind-farm project near Healy. The 24.6-megawatt wind farm was picked in February over his proposal and another project near Anchorage.
ANGDA Hosts Two Useful Energy Events - CIRI Wind Moves Ahead Despite Backdraft - Salazar Announces Lease Sales
1. Last Friday, Chairman Mary Ann Pease (NGP Photo-r) conducted a Commonwealth North Energy Action Coalition meeting to hear a thorough briefing by the Alaska Village Electric Cooperative's (AVEC) Meera Kohler (NGP Photo-l). The briefing occurred at the offices of the Alaska Natural Gas Development Authority (ANGDA).
AVEC serves 7,500 facilities with 78 employees and 95 village technicians in 53 villages covering a population of 22,000 comprising what would be Alaska's 4th largest city after Anchorage, Fairbanks and Juneau. The AVEC customers comprise 44% of Alaska's village citizens. Contributing to the complication of AVEC's mission is dealing with the extreme variation in served populations. The average village served has 420 souls compared to Anchorage's almost 285,000 citizens.
Kohler emphasized the goal of achieving efficiency and diversifying the sources of electric power, saying that rates among her cooperative members had increased from $1.29 Kwh in 2002 to $4.55 Kwh last year. She said AVEC's Board of Directors has set forth goals to include the reduction of diesel use by 25% and elimination of half of AVEC's power plants over the next 10 years, along with a reduction of non-fuel costs by 10% over the same period. Kohler seemed confident in meeting the goal, outlining AVEC's ambitious plans for grouping nearby villages to share power generation facilities and expanding the use of wind energy. (More meeting photos will appear below. -dh)
2. Agency Briefing to the ANGDA Board of Directors B2F Pipeline Project. ANGDA’s Project Purpose: “The B2F pipeline will deliver Cook Inlet natural gas to the Copper Valley, Delta Junction and Fairbanks, and will provide gas storage for Southcentral use.”
3. CIRI Wind, ADN by Elizabeth Bluemink (NGP Photo). Citing mismatched business goals as the reason for the split, the Anchorage Native corporation said that it and California-based EnXco, agreed to part ways in October. Until then, EnXco had been the developer of the 54-megawatt wind farm and CIRI's equity partner in the project. CIRI said it hopes to sign a deal with another well-known wind farm developer in early December. CIRI can fund the project without an equity partner, if need be, said Ethan Schutt (NGP Photo), a CIRI vice president for land and energy. The parting with EnXco has not caused the project's timeline to slip, CIRI spokesman Jim Jager said. (See our original story.)
4. DOI Decides to Schedule Lease Sales. The Department of the Interior has scheduled 38 oil and natural gas lease sales for U.S. public lands in 2010, including a sale in the National Petroleum Reserve-Alaska, Secretary of the Interior Ken Salazar (NGP Photo) announced today. “During the past year we have held 32 onshore lease sales, offering more than 2.7 million acres in the West and generating more than $126 million in revenue for American taxpayers,” Secretary Salazar said. “Next year will be just as busy with 37 quarterly sales for Western public lands and the first sale in nearly two years for tracks in the northern reaches of the National Petroleum Reserve-Alaska. Our nation needs a balanced and appropriate use of our conventional and renewable energy resources. That means oil, gas and coal will continue to play an important role in our energy mix, as we develop and expand the use of wind, solar, geothermal and other renewable sources.” The Bureau of Land Management’s 37 quarterly oil and natural gas lease sales scheduled for 2010 will offer thousands of parcels in a dozen states, most in the West. The BLM’s Alaska State Office oil and gas lease sale will offer available tracts in the Northeast and a portion of the Northwest areas of the National Petroleum Reserve-Alaska. The sale is scheduled for August 11 in Anchorage, Alaska. The last sale for the Reserve was held September 24, 2008. BLM conducts its quarterly lease sales based on nominations received from industry. These are evaluated to determine eligibility and availability for leasing before being delineated into individual parcels. A preliminary parcel list is sent to sister agencies, such as the National Park Service and U.S. Fish and Wildlife Service, for review and recommendations on which parcels to offer. Since January of this year, the Bureau of Land Management has held 32 onshore lease sales that offered 2,346 parcels, covering 2.7 million acres, and sold 1,212 of those for $126 million. BLM will hold four more lease sales this year, for a total of 36 for 2009. Oil and gas leasing in the NPR-A is authorized under the Naval Petroleum Reserves Production Act of 1976, as amended. Integrated Activity Plan/Environmental Impact Statements have been prepared for both the Northeast and Northwest planning areas.
...From the CWN meeting Friday at the ANGDA offices:
7-13-09 (Weekend and Monday News & Comment). PNA. Cook Inlet Region Inc. said June 30 that it has received key permits for a proposed wind farm on Fire Island near Anchorage. The U.S. Army Corps of Engineers has approved permit applications for Wind Energy Alaska’s Fire Island wind farm and related electricity transmission infrastructure and the project is on track for startup in 2011, CIRI said in a statement. The wind farm will provide commercial-scale renewable power in Southcentral Alaska. (Comment: This little wind project will be a historic diversification of energy supply for South Central Alaska. We refer to it in this gas pipeline web page because of the extremely interesting focus it places on Regulatory Commission of Alaska (RCA) decision making re: natural gas and electricity projects. The RCA has broad powers under AS 42.05 to consider electric utility power sales agreements and gas utility supply agreements. In late 2006 the RCA rejected a contract presented to it by Enstar, for Marathon-supplied gas through 2016. Had that contract been approved, South Central consumers would likely have enjoyed both lower gas prices than they will be paying and a more secure supply. But the RCA majority departed from a 2001 Commission precedent and rejected the 2006 contract. I first dissented from the majority on its fundamental decision and dissented again when the majority of commissioners rejected a petition for reconsideration. In my dissents, the bad outcomes I projected are pretty much evolving. On 2-23-09, in a speech to the International Association of Energy Economics, and on 12-9-08 in another to the International Law Seminars Energy Symposium, I summarized the unavoidable, negative effects of too much regulatory interference with natural gas supply contracts. Today one might further wonder that if the RCA could reject the price per energy unit presented in the proposed 2006 Enstar contract--jeopardizing citizen gas supply as early as this winter--how could it with consistency approve an alternative energy supply source that may be more expensive? How could it approve a North Slope gas supply from a bullet or spur line that could be more expensive that that 2006 Marathon contract it disapproved? I suspect that if the matter of a sale of wind-generated electric power from CIRI to Chugach Electric Association or other Southcentral electric utilities comes before the RCA, proponents will argue, "Well, spending more per British Thermal Unit for Fire Island wind power is worth more to consumers than spending less for natural gas for Enstar because wind is 'clean' energy, the 'favored' fuel of the future, and it helps us diversify our energy sources." At least, that's what I might try to argue if I were CIRI, dodging various logic-created traps along the way. But I truly think that ratepayers would vote--were they given the vote--to have more Beluga plant-supplied electricity powered by natural gas than electricity powered by Fire-Island wind unless the wind source were cheaper. But that would require an electric company to obtain gas with RCA approval when RCA has not been willing to approve contracts in the last half-dozen years that might have represented a price higher than the weighted average of existing gas sources. On 1-9-09 CIRI's highly articulate Wind Energy Alaska project manager, Ethan Schutt (NGP Photo), addressed the International Association of Energy Economists. He described the project and various regulatory challenges with the FAA and Corps of Engineers. He noted that final permitting and power supply agreements should be completed this year with construction and commissioning to occur next year. The PNA story suggests CIRI and its Wind Energy Alaska partner, EnXco, have competently executed their plan so far. So this story is good news, but goes to show that all of these energy projects are related in small or big ways. The best way to have them all thrive and benefit ratepayers is to let the private market control the outcomes and choose 'winners' and 'losers'' whenever possible; otherwise, consumers will inevitably lose. After all, Alaskans know better than most that bureaucratic manipulation of the free enterprise system has produced mostly failed results over the years. We must also hope that the RCA will re-embrace its 2001 Unocal gas supply agreement (GSA) position that, "The GSA is a commercially negotiated agreement. We will not speculate whether a better agreement could have been obtained by ENSTAR, with Unocal or with another potential supplier" (RCA Order U-01-7(8) at 4). -dh * ADN. * Forbes. Gov. Sarah Palin's unexpected midterm departure should not affect the project she touted as one of her primary successes, a massive natural gas pipeline, according to state lawmakers and sources in the industry.