Chugach Consumers
FIRE ISLAND WIND PROJECT www
Background documents assembled by Chugach Consumers  
NOTE: Inclusion here does not necessarily indicate agreement with the content or views expressed in the documents.  

Websites:   CIRI  Chugach Electric   ML&P   RCA TA335-8  

10/11/11 Sale of Fire Island wind power to Chugach Electric gets OK - ELECTRICITY: Production could begin by fall of 2012 - By SEAN COCKERHAM - Anchorage Daily News - 
10/7/11 Fire Island wind would be a sound step forward - By STEVE CLEARY
8/8/11 RCA ORDER SUSPENDING TARIFF FILING - Chugach’s rate impact projections are based upon assumptions that are not supported with sufficient detailed back-up either in TA335-8 or in Chugach’s supplemental filing. We required Chugach to specifically reply to the adverse comments filed by the public and ML&P.  Chugach responded in its supplemental filing but we do not believe the response adequately addressed the comments. We cannot approve the PPA based on the existing record. We suspend TA335-8 for an initial period of six months until Tuesday, February 8, 2012.
7/25/11 ML&P Comments to the RCA - Dan Helmick   Kenneth W. Langford (240 pages, ML&P Power Mgt Supervisor)     7/10/11 - Alex Gimarc Comments    6/23/11 - Chugach Electric Filing (146 pages)   
7/16/11 Regulators weigh Fire Island wind generation project - WIND POWER: Developer asks for decision by Sept. 15. - By WESLEY LOY - Petroleum News - 
6/15/11
 		 KBYR Glen Biegel Show - [53:58 min]  Discussing Chugach Electric voting to buy wind power from Fire Island - Former Chugach Board president Rebecca Logan, "Chugach staff was made to feel they would lose their jobs if this wasn't done."    
6/15/11 Our view: One third of the wind - Fire Island project gets a shot [Editorial] - Anchorage Daily News
6/14/11 Fire Island wind power project moves closer to reality - Anchorage Daily News - Rosemary Shinohara 
6/10/11 Chugach board votes to approve Fire Island terms - The proposed deal calls for Chugach to take up to 17.6 megawatts of power at a flat net price of $97 per megawatt-hour for 25 years, beginning Jan. 1, 2013. Chugach agreed to buy the power at a price of $107.85 per MWh, and Fire Island Wind, LLC agreed to pay a System Integration Charge equal to $10.85 per MWh (including curtailment) to help integrate the power into the system.  TERM SHEET (price agreed)  
4/24/11 Wind farm struggles to sign up energy utilities - Anchorage Daily News - ENERGY: ML&P looks elsewhere, even if it means importing gas - ROSEMARY SHINOHARA - With Cook Inlet natural gas fields declining, you might think local utilities would embrace a plan to use renewable energy like a proposed wind turbine farm on Fire Island to supplement the gas -- a project that could deliver power in two years.  But they're not.
4/21/11 Wind power project aimed at profits [Letter] - I fail to understand the argument presented by Mr. Cleary in favor of purchasing Fire Island power at 9 cents per kwh ("Wind fits quite well in ML&P power mix," April 19). If Bradley Lake power is 3.7 cents, and Susitna power is anticipated to be 6 cents, CIRI's proposal of 9 cents is certainly not "right in the middle." And if Susitna power costs double the expected 6 cents, CIRI would still be far from "in the middle."

So far, all CIRI seems to have furnished is a location for wind generators and a concept. The concept is that, if they can get a commitment from someone to buy as-yet nonexistent power, they can obtain $40-odd million of the federal taxpayers' money to buy wind generators. Then they can get another $20-odd million of the state taxpayers' money to build transmission lines. Then they can sell the resulting power to the taxpayers who have already paid for the means of producing it.

CIRI is in this for profit -- ML&P has a responsibility as a public utility. Let's listen to both with that in mind.  
-- Don Neal, Anchorage
4/19/11 Wind fits quite well in ML&P power mix - STEVE CLEARY - Anchorage Daily News - City-owned Municipal Light and Power (ML&P) is concerned that buying power from Fire Island will cause its rates to rise. Yet, doing nothing will cause rates to rise. Gas is getting more expensive, and scarce. It is well past time to face that fact. Fire Island is one solid step toward an electricity supply that isn't overly reliant on natural gas.
4/15/11 Money Well Spent? - By Alex Gimarc - RedCounty.com - If Fire Island performs as well as all wind generation in Great Britain, we can expect to get just under 11 MW on average off Fire Island, making this a very small project with not a great upside for Chugach members.

So how has the Chugach Board spent our money over the last year? One would expect them to maximize their support of Susitna, as it is the largest and most promising of all three projects. Yet their costs have been mainly in-house staff time. Support for Mount Spurr has been much the same. On the other hand, the Board has directed and supported with our utility dollars over $510,000 from April 2010 through April 2011 negotiating and engineering Fire Island wind project with CIRI.

If it were me, I would ask the various candidates what they would pursue and why. What sorts of new generation projects will be supported over the next three years? What is so important about Fire Island so that the current Board Majority believes it must be supported at the expense of the other two projects? Why does an outfit that prides itself (and calls itself) the Chugach Reliability Group support candidates pushing a notoriously unreliable and expensive renewable generation technique – wind - at the expense of other more robust and more reliable generation?
3/24/11 Anchorage utility offers proposal for Fire Island wind power - Anchorage Daily News - The Anchorage Municipal Light and Power board met today and decided to forward a proposal to a company that wants to develop and sell power from a wind turbine farm on Fire Island.
2/2/11 Anchorage Assembly pushes Fire Island wind project ahead - Patti Epler - Alaska Dispatch - The Fire Island wind project got a big boost from the Anchorage Assembly Tuesday night when it ordered the city's electric utility to formally pursue a contract for the power...The unanimous Assembly action doesn't necessarily mean Anchorage Municipal Light & Power will buy electricity from the project. It simply directs ML&P to sit down and craft a contract with the Native corporation to see if the project would be an economically viable option for the city, said Assemblyman Bill Starr, who sponsored the resolution.

"I've only heard that it doesn't make economic sense or that it doesn't pencil out," Starr said Wednesday, adding that he wants to see a formal written agreement with costs and other factors. "I want to see a power purchase agreement. If it doesn't pencil out, let us (the Assembly) decide that."

Starr said a wind farm makes sense because it takes the load off the current natural gas supply, which is going up in cost, and it could free up gas for heating and other uses. 
2/1/11 AR 2011-39 — A RESOLUTION OF THE ANCHORAGE MUNICIPAL ASSEMBLY TO ENSURE DIVERSIFICATION OF ENERGY RESOURCES SUPPLYING MUNICIPAL POWER.  ASSEMBLY MEMORANDUM No. AM 78–2011
1/28/11 Fire Island in limbo; CIRI scales back project - By Tim Bradner - Alaska Journal of Commerce - The project, at least in its first phase, would be reduced from 50 megawatts to 35 megawatts in the revised proposal, making it easier for the utilities to deal with variations in power output from the wind turbines planned for Fire Island, Schutt said...In a related development, CIRI will have met requirements to qualify for an up-front federal stimulus grant toward capital costs of the wind project if the project can actually get under way this year, Schutt said. In any event, Congress has extended the program beyond the original Dec. 31, 2010, expiration date, which gives CIRI more time...CIRI has invested between $7 million and $10 million in the project so far, Jager said.
11/14/10 A storm blows up over wind power cost - CIRI and power utilities disagree over cost of integrating Fire Island wind power into the Railbelt power grid; pricing also an issue - Alan Bailey - Petroleum News - An analysis of potential Fire Island wind energy integration costs, commissioned by Southcentral utility Chugach Electric Association, has concluded that the integration cost would amount to around $100 to $110 per megawatt hour of wind-generated power, a cost that CIRI vehemently disputes, Ethan Schutt, CIRI’s senior vice president of land and energy development, told the Anchorage Mayor’s Energy Task Force on Nov. 3...Schutt said that it appeared that the Chugach study assumed that the wind farm would, for example, cover the entire cost of stored gas backup capabilities at Chugach power plants, whereas backup facilities would have wider application than just accommodating power fluctuations from Fire Island. Costs need to be spread across all who benefit from the facilities, Schutt said.  And CIRI does not agree with the assumptions that the Chugach study appears to have made about the way in which the varying output from the wind farm would be accommodated, said Dana Zentz, vice president of Summit Power Group and a CIRI consultant.

In contract negotiations, Chugach and CIRI are still 20 percent apart on price; Anchorage utility, Municipal Light & Power, has not responded to offers from CIRI; discussions are still in progress with Matanuska Electric Association; discussions are also in progress with Fairbanks-based Golden Valley Electric Association; and Homer Electric has refused to consider buying any Fire Island power, Zentz said.
11/14/10 CIRI says rising gas prices will justify Fire Island wind farm - Petroleum News - Gibson said the current LNG price in Japan, the world’s largest LNG importer, is $13 per million Btu.  
11/11/10 Report looks at integrating Fire Island wind, power grid - By Tim Bradner - Alaska Journal of Commerce - A consultant report commissioned by the utilities has estimated the cost of the integration at 10 cents to 11 cents per kilowatt hour, which is higher than the 9 cents per kilowatt hour wholesale price for which CIRI would sell the power to the utilities.  This would make the combined price of Fire Island wind power at about 19 cents to 20 cents per kilowatt hour...

Jim Jager, CIRI spokesman, said that Alaska's utilities may not have the best kind of turbines that can respond quickly to load variations, but that having these would be a good investment for the utilities anyway aside from Fire Island. The same goes with the compressed natural gas storage considered in the R.W. Beck study.  "These are things the utilities should be doing anyway to enhance the reliability of the system. It's not fair for them to load the cost of these totally onto Fire Island wind," as it suggested in the R.W. Beck study, Jager said. "That's our biggest complaint with this." 
11/8/10 CIRI looks for city support of Fire Island wind project - Rhonda McBride - Channel 2 News - CIRI lobbied the Anchorage Chamber of Commerce Monday to throw its support behind its Fire Island wind project and apply pressure to utility companies and the state to move forward. 
11/3/10 Fire Island Wind Project - CIRI presentation to Mayor's Energy Task Force 
10/25/10 Letter to RCA from GVEA on allocating costs of renewable energy in the Railbelt grid.
10/23/10 Time to get serious about alternate energy - Tim Bradner - Anchorage Daily News - 
10/21/10 Despite funding concerns, wind farm construction under way on Fire Island - By Sean Manget - Alaska Journal of Commerce 
10/21/10 Clock is ticking for CIRI's Fire Island - By Tim Bradner - Alaska Journal of Commerce - 
10/20/10 CIRI Town Hall presentation on Fire Island Wind Project [Loussac Library]
10/19/10 Wind Integration Costs Using the R.W. Beck Hourly Dispatch Model (for Chugach Electric) - Integration costs are around $50-60 per MWh plus $40-50 per MWh (Chugach estimate) for the cost of a facility to provide an on-site variable gas supply
10/18/10 Our view: Fire Island wind power - 33 turbines will help ease load in darkest, coldest months - Anchorage Daily News [Editorial] - 
9/24/10 ML&P moves towards wind farm contract - Kirsten Adams - AlaskaWatchdog.org - While CIRI would own and operate the turbines, the transmission line transporting the power off the Island would be owned by the utilities contracting with the farm.
9/19/10 Fire Island wind farm needs contracts - Elizabeth Bluemink - Anchorage Daily News - Nearly $44M in federal money for CIRI project expires this year; utilities concerned about cost; CIRI says cost flat over time
8/23/10 CIRI offer to ML&P - Long Term Power Purchase or Output Share Purchase Agreement [marked "CONFIDENTIAL"] - 
6/30/10 Homer Electric - Independent Light Project: RCA Discussion [slide 26 has forecast of future wholesale power costs].
6/27/10 Wind power takes off; GVEA gets on board - Stefan Milkowski - Petroleum News - Golden Valley Electric Association revisits large-scale project near Healy, prompted by federal incentive to reduce financing costs. Thanks to a strong wind resource, favorable economics, and government support, wind power has become a growth industry in Alaska. A big break came earlier this year in the form of a modification to the federal Clean Renewable Energy Bond program that would lower GVEA’s cost of borrowing to just 1.9 percent. Lamal said the project, which is expected to cost $93 million, would produce power for roughly 9 cents per kilowatt hour, more than a penny less than the utility’s current wholesale avoided cost of 10.6 cents per kilowatt hour.
6/13/10 CIRI prepping RFP for Fire Island - Plans to build new navigation system to resolve FAA concerns, new law paves the way for negotiating contracts with area utilities - Eric Lidji - Petroleum News - Cook Inlet Region Inc. plans to start the formal search in the next few weeks for a firm to build the first commercial-scale wind farm in Alaska on an island in Cook Inlet. CIRI, the Alaska Native co...
5/24/10  Wind power isn't all it's cut out to be - By Alex Gimarc - Alaska Standard
10/15/09 CIRI moving forward with Fire Island wind project - Margaret Bauman - Alaska Journal of Commerce - The state will foot the $25 million bill for the transmission line to connect Fire Island to the Railbelt grid, but only when CIRI has power purchase agreements in place.
9/30/09 What to do with Fire Island - By Alex Gimarc - Alaska Standard - Large wind projects here in the US and in Europe produce less than 10% of their installed capacity on a continuous, day by day basis. Additionally, the average cost of wind energy in Europe, where it has been deployed and used extensively is around 11 cents/kilowatt hour – nearly 150% that of what Chugach Electric is currently producing its electricity for. Do we have enough free money laying around to spend on building and hooking up a wind farm that will not add significant new energy to our electric energy grid here in Southcentral Alaska?
7/16/09 Fire Island wind power plan comes with high costs - By Dave Harbour - Alaska Standard
2/16/09 Exporting Pollution - By Penny Nixon - Alaska Standard
5/29/08 Fire Island wind farm in late 2009 - CIRI says that the state has appropriated $25 million for a transmission line from the island to the Anchorage electric grid - Alan Bailey - Petroleum News - The state Legislature has appropriated $25 million for the construction of a submarine cable from the island to connect to the electrical grid in Anchorage. “The cost of the power lines won’t have to be paid by the utilities or customers that buy power from Fire Island,” Sophie Minich, chief operating officer for Cook Inlet Region Inc. said. 
5/15/08 Anchorage Daily News - May 15, 2008 [Letter to the editor]

$25 MILLION FOR FIRE ISLAND POWER TRANSMISSION LINE IS LOST IN WIND 

Spending $25 million on a transmission line to Fire Island is money misspent for several reasons. 

Due to the variable and unreliable nature of wind generation, 50 megawatts of wind power does not relieve Chugach Electric Association or Municipal Light and Power of 50 megawatts of generation construction. Fifty megawatts of efficient gas generation must be built or of the current inefficient fleet retained; and must be spinning online, an expensive proposal. 

The project is generation provided by an independent power producer (IPP), whose sole business is to make a profit by selling power. The cost of access is neither the obligation of the local grid owner, nor its customers. 

This is not a public works project; the public is best served if the IPP is made to bear the connection cost. The public should not be setting a precedent; it will have a difficult time backing away when other private projects cite this example for similar funding. 

-- Jonathan J. Skinner, Anchorage   

NOTE:  This letter is from a power dispatcher at Chugach Electric. It is excellent and very well stated. He is certainly in a position to well know the facts and is to be congratulated for speaking out.
4/12/08 Capital Budget HCS CSSB 221 (FIN) am H --Capital, Supplemental, and Other Appropriations - E Sec 13-15   2  "The previous appropriation is contingent on the owner of generation being legally obligated to build a generation facility through power sales agreements that are in place to accept the generation." 

From Attorney General's review:  "This section of the bill makes appropriations to the Alaska Energy Authority totaling $68,501,000, for specified hydro studies, energy projects and plans, renewable energy projects, and the Fire Island Wind Farm. Page 87, lines 14 -26. The appropriation for the Fire Island Wind Farm (transmission lines), is made contingent on the owner of the generation being legally obligated to build a generation facility through power sales agreements that are in place to accept the generation. The contingency appears to meet the Hammond factors to be valid, and it is focused upon ensuring that a public benefit will be derived from the publicly funded project."
5/16/07 CEA board resolution on Fire Island Wind Power
5/15/07 CEA Fire Island Economic Analysis - Chugach Electric Association Renewable Energy Committee
3/7/07 Resignation of CEA Renewable Energy Committee Chairman Bruce Campbell:  Letter  Appendices:  1-2006 Energy Forum   2-Other  Campbell is a former Alaska State Highway Commissioner and Commissioner of DOT.  "The Fire Island wind plan, which will feed small amounts of power into the system, has all the earmarks of an economic disaster from the members' viewpoint."
1/19/07 Renewable Energy and Efficiency - Steve Gilbert, Chugach Electric Association

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