Golden Valley Electric Association

2000 Annual Report

"Looking Forward"

PDF Icon 2000 Annual Report - PDF (1.47Mb)

“Looking forward” focuses on the vision that’s necessary to plan for the future. Golden Valley’s Board of Directors is committed to providing low-cost, reliable power to the Interior today and far into the future. This is accomplished by their vision, by their willingness to continually look forward, anticipate the needs of tomorrow’s members and work toward solutions that meet those needs.

During 2000, Golden Valley continued work on several major projects. These projects represent years of relentless effort to ensure that GVEA maintains adequate, reliable and economical power. The Northern Intertie Project, Healy Clean Coal Project and GVEA’s rate filing are all parts of the larger plan to provide power and service to tomorrow’s Alaskans.

Healy Clean Coal Project

The Alaska Industrial Development and Export Authority (AIDEA) constructed and owns the coal-fired 50-megawatt Healy Clean Coal Project (HCCP). The project was partially funded by the U.S. Department of Energy (DOE) in their efforts to research and develop clean burning coal technology. Usibelli Coal Mine partnered in the project as the coal supplier and GVEA participated as the future operator and power purchaser.

Since it was fired up in late 1997, and until it was shut down on December 31, 1999, the HCCP generated power intermittently but was not commercially reliable and the power was very expensive due to higher than expected costs and operational deficiencies. In November 1999, the plant failed a 90-day operating run designed to test reliability and economics. As the result of the settlement of a lawsuit against AIDEA, GVEA was given three alternatives for HCCP: participate with AIDEA in a full or partial retrofit of the plant to standard, proven technology; or terminate Golden Valley’s involvement. While it was shut down during 2000, an independent engineer, Duke Engineering, evaluated the cost estimates and the alternatives. Duke’s report is final and GVEA will use it to fully evaluate the available options.

Golden Valley remains committed to working with AIDEA toward eventual commercial operation of the plant. GVEA’s goal continues to be a first-class power plant that has very low emissions and produces low-cost, reliable power for our members.

Northern Intertie

Construction of the Northern Intertie continues to be a high priority for Golden Valley. When complete, this second transmission line will supplement the existing 30-year old intertie. It will allow GVEA to meet existing and future power needs for Interior Alaska by providing low-cost power from GVEA’s Healy Plant, our Bradley Lake Hydroelectric Plant near Homer and the natural gas-fired generators in the Anchorage area.

During 2000, the Interior Board of Land Appeals denied Earth Justice’s 1999 appeal of the Environmental Impact Statement. This decision, the highest level for federal appeals within the Department of the Interior, upheld BLM’s right-of-way grant to GVEA for construction on federal lands along the Rex/South Route.

At the state level, Department of Natural Resources (DNR) issued a draft, then a final, Best Interest Finding (BIF). In both documents, DNR selected the Rex/South Route as the route with the least effects on Interior residents, wildlife and ecosystems. In July, Governor Knowles asked retiring DNR Commissioner Shively to grant a BIF reconsideration; then in September he asked Shively to turn the decision over to incoming Commissioner Pourchot.

The year ended with Pourchot requesting additional reports. These reports were completed and reviewed in February 2001, and on March 1, 2001, Pourchot upheld the Rex/South Route. DNR’s previously issued early entry authorization was reinstated and construction has finally begun on the Northern Intertie.

The second element of the Northern Intertie Project is the addition of a Battery Energy Storage System (BESS). When complete, the BESS will be the largest battery back-up system in the world and will provide 40 megawatts of power for 15 minutes—the time it takes to bring local generation on line. Currently, GVEA is reviewing vendor proposals.

Rate Filing

In December 2000, Golden Valley filed a proposed rate revision with the Regulatory Commission of Alaska (RCA). The RCA required this filing as a condition of its approval for GVEA to purchase the electric utility portion of the Fairbanks Municipal Utilities System in 1997.

In order for Golden Valley to more thoroughly review the impact of this rate revision, GVEA, with the RCA’s approval, withdrew the proposed rate revision in early 2001.

RCA will allow GVEA to make adjustments to this filing during this review period. Golden Valley expects to complete a thorough analysis and evaluation by late summer 2001.

1999 Highlights