Offer for wind power called “too low”


NFPA 70E Training - 2027 Edition - Arc Flash and Electrical Safety Course

Our customized live online or in‑person group training can be delivered to your staff at your location.

  • Live Online
  • 6 hours Instructor-led
  • Group Training Available
Regular Price:
$199
Coupon Price:
$149
Reserve Your Seat Today

CIRI Fire Island wind project faces stalled power purchase agreements as ML&P disputes pricing and day-ahead forecasting. Chugach Electric negotiations continue, while Anchorage Assembly weighs intervention to secure renewable energy, grid integration, and cost protection.

 

The Important Points

A proposed 22-turbine wind farm near Anchorage seeking fair PPAs, viable pricing, and grid terms to start construction.

  • 22 turbines could power about 12,000 Anchorage households
  • ML&P offer at $30.20 per MWh deemed too low by CIRI
  • Day-ahead forecasting and firming terms called unworkable
  • $44M federal grants hinge on construction start this year

 

Anchorage's city power utility made a long-awaited offer to buy wind power from Cook Inlet Region Inc., backers of a proposed wind turbine project on Fire Island.

 

But CIRI senior vice president Ethan Schutt said the offer is so low it's ridiculous and contains unworkable terms.

Municipal Light and Power director Jim Posey held a press conference to explain the utility's offer, which he said protects ML&P customers from higher costs, noting that lower bills from utility mergers have been seen elsewhere as well.

CIRI wants to begin construction of turbines on Fire Island off Anchorage this summer, but has so far been unable to get any utility companies to sign contracts to buy the power it would generate, said company spokesman Jim Jager. "Realistically, the project isn't going forward until we have power-purchase agreements," he said in a recent interview.

The corporation is lined up to get nearly $44 million in federal grants to help build the turbines, but the money is contingent on starting this year, though rising costs have stalled energy projects elsewhere before deadlines. The state has approved using $25 million in public funds to build a transmission line from Fire Island to the mainland.

The first phase of the project — 22 turbines that could provide electricity for 12,000 households — would cost about $135 million, said Schutt.

CIRI is in what Schutt called "legitimate negotiations" with Chugach Electric Association, the Railbelt's biggest electrical utility, as debates over a Railbelt utilities plan continue in Alaska today. But Chugach doesn't want to take the entire output, so the project needs another power buyer, he said.

The details of the Chugach negotiations are confidential, he said, a level of opacity that recalls controversy when a utility hired outside consultants elsewhere too.

Meantime, two Anchorage Assembly members introduced a proposal that could lead to the Assembly itself taking over negotiations with CIRI on behalf of ML&P if it decides the public interest would be served, amid calls to force utility cooperation in the region today.

"I don't intend to let the city lose in the ability to capture wind power," said Assembly chairman Dick Traini, who is co-sponsoring the ordinance with Assembly member Bill Starr. "If you take a look at where we're heading you have to diversify energy sources, as coal generation concerns in Alaska persist today, as much as possible."

The Assembly proposal will be up for public hearing April 12, a step meant to increase transparency as ratepayers kept in the dark issues elsewhere show risks. The Assembly has already passed a resolution supporting the wind project.

CIRI and ML&P are at odds over two key elements:

• The price ML&P would pay. At $30.20 per megawatt hour in 2013, the first year, the price is below the $48.72 average that ML&P pays for power now, said Schutt.

• A requirement by ML&P that CIRI predict the wind power a day in advance, and if it falls short, buy other power to replace the shortfall.

Posey said $30.20 represents costs ML&P would avoid if it bought wind power instead of buying from another source. Its "avoided cost" number is low, Posey said, because it owns its own Beluga gas fields, and gets fuel from that source more cheaply than other utilities can.

Schutt said a utility wouldn't replace its lowest cost energy source with wind power, but would choose to offset higher-cost gas with it.

Posey said the requirement that CIRI provide predictable power whether the wind blows the right speed or not is reasonable and ensures that ML&P customers don't pay extra, which they might have to do if the utility had to quickly replace expected wind power.

Predicting exact amounts of power the Fire Island turbines would generate at any moment in the future isn't possible, said Schutt.

"That doesn't work with wind.... That single item makes it unworkable," he said.

 

Related News

Related News

Why Canada's Energy Security Hinges on Renewables

Renewable Energy Security strengthens affordability and grid reliability through electrification, wind, and solar, reducing fossil…
View more

Bitcoin mining uses so much electricity that 1 city could curtail facility's power during heat waves

Medicine Hat Bitcoin Mining Facility drives massive electricity demand and energy use, leveraging natural gas…
View more

Germany's Call for Hydrogen-Ready Power Plants

Germany Hydrogen-Ready Power Plants Tender accelerates the energy transition by enabling clean energy generation, decarbonization,…
View more

'For now, we're not touching it': Quebec closes door on nuclear power

Quebec Energy Strategy focuses on hydropower, energy efficiency, and new dams as Hydro-Que9bec pursues Churchill…
View more

U.S. residential electricity bills increased 5% in 2022, after adjusting for inflation

U.S. Residential Electricity Bills rose on stronger demand, inflation, and fuel costs, with higher retail…
View more

New Program Set to Fight for 'Electricity Future That Works for People and the Planet'

Energy Justice Program drives a renewables-based transition, challenging utility monopolies with legal action, promoting rooftop…
View more

Sign Up for Electricity Forum’s Newsletter

Stay informed with our FREE Newsletter — get the latest news, breakthrough technologies, and expert insights, delivered straight to your inbox.

Electricity Today T&D Magazine Subscribe for FREE

Stay informed with the latest T&D policies and technologies.
  • Timely insights from industry experts
  • Practical solutions T&D engineers
  • Free access to every issue

Live Online & In-person Group Training

Advantages To Instructor-Led Training – Instructor-Led Course, Customized Training, Multiple Locations, Economical, CEU Credits, Course Discounts.

Request For Quotation

Whether you would prefer Live Online or In-Person instruction, our electrical training courses can be tailored to meet your company's specific requirements and delivered to your employees in one location or at various locations.