Hydro project breaks ground at Allison Creek site
CVEA tunneling through to bring run of river project online
Photo courtesy CVEA
Contractor Harris Sand & Gravel began earthwork on the new Allison Creek hydroelectric project that Copper Valley Electric Association hopes will be online by 2016.
Copper Valley Electric Association, CVEA, says ground work is underway for the long-planned Allison Creek Hydroelectric project.
The project has been in the planning stages for several years and is designed to extend the amount of time CVEA can generate electricity from non-fossil fuel sources.
At its annual membership meeting in April, CVEA said that once the project is online, it will increase hydroelectricity generation by the cooperative to 64 percent, up from its current 50 percent and will displace 725,000 gallons of fuel annually.
The Valdez Star asked CVEA what the final costs will be for electricity for co-op members and for details of how the project is financed.
The questions were answered by Jaime Matthews, the manager for administration and finance for CVEA.
Questions are printed in bold, with written responses in regular type.
Foremost, what is the current projected cost to members for a kwh of electricity from the Allison Creek hydro project?
One kWh for Allison Creek is 13.75 cents for the expected 15,057,000 kWh's out of the project. This replaces one kWh of diesel fuel at 24.7 cents per kWh.
At the 2014 annual meeting the slideshow states that the total cost of the project is $49 million. A total of $22 million is being paid for by grant funding, with $27 million to be financed. It then lists $35 million in debt. Does this number reflect the $27 million plus the cost of financing?
$35 million is the borrowing capacity for this project. We only plan to borrow $27 million.
Is the $35 million debt already encumbered?
Photo courtesy CVEA
Access to the Allison Creek hydro project includes a tunnel, which adds $9 million to the cost.
No, this is our borrowing capacity.
How is it financed?
CVEA has the construction financing approved through NRUCFC, our Cooperative Bank that holds 100 percent of CVEA's debt.
Can you elaborate on this, such as possible ways to reduce the cost of financing?
With $22 million in grant funding, this is 45 percent of the project costs. It is unlikely CVEA will get additional grant funds. We are presently monitoring interest rates.