The Valdez Star - Serving Prince William Sound and Copper River Basin

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CVEA updates Valdez City Council at work session


Tony Gorman photo

CVEA staff met with the Valdez City Council last week in a work session.

The Valdez City Council got a glimpse of what Copper Valley Electric Association is working on during a work session last week.

The newly-constructed Allison Creek Hydro Project and the improvements to the South Harbor Dive area were the hot topics of discussion.

The run-of-the-river project was completed and commissioned last fall. It was shut down for the winter in December. After the restart in May, Allison Creek ran at 6.7 megawatts a day throughout the entire of month of June. The month of July is expected to produce 100 percent energy for Valdez. CVEA projected Allison Creek will produce 15.5 million kilowatts this year and it is currently on track to produce 16 million kilowatts this year.

The Solomon Gulch facility is still operational and is getting some relief due to the early success of the Allison Creek. The lake at Solomon Gulch was allowed to fill up in the process.

"So, you can kind of think of Solomon as a battery," said CVEA COO Travis Million. "We're able to not necessarily run Allison in the winter. But, we're able to store more water in Solomon later in the year and fill it up faster early in the year and basically use Solomon as storage for us."

The Allison Creek project cost $55 million. It was mostly funded through a $23 million grant from the State of Alaska and a $31 million loan from CFC. CVEA - which is member owned - paid for the rest of the project with its own funds. Capital credits to members were postponed during the construction of the project.

Upgrades to the South Harbor Drive area in Valdez will be a focal point in CVEA's future projects to help power fish processing plants in the area.

CVEA said that in 2015, it experienced high usage in the area and expensive diesel fuel was brought in the help ease the heavy load.

Four aging units contributed to the problems - as the newest units were installed in 1964. Two of the units were replaced with newer caterpillar-style units last year. The installation was completed earlier this year.

CVEA is also reaching out to processors for further improvement projects. Last month, new equipment was installed at Peter Pan Seafoods. Silver Bay Seafoods is currently in an agreement in doing an engineering study to supply them with a full load of 8.5 megawatts. After securing funding, a contractor created a new design that is more economical and quicker to get their load. The plan is to connect Silver Bay Seafoods with a 6.5-megawatt load by next summer and a full 8.5-megawatt load the following summer.

If more demand is created by another processing operation, CVEA is looking at utilizing some of the same lines and upgrading them. The next step would be to create a new design. Increase in load from a new processor would mean that CVEA could potentially generate excess energy.

"When we designed Allison Creek, we designed to get the maximum power out of the creek which gave us excess power," said CVEA CEO John Duhamel. "With the increase in the processor, we can sell some of that excess."

It would also mean that it would have to use diesel fuel to help with the load.

"We got to be aware of that," Duhamel said. "We may be able to provide for all of that. But, you're going to drive us into a different production scheme. And, that production scheme is going to drive cost in a different way. It wouldn't be fair for the members to pick it up if we're going to be charging fuel charges during the summer."

Another big challenge facing CVEA are increasing government fees.

This includes fuel tax, use of kilowatts, and administrative cost. Regulatory and environment fees which are the basis for the rates have increased from $80,000 to $400,000 over the last five years.

"We're concerned about these and we're trying to do some things about reducing some of these. But, they are out there and certainly a challenge for us," Duhamel said. "We want to keep those rates flat if we can. But, prices grow every day. CVEA rates are ranked fifth in best cost compared to all 200 isolated grids in the state."

Other topics that were discussed during the work session include CVEA's settlement on rights-of-way through Native lands, the Underground Residential Distribution Project, and the clearing of vegetation near lines. CVEA's rights-of-way through Native were made invalid as part of the Alaska Native Lands Claims Settlement Act twenty years ago. The cooperative recently signed the tenth of twelve settlements following a stalemate. The focus of the Underground Residential Distribution Project is to upgrade underground systems that were installed in the 1960s. The original plan was to upgrade the eastside of the Barney Meyering Park Strip, but has changed to focus on areas with outages. Upgrades are currently being made in the Robe River subdivision. CVEA is working to clear vegetation along the Richardson Highway near the Tsaina Lodge and Pump Station 1 and main lines in town for easy access for maintenance and prevent outages.


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