Fire Island Wind
Chugach Electric Association, Inc. (Chugach) introduced electricity from wind power to its customers in September 2012. This energy source supplies approximately 4% of Chugach’s retail load under a 25 year power purchase agreement with Cook Inlet Region Incorporated and its subsidiary Fire Island Wind LLC (Fire Island Wind).
Fire Island is located west of Ted Stevens Anchorage International Airport in Cook Inlet and is home to Anchorage’s first commercial-scale wind farm, operated solely by Fire Island Wind, LLC. Chugach purchases all of the generated electricity from the eleven, 1.6 megawatt (MW) General Electric XLE wind turbines on Fire Island, which provides up to 17.6 MW of generation capacity and supplies approximately 44,000 megawatt hours (MWh) per year to Chugach retail members.
For 15 years, Chugach pursued and assessed wind resource potential and development throughout its service territory, including Fire Island. Necessary studies were completed over the past several years to evaluate the impact of Fire Island Wind on Chugach's system and consumers. These efforts resulted in agreement with Fire Island Wind to purchase the output of its wind project located on Fire Island (Anchorage area map).
Fire Island Wind originally proposed a 52.8 MW wind farm to provide power to the entire Railbelt. The project was ultimately sized to provide energy solely to the Chugach service area. Fire Island Wind maintains a capacity factor of approximately 30 percent, provides an average output of approximately 5 megawatts, and produces approximately 44,000 MWh per year.
Chugach requires approximately 9 billion cubic feet of natural gas per year to meet its retail requirements. Purchase of wind energy is expected to reduce gas consumption up to 300 million cubic feet, or 3% of Chugach's long-term annual gas requirements.
Fire Island is connected to Anchorage via a double circuit 34.5 kV sub-transmission line. The sub-transmission line is comprised of submarine, overhead and underground segments. The bulk of the transmission line was paid for with a $25 million grant rom the State Legislature in 2008. This grant was specifically for the purpose of building a transmission line to Fire Island.
Wind power is different from Chugach's other sources of power in that it varies depending on the wind. The Fire Island Wind Project provides Chugach with the experience of integrating a variable energy resource into our power supply portfolio. The knowledge Chugach is gaining by dispatching this resource increases our opportunities to provide stable, responsible and diversified energy in the future.
For more information on the project, construction and wind generators visit, Fire Island Wind LLC's website: www.fireislandwind.com
Power Purchase Agreement
On October 10, 2011, the Regulatory Commission of Alaska approved a 25-year Power Purchase Agreement (PPA) between Fire Island Wind, LLC, a subsidiary of Cook Inlet Region Incorporated (CIRI), and Chugach Electric Association. Over the term of the PPA Chugach pays a fixed price of $97 per megawatt hour ($0.097 per kilowatt hour) for power made available by Fire Island wind generators.
Wind power acts, along with other largely fixed-priced resources like Bradley Lake and Cooper Lake hydro-electric power, as a counterbalance against significant fluctuations in the price of natural gas needed to supply the bulk of Chugach's electric energy. This pricing arrangement helps stabilize Chugach's cost of electric energy.
Cost to Members
The cost of Fire Island wind power is recovered from Chugach retail members. Currently the price is higher for wind power than it is for power provided by other sources, such as natural gas generation and hydroelectricity. This is typical of new generation resources. For example, power from the Bradley Lake hydroelectric facility initially cost more per kWh than Chugach's other sources but now is among the lowest cost resources on the Railbelt.
Fire Island wind is approximately 4% of Chugach's retail kWh sales. Its total annual cost is on average approximately $4.8 million. Unlike gas-fired resources, the cost is stable for 25 years, serving as a hedge on potential gas price increases. Chugach pays $0.097 per kWh for power made available by Fire Island and, on average, slightly more if unable to take all the available power from the project (e.g. due to power dispatching needs). This compares to the approximately $0.055 to $0.060 per kWh for power from other sources.
The table below illustrates the impact of Fire Island wind on an individual retail member's monthly bill for each customer class. The line item below "FIW Renewable Energy Adj." identifies the additional cost of Fire Island wind on a per kWh basis. It represents the difference between the average cost of electric energy from Chugach’s other resources and the cost of Fire Island wind energy.
For example, using rates effective August 15, 2016, the total bill for a typical residential customer using 600 kWh is $113.58, including the cost of Fire Island Wind. Fire Island Wind adds $1.23 on the total bill, or approximately 1.1%. This difference fluctuates over time based primarily on the cost of natural gas for Chugach’s other resources and Fire Island is expected to cost less than other gas-fired resources in the future.
Members may look to their monthly Chugach billing statement for the actual cost impact of Fire Island wind based on their actual monthly usage.
Renewable Energy Information
As a purchaser of Fire Island wind power, Chugach earns a Renewable Energy Certificate (REC) for every Megawatt hour of wind energy produced.
RECs represent the environmental and other non-power attributes of renewable electricity generation and are a component of all renewable electricity products, according to the Environmental Protection Agency.
The Fire Island wind generation units are registered with North American Renewables (NAR) Registry and the associated RECs are created and tracked through NAR's accounting platform. The project was also deemed "Green-e Eligible" by the Center for Resource Solutions and allows Chugach to engage with buyers to complete Green-e certifiable transactions, a nationally recognized standard. The RECs may be sold on the national voluntary market as well as retail markets to interested buyers. Chugach uses the revenue from sales of renewable energy certificates tied to the Fire Island Wind Project to offset the price of purchased power. Chugach sought the ratemaking treatment in a July 11, 2013 filing with the Regulatory Commission of Alaska.
If you would like more information about Fire Island Wind RECs, or are interested in purchasing RECs, please e-mail: firstname.lastname@example.org or call 907-762-4336.