As one who has followed the sad saga of the experimental coal fired power plant project in Healy, Alaska since 1990, some of the editorials advocating for continued investment in it have been missing some critical points.

Usibelli Coal and GVEA championed a $105 million federal grant to build the plant, though neither incurred much risk. Usibelli wanted to market unsalable quality coal to the plant and GVEA wanted a free functional power plant. Their combined efforts got the State of Alaska to take ownership through the Alaska Industrial Development and Export Authority (AIDEA), with an added $25 million direct Legislative appropriation in 1990. The federal Clean Coal Technology program, initially set up to find ways to reduce acid rain from coal plants, ended up providing $105 million to find out if the two technologies tested worked. They got what they needed, leaving AIDEA with cost overruns and legal bills that now exceed about $200 million more for a total of over $350 million.

AIDEA wants to off‐load the plant to GVEA for $50 million as is. GVEA is in a bind as they allowed the plant not only to be constructed on GVEA property, but to be attached to GVEA’s existing 25 mw Healy plant, through which both plants share infrastructure. GVEA and AIDEA, after nearly a decade of suing each other, have signed a purchase agreement which is very hard for GVEA to back out of, barring 3rd party litigation or failing to get their air quality permit approved.

GVEA estimates $45 million to modify the experimental plant to be acceptable for GVEA to own and operate, for a total of $95 million debt for GVEA. One current milestone is receiving an air quality permit from the State of Alaska with concurrence from the E.P.A. , responsible for reviewing such permits. This plant was constructed next to Denali National Park and the original permit was issued in 1994 with added requirements to not impact the airshed of one of Alaska’s and the country’s natural treasures.

While new elements in permitting power plants are not yet regulated (mercury, CO2), newer technology is now available than from 18 years ago when the air quality permits were last issued. This best available current technology would add $20‐$40 million more to the $45 million retrofit price tag, for a total to GVEA members of $125‐$145 million. I don’t see where this increased cost is built into GVEA’s touted savings of 10% on fuel cost (5% of rate‐payers bills).

I recently reminded the GVEA board recently that members just removed a restriction on outstanding debt no more than $450 million ($350 million was outstanding debt) with public promises from the board that they would be cautious in not over‐borrowing. However, in the past few months, GVEA has announced borrowing for $93 million for Eva Creek Wind Project, over $100 million for trucking natural gas to the North Pole generator, and now over $100 million for buying and retrofitting the experimental coal plant in Healy. These loans mean that in less than a year, GVEA will have doubled the debt to the cooperative. Debt service, interest, and depreciation are the major components of rate‐payers’ utility charge. The board will be incurring 20 years of debt for a promise of short term savings, which are likely to be overshadowed by other economic means of cost reduction, such as natural gas, hydro, conservation.

Some argue that coal as a fuel source makes sense because it is cheap. The only reason it is cheap is because the full external cost to the environment is not included. The EPA was already instructed by the Supreme Court to start regulating CO2. Some Congressmen says that’s Congress’ job, but they oppose doing so. Mercury and coal ash are likely to be factors in the near future. There is a reason that the Rural Utility Service doesn’t loan on coal plants any more. GVEA’s purchase of this plant is a 20 year commitment. It is estimated to take 18 months to get on line, within months of when trucked natural gas is scheduled to begin.

Complicated history, but figure this plant, if restarted, will likely have sucked down nearly half a BILLION dollars if allowed to proceed. I understand rate‐payers want relief from high energy prices, but I believe that re‐starting the experimental coal fired power plant in Healy won’t save us in the long term and will remain the boondoggle that everyone agrees it has become.


It seems like a long effort on my part, but it is time to re-evaluate and move forward.

Here are the vote results for the two ballot issues submitted to members:

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For transferring assets to the GVEA G&T
Yes 2653 41%
No 3878 59%

Vote fails. GVEA G&T assets remain with GVEA.

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For allowing all but board member and spouses to participate in GVEA alternative energy programs (e.g. SNAP)

Yes 4304 66.4%
No 2180 33.6%

Vote passes. All but board members and spouses may now participate.

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Check out the more detailed vote tally

See for comment on this or further GVEA issues.

The GVEA website now includes links to the GVEA G&T, under board of directors. We’ll see how long it stays there.

After announcing results of the vote Mon. night of the G&T proposal vote, I would like to move GVEA discussions over to a separate blog so we can work to get two way communications between the GVEA organization, board and membership.

It will also allow this blog to get back to other things without being buried in GVEA issues. There is life after GVEA (:-).

Listening in on KFAR radio today to board members Dan Osborne and Tom Delong discuss the G&T proposal, one caller requested GVEA to post the G&T Articles of Incorporation. I had already done so, extracted from GVEA G&T’s larger RCA filing back in June 2006. A list of documentation was also posted. Sorry they didn’t mention it on the radio show as I think I’ve presented a pretty complete picture of the proposal with links to all sides of the issue.

As far as the radio show, it went on for 1.5 hours. Everyone appeared to have their chance to present their points more than once and got a number of callers to prompt the occasional spirited exchange.

I did hear an official word that 5369 ballots had been turned in as of Wed. 5 pm. Anybody wanting to come down and observe the ballot counting process should know it will be started next Mon. Dec 11, 2006 6 pm in either the GVEA Board Room (space willing) or the Training Room on the 2nd floor of the Operations Bldg. behind the administrative bldg. at GVEA offices on Illinois St. My understanding is that MAC members will be doing the counting.

I’ve learned a lot during this G&T affair, but one easy recommendation to GVEA is to separate the ballot collectors from the staff who are charged with advocating on one side of the issue, in this case the P.R. folks. Not that I believe any ballot stuffing is going on, but, as Government Affairs Director Tom Irwin might say, “It doesn’t meet the smell test”.

I went down to GVEA to turn in my ballot in person a couple days ago. Jokingly I was asked if I wanted to share how I voted. Let them guess.

Besides the full page Newsminer ads, GVEA also produced 15 second radio and TV spots. Very basic, just the big $30 million figure flying across the screen, with any of 4 board members telling you to vote so they could save you money. Kind of reminds me of sale advertisements, where you have to spend to save. Pretty dishonest presentation IMHO, even given the limitation of 15 seconds.

So I hope everyone that will has turned in a ballot. The last time they can be turned in (received by GVEA) is 5 pm next Monday, Dec. 11, 2006.

GVEA has taken out 3 days of a full page ad to promo the G&T. I’ve posted it here, but have done a bit of editorial corrections, as I see it. GVEA spent $5,000 of the members’ money on this ad.

While missing board member Delong declined to be in the ad due to the advocating for the G&T, perhaps it would have been better to have him included with a caveat that he has concerns about the G&T proposal. It appears kind of one sided as is.

That being said, the ad is pretty much in your face, overkill, far more than one would expect for something that only saves the members’ some of their capital credits in advance. I was told by GVEA executive management that, if the members reject this, the issue will be dropped. Others have expressed conspiracy theories, which I would like to reject, but it makes me wonder why not just let the members vote? Is it just the ego of potentially not getting their way?

I do worry that GVEA will fail to meet their financial target in 2006, which will put them in default for the second year in a row, causing them to have to increase their margins. I certainly hope this is not the case, but they’ve been on a big spending spree the past few years and don’t show signs of tightening their belts in a number of areas. I don’t mean those that would create safety or service issues for consumers.

I think that there ought to be deeper scrutiny of the budget beyond that of staff and the board, if they can’t seem to do it themselves. There was just a several hour 2007 budget workshop with the board, but the board appeared to approve it with only minor modifications. I’m not a big fan of wholesale budget cutting, but we the consumers pay for those who won’t strategically conserve during lean times. If it is our utility, as the ad indicates, how about making the budget easily available for members to critique?

I attended the GVEA board meeting last night, followed by the second meeting of the GVEA G&T ever since its inception in Dec. 2003.

The GVEA G&T finally has bylaws adopted, the same board as the GVEA Board, and the same officers for now. The appointed CEO is GVEA CEO Steve Haagenson. One board member suggested me for the position – I wisely refused.

There was no discussion over G&T board or CEO compensation, though the board was adequately compensated by their workshop all afternoon and the meeting that went till after 10 pm. I think they received between $800 and $1000 each. They usually get $350 for a workshop and $450 per board meeting. That’s over $100/hour. Plus good food.

During the GVEA board meeting board comments, concerns were expressed by staff and board about information that was out in the public about the G&T proposal. Staff felt like they’d been on a constant road show, but heard little back from members. Board directors felt like they’d received a lot of calls from members, some with what some felt was inaccurate information. Some seemed surprised and a bit perturbed. I’d opine that they should be pleased that members are calling on their district reps to explain the G&T proposal.

As far as inaccurate information, I can’t speak for others, but I’ve certainly tried diligently to be accurate. CFO Grubich indicated I blogged that GVEA intended to sell the assets. I only repeated what he and Tom Irwin said is that they could sell the assets. Interestingly, with all the discussion about communications, they don’t seem to realize that they are welcome to offer comments on any of my blog entries.

The Town Hall meeting earlier this month at Noel Wien Library was video recorded and one can download the video from the GVEA website. With a really fast connection, it will take at least as long as the meeting of 1 hour 40 minutes – it’s 200 mb big. One of the directors commented he tried with his dialup and gave up. It was the first they’d heard of it. For all the great reputation GVEA has for quality IT support, I’m surprised nobody warned the PR folks about this.

One of the more entertaining parts of the meeting was a presentation given by Tom Staudenmeier, a former Matanuska Electric Ass’n board member from the early 1980’s. He was lobbying for a regional utility, with Ross Perot’s people (whoever they are) to come in and set it up. He was ready to put many utility managers and former legislators in jail as crooks, even Gov. elect Sarah Palin’s father-in-law. Chair Bill Nordmark didn’t enforce any time limit, so knowing that, I feel that there must be no time limit on member comments (not that I would ever so abuse). Some of the old history makes an interesting read