Come 2014, Homer Electric Association will be on its own.
With its contract with Chugach Electric Association expiring at the end of 2013, the cooperative is looking to operate independently. Alternative energy is an integral part in the utility's independence.
HEA has been focusing on two sources of alternative energy, wind and hydroelectricity. To keep members informed on its progress, the co-op held an alternative energy forum in each of its three districts on Monday, Wednesday and Thursday.
"We're pretty heavily dependent on natural gas," said Steve Gilbert, manager of Alaska projects for renewable energy company enXco, at Thursday's meeting. Gilbert's company co-owns Wind Energy Alaska, a renewable energy company that partnered with HEA to study the feasibility of low impact hydroelectric projects on the Kenai Peninsula.
Currently, about 90 percent of HEA's power source comes from natural gas.
Gilbert presented information about several types of renewable energy.
"All generation sources have some impacts," he said. "All of them have trade-offs that you need to think about."
Gilbert said alternative energy projects are more expensive to construct at first, but once capital costs are paid off the energy is essentially free.
"You always know what your energy input is -- zero," he said. Energy costs remain consistent with renewables, unlike relying on natural gas.
"When you put all of your eggs in the same basket, you put everybody at risk," Gilbert said.
"(Wind energy) really turned a corner about 10 years ago," he said. Today, wind is the cheapest form of renewable energy.
The blades of a wind turbine are wing-shaped. This allows the turbine to capture 40 percent of the wind and convert it into energy, Gilbert said. He said an old-fashioned windmill has flat blades and can only collect about 5 percent of the wind.
Researchers have been collecting wind data in Homer and in the Caribou Hills, Gilbert said. The testing process takes about one to two years.
One promising wind project is Cook Inlet Region, Inc.'s plan to develop a wind farm on Fire Island, located just off the western tip of Anchorage. Gilbert said the project is in the final stage of permitting and should be operating by 2011. Besides HEA, Chugach and Golden Valley Electric Association have expressed interest in purchasing power from the Fire Island site.
Despite its many beneficial qualities, wind is an "intermittent resource," Gilbert said.
Because there's no control over when the wind blows, it's a good complement to other alternative sources.
"Wind and hydro tend to work really well together," Gilbert said. When the wind is blowing, the hydro site can be "throttled back" to produce less electricity, and on days when wind is absent, the hydro site can make up for it, he said.
Last October, the Federal Energy Regulatory Commission awarded HEA preliminary permits to test the feasibility of four small hydro sites on the peninsula. The four sites include Grant Lake, Ptarmigan Lake, Crescent Lake and Falls Creek.
Ptarmigan Lake has since been dropped from the list of potential hydro sites, said HEA engineer Brad Zubeck. It was the most expensive of the four projects and had the most environmental issues, too.
"It didn't pan out on any front," Zubeck said.
Grant Lake is the most promising project at this point.
"A lot of work has been done on this lake. We're fairly confident with the Grant Lake project," Zubeck said.
The project has an estimated cost of $26 million and has a potential production of 4.7 megawatts, Zubeck said. Studies conducted so far have not shown any salmon in the lake, however, fish have been found in Grant Creek. Zubeck said research will be continuing this summer.
The Falls Creek site is an estimated $17 million project. Because the creek freezes in the winter, the site would only be operational during the summer months. The site could produce about two megawatts of power.
Crescent Lake has potential to produce 5.8 megawatts and an estimated $60 million cost of construction.
Research will continue on all three sites. HEA has two and a half years left on its FERC permits.
"These are strategic solutions," Zubeck said. "These are not quick fixes."
To get a hydro project through permitting and construction can take between five and eight years, he said.
To assist HEA with environmental research, HDR Inc., an engineering consulting firm, was brought in on the project.
HDR representative Donna Robertson spoke at Thursday's forum. She said the environmental research will include looking at lakes and streams, water quality, water temperature and turbidity. Research will also be conducted on existing fish habitats and nesting birds.
HEA spokesperson Joe Gallagher said it's important for the membership to realize that though renewable energy is cheaper than natural gas, rates most likely won't be decreasing. By diversifying fuel sources with projects such as wind and hydro, rates will increase at a slower rate than if the utility's dependence on natural gas remains the same.
"These aren't going to be cheap solutions," Zubeck said.
Part of HEA's independence plan consists of purchasing natural gas powered turbines.
"When the renewables aren't there, you have to have something," Zubeck said. He said that many of the natural gas turbines along the rail belt are old and will need to be replaced. HEA can either enter another contact and purchase power from another utility, like it is now, and pay for a new turbine for that company or buy one for itself. Either way, money is going to have to be spent, and a new turbine will have to be purchased, Zubeck said.
This is one of many options being explored by the utility. No size or location of gas-powered generation sites have been determined. The cooperative is looking to operate independently by providing power using a variety of sources such as natural gas, wind, hydro and/or purchasing power from the Healy Clean Coal Plant. At this point no final decisions have been made about the co-op's future.
HEA's interconnection and Sustainable Natural Alternative Power programs were also discussed.
Under SNAP, which was approved last fall by the Regulatory Commission of Alaska, any member can voluntarily donate money that goes into a SNAP fund.
That money is then distributed once a year back to members who are producing electricity from renewable sources.
The money designated for SNAP is not used for any other purpose. The amount received for those producing renewable power is based on how much is in the SNAP fund and the amount of energy generated.
The SNAP program is a way for HEA members who can't install renewable projects at their homes to still support alternative energy.
Once a person decides they want a wind turbine or solar panel, HEA must be notified so it can be properly connected to the grid.
An application for power needs to be filled out, a new account is created and a new meter must be installed, said Brad Hibberd, manager of distribution engineering services at HEA. A list of interconnection requirements can be found at HEA's Web site at www.homerelectric.com.
Hibberd also conducts research for the installation and makes sure the product has an Underwriters Laboratories Inc. listing.
"We try to make sure everybody is operating in a safe mode," he said.
Hibberd also goes to the person's site and gives ideas on where the turbine or panel should be placed.
He said as part of the interconnection program, any power that is generated but not used HEA will buy back.
So far, six different homes on the peninsula already have connected to the grid, three with wind turbine and three with solar panel installations.
Mike Nesper can be reached at email@example.com.
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