GVEA Board Meeting, Dec. 10, 2024

By Brian Kassof

GVEA Board Meeting Summary—December 10, 2024

Topics for Executive Session:

1.     Resource Adequacy

2.     Aurora Contract

3.     Strategic Generation Plan Update

4.     Legal Reports

5.     Healy CBA [Collective Bargaining Agreement] Update

Public portion of meeting opened at 6:43 p.m.

In attendance: Directors Bunch, DeLong, Messier, Newman, Sheen, Solie, Zappone (all), CEO Million

I attended meeting via Teams’ feed.

MAC Report (given by Phil Wight)—They are recruiting a MAC Sub-Committee on elections—board is concerned about policies for the Election Nominating Committees and they want to the MAC to look them over to make sure they are good.

Member Comments: 4 members made comments.

• Linda Schandelmaier (District 2)—Hopes for more wind generation, believes the majority of members support this. Recent federal grants should facilitate integration of wind power into grid. She can’t understand why progress on integrating wind is not faster and would like the board to find ways to keep members updated on progress in this area. Chair DeLong replied that they are working on this, but don’t have complete control over the timetable.

• John Davies (District 2)—Also concerned with lack of progress over wind—he feels that changes to the Strategic Generation Plan have sidelined wind power, which could offset Healy 2’s production and allow its closure. He is also concerned that GVEA’s recent request to the RCA [Regulatory Commission of Alaska] to allow GVEA to include the cost of its new storage facility in North Pole in its base rates will have a negative impact on the avoided cost used to set rates for renewable power.

• Mike Musick—Also in favor of signing purchase agreements with Delta Junction and Shovel Creek wind projects—he said that GVEA almost couldn’t meet demand last winter, and these are an obvious solution. Frustrated with what he perceives as a lack of urgency in addressing this.

• Richard Theilmann (sp?) (District 2)—Member of the MAC. Wanted to make sure that both phases of Community Solar project are pursued—not only Phase 1 (gauging interest in buying shares in conversion of existing GVEA solar farm), but also phase 2 (development of new community solar projects). The MAC feels that they could increase generation through renewables and solar farms are a good vehicle for this. Independent Power Producers (IPPs) like Mike Crafts proposed wind farm could provide a lot of power. Discussed need for grid upgrades to integrate more renewables. He appreciated Daniel Heckman’s presentation to the MAC on community solar.

Management Reports (staff updates on departmental reports that were submitted to the board—only those topics of interest included):

Abagail Dillard (Dir. of Member Service)

• Reported on Railbelt Reliability Council’s recent budget filing and updated board on progress of their work.

• Chair DeLong asked if change in presidential administration would have any impact on federal grants GVEA had received.

  • Dillard said that they had gotten an obligation letter for the PACE grant, so it looked fairly solid. They are considering a new storage battery option due to insurance issues with old one. The solar IPP (independent power producer) they are partnering with had some concerns about its original site and is working on a lease near Clear. They will need to do an interconnection study when the site is finalized.

  • The New ERA grant has not received an obligation letter, so may be on shakier ground. They got feedback from the USDA’s Rural Utility Service (RUS) that it might provide some funding for the related wind-generation project if they contribute toward GVEA’s carbon reduction goals. Shovel Creek is working on an interconnection study.

  • Director DeLong asked if funds not obligated before new administration takes power could be clawed back. Director Sheen said that RUS said that had never happened before.

• In response to a question from a director about delays in power purchase agreement with Ameresco (Delta Wind farm), she said they had to reconfigure their turbine configuration, so GVEA is still waiting for complete information for an interconnection study.

  Dan Bishop (Dir. of Engineering)

• Directors asked about Black Rapids transmission extension and EV chargers

Chris Forrest (Director of Power Supply)

• The new fuel tanks in North Pole will be on line in 2026, will be connected to generation plant by a pipeline.

Katherine Strle (Finance)

• In response to a question from Director Messier about the On-Bill Financing program, she said it had been turned over to member services. A. Dillard said they were looking at starting at the beginning of January, so they would not have to file a report on loans for 2024.

Travis Million (CEO)

• Reported about a discussion at the Bradley Lake management committee about the possible sale of renewable energy credits (RECs) from Bradley. New AEA Board raised possibility, believe they could be worth $400k a year, with price going up to $900k by 2027 (they haven’t been sold before). Credits belong to AEA, utilities asked for first right of refusal to purchase them if sold. If a Renewable Portfolio Standard (RPS) were instituted in AK, RECs couldn’t be sold to utilities in other states.

• Said that progress was being made on the Bylaws and Charter for the Regional Transmission Organization (RTO).

Board Reports:

MAC Report (Director Solie)—Community solar was main topic of discussion at last MAC meeting—the board had delayed its vote on a resolution so the MAC could discuss first (see below). Daniel Heckman gave presentation. MAC consensus was that GVEA shouldn’t just convert its existing solar farm into community solar project, but should build a new one. MAC also discussed On-Bill Financing and rate increases. He said the MAC expressed concern that board and management seemed to be going in a lot of directions at once and need to keep focused.

New Business:

• Director Bunch reappointed to GoodCents Board.

• Retirement of Capital Credits (meeting packet, 113-16); Resolution 118-24

  • Resolution to retire $4.75 million in capital credits, including $1.35 million in early retirements in 2025.

  • Early retirements for people who have discontinued service and industry with non-firm service (meaning Kinross Ft. Knox)—issued at steeply discounted rate. Kinross getting $650k. GVEA gets to retain outstanding value of these credits.

  • Director Solie expressed concern about releasing credits early—basically making a decision for future boards. Also worried about lowering capital due to uncertainty around Strategic Generation Plan. Chair DeLong agreed about making decisions for future boards, but there is no other way to release credits early. Director Messier noted that people have long asked if they could get early credits released at discounted rate while still members—K. Strle said she was not aware of any cooperative that did that. Resolution passed without dissent

• Proposal to update board policy to allow people attending the annual meeting by phone or virtually to make member comments was shelved until January—they had intended to include board meetings as well, but it was left out [they already allow this at board meetings, just not official policy].

• Community Solar Recommendations 

  • Although the board voted on this, it was apparently a “recommendation” and not an official resolution. The text (shown on a slide) read as follows:

  “1/ Approve the Community Solar Project proposal as supported by GVEA’s Member Advisory Committee, understanding the current board is making a commitment to evaluate future expansion of community solar generation options, and 2/the board approves the President & CEO to direct staff to file the pertinent documents with the Regulatory Commission of Alaska for GVEA’s Community Solar Program.”

  • The 2nd part refers to the conversion of GVEA’s existing solar farm in South Fairbanks to a community solar project—this will be done before the regulations associated with SB 152 are set, so it will be a separate tariff.

  • There was a lot of discussion about the first part [unfortunately, the feed cut out a couple of times, so I missed some parts]. According to Philip Wight, the MAC supported the staff’s proposal to convert the existing solar farm into a community solar project, but was concerned that they might stop there and not consider the building of new community solar projects if there was interest among members.  They had hoped the board would issue an RFP for a new project. It is important to them that the board seriously consider building a new project.

  • The board was not willing to commit to this, so the language was added that they would evaluate future expansion. Director DeLong voiced concern that this not be misunderstood as a commitment to a future project, only to considering one.

  • Director Solie also said he was worried that this language could be misunderstood as a commitment to a project, and said it should be dropped. He was worried about committing a future board. He said he thought the MAC felt burned by the On-Bill Financing program—it put a lot of work into it, but then it didn’t go anywhere for a while. He said the board shouldn’t give the MAC projects that it won’t follow up on.

  • After discussion, Chair DeLong asked if anyone opposed leaving the first part in—no objections.

  • There was discussion about whether part 2 was needed—in the end, the whole recommendation passed without dissent. Chair DeLong acknowledged the conversion project was not perfect, but it would get GVEA started with virtual net metering.

• RPS Discussion (I missed part of this discussion because feed cut out).

  • Director DeLong said that REAP (Renewable Energy Alaska Project) will be introducing a new Renewable Portfolio Standards (RPS) in the upcoming legislative session. While he didn’t know exactly what was in the bill, he thought it would be a good idea to get ahead of it, and have the board develop a position in advance—hard to provide feedback once session is in full swing and bill is being debated and changed. He mentioned the Chugach Electric resolution on last session’s RPS.

  • Director Messier stressed that the board needs to provide the CEO with guidance before the leg. session starts, as it did with last year’s RPS resolution. He favored a strong statement of support, like the one Chugach Electric issued last year—statement that stayed at a high level and did not get bogged down in details. He offered to write up a statement.

  • Chair DeLong noted that last year’s statement had been intended as constructive criticism—Dir. Messier said he had heard from people that it was not taken as such. DeLong personally supports RPS and passing a resolution on it, but wants any resolution to clearly spell out things they would not find acceptable in the bill.

  • Chair DeLong appeared to suggest that, in the past, one or more individual board members had contacted the CEO to suggest how GVEA should weigh in on specific legislation, but did not elaborate further.

  • Director Newman said that providing specifics pros and cons is the most useful thing for legislative committees.

  • Director Zappone said that a briefer statement would be more impactful.

  • Director Solie asked for management input on an RPS and suggested that should provide guidance for GVEA’s lobbyist. He also said that the RPS should not be elevated above other legislative issues (GRIP funding, wildfire indemnification)—he would like a list of legislative priorities drafted.

  • It was noted that last year, the Administrative Committee developed a draft that the board considered. Director Messier offered to write up a statement for January meeting; CEO Million said staff would work up a legislative agenda for January.

For the Good of the Order (only items of interest):

• Director Bunch said that members should keep an eye out for educational materials on GVEA’s upcoming rate case.

• Dir. Messier said that the board should get a presentation in the future about a single load balancing area, and should consider generation opportunities as part of the Strategic Generation Plan.

• Dir. Sheen asked if GVEA’s lobbyist could give a public update on legislative issues.

• Dir. Solie noted that there was a lot going on regarding natural gas, and spoke supportively of AIDEA’s loan guarantee for initial development of a North Slope gas pipeline. Said they should be ready to pivot to gas generation if this project takes place

• Dir. Newman acknowledged some members frustration with the pace of reaching power-purchase agreements with wind farms, but said there is a process that needs to be followed.

• Chair DeLong echoed Newman, saying that GVEA doesn’t completely control the timeline—sometimes they have to wait for information from developers to move ahead.

The member book can be found at: https://www.gvea.com/wp-content/uploads/December-10-2024-Member-Book.pdf