The launch of a new hydroelectric system in Valdez means another power provider has joined the ranks of utilities that can operate fully on renewable power, at least seasonally.
Copper Valley Electric Association flipped the switch on the $50 million Allison Creek project a week ago, allowing the utility to eliminate diesel fuel for power generation during the warmer months.
"Right now we are 100 percent hydropower, and it feels great," said Travis Million, chief operating officer for the utility serving the Copper Valley Region in a Maryland-sized service area with 9,000 people.
The project, with water falling from alpine heights blasting an electricity-generating turbine wheel, will provide enough power to serve the utility's residential load of about 3,000 households, said Million.
The project supplements hydropower from the Solomon Gulch dam built more than 30 years ago, and will allow the utility to operate on renewable power from May to October. Freezeup will force the utility to turn on diesel-powered generators.
The additional hydro project will allow the utility to stop use of 725,000 gallons of diesel fuel in the area. The state paid for close to half the project, and about half the cost was borrowed.
To service the loan, the utility must pay about $30 million over the next three decades. If oil prices rise to $100 a barrel — the price more than two years ago until they generally crashed to around $50 — the project makes money.
If oil is below $100 a barrel, customers will pay a bit more as the utility pays off the debt, said Million.
The utility will join others in the state that have eliminated diesel power, in some cases year-round except for emergencies or during maintenance, such as in Juneau, Kodiak and Sitka.