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Copper Valley region expects to rely fully on renewable energy in summer

  • Author: Alex DeMarban
  • Updated: September 28, 2016
  • Published December 22, 2015

A rugged swath of Alaska that draws mobs of hunters and anglers will soon have another claim to fame: More renewable energy than it knows what to do with, at least in the warmer months.

That will happen next summer after water falling from alpine heights near Valdez begins to blast an electricity-generating turbine wheel as part of the $50 million Allison Creek project.

Along with power from the nearby 33-year-old Solomon Gulch dam and a bit of solar power, the new facility will enable the Copper Valley Electric Association to generate all its electricity using renewable energy from May to September, while shutting off costly diesel-fed turbines. The Copper Valley utility will then join others in the state that have eliminated diesel use, in some cases year-round except for emergencies or during maintenance, such as in Juneau, Kodiak and Sitka.

John Duhamel, chief executive for the Copper Valley electric cooperative, said that once Allison Creek comes on line, rates could rise a bit in the short term. Capital loans -- the utility borrowed $27 million and funded the rest with state grants -- must be paid off.

But rates in the Maryland-sized service area, home to 9,000 people, will fall in the years to come, he predicted.

"The immediate benefit is we'll burn 700,000 gallons less of diesel fuel a year, reduce acidification in the ocean and make the air healthier," he said.

But all that renewable power presents a dilemma for the homeowners and businesses hoping to install their own solar panels, a small but growing trend in the region as customers try to trim electric bills in a valley blessed with lots of summer sun.

Buying electricity from those small solar producers won't make economic sense when the utility already has all the renewable power it can use, including from the 2.7-kilowatt solar panel array it installed four years ago in Glennallen, Duhamel said. The array moves to track the sun to get the most light possible.

Of course, it's not very productive in winter, Duhamel said. But that's the season when costs to produce electricity soar and the utility could use the help from small producers -- freeze-up forces the utility to rely heavily on diesel-fuel powered generators. But homes and businesses aren't producing excess solar energy in winter because the sun hangs low, its energy greatly diminished.

"It's a quandary," said James Fields, part-owner of the Hub of Alaska in Glennallen, a truck stop, gas station and gift shop that recently installed a 25-kilowatt solar panel array, one of the biggest systems in the state.

The good news for the Hub, something of a tourist landmark at the intersection of the Glenn and Richardson highways, is that it is among the eight solar power producers that the utility added to its system over the past four years that will receive the same deal, Duhamel said. The board has to finalize the plan, but the utility intends to retain the calculation that determines how much it pays those customers for their excess energy, he said.

The utility wants to be fair, Duhamel said. "They made an investment based on the climate they're in, and we can't say, 'We're sorry you put $50,000 into a solar array, but the rules are changing.'"

The existing "net-metering" customers -- all powered by sunlight because the wind doesn't blow consistently enough to support wind turbines -- produce about 60 kilowatts on average in summer, barely a sliver of the utility's 13-megawatt load. But it's enough to reduce their bills and, for the biggest ones, to routinely sell excess power back to the utility.

The Hub, which has by far the largest solar panel array among the utility's "net-metering" ratepayers, will see that benefit next summer.

On average over a year, the utility charges ratepayers about 25 cents a kilowatt-hour. Fields expects that when the Hub's solar array is cranking out power next summer, he will sell his unused power to the utility for a little more than half that amount.

Jarrett Humphreys, owner of Wolf Solar Electric in Tok, said the Copper Valley and the Interior have strong potential for solar power, a fact that surprises some people who think solar energy won't perform well at such high latitudes.

"The coastline has a lot of clouds, rain and fog but the Interior, generally March to August, is strong and clear," said Humphreys, whose company installed the Hub's array. "In the summer months they're producing 20 hours a day, so at that time we have as good a radiation as the southern United States."

At a cost of about $150,000, the 104-panel bank alongside the Hub began producing power at full tilt in August but wasn't selling electricity into the utility until late September.

On a recent December day, it generated 2 kilowatts, not bad for a cloudy afternoon in low-light winter, Fields said.

The project will help lower yearly electric costs that peak in winter, when the Hub's bills have reached $6,000, Fields said.

"We're two hours from ocean fishing in Valdez and all your hunting is right here, so it's a great place to live," he said. "But the utility costs just kill businesses here."

The Hub plans to recoup its investment in five to seven years, depending on the weather and with the help of a U.S. Department of Agriculture grant that covered 25 percent of the expense, Fields said.

"Every month we're producing power and saving money," he said.

Once the Allison Creek project comes on line, and the electric utility's new rate is set, the utility plans to have a new policy in place for solar power systems launched after that point. The utility may pay almost nothing for the sun-generated power it buys from any of those new net-metering customers, Duhamel said. But those customers will know the deal up front before they make an investment.

It may not matter much to some homeowners and business owners who simply want to help the environment, he said.

Chris Rose, head of the Anchorage-based Renewable Energy Alaska Project that assists alternative-energy projects statewide, said some people might still find economic value in installing new solar arrays after Allison Creek comes on line.

In some areas of the state, Alaskans have installed solar panels to slow their electric meters, and used the excess power to charge their electric cars and reduce gas costs. Others have used it to power greenhouses, lowering sky-high food costs and creating businesses in remote areas where fresh vegetables aren't found at the local store.

"I'm not saying it's a solution everywhere, but as people think more outside the box, they might find it's worthwhile to put in a system even if they're not able to sell excess electricity back into the grid," he said.

Duhamel said the utility is shooting for a July launch date of its Allison Creek project, though that could be delayed.

The creek's water will be diverted into a 42-inch pipe and fall close to a quarter of a mile in elevation before reaching the powerhouse. The effect of gravity would give the water more than twice the force of a fire hose.

Approved by the Federal Energy Regulatory Commission, the pipe and powerhouse are being installed above salmon spawning grounds, and the Alaska Department of Fish and Game has said there won't be adverse effects on salmon and other fish, Duhamel said.

"We've told ratepayers this project is for our future; it's not so much for us, but for our children, and when it's paid for it will be a really wonderful thing," he said.

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