Homer Alaska - Business

Story last updated at 12:22 PM on Wednesday, October 12, 2011

Fire Island wind plans receive conditional OK

By Tim Bradner
Morris News Service - Alaska

The Regulatory Commission of Alaska has approved an agreement for Chugach Electric Association to purchase wind power from Fire Island Wind LLC, a subsidiary of Cook Inlet Region Inc. in a decision issued late Oct. 10.

It's not a done deal yet, however.

Under the contract Chugach would purchase 48,500 megawatt hours of electricity per year at a cost of 9.7 cents per kilowatt hour with a 25-year, fixed-price contract.

Fire Island Wind would spend $65 million to initially install 11 wind turbines on Fire Island, which is in Cook Inlet near Anchorage.

Eventually the project is to be expanded, said Jim Jager, spokesman for Cook Inlet Region, an Alaska Native regional corporation that is Fire Island Wind's parent company and which owns most of the land on Fire Island.

The contract was opposed by another Southcentral Alaska utility, Anchorage's city-owned Municipal Power and Light, which argued it would cost Chugach $12.9 million more over 25 years than if Chugach were to continue with its present fuel sources, mainly natural gas but including some hydro.

The decision also requires Chugach to repay other utilities in the region for the cost of integrating wind power into their systems.

Chugach spokesman Phil Steyer said the utility to studying the RCA order. The utility's board was to meet Wednesday to decide whether to accept the terms ordered by the regulatory commission.