The new majority on Chugach Electric Association's board campaigned on a cost-savings platform. It is raising questions about whether the wind farm makes financial sense. The project is being planned by Cook Inlet Region Inc. for land the Native corporation owns on the windy island.
Under its previous leadership, Chugach united with three other Railbelt utilities to explore buying power from the wind farm if CIRI builds it. Last week, its operations committee voted 3-1 to withdraw Chugach's support.
"There may be other renewable energy projects that are more cost effective," Chugach's new board chairwoman, Elizabeth Vazquez, said Tuesday.
The new board wants to review the project before committing to back it, she said.
The project is expected to cost $151 million to $227 million, including transmission lines from Fire Island, a barge landing and roads on the island, and wind turbines. The turbines could generate an estimated 3.5 percent of the power needs from Fairbanks to Homer.
The Legislature's capital budget proposal - which could be approved any day - contains $24 million of the estimated $36 million to $37 million needed for the transmission lines. CIRI plans to announce today a corporate partner to help develop the wind farm and says it can proceed with the project with or without Chugach.
Chugach board member Jim Nordland, who supports the wind farm idea, said the board is now split, with three members critical of the project, three supporting it, and one apparently undecided.
New board member P.J. Hill, a UAA economics professor, confirmed that he is undecided. He said he needs more information about the project's costs before making up his mind.
The other new member, Alex Gimarc, said Tuesday he was uncomfortable pushing forward with Fire Island. "Why do something expensive if you can do something cheap?" he said.
He said coal-bed methane or coal gasification projects could be wiser choice for Chugach's future. "I don't think we have the answers yet," he said.
The new board's questioning stance has whipped up some members of the utility's renewable energy advisory committee and some city officials.
"It's unfortunate that one of the first acts (since the Chugach board election) was to torpedo Fire Island," said Kevin Harun, the city's renewable resources manager.
"(The city) wants this project to happen. We've studied it for years and it makes financial sense," he said, adding that any coal projects in the area would have serious environmental implications.
So would wind power, said Vazquez, who said she's worried about the turbines' potential danger to birds using the area.
Wind is the only viable renewable energy source that can be developed anytime soon in the Anchorage area, said Chugach's Renewable Energy Committee chair Pat Kennedy, appointed recently after the previous chairman resigned.
The former chairman, Bruce Campbell, wrote in his March 5 resignation letter that "the only real alternative for future dependable, low-cost base generation is coal from Healy."
He said the Fire Island plan has "all the earmarks of an economic disaster" because it would most likely increase customer costs.
CIRI officials said this week that the economics are great for wind power at Fire Island; otherwise, they wouldn't be pursuing it. "The beautiful thing about wind is that your fuel costs never go up," said CIRI spokesman Jim Jager.
While wind from Fire Island could cost several cents more on the dollar than natural gas, gas prices have been climbing and will continue to do so, he said.
"If it's not the cheapest now, it doesn't mean it's a bad (economic) decision," Jager said.
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