GVEA: Your Co-op at Work?
We don’t have Brian Newton to kick around any more. The General Manager of Golden Valley Electric Association resigned suddenly and unexpectedly. A recruiting effort to find a replacement is under way. In the meantime, local attorney for GVEA, Cory Borgeson, is serving as interim General Manager.
For out-of-towners who read this blog, Golden Valley Electric Association – GVEA – is the electric service provider for all of Interior Alaska. Through an embarrassing, expensive and improbable series of gaffes and bad planning, GVEA generates a 60% of the electric power it sells measured by fuel cost (37% by kilowatt hour) by burning oil. GVEA has a spur pipeline of of the Trans-Alaska Pipeline at North Pole, Alaska, drawing from the Trans Alaska Pipeline. It is very, very expensive energy, sometimes, depending on the price of crude. Piss-poor planning.
GVEA was also involved in a disastrous “Clean Coal” power project in Healy, Alaska, which promised a high tech solution to the problems of burning coal. Especially the problems of burning low grade lignite coal just a few miles from Denali National Park. The short version of that long disaster is that Healy II hasn’t produced a kilowatt of power and sits idle, a failed technology.
But recriminations about bad planning over 15 years aren’t a solution. WC would like to look instead at some numbers gleaned from the annual reports available on-line. Because GVEA annual reports have varied in what they disclose and how they disclose it over the years, it’s a bit difficult to compare straight across. And these numbers are not corrected for inflation.
|Total Members||36,945||37,154 (2009)|
|General and Administrative Expenses||$2,757,997||$9,729,758|
|Total Long Term Debt||$138,069,421||$284,430,780|
Now sometimes GVEA list “members,” and sometimes it lists “meters,” and it doesn’t always seem to be consistent across annual reports. But if WC has this right, for an effectively unchanged number of members in the co-op, from 1998 to 2010 long term debt at GVEA has more than doubled and general and administrative expenses are up an astonishing 350%. Even Brian Newton’s amazing $455,000 salary can’t explain that increase. Whatever severance package he got isn’t even on these books. And it can’t all be Mike Kelly’s retirement package.
GVEA’s proposed solution to the high cost of producing energy is to start up the abandoned Healy II plant as a traditional coal-fired power station. WC is skeptical that a huge new point source for air pollution a few miles from Denali National Park is going to get green-lighted by the Feds, or even should be approved by the Feds, but assuming that happened, any “lower costs of fuel” are created by failing to address the true cost of burning coal. Coal produces at least twice as much CO2 per unit of electricity as does natural gas. Coal injects more sulfates, nitrates and fine particulates into the atmosphere. Coal is “cheaper” than other hydrocarbons only if you leave those costs off of the balance sheet. And then there’s the transmission loss moving that new electricity from Healy, where there is very little demand, to Fairbanks, something like 100 miles of controversial high transmission lines.
The true savings from burning natural gas are so great the GVEA should be working harder and faster at trucking natural gas from the North Slope to Fairbanks and converting the North Pole power plant to gas. Trucking should be the bridge to a pipeline from the Slope to the Interior. The economics are very good because natural gas prices are very low now, as a result of increased natural gas production stateside. It’s not just WC pushing this idea; Dermot Cole thinks it’s pretty attractive as well. The availability of natural gas for residential heating is an added plus. The project is reportedly under way at GVEA, but it’s pretty unclear exactly where it stands.
GVEA also needs a freeze on hiring and a serious discussion about the long term debt issue. There are likely real savings there as well. But the big savings are from getting off oil.
But GVEA, at least under the Newton administration, would rather mount a protest the Northern Alaska Environmental Center, which is actually a member of GVEA. And NAEC’s members are, for the most part, themselves members of GVEA. All because NAEC knows that “clean coal” is an oxymoron. So we have been treated to the ugly sight of a monopoly nonprofit picketing another nonprofit. It’s divisive in a community that doesn’t need more divisive issues. And it accomplishes nothing useful.
Those readers who are GVEA customers should talk to their Board members. We own this outfit.