GVEA announced that it has entered into a natural gas supply contract with BP Exploration (Alaska) Inc. Under the contract, the cooperative may purchase up to 23 billion cubic feet of natural gas each year for 20 years.
This positions GVEA as the aggregator, which is kind of like a wholesaler. All fuel purchases will flow through Golden Valley.
This contract benefits the Interior in many ways, including:
- It meets GVEA’s needs for electrical generation. GVEA can convert the North Pole Expansion Power Plant to burn natural gas, displacing expensive oil-fired generation.
- It allows for the expansion of a natural gas distribution infrastructure in the Interior. The high cost of space heating is crushing Interior Alaska. GVEA will be able to supply the natural gas, opening up opportunities for distribution system expansion.
“Beyond satisfying our own electrical generation needs, we recognized an opportunity to address the energy crisis facing Interior Alaska’s residents and businesses, in particular, the high cost of space heating,” said Cory Borgeson, GVEA Interim President & CEO. “BP’s willingness to work with our cooperative to address Interior Alaska’s energy crisis is appreciated and is crucial to the long-term success of our communities.”
It is difficult to determine the precise impact this natural gas contract will have on the average Interior resident’s electric bill. Savings are contingent on the price of other fuel sources, including oil. Adding natural gas to our fuel mix will help GVEA stabilize rates and provides an opportunity for decreased fuel costs.
Providing the project stays on track, natural gas is expected in the Interior by 2015.