“If Golden Valley wasn’t providing power to Fort Knox and Pogo mines, would we still need all the diesel-fired generation that is in operation now? What percentage of the power generated by GVEA goes to those mines? When those mines came on, we were told they’d cause our rates to drop. Do Fort Knox and Pogo pay the same rates I do as a residential customer? Interested rate-payers want to know!”  wrote a member recently.

These are such great questions, I thought they deserved a home on our main blog page (instead of being buried on the About GVEA page).

1. If Golden Valley weren’t providing power to Fort Knox and Pogo mines, would we still need all of the diesel-fired generation that is in operation now? Yes, absolutely. In order to maintain reliability, we need the generation facilities we have today. We do not have one specific power plant dedicated to Fort Knox and Pogo mines.

2. What percentage of power generated by GVEA goes to those mines? In 2009, GVEA sold 1.31 billion kilowatt-hours. Some of that power was purchased from Aurora Energy and Chugach Electric in Anchorage. Pogo and Fort Knox accounted for 26 percent of Golden Valley’s total sales.

3. When those mines came on, we were told they’d cause our rates to drop. When Fort Knox came online in 1997, members saw a Fort Knox credit on their bill. The verbiage read “Your fuel credit of ____ per kWh resulted from GVEA’s reduced fuel costs, economy energy purchases and Ft. Knox gold mine margins.”

4. Do Fort Knox and Pogo pay the same rates I do as a residential customer? No, they pay an industrial rate. All GVEA members pay for their cost of service as filed with the Regulatory Commission of Alaska. During our latest rate case, it was found that these large industrial members (like Fort Knox and Pogo) were overpaying by 5.1 percent. They chose to forgo this decrease and pass the savings on to the rest of the membership.

Further questions? Don’t hesitate to ask.

There are a couple reasons why we prefer to install our power lines above ground. First, it costs four to seven times more to install underground lines than above ground lines. Cost varies depending on the location.

Second, while underground lines may ultimately experience fewer outages, the average outage lasts much longer. And extended outages are bad news at 40° F below.

One reason underground lines cost more is we install double feeds. That way, if we lose one feed, we’ve got a backup.

But sometimes both feeds fail. And unlike many above ground outages that last just seconds – say a tree bounces on a line on its way to the ground – underground outages are rarely temporary. Instead, power remains off until a repair is made.

It takes time to dig up frozen ground. And since buried lines are not visible, it also takes time to locate the failure.

GVEA has more than 3,100 miles of power line. Transmission line accounts for approximately 460 miles; distribution line makes up the remaining 2,640. Only 115 miles, or four percent, of our distribution line is underground.

We really try not to go underground. If a contractor requests underground lines, we require them to pay the difference in cost. The last thing we want to do is decrease reliability and increase members’ rates.

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