Alaska utility GVEA secures US$206 million federal package for T&D, 92MWh BESS

By George Heynes, Cameron Murray
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Utility Golden Valley Electric Association (GVEA) is to receive US$206 million from the US Department of Agriculture’s Empowering Rural America (New ERA) programme to help develop three projects, including a 46MW/92MWh BESS in Fairbanks, Alaska.  

The funding will also support transmission & distribution (T&D) investments. It will help construct 64 miles of transmission lines, add two new substations, and upgrade GVEA’s existing North Pole Industrial Substation to reliably interconnect large-scale variable generation to Alaska’s grid.

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The 92MWh Fairbanks BESS is the second largest in Alaska, a pinch smaller than one from Home Electric, which was commissioned in 2022 using Tesla BESS.

Additionally, funding will help to retire its Healy Unit 2, a 50MW coal power plant that will become a stranded asset. The retirement date will be determined as part of any final award agreement. Refinancing the debt at 0% interest will result in cost savings that can be reinvested in other projects in Alaska related to GVEA’s New ERA application.

A press statement released by the company stated that US$67 million of this funding will be awarded in grants following project completion. GVEA will also seek direct pay tax credits from the Internal Revenue Service for the BESS project to further increase the loan’s economic benefits. 

In June 2024, GVEA secured a US$100 million loan from the USDA to support the development of the 46MW Fairbanks BESS and other, smaller transmission upgrades, including for the solar project, Nenana Solar Farm.

Its proposal to the USDA may have been reconfigured for the new financing package to include the new transmission upgrades, which are much larger than the ones outlined in June, and the Healy Unit 2 refinancing. Or, the BESS project could have been rolled into this separate package.

Note that the US$100 million loan announced in June was also under a separate programme, the Powering Affordable Clean Energy (PACE) program.

Projects to help renewable penetration, create jobs

GVEA’s New ERA proposal aims to stabilise rates, increase renewable energy penetration, and reduce carbon emissions from GVEA’s existing generation profile.

These projects are also expected to create up to 300 new jobs during the construction period and provide long-term employment opportunities for electricians and linemen in the communities served by GVEA.

GVEA noted that no final decisions have been made yet regarding the acceptance of the award or the start and final timeline of the proposed projects.

GVEA will start negotiations with the US Department of Rural Affairs as early as late 2024, and a timeline for these projects will be finalised later. The scope and scale of the proposed projects may change as evaluations progress.

“We are committed to ensuring that any project we undertake will directly benefit our members and the broader community,” said Travis Million, GVEA’s CEO.

“Negotiations with the US Department of Rural Affairs will focus on affirming that these projects align with the best interests of our membership.” 

In 2003, Fairbanks became home to the then-largest stationary BESS project in the world, a 25MW, 15-minute duration nickel-cadmium cell system. That was later expanded and even entered the Guinness Book of Records in 2005 at its 45MWp sizing.

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