Golden Valley Electric Association Awarded over $206 Million in Loans and Grants from USDA Empowering Rural America Program

September 5, 2024 - Golden Valley Electric Association (GVEA) is proud to announce that it has been awarded an opportunity for over $206 million in 0% interest loans under the U.S. Department of Agriculture's Empowering Rural America (New ERA) program. Of that amount, $67 million can be awarded in grants following project completion. This program, aimed at supporting rural electric cooperatives in their transition to renewable energy, presents an opportunity for GVEA to advance projects designed to enhance energy reliability and sustainability in Alaska's Interior.  

As part of its proposal, GVEA included: 

• Battery Energy Storage System (BESS): Construction of a 46 megawatt (MW) / 92 megawatt-hour (MWh) BESS in Fairbanks, Alaska. 

• Transmission Loop and Substation Construction and Upgrades: Construction of 64 miles of transmission lines, the addition of two new substations, and upgrades to GVEA's existing North Pole Industrial Substation to reliably interconnect large-scale variable generation onto Alaska's unique grid. 

• Healy Unit 2 Stranded Asset Refinancing: Should GVEA move forward with this award, Healy Unit 2 will be retired and become a stranded asset. The date of retirement would be negotiated as part of any final award agreement. The refinancing of the debt at 0% interest would provide cost savings to re-invest in other projects associated with GVEA's New ERA application.  

The addition of these projects would enable GVEA to enter into a wind Power Purchase Agreement of up to 150 MW. The final project size will depend on results from various interconnection and system studies and final project costs at the completion of these studies.  

To further increase the economic benefits of the loan, GVEA will also seek direct pay tax credits from the Internal Revenue Service for the BESS project. 

Through GVEA's New ERA proposal, the cooperative aims to stabilize rates, increase renewable penetration and reduce carbon emissions from GVEA's existing generation profile. These projects are also estimated to create up to 300 new jobs during the construction period and provide long-term electrician and linemen jobs in the communities GVEA serves.   

Community Benefit Plan 

Similar to GVEA's proposal under the Powering Affordable Clean Energy(PACE) program, a Community Benefit Plan (CBP) is a core component of the successful New ERA award. Should GVEA accept the terms of the award, the CBP will serve as a living document throughout the early phases of the project, with members and key stakeholders being asked to provide feedback and suggestions. Like PACE, the aim of the CBP will be to extend benefits to the communities GVEA serves beyond the scope of the awarded project. GVEA's New ERA CBP, as currently drafted, includes a job retraining program, creation of an additional apprenticeship position, and expanded educational opportunities and scholarships to diversify the workforce. 

Looking Ahead

It is important to note that no final decisions have been made regarding the acceptance of the award, or the initiation and final timeline of the proposed projects. GVEA will begin negotiations with USDA as early as late 2024 and a timeline for these projects will be finalized thereafter. The scope and scale of the proposed projects may evolve 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 USDA will focus on affirming that these projects align with the best interests of our membership." 

GVEA's proactive approach in securing this funding opportunity underscores its dedication to exploring every feasible avenue to deliver reliable and affordable energy to Interior Alaska.

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