HEA Board Approves Contract for State’s Largest Solar Farm
— Ben Boettger
On August 13 the Homer Electric Association (HEA) board unanimously approved two measures in a single resolution: to buy the power from the planned Puppy Dog Lake solar farm – to be built in Nikiski by the Anchorage-based developer Renewable Independent Power Producer (RIPP) – and to replace an old gas turbine at the Nikiski power plant with a newer, more efficient model. Both projects are expected to be complete by late 2027 or early 2028 and would reduce HEA’s gas need by at least 17%.
Currently, HEA generates about 88% of our electricity from natural gas and burns 4.2 billion cubic feet (Bcf) of gas every year to do it. Until this spring, that gas demand was met by a long-term contract with Cook Inlet’s near-monopoly driller, Hilcorp. But as the costs of extraction from the Inlet’s aging gas fields continue to rise, Hilcorp has declined to offer utilities future contracts.
Since HEA’s Hilcorp contract expired in April, the co-op has been getting its 4 Bcf through a one-year deal with ENSTAR. Not long after the contract went into effect, ENSTAR wasn’t certain it would have the gas volume to meet it for a second year.
“ENSTAR does have a (gas supply) contract in place with Hilcorp until 2033, but the volumes do not meet ENSTAR’s entire demand,” ENSTAR representatives wrote in a May 20 petition to state regulators. “ENSTAR currently has a gap in its gas supply portfolio of approximately 7 Bcf beginning in 2025. This volume includes 4 Bcf of uncontracted gas required to service Homer Electric Association.”
That petition would allow ENSTAR to build a pipeline to serve a possible LNG import terminal in Point Mackenzie. The Regulatory Commission of Alaska granted it in late July. Consultants for the Railbelt utilities have previously forecasted prices for imported natural gas to be up to twice current Cook Inlet gas prices.
With immediate precarity and looming price increases inevitable for natural gas, HEA’s turbine upgrade would reduce its yearly gas demand from 4.2 to 3.5 billion cubic feet and would double the percentage of renewable capacity on HEA’s system from 12% to 24%, said HEA chief strategy officer Keriann Baker. Though HEA’s purchase price for the new solar power won’t be public until RIPP presents the contract for approval by the Regulatory Commission of Alaska, Baker confirmed that it beats the current cost of HEA’s gas-fired power.
The Puppy Dog Lake solar farm is exciting for many reasons. When it comes online in late 2027 or early 2028, it will be Alaska’s largest solar farm with 45 megawatts of installed capacity. The current largest solar farm, which RIPP brought online a year ago in Houston, has 8.5 megawatts. RIPP’s CEO Jenn Miller said Puppy Dog Lake will also be the first project by an independent power producer to connect to the high-voltage region-wide transmission system, rather than to a lower-voltage, more local distribution system.
“By tying into the transmission system, for a project this large, it allows the energy to be distributed throughout HEA’s grid,” Miller said. “Whereas if you’re in a distribution system, you’re just in a subpart of it and you can’t spread those kilowatt-hours out across the members. This is really going into the backbone of their system for efficient transportation of that energy to their members.”
To make this possible, RIPP will build a new substation at the project site on state land near Nikiski’s Escape Route Road, directly adjacent to HEA’s existing transmission line. Miller said RIPP would be putting its $2 million grant from the state’s Renewable Energy Fund toward the substation. As for the need to even out the variability of solar power, Baker said HEA’s existing battery system would have sufficient capacity — and that HEA’s plans to double its battery capacity with federal funding would allow it to integrate future variable renewable power.
The new solar farm’s 300 acres may also prove suitable for combining energy with food. RIPP’s Houston solar farm was nominated for Solar Builder magazine’s 2023 project of the year in part for steps taken to preserve native vegetation and use mulching techniques to promote cranberry and blueberry growth between panel rows. Because the sun sits lower in the sky at northern latitudes, rows of panels in Alaskan solar farms will need to be farther apart. This creates the possibility of alternating rows of solar panels with rows of berries or other food plants. At their Houston solar farm, RIPP is partnering with the University of Alaska Fairbanks on a study of “agrivoltaics” — co-locating crop farming and solar farming. Per their project description, UAF’s research at the Houston solar farm will study “four different high-value crops and quantify the economic impacts and benefits of both solar and agricultural operations.”
“We’ll be taking the learnings from that and seeing if we can do something similar at Puppy Dog Lake,” Miller said.
RIPP has spent three years developing a Kenai Peninsula solar farm. The original location was in Sterling, but after a landowner there pulled out of the project, RIPP and HEA collaborated to find the Puppy Dog Lake site in Nikiski, which is on state land owned by the Mental Health Trust. HEA negotiated with RIPP for over a year once the project found its current site (the board unanimously voted to continue negotiation in July 2023) and the unanimous approval on August 13 came after the board spent two hours discussing it in executive session.