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HomeMy WebLinkAboutSutton-Glennallen Petro Star communications 1996ee ew) ere uv. VEL Ie YUILALUT gus QUL OUDO,# Z/ DO 1 ee a * u ab (6429 P.@e [PS] letterhead] For immediate release For additional information contact: April 19, 1996 Stephen T. Lewis, Chairman & CEO Petro Star to install co-generation equipment at Valdez Refinery Petro Star Inc. will move ahead this summer with installation of its own co-generation project at the Petro Star Valdez Refinery. Four modular diesel-fired units are to come on litte this fall. The units will produce two megawatts of power as well as heat that can be recovered for use in the refining process. Once the generating units are inotalled, the refinery will be scL{- sufficient and will no longer need to purchase electricity from the local utility, Copper Valley Electric Association (CVEA). ' The Valdez refinery presents a classic opportunity for co-generation. The diesel-run generating units to be brought on site will produce both electricity to run the refinery and waste heat for use at the refinery. This will optimize the energy efficiency of the diese] generators. "Two considerations prompted our decision--cost and reliability," said Petro Star Chairman and CEO Stephen T. Lewis. “We stand to save $50,000 a month by generating our own power.” Petro Star pays some $1.25 million annually ta CVEA, and will save approximately half that amount by generating its own power. “The refinery business is a highly competitive industry, and we've got to get our costs down if we're to retain our position in the marketplace," said Lewis. Power rates in Valdez are approximately double those paid by other Alaska tefineries. “But equally important as the dollars saved," Lewis added, “will be the improved quality of power. Each year with CVEA there are a = a < vuam LL" JUINNLAU7 ous JOL OUUO rT Ur YU sex uw) urvuAm » UU. ULE J Al Serv we tremendous number of power dips and outages. We need reliable power to operate efficiently and economically." Petro Star's decision to invest in the generating units follows months of discussions and negotiations with CVEA. Petro Star is CVEA's single largest customer and last year accounted for 13% of the utility's revenues. In the closing weeks of 1995, Petro Star and CVEA had a signed agreement: CVEA offered the refinery discounted power rates until an electrical] intertie could connect Copper Valley to the less expensive power offered by Anchorage-based Chugach Electric Association. In exchange, Petro Star agreed to defer installation of co-generation equipment at least until an intertie was built. This contract was canceled by Chugach and CVEA. “The talks with CVEA have dragged on and on," said Lewis, “and meanwhile, we're seeing no resolution to our urgent concerns about power cost and reliabiliry. The owners felt we had to take this step.“ Looking toward the longer term, Lewis said, "We believe there is a solution to the problem of high power costs for the refinery, for the people of Valdez, and for others in the Copper River basin. We look forward to working with the city, the state, CVEA and others to find solutions for these long-term challenges of power cost and reliability." ## TOTAL P.O3 eLivi bi: zevowv ) ¢ravam + UYY. YUP IULJUIVLAL7 Dur DOL OUDO,F Z/ Se Ga, Ant a BOB Galo 3 CLINV Ola (Z-LYUTabad (YMA L/L —.»-— PETAO stir VALDEZ REriNERY --——- , A JOINT VENTURE Yclephona (8307) 444 2661 201 Arctic Slopy Avenue. Suite ZOO Fax (807) 267-8429 Anchorags, Alasks 99519-3030 April 23, 1996 The Hon. Ramona Barnes By Facsimile: 465-4565 Alaska State Legislatura State Capitol Rm. 403 Tuneau, Alaska 99801~1182 Dear Representative Barnes: Thank you very much for taking the time to meet with me yesterday. As I outlined to you, I wanted to emphasize that the only project Petro Star is committed to is to generate its own power. We view this as an interim solution to our needs while a long-term approach to meeting power eupply needa in the Copper valley basin is devised. We are eager to participate in the formulation of such a long-term solution, and we fully agree with you that it will be necessary to coordinate what ultimately is done in the Copper Valley basin power with generation facilities and markets elsewhere in Alaska. We continue to believe that the Sutton-Glenallen intertie could be an integral part in making economic power available to the Rail Belt as Alaska moves into the twenty-first century. I would again like to apologize for not briefing you on this issue sooner. As I said, someone else let the cat out of the bag. Unfortunately, the cat still is out of the bag, and I have just been informed that the Valdez Star will publish a story tomorrow based on that draft press release. I would like to emphasize that no one at Petro Star was responsible for this leak, and that, at the request of the Administration and Representative Kubina, we had agreed to hold off on issuing our release until the end of the legislative session. This is now moot. Once again, thank you for taking the time to meet with us. I hope that we can soon put the misunderstanding over this issue behind us. Sincerely, Postlt” Fax Note 7671 41 xo [Pages —— (Ca. Stephen T. Lewis Chairman of the Management Commj Petro Star Valdez Refinery cc: Hon. Gene Kubina 465-3799 APR-23-1996 16:27 97% P.a1 oui DI i. #-2u-gu » ¢°LUAM + uvyv. CHUGACH ELECTRIC ASSOCIATION, INC. April 4, 1996 ECEIVE Reem Commissioner Mike Irwin ; 2 Department of Community & Regional Affairs COMMISSIONER'S OFFICE urr IUC-JUNCAL? wus DOL GddO+r viv Jae” P.O. Box 112100 COMMUNITY & REGIONAL AFFAIRS Juneau, Alaska 99811-2100 Dear Commissioner Irwin: We are in receipt of the letter from Copper Valley Electric Association, Inc., to you of March 29th and wish to pass on our thoughts. We continue to believe that Copper Valley Electric is an important infrastructure essential to the growth of the Copper Valley/Valdez region. We have always known that in the short run benefits to our existing customers would be small; however, we remain committed to doing whatever we can to promote its completion subject only to the constraint that our existing customers not be unduly burdened with addcd costs. Chugach has strived in good faith to do what is necessary to comply with the state’s requirements and to mect Copper Valley’s necds. Ultimately the choice of whether to go forward with this project rests with the citizens of the areas affected and their representatives. For Chugach’s part, we believe this project holds the potential for substantial value to the Copper Valley service area and can be accomplished with negligable impact on the environment and could benefit Railbelt ratepayers as well. Chugach is poised to continue its cooperation with Copper Valley and to take other necessary steps to extend this essential electric power infrastructure to Copper Valley and Valdez, Our only requircment is and has been, that other Chugach customers must not be harmed. Chugach hopes this clarifies our position and helps move the effort along. Sincerely, en tn. (Yo tel Sea Eugene N>Bjornstad ~ Gencral Manager Griffith/96044 wpd 5601 Minnesota Drive » P.O, Box 194300 « Anchorage, Alaska 99519-6300 Pnone 907-563-7494 © FAX 907-562-0027 ’ ve Lb IU YUNLAL™ gui JUL ODDOrF li VU wun wie Pax “RANSMINTAL SSET STATE OF ALASKA TONY KNOWLES, GOVERNOR Office of the Governor P.O. Box 110001 Juneau, AK 99811-0001 Please deliver to: Kiley nell — A DIH Location: =ax number: 40 f%~- 3O2O PHONE: (907) 465-3500 FAX: (907) 465-3532 Phone number: Number of pages including transmittal sheet: = comments: Lutes 6 Cn SW Vavert : Yeerk rpc date: 425- From: Lider l Phone: ——— PETRO st Vr VALDEZ R caneny SLB A JOINT VENTURE Telephone: (907) 344-2661 201 Arctic Slope Avenue, Suite 200 Fax (907) 267-6429 Anchorage) Alaska 99518-3030 November 8, 1995 Mr. William R. Snell Director pio a AIDEA 490 W. Tudor Rd. Anchorage, AK 99503-6690 Re: Intertie Negotiations Dear Riley: I am pleased to confirm that Petro Star Valdez Refinery has finalized the attached Memorandum of Understanding with Copper Valley Electric Association, Inc., and Chugach Electric Association, Inc. As stated in the Memorandum itself, the agreement is subject to approval by the boards of directors of the two utilities. However, I am at the present time optimistic that these approvals will be forthcoming later this month. We are confident that the Sutton-Glennallen intertie will achieve substantial benefits for the Copper Valley basin and Alaska and that it is necessary for the orderly development of the region as we move into the twenty-first century. Consequently, we strongly support approval of the intertie loan by the Governor. Please give me a call if you have any comments or questions. Sincerely, pe Stephen T. Lewis Chairman of the Management Committee Petro Star Valdez Refinery cc: Mr. Jim Ayers The Hon. Ramona Barnes The Hon. Georgiana Lincoln The Hon. Gene Kubina Mr. Clayton Hurless (w/o attachment) Mr. Eugene N. Bjornstad, P.E. (w/o attachment) SnIVI DI- PETRO stYyr INC. Fax (207) 267 usaa Anchorage, Alaska 99518-a0U0 STEPHEN T. LEWIS Chairman / G F.O. October 25, 1995 Mr. Clayton Hurless General Manager Copper Valley Electric Ass’n P.O. Box 45 Glennallen, Alaska 99588 Mr. Eugene N. Bjornstad, P.E. General Manager Chugach Electric Ass‘n, Inc. P.O. Box 196300 Anchorage, AK 99519-6300 Re: ntertie Ne i ns Gentlemen: My recent conversations with Riley Snell indicate that the Governor may reach a decision regarding the Sutton - Glennallen intertie this week. My staff has advised me of the status of discussions between your utilities and Petro Star, and I am heartened that it appears that there are no obstacles in principle to an agreement. However, I am not at all satisfied with the progress that has been made towards a concrete agreement that will protect Petro Star’s interests. Our companies have been meeting for well over a month, and we have yet to see any numbers attached to the proposal that you made in mid-September. As the issues have been outlined to me, there does not seem to be any reason that an agreement cannot be reached at the meeting now scheduled for this coming Monday afternoon. It will greatly facilitate matters if you can provide us with your projections of future power costs in advance of the meeting. My staff will have full authority at the meeting and will be directed to exert themselves to reach a satisfactory agreement. I am hopeful that the Governor’s decision can be put off until after the Monday meeting, and that our discussions can be brought A Subsidiary of Arctic Slope Megronal Corporarion lu-Zo-yad 5) 1Z+ZB PEIRO SIAR? 907 561 8998;# 1/ 2 a Talephone: (907) 244-2061 207 Arctic Slope Avenue, Sure 20U Sov) DI: 1lu-Z0-9D 5 12:20; PEIRO SIAR? 3U7 561 8998;# 2/ 2 Mr. Eugene N. Bijornstad Mr. Clayton Hurless October 25, 1995 Page 2 of 2 to a successful conclusion. It continues to be my desire to work as closely as possible with you in support of the intextie. However, I am concerned about misleading Mr. Snell and the Governor about Petro Star‘s intentions. Therefore, I want to be on record that unless an agreement can be reached on Monday, Petro Star will move forward and install cogeneration capability in Valdez to produce all of its current and future power needs. Please give either me or Mike Craig a call if you have any comments or questions. Sincerely, Stephen VA is Chairman of fiche Management Committee Petro Star Valdez Refinery cc: Mr. Riley Snell, AIDEA Mr. Jim Ayers The Hon. Ramona Barnes The Hon. Georgiana Lincoln The Hon. Gene Kubina Habre | 1 Pech = 5.x ¢ Abel ferd -30d & 15¢