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Home My WebLink AboutSutton-Glennallen Newspaper 1996QUALITY SERVICES pate JAN 01 1995 _ Anchorage Daily News Client _No,_“204 State extends. intertie review © JUNEAU — The Knowles administration said Friday that a state review of the proposed Sutton-Glennallen intertie has been extended, in response to public concerns. Mike Irwin, Community and Regional Affairs commissioner, said public comment collected in Valdez, Glennallen, Anchorage and Sutton had caused the state to consider possible alternatives. The review also will include further analysis of construction costs. Some residents have opposed the utility project because they say it will mar scenic vistas. Among alternatives is a proposed Silver Lake hydroelectric project, Irwin said. The state had said it wanted to issue a feasibility determination by the end of this year, but Irwin said public comments had convinced him to extend the review. QUALITY SERVICES pate JAN 02 1996 Anchorage Daily News Client No._426q Look at intertie’s true benefits There seems to be a lot of discussion of the environmental impacts of the pro- posed electrical intertie project but little about its apparent lack of economic bene- fits compared to its cost. First, from a political deal struck some years ago, the project receives an interest- free state loan of $35 million. Compared to a typical bond of 7 percent, this is about the same as an outright gift of $35 million or the PFDs from 3,000 Alaskans for the next 25 years. But that’s not all: Every Chugach ratepayer is then to be assessed a surcharge to help pay the bill. The new ‘‘cheap’’ intertie electricity will primarily benefit a privately owned refinery and secondarily a small number of residents, yet the Voice of the Times recently editorialized that the intertie represents a good public investment. How so? I’m curious. Could the Daily News publish a CPA’s analysis of the true costs and benefits? Also, this project must have an economic analysis; perhaps an indepen- dent economist could comment on the likelihood and worth of any claimed future benefits. And lastly, if Alaskans have $35 million handy that doesn’t need to earn any interest, would this project qualify as the best use? soz 3oL S40E $204 — Jack Keane Anchorage eo) QUALITY SERVICES Date. JAN 02 1996 Anchorage Daily News Client No._¥20A Intertie cost can’t be justified The Voice of The Times editorial (Dec. 18) supporting the ‘Intertie investment” omits crucial information. The Times fails to justify the intertie as a sound “‘invest- ment” of taxpayers’ money. What is the expected return to the state’s taxpayers, and when will that return be realized? Will the imagined benefits outweigh the very real costs, or is this just another giveaway? . The Time’s biggest whopper is suggest- ing that the intertie is a financially. prudent rgeans of providing subsidized energy to the Copper Valley — not so! The proposed $35 million loan of taxpayers’ money appears to be prudent only because The Times — and every other intertie supporter — ignores substantial lost reve- nues. Given that a prudent investment will earn 8 percent interest, the real cost of giving someone a $35 million interest-free loan for 50 years is at least $1,606,556,437 in lost interest income (compounded annu- ally). The intertie’s supporters never men- tion that cost because the intertie cannot be justified — even on purely economic grounds — when all its costs are consid- ered. Finally, The Times’ facetious question is not so easily dismissed: Who wants to see ugly power poles along the length of the Glenn Highway? Indeed, why should any of the state’s residents — or any of the tens of thousands of tourists who come to Alaska each year to drive our highways, spend money and enjoy the beautiful views — accept this insult or the injury to the public fisc? deo2 sol 219€ — Richard A. Poulin 204 Anchorage Q Quilay Senices (907) 274-1056 Date Client No.__“Z0 4 JAN 0 3 1996 Powerline Put ‘On Hold’ Again by Pat Lynn Editor, The Star Y20A 2lI0cE 302 JUNEAU—A decision on state support for the building of the controversial power transmission line from Sutton to Glennallen has been put on the back burner for at least another month. “Further review is war- ranted to make sure that thor- ough consideration is given to all issues of public con- cern,”. said Mike Irwin, the state commissioner of the De- partment of Community & Regional Affairs. Irwin promised last month that his decision would be made before the end of the year but changed his mind following four public hear- ings on the controversial line. Speakers at public hearings Valdez and Glennallen sup- ported the project while those in Anchorage and Sutton, in- cluding environmental groups, were adamantly op- posed. Irwin said Friday his con- tinuing review of the power line “will include further analysis of the construction costs and possible alternatives such asa proposed Silver Lake hydroelectric project.” The 138-mile transmission line, estimated to cost at least $55 million, would be fi- nanced in part by a $35 inter- est-free loan from the state. See Review... Page 4 Review of Intertie Proposal Continues Continuewd from Page 1 ¥2¢A 2/0E 302 It is designed to tap into cheap wholesale power from Chugach Electric, the state’s largest utility, to bring cheaper power to the Copper River Valley and Valdez. Under a current proposal Copper Valley rate payers on the issue of selling the utility. The city council and the board of directors of Copper Valley will be meeting this month to discuss the sale is- sue. accepted at the staff level-of - w ~ Chugach and Copper Valley Electric, the two utilities would split the cost 80/20 with Chugach assuming the larger share. That staff-level agreement may be upstaged, however, by a current effort to sell Copper Valley Electric out-, right to Chugach. All-seven members of the Valdez city council, acting as individuals, have signed a petition calling for a vote by (907) 274-1056 DaredAN 0 3 1996 Valdez Vanguard Client No_ % “404 |. State extends intertie review period 420A GE 362 Vanguard staff and wire reports The Knowles administration said Friday that a state review of the pro- posed Sutton-Glennallen intertie has been extended, in response to public © concerns. A decision was to be made by the end of 1995 whether to release a $35 million interest-free state loan to build the 138-mile electrical transmission line. But Mike Irwin, Community and Regional Affairs commissioner, said public comment collected ‘in Valdez, Glennallen, Anchorage and Sutton had caused the state to con- sider alternatives, and to conduct more analysis of construction costs. The current constniction estimate is $55 million. Public comment in Valdez last month was mostly in support of the intertie because it is expected to low- er electric bills. However, environ- mentalists say the line will mar scenic vistas. Some Anchorage offi- cials are worried electric rates there may rise if the intertie is approved. .Among alternatives that will be discussed before a decision is made is a proposed Silver Lake hydroelectric project, Irwin said. - + Q (907) 274-1056 JAN 0 3 1996 Date SITKA SENTINEL Client No. F200 i Review Extended On Intertie UreA doe JUNEAU (AP) — The Knowles administration said Friday that a state review -of ‘the proposed Sutton-Glen- nallen-intertie has been extended, in response to public concerns. . Mike: Irwin, Community and Re- gional-i Affairs commissioner, said public comment collected in Valdez, Glennallen, Anchorage and Sutton had ‘caused ‘the state to consider possi- ble alternatives. The review also will include further analysis of construction costs. Some residents have opposed the utility pro- ject because they say it will mar ‘scenic vistas. Among ‘alternatives is a proposed Silver Lake hydroelectric Project, Ir- win said. - ‘The state had said it wanted to issue 1a feasibility determination by the end of this year, but Irwin said public comments had convinced him to ex- - tend the review. Tn 1995 the 800-mile pipeline was valued at $3.7 billion, down from $7.8 billion in 1986. The downward spiral is linked to the decline in oil field production. At its peak, the North Slope’s production averaged slightly more than 2 million barrels per day. Today, it stands at about 1.5, million barrels per day. In 1985 the assessment for pipeline and pipeline-related property came in at $630 million. With the exception of one upward blip in 1990 the number has steadily declined to its present $317.7 million. “I don’t really know where we're ' going with this, frankly. This is a dif- ficult one to get our arms around,” said Mayor Sampson. The decline should be everyone’s concern, said Sampson. “The less money. we get off pipeline properties, the cost of that’ is distributed among the rest of the property taxpayers in the borough.”’ (907) 274-1056 Date JAN 0 3 188 Frontiersm Client No. Yre A Public concern causes state to delay intertie decision ~ SY20A 2/0E 302. 6333 339 Responding to public concern, the state has delayed the decision on the roposed Sutton-Glennallen Intertie pro- ject until further review. The review will include additional analysis of the con- struction costs and possible alternatives, such as a proposed Silver Lake hydro- electric project. 6‘ ‘ Commissioner Mike Irwin of Commu- nity and Regional Affairs made the an- nouncement Friday, stating the decision was based on the public response at re- 0229 306 ’ cent meetings in Valdez, Glennallen, An- chorage and Sutton. : “.. | have determined that further re- view is warranted to make sure that thorough consideration is given to all is- sues of public concern,” Irwin said in a press release... - ; Originally, Irwin anticipated having a decision by the end of 1995. He is now expected to complete the review within the next month and have a decision. shortly thereafter. © - a we “This is excellent,” said Chuck Spaulding, member of the Alaska Citi- zens for Responsible Energy Develop- ment. The Chickaloon resident has been a long-time opponent to the project and says he is hopeful the pie oe means the state is taking public concern into consideration. _~ * 7 Gary Brooks, president of the local In- ternational Brotherhood of Electrical Workers, said union members met with the Commissioner Irwin last week. He > Q wi 28 =o a > ¢ (nA ye s 3 & = € 2a I PD a iS Q os ==? sa ey =) Q o> — = mi — Ueudojan said they were told that the state wanted to insure that alternative projects were given proper consideration. “We're disappointed, but certainly we think if the governor wants to look fur- ther at alternatives, that’s within his pore and even his obligation,” rooks said. He said the IBEW is confident that the -Sutton-Glennallen Intertie project will compare favorably to alternative pro- posals. QUALITY SERVICES Anchorage Daily News Client No._4A0f An idea for the ‘powers’ that be Ten years ago, I built a house in the Big Lake area. It is less than two miles from the Parks Highway and approximately 500 feet from existing power. In 1985, I was quoted a minimum of $10,000 to have electricity brought to my home. This year, the quote was $4,000. Maybe if the “‘powers”’ that be want to help crete a healthy economy for the future, they should support the people who have been struggling to exist without power because of their outrageous exist- ing prices. s2/2= «(204 — K.E. Cope Big Lake (907) 274-1056 JAN 0 4 1996 COPPER RIVER —COUNTRY IOURNAL _ _ Client No. Pa Z 0A Date eee tee BYSH 347 Bor 3 SIOE Y2sH SYE CID FAIRBANKS-The "value" of the Trans-Alaska Pipeline is going down. In Fairbanks, the North Star Borough alone, the pipeline has lost more over $1.3 million in value. The ipeline in Fairbanks makes up 10% of the borough's tax ase. ANCHORAGE-The state has decided to extend its re- view of the Sutton-to-Glennallen Intertie. Department of Community & Regional Affairs head Mike Irwin has said that the public comment that was given at Sutton, Valdez, Anchorage and Glennallen has lead the state to consider possible options, including further analysis of construction costs. Alternatives include the proposed Silver Lake hydro project, according to Irwin. Originally, the plan was to have the feasibility study done by the end of the year. Irwin said that public comments had convinced him to continue with the review. ALASKA-People who have been convicted of sex of- fenses will have to visit the Troopers between now and January 31st, to be photographed and finger- printed. A new state law mandates the registration of offenders. The people who will be registered include those who have been convicted - in Alaska or elsewhere - of sexual assault, incest, child pornography, prostitution, or sexual abuse of a minor. Troopers estimate that 1,700 Alaskans will register under the new law. Alaska has one of the highest rates of sex offenders in the nation - over twice the national average. Under the law, anybody can ask for information about sex offenders living in their towns, on their streets, or in their zip code area. A $10 fee would give the name, address and photo of the sex offender. A federal judge has issued a temporary restraining order, however, pe the state from releasing the information to the public. COPPER RIVER-The Federal Government has been on hold again, due to the national budget crisis. Joe Morris, the BLM ranger in this area, is one of the 6 BLM employees in Alaska that is considered "essential". He is on duty with 3 other BLM rangers, the state director, and one special agent. At Wrangell-St. Elias Park, only 6 employees are considered "essential". They are the superintendent, Jon Jarvis; Chief Ranger Jay Wells, and Rangers Tim Saskowski, Donald Mike, Jim Hannah, and Jim Baker. The national park normally employs 23 people. Jon Jarvis said that "non- essential" employees have been coming in to work without pay on projects that have to be done, including work towards the Chisana telephone system. QUALITY SERVICES pate_JAN 04 1996 Anchorage Daily News Client No._420A___ Intertie will benefit Alaska I am writing in support of the Sutton- to-Glennallen intertie, which I feel will positively impact the Copper River basin for years to come if built. Ahtna Inc. has always supported this project, not only because it makes economic sense, but because we have an interest in the well-being of individuals living out here, and we see the potential this land has for development. With a dependable and reasonably priced source of electricity, we see signifi- cant enhancement of the many opportuni- ties for development that this area has. As has been pointed out before, we pay one of the highest electrical rates in Alaska here in the Copper River basin. This in itself is a detriment to the growth and the well-being of individuals who have made the area their home. We have to look at this project from the point of‘view of those living out here and the impact the building of this project would have on the whole state. As things stand right now, I believe both the state- wide and local impact would be very positive if the project is built. Certainly there are those who oppose this project for one reason or another, but I do not believe their concerns outweigh the poten- tial benefit to this state and to the local residents. Ahtna Inc. would like to see the Sutton- to-Glennallen intertie built. Bor 20b_ “Roy S. Ewan, president/CEO See Abtna Inc. YU Coe Q Quality Services (907) 274-1056 __ JAN 06 19965 Dat CHUGIAK-EAGLE RIVER Client No._%%0A E Further review 210k Further review of the Sutton- Glenallen intertie project has been ordered by Mike Irwin, commis- sioner of Community and Regional Affairs. The proposed intertie would link electrical power grids in Southcen- tral Alaska with those of Central Alaska. It has drawn considerable public debate, particularly in the Matanuska-Susitna Borough com- munity of Sutton. In a statement released last week, Irwin said the review will include further analysis of the con- struction costs of the project and possible alternatives such as a pro- posed Silver Lake hydroelectric project. “Based on the comments we re- ceived during recent meetings in Valdez, Glenallen, Anchorage and Sutton, I have determined that fur- ther review is warranted to make sure that thorough consideration is given to all issues of public con- cern,” Irwin said. Irwin’s office is responsible for completing a feasibility study of the project. Originally scheduled for completion by the end of 1995, the commissioner said public com- of intertie requested ments “convinced (him) of the need for additional review.” The review is expected to be completed this month, with a final recommendation to be issued shortly thereafter. QUALITY SERVICES pate_JAN 0 6 1996 Anchorage Daily News Client No. 420A Alaska too beautiful to. spoil Do the lawmakers and their supporters who propose the Sutton-Glennallen inter- tie or the timber harvest along Turnagain Arm have cars? And when they drive, do they look at the beauty around them? Why would anyone want to spoil some of the most spectacular scenery on Earth? Find another way please. — Ken Graham Girdwood QUALITY SERVICES pate JAN 0 8 1996 _ Anchorage Daily News Client No._Y20A4 Knowles ignoring supporters Gov. Tony Knowles’ decision on the intertie to Glennallen could be his swan song, his kiss goodbye, his decision that could make him a one-term governor. His decision will show his supporters if he is a governor who makes decisions based on facts or a governor who makes decisions according to his political ledger. ° If logic does not prevail, then it is obvious that caution has been thrown to the wind, and the political paybacks have begun in earnest. Political contributions are not free. They come with shackles. When I see politicians ascending capitol steps, I see people bound in shackles to their big-money contributors. A sad sight. I see people without the freedom to make intelligent decisions, people who must first consult the political ledger before making any decisions. No one with any business sense can look at the-figures necessary for the intertie and conclude’ this is’ a smart business deal. If this deal goes through, it is political payback in its purest form. Still, what really amazes me':is the: governor’s inability to understand his supporters. He won the governorship by the closest of margins. The people who opposed him will still oppose him — intertie or no intertie, but those who supported him are losing faith. . I’d rather vote Republican. At least I know where I stand. With Knowles, it seems payback to big-money contributors is more important than loyalty to his backers. I hope this isn’t true. I hope he doesn’t want to be a one-term governor. Listen when we say, ‘‘No intertie. This is not a sound business solution to the problems in the Copper River valley.” Boz 30b Y2wA AIOE — Suel D. Jones Palmer QUALITY SERVICES parelAN 0.9 1996 Anchorage Daily News Client No. 2 _ Use intertie money elsewhere In regard to the Tollman/Roetman col- umn (Forum, Dec. 28): I am all for economic viability and growth. However, it would seem to me that if the state was really interested in furthering economic growth, that the Mat-Su Valley has much greater potential than the Copper River Valley does at this time. .- Therefore, it seems obvious to me that the millions of dollars would be better spent continuing to hook up homes and businesses located in the Mat-Su Valley, rather than, having said businesses and homes burning fossil fuels to generate (inefficiently) electricity. ~The existing prohibitive cost of access- ing electricity does not promote economic wth. 202 30 210& Y20A a ° — J.R. Graupmann Kotzebue QUA] | SERVICES Date__JAN 1 2 1996 Anchorage Daily News Client No. Y2r0eAq The Anchorage Times , Publisher: BILL J. ALLEN "Believing in Alaskans, putting Alaska first" Editors: DENNIS FRADLEY, PAUL JENKINS, WILLIAM J. TOBIN The Anchorage Times Commentary in this Segment of the Anchorage Daily News does not ropresont -the views of the Daily News. It is weitton and published under an ane sment with former owners of ‘ he The Times, in the interests of presorving a diversity of viewpoints i int communily, f 0. Cost of intertie- The proposed intertie to link Copper’ Valley Electric Association’s system with the Railbelt power grid has generated a number of news articles and letters to the editor. Conflicting assertions have left many people confused about the whole issue. Since the Chugach Electric Associa- tion would build the power line and be responsible for repaying the state loan, a basic question should be on the minds of Chugach customers: Will the intertie raise or lower monthly electric bills? The Chugach board of directors is evaluating this project as a business in- vestment. Like other capital projects, the benefits and risks must be assessed as realistically as possible. On the Copper Valley intertie propos- al, the board must consider: * ¢ Are the demand forecasts for future power too optimistic? If so, future rev- enues might be insufficient to offset debt payments from line construction. © On the the other hand, it would not serve ratepayers to mistakenly rely on load forecasts which are too conservative, and consequently not build a project which would have produced profits and lowered future bills. ¢ If there were to be construction de- lays or cost overruns, the net benefit to Chugach ratepayers could be reduced or eliminated. However, there might be ways to cut construction costs. For in- stance, the Anchorage School District re- cently saved millions of dollars because intense bid competition between contrac- tors drove down school construction costs. Before signing off on the project, the board wants to know that the intertie will be built in a quality manner at the lowest cost and with the highest long- term benefit to Chugach members. Ray Kreig Chairman, Board of Directors Chugach Electric Association QUALITY SERVICES pate JAN 12 1996 Anchorage Daily News Client No, Yuc4 an . Chugach Electric ripoff My electricity bill for November seemed higher than usual, so I did some checking into my past bills. As it turned out, my electric costs had gone up from total yearly charges of $860.25 in 1991 to $1,216.71 in 1994, although the power use was nearly the same. That is a 41 percent increase in four years! For the same period, Chugach informed me that I had earned $397.90 in “capital credits” which they would attempt to repay to me in 20 years. What a ripoff! Chugach Electric is supposed to be a co-op run for the benefit of its members; in- stead, they are allowed to systematically overcharge me to the tune of $100 per year. Isn’t there a Public Utilities Commis- sion in this town? The so-called obligation to repay this capital credit debt 20 years later, without interest, means -that, at present inflation rates, Chugach would repay about 50 cents on the dollar. That is, if I haven’t died or moved away. What a deal! I wish I could get the same payment schedule on my house and truck loans! Now when I read about the generous salaries at Chugach Electric and their proposed, big-ticket projects like the Glennallen intertie, I know where they are coming up with the spare funds. sur Bel Aol 4204 — Jim Craig Anchorage QUALITY SERVICES sate JAN 1 4 1998 Anchorage Daily News Client No. YucA ; Stop intertie project now I can understand the IBEW’s concern about providing employment opportuni- ties for its union members in regard to the Sutton-Glennallen intertie, but it is unac- ceptable to turn the Matanuska Valley into an environmental ‘sacrifice area in order to achieve that. objective. It is disconcerting to everyone when, in order to make a livelihood, we also disfigure the very thing that attracted us to this country to begin with. Commissioner Mike Irwin’s decision to delay approval of the intertie is a positive step forward! Further review will only continue to reinforce the only conclusion possible: This project is a waste of public money. Glennallen can and must develop other reasonable sources of power genera- tion before it taxes additional financial burdens to every electric ratepayer within Anchorage and the Matanuska-Susitna Valley. ‘* : my The commissioner must cease_ this senseless drain of public money as well as years of numbing legal litigation by stop- ping this project now. 302306 MOK — William Schmidtkunz HSon Css aoe . . Sutton Se ) (907) 274-1056 _ JAN 1 6 1996 Fairbanks Daily News-Miner Client No_YU UGA Da 420A 2/0E 302 By DONNA TOLLMAN and PAUL ROETMAN The controversy around the Sutton to Glennallen intertie is a classic example of the struggle between partisan politics and sound economic policy. It also exemplifies the Chicken Little syndrome. You all remember the old story where Chicken Little tells Henny Penny, who tells Turkey Lurkey, who tells Loosey Goosey that the sky is falling and all the animals run in terror for the cave where the Fox is waiting for his supper. Electrical utility issues are often complex and require extre- mely long-range planning and analysis. But what we hear from critics, and the better part of what we see in the press, does not attempt to deal with substan- tive fact. Most of the criticism, and the reporting of that criti- cism, is based on emotion. - The $35-million loan approved by the Legislature for the project was contingent on the results of a feasibility study. Two different administrations have now funded studies and they are both posi- tive. The feasibility question has been answered. The intertie is feasible and the project should go forward. The intertie is still stalled, though a decision from state Commissioner of Commu- nity and Regional Affairs Mike Irwin is expected at the end of the month. Once again, the private moral prejudices of a small, vocal mi- nority are set against sound eco- nomic and_ environmental practice and the legitimate needs of ordinary Alaska residents. The Alaska Legislature endorsed the importance of electrical intercon- nection for the Copper River Valley when it awarded a $35- million, “zero-interest” loan to Copper Valley Electric Associa- tion (CVEA) to partially finance the intertie. This is not a grant. This is money that will be paid back to the state. There is very little opposition Guest Opinion | to the project among CVEA members. Most of the opposition comes from a small group living around Sutton and from the en- vironmental lobby. Designers of the intertie have done everything possible to reassure these folks, including moving the line three miles from the Glenn Highway and routing it far away from the “viewshed.” Much of the line will not be visible from the road. No offer of compromise with the minority has made any differ- ence at all. Compare this with the situation in Anchorage where the majority of residents and Chugach customers are either supportive of the project or in- . different to it as the tie line will affect their lives and their elec- tric bills very little. The intertie, when completed, will reduce the cost of power for CVEA customers, who pay the highest unsupported rates in Alaska. Lower electrical rates will mean new business develop- ment, especially tourism-related development in the Copper Valley afd Prince William Sound. It will be especially bene- ficial to the Anchorage business community. Anchorage is the hub for economic activity in southcentral and growth any where in the region promotes de- velopment in Anchorage. Here are some items that ha- ven’t gotten much attention in the press. You may have heard that: 1. “The intertie will harm the ‘viewshed’ along the Glenn Highway.” The truth is that the majority of the tie line will not be visible from the road. There is already a tie line bet- ween Glennallen and Valdez over Thompson Pass. It travels right by the Worthington Glacier turn- out and viewing area. 100,000 vi- == Sutton-Glennallen intertie: efficient, clean power source sitors stopped there last summer. The towers are so well designed and placed that the tie line at- tracts little or no attention. 2. “There are cheaper alterna- tives to the intertie.”” The truth is that the intertie is cheaper than the only other viable alter- native, which is local diesel gene- ration. Not one, but two state-funded studies have proven the feasi- bility of the intertie project. The more growth in the CVEA area, the better the tie line looks. Hy- droelectric power ran an extre- mely poor third and hydro will only supply power six months of the year. 3. “Interties are environmen- tally bad and harmful to resi- dents and wildlife.” The truth is that electrical interconnection is the most environmentally effec- tive way of delivering electricity to residences and businesses. Small utilities are terribly inefficient. In terms of cost, ma- terials use, and fuel efficiency, they are a lousy deal for the cus- tomer and the environment. The intertie will make efficient use of the available surplus of clean, cheap generating capacity in the Railbelt region, without the du- plication of new generating ca- pacity in the Copper Valley. Don’t believe everything you read. Pay no attention to Chicken Little. The sky is not falling and nobody is advocating an environmental holocaust! Infrastructure, the nuts and bolts of any economy, must be built and maintained. People need to work. They need elec- trical power for their homes, bu- sinesses, schools, and hospitals. A healthy economy provides elec- tric power as cheaply and cleanly as possible. Support for the in- tertie means support for respons- ible economic development. Donna Tollman is the executive di- rector of the Copper Valley Economic Development Council, based in Glen- nallen. Paul Roetman is the executive director of Prince William Sound Eco- nomic Development Council, based in Valdez. QUALITY SERVICES pate JAN 2 1 1996 Anchorage Daily News Client No. Yt04 Giveaway brings program cuts Your paper (Jan. 14) ran an editorial about the state’s fiscal gap; another Fritz Pettifogger diatribe blaming all the evils of the world, particularly the deficit, on Democrats; and another angry letter about the Petro Star intertie the state is trying to force on Mat-Su residents. I hope Alaska voters will remember, this November, that it was Ramona’s) Republican Raiders, along with a few renegade, pork-craving Democrats, who) squandered over a billion dollars two, ears ago. The Copper Center intertie was lust a small cut off that hog. Far worse was the “Clean Coal’’ burn- ing facility at Nenana and its related interties meant to provide subsidized power to the ld Spur mine in Fair- banks. These corporate welfare raids on the state treasury largely benefit the Usibelli family and Phoenix, Ariz., mine owners. That 1993 capital budget cost each Alaskan about $2,000 in state revenues. The net effect of that enormous 93) giveaway will be to eventually and sub-| stantially cut state services and programs and to accelerate, by two or three years, the imposition of a state income tax. The supposedly ‘‘fiscally conservative” local Republicans, whom Fritz never tires) of touting, have helped get us in an economic mess just as overwhelming as the one their colleagues in D.C. caused: the $3 trillion Reagan-Bush addition to the national debt, and the savings and loan deregulation/crisis/scandal our own Sen. Murkowski had a hand in creating. The S&L bailout cost each U.S. taxpay- er an average of $2,000, and that $3 trillion deficit cost us each about $12,000 in federal debt, losing each of us some $600 a year in interest payments alone. Jo2z 30 20 4204 C20 _ Frank Smith Barrow - = Qsm= = (907) 274-1056 Date JAN 2 2 1996 ALASKA JOURNAL OF COMMERCE Client No. qd 204A Guest Commentary — O22 30% AIO 204 By Donna Tollm..n and Paul Roetman he controversy around the Sutton to Glennallen Intertie is a classic example of the struggle between partisan politics and sound economic policy. It also exemplifies the Chicken Little syndrome. You all remember the old story where Chicken Little tells Henny Penny, who tells Turkey Lurkey, who tells Loosey Goosey, that the sky is falling and all the animals run in terror for the cave where the Fox is waiting for his supper. It's about that process as well. Electrical utility issues are often complex and require extremely long range planning and analysis. But what we hear from critics, and the better part of what we see in the press, docs notattemptto deal with substantive fact. Most of the criticism, and the reporting of that criticism, is based on emotion. The $35 million loan approved by the Legislature for the project was contingenton the results of a feasibility study. Two different administrations have now funded studies and they are both positive. The feasibility question has been answered. The intertie is feasible and the project should go forward. The intertie is still stalled, though a decision is expected at the end of the month, Once again, the private moral prejudices of a small, vocal minority are set against sound economic and environmental practice and the legitimate needs of ordinary Alaska residents. The Alaska Legislatu —dorsed the importance of rs electrical interconnecuvu: for the Copper River Valley The interue is feasible and when it awarded a $35 million “zero” interest loan to . Copper Valley Electric Association to partially finance the project should go forward. the intertie. This is not a grant. This is money that will The intertie Is still stalled, be paid back to the state, though a decision is expected There is very little opposition to the project among at the end of the month. CVEA members. Most of the opposition comes from a << small group living around Sutton and from the environmental lobby. Designers of the intertic have done everything possible to reassure these folks including moving the line three miles from the highway and routing it far away from “View Shed.” Much of the line will not be visible from the road. No offer of compromise with the minority has made any difference at all. Compare this with the situation in Anchorage where the majority of residents and Chugach customers are either supportive of the project or indifferent to it as the tie line will affect their lives and their clectric bills very little. The intertie, when completed, will reduce the cost of power for CVEA customers who pay the highest unsupported rates in Alaska. Lower electrical rates will mean new business develop- ment, especially tourism related development in the Copper Valley and Prince William Sound. It will be especially beneficial to the Anchorage business community. Anchorage is the hub for economic activity in Southcentral and growth anywhere in the region promotes development in Anchorage. Here are someitems that haven't gotten much attention in the press. You may have heard that: ¢ The intertie will harm the “View Shed” along the Glenn Highway, but the truth is that the majority of the tie line will not be visible from the road. There is already tie line between Glennallen and Valdez over Thompson Pass. It travels right by the Worthington Glacier turn-out and viewing area. More than 100,000 visitors stopped there last summer. The towers are so well designed and placed that the tie line attracts little or no attention. ¢ There are cheaper alternatives to the intertie, but the truth is that the intertie is cheaper than the only other viable alternative, which is local diesel generation. Not one, but two state funded studies have proven the feasibility of the intertie project. The more growth in the CVEA arca, the better the tie line looks, Ilydroelectric power ran an extremely poor third and hydro will only supply power six months of the year. ¢ Interties are environmentally bad and harmful to residents and wildlife, but the truth is that electrical interconnection is the most environmentally effective way of delivering electricity to residences and businesses. Small utilities are terribly inefficient. In terms of cost, materials use and fuel efficiency, they are a lousy deal for the customer and the environment. The intertie will make efficient use of the available surplus of clean, cheap generating capacity in the railbclt, without the duplication of new generating capacity in the Copper Valley. Don'tbelieve everything you read. Pay no attention to Chicken Little. The sky is not falling and nobody is advocating an environmental holocaust! Infrastructure, the nuts and bolts of any economy, must be built and maintained. People need to work. They need electrical power for their homes businesses, schools and hospitals. A healthy economy provides electric power as cheaply and cleanly as possible. Support for the Intertie means support for responsible economic development. Donna Tollman is the executive director of the Copper Valley Economic Development Council, based in Glennallen. PaulRoetman is the executive director of the Prince William Sound Economic Development Council based in Valdez. (907) 274-1056 paw JAN 24 1995 Valdez Vanguard Client No__% terA Copper valley Electric Association pushing for Intertie 24I0E 302 420A By Mike Jakiemiec Valdez Vanguard Copper Valley Electric Association Board members and staff told the Valdez City Council at a work session Jan. 17 that a proposed coun- cil resolution could hamper ongoing negiotiations between CVEA and Chugach Electric Association. The resolution, proposed at the Dec. 18 Valdez city council meeting, contains two propositions to change CVEA bylaws to facilitate voting and two propositions that would allow CVEA members to vote on whether or not to sell the cooperative and its assets to CEA. It is currently tabled indefinitely pending Gov. Tony Knowles’ decision about to approve or turn down the intertic. CVEA and CEA are still working on an agreement to construct the Intertie if approved by Knowles. A working agreement between the two co-ops, one of the conditions set by Knowles for the project to move ahead, has been tentatively agreed upon, but is by no means final, said CVEA general manager Clayton Hurless. “Negotiations are very sensitive right now,” he said. “We’re making progress inch by inch. What had been a pretty friendly discussion has turned into a more hardnosed one.” Major changes in the CEA board are partly responsible for the change in the tenor of the negotiatons, Hurless said. CEA members are also concerned about picking up the tab for the project, estimated to cost $55 million to build. The tentative agree- ment calls for CEA to pay $44 mil- lion; CVEA the rest. CVEA board members said they would prefer concentrating their efforts on getting the intertie project approved before talking about a merger with CEA or anyone else. The city resolution would muddy the waters surrounding the already con- troversial project, said CVEA board member Pat Day. “It’s been my observation that every time this (the intertie project) begins to gel, someone stirs the pot,” he said. “I think we need to do one thing before we go on to the next, instead of stirring the pot again.” Hurless said he didn’t think CEA would be interested in acquiring CVEA unless the intertie was approved and CVEA sent it a letter of interest. Rich Huffman, CVEA’s attomey, said three of the propositions in the resolution - one calling for a majori- ty vote and the other allowing mem- bers to vote by mail - are already in CVEA’s bylaws. Members also have the right to call a special membership meeting if they desire. The other part of the resolution, calling for the sale of CVEA to CEA at fair market value was unclear, Huffman said, although if reworded, could be an expression of the mem- bership’s wishes. Day said even though the vote wouldn’t take place until after Knowles makes his decision, the res- olution could have an impact on the decision. That wouldn’t necessarily be neg- ative, Mayor John Harris said. “The council is just considering whether or not to pass a proposition supporting the question of a sale,” he said. “We’re doing everything we can to push this intertie through - it’s a major concern for us.” Community and Regional Affairs Commissioner Mike Irwin is still considering public input on the pro- ject before making his final recom- mendation to Knowles. The legislature has designated a $35 million interest-free loan for the project, as well as up to $25 million in state-issued bonds. Irwin must give his approval for the funds to be released. (yak Cek QishiyiSeaices (907) 274-1056 Dae JAN 2 4 1395 Valdez Star Client No.4 272A City, Phone Co-Op Locked in Turf War by Pat Lynn Editor, The Star Arce 3202. 420A CITY HALL—Members of the Valdez city council engaged in a bureaucratic turf war with the board members of Copper Valley Electric Wednesday with the co-op telling the city to back off and quit interfer- ing in co-op business. The councilmen, on the other hand, responded—in polite language—that the city has an interest in lower electrical rates and would continue to pursue that goal. No voices were raised, no threatening words were ex- changed but the message from both sides was clear nevertheless. Co-op manager Clayton Hurless said city interven- tion into electrical power concerns threatened to upset on-going “delicate negotia- tions” between Copper Val- ley and Chugach Electric. The two cooperatives are trying to forge together a powersales agreement, anda separate deal whereby Chugach would underwrite 80 percent of the $55 mil- lion cost of the Sutton-to- Glennallen transmission line with Copper Valley taking on 20 percent of the bur- den. If the deal goes through, Copper Valley hopes to forge a powersales agreement with See Negotiation... Page 15 ~~» aa, Negotiation Waters ‘Muddied’ By Council Continued from Page 1 2/0E 302 426A Chugach to feed cheap power along the line to serve Cop- per Basin/Valdez consumers. City officials are alarmed that the transmission line promises little, and perhaps nothing immediately, in re- duced power costs to con- sumers. All seven members of the city council have endorsed a proposal whereby Copper Valley ratepayers would vote on selling the co-op outright to Chugach Electric. A city resolution calling for the vote has rankled Copper Valley Electric officials and the resolution is now in limbo. “If our ratepayers have to pay for it (transmission line), then our gut feeling is our rates will go up,” said Mayor John Harris. The city and the school district now pay $1 milliona year in electrical charges, he said. “Our intentis to try and get someone else (Chugach) involved in building the transmission line.” “The city is very strongly . looking for alternative sources of power to reduce our costs,” he added. On Monday of last week, the Mayor, members of the city council and the city man- ager met in Anchorage with Chugach staff and board members. The Chugach people made it clear that no merger or buyout of Copper Valley would be possible without the transmission line in place. When councilman Brian Johnson suggested sending Chugach a letter asking for a merger, Paul Holland, chair- man of the Copper Valley board, warned, “Don’t muddy the waters. This is not good timing.” Board member Pat Day agreed. “Every time we get a deal going (on the transmis- sion line), someone stirs the pot again. Now’s not the time,” he said. Hurless also cautioned the city council about Chugach. “They think they have us in their back pocket. They’ve taken an arms length atti- tude toward us,” he said. Hurless also said that the Alaska Generation & Trans- mission Co-Op, a coalting of Homer Electric and Matanuska Electric, had put forward an alternative pro- posal to Copper Valley. He did not, however, reveal the nature of the proposal. City councilman Ryan Sontag said he wanted “as- surances that the momentum (toward lower rates) will con- tinue. That has not been so in the past.” : Mayor Harrisagreed."Ifwe don’t feel Copper Valley Electric is doing that, we are going to be involved.” Clayton Hurless, manager of Copper Valley, assured the city council that rate reduc- tion is his top priority. “I spend 60 percent of my time on this (transmission line project). I don’t want to end my career by leaving an Albatross to anybody,” he said. The fate of the transmis- sion line is now in the hands of Mike Irwin, the commis- sioner of Regional & Com- munity Affairs. Irwin is currently review- ing an interest-free state loan of $35 million to help fund construction of the $55 mil- lion transmission line. QUALITY SERVICES pate AN 2 7 1996 Anchorage Daily News Client No;_420A4 Sites soug we 420A 302 30b The Associated Press KENAI — A new electric line between Anchorage and Kenai Peninsula will boost capacity by 70 per- cent and could reduce pow- er outages in the Anchor- age area. But construction on the line won’t start un- til at least 1999. The intertie would up- grade the electrical connec- tion between the Homer Electric Association system and other Railbelt electric utilities. The Legislature ap- proved spending $46.8 mil- lion on the project, but planners say they aren’t sure how much the project will cost, exactly how much it will raise rates or even where the line will be built. The current line was con- structed in areas prone to avalanches and sometimes goes down in the winter. The new intertie would take advantage of an abundance of power on the Kenai Peninsula. The new intertie would take advantage of an abun- dance of power on the Ke- nai Peninsula. The penin- sula is home to four power plants that together can produce: 247 megawatts of electricity. Peak demand on the Kenai Peninsula sel- dom reaches beyond about 60 megawatts. Some site ideas for the Peninsula intertie should be picked by the end of June. An intertie project committee made up of rep- resentatives from seven utilities is taking public comment before it draws up possible routes. Tim Tetherow, project manager with Dames & Moore, the intertie’s engi- neering firm, says he -is looking for ideas on where the line should be built and what obstacles the in- tertie should avoid. The intertie itself won’t have “big lattice tower structures,’’ Tetherow said. Instead, it will have either 80-by-60-foot steel towers, which look like an ‘‘X,”’ or 20-by-50-foot wooden frames in the shape of an “a } ht for Peninsula intertie Tetherow said the com- mittee is trying to consider the recreational and visual impacts of the intertie. A similar project con- necting Healy with Fair- banks is further along. Its budget is set at $70 million, including a $43.2 million grant from the state. Construction will start next fall at the earli- est. An intertie to connect the Railbelt system with the Copper Valley Electric Association has been mired in controversy and still awaits a state ruling on its feasibility. Currently there is no connection, and the proposed line along the Glenn Highway from Sut- ton to Glennallen has met fierce opposition from resi- dents along the route. It would be built with a $35 million interest-free state loan if the administration approves the deal. QUALITY SERVICES Date_JAN 3 0 1996 Anchorage Daily News Client No. 4204 No one justifying intertie cost Recently, I read two letters describing the Sutton intertie as a massive boondog- gle. I agree. However, one letter claimed the subsidy would be $1.6 billion, while the other reported ‘‘only’” $35 million (plus the amount all Chugach consumers will be assessed) as the free gift to the utility. After asking a few questions, I found the low number assumed only a 25-year installment payback. Actually, the zero- interest loan will have a 50-year term so Alaska’s present to the utilities will be at least $90 million. The $1.6 billion figure would be correct if the money were paid back in a lump sum after 50 years of free use. Which is it? Apparently the terms have not yet been arranged, but there is an “assumption of an annual installment payback.” Could we have a peek at the contract before someone signs it for us? If Alaskans spend this much for’electri- cal poles from Sutton to Glennallen, who benefits? Currently, about 3,000 ratepay- ers use $10 million worth of electricity each year. How much will those ratepay- ers save? Not much, say the experts, but maybe future increases will be reduced for them. Why are we spending so much for so little? That is the question many are asking and no one is answering. 302 06 Y20a — Jennifer Sonneborn Pe Trapper Creek Q= Services (907) 274-1056 * Date _FEB 0 1 1996. COPPER RIVER COUNTRY JOURNAL Client No._ 4 ZoA4 ; at GLENNALLEN-CVEA says the Governor and DCRA are still studying alternatives to the Intertie project as they work on making a final decision. A place called "Whitewater Engineering" has submitted another proposal for a Silver Lake hydro project. CVEA thinks there will be a decision on the intertie by mid-February. Qs: Ss (907) 274-1056 Date FEB 1 2 1996 ALASKA JOURNAL > OF COMMERCE Client No. 4 20/e Letters to the Editor So2 306 210 #20R n response to the pro-Intertie Guest Commentary in the Jan. 22 issue of the Alaska Journal of Commerce, I quote the Journal of Commerce: “Welfare is poison.” Indeed, “To say our current welfare system works because it provides a safety net for dependent children is like saying DDT works because it kills insects.” (Editorial, Journal of Commerce Oct. 2, 1995) To say the Anchorage-to-Glennallen intertie should be built; because it is “feasible” is equally nonsensical. Again, the! compelling question is, “At what cost?” Itis time for the intertie’s supporters to ‘fess up. In addition to the modest sums they acknowledge, the intertie will cost no less than $1.6 billion dollars. Say what? That's right, you heard right. All rational businessmen know that moneyis not free. An “interest-free” loan isn’t free either. The cost of money may be free to the borrower, but it most certainly is not free to the lender. In this case, the state and the taxpayers take the hit. Given that a prudent investment will earn 8 percent interest, the real cost of giving someone a $35 million “zero” interest loan for 50 years is at least $1,606,556,437 in lost investment income (compounded annually.) That's one substantive fact the intertie's supporters would rather not deal with — let alone repay. So when the would-be welfare recipients eagerly note that the $35 million loan will be repaid, I just have to laugh. Who's going to repay the $1.6 billion in lost investment income? As advocates of “sound economic policy,” we must insist that developers honestly address all costs of any project that requires public financing. No, the skyisn’t falling, butfrom this end of the proposed power line it sure looks like the Emperors of Glennallen and Valdez have no clothes. Richard A. Poulin, Anchorage "QUALITY ‘SERV ICES pate FEB 2 7 1996 Anchorage Daily News Client No._d¢ 264_ Beauty already being disrupted I would like to add my. 2 cents worth re ig the intertie. — ' “Most letters seem to come from people who don’t want the — beauty of the Matanuska Valley rupted. My question is: Y wave any of you people driven through Sutton lately? ‘Let’s take a look. First, ‘cians is that attractive log pile near Eska Creek and the tent city or whatever it is, beside the mud bos they use ‘tor their monster-truck ' Don't forget that wonderful view of old cars stacked near the lumber mill or the ig <n standing in the yard. Then comes the sheoiuesis pristine Mf of all the junk and garbage in the d those Native graves. That is pay a ‘stunning sight. : “Another fabulous view is the old coal facility. That’s lovely. As you go by the peut office; take time to look at the exquisite sight of all that “used equipment” out in back. ' This is all.gorgeous, along with the electric poles going along the back street so Sutton -can enjoy low-cost electricity. Last but not least, all along the Glenn Highway and up on the hillsides, I see those horrible, 6-foot, TV dish antennas. Don’t they disrupt the pristine beauty of the Matanusia. Valley as o 2A.’ —. Monty -Montague eit. O31 4 Copper Cotter Date (907) 274-1056 MAR 13 1996 Valdez Vanguard Client No. intert wants AIOE 302. By Mike Jakiemiec x. A 31r Irwin sent CVEA a ie update: State pact in writing lette Valdez Vanguard Tentative agreements among Copper Valley Electric Association, Petro Star and Chugach Electric Assocation need to be firmed up before Community and Regional Affairs Commissioner Mike Irwin requesting “definite binding agree- ments before making final determi- nation of the feasibility of the pro- ject,” said Bob King, a spokesman for Gov. Tony Knowles. Clayton Hurless, CVEA’s gen- eral manager, said in a recent inter- view the electric cooperative is still makes his decision about the Intertie project. Intertie.... “2002 362 420A 311 From page 1 considering its response. “They’ve raised the standards,” he said. The agreements are part of the out for the project. Irwin has been charged by Gov. Knowles to deter- mine if the project is feasible. “ If all the conditions are in place, building this intertie to provide low- er cost power to the affected Alaskans and to facilitate econom- ic expansion appears to make sense, Irwin said in November. ‘requirements Irwin has already laid” “ See Intertie, page 2 “Representative Gene Kubina said the request could strain CVEA’s efforts to ads ance the Glennallen-Sutton intertie. “The problem is once those stip- ulations are out there, it makes it pretty hard to negotiate,” he said. King said Irwin doesn’t expect a response from CVEA until the end of the month. (907) 274.1056 Date MAR_1 6 1996 CHUGT AK-EAGLE RIVER STAR Client No._ 422A Redirect intertie funds to build gas pipeline 4aue ViwP 24F To The Editor: Please encourage Governor Knowles and Commissioner Condon to consider using the Glenn Allen Intertie funds to help redirect the proposed gas line from the North Slope through Glenn Allen to the ocean. Make gas available to people along the line for heat, electricity, etc. Such gas line relocation, re- vitalizing the dairy industry with a farmers coop etc., doing right by the dairy woman that was made a broke slave and seriously stressed mentally and physically and cancel- ling any big loans for orange groves in the valley, etc., etc. will provide incentive for industrial development and please the people and this administration. Don Shaginoff Sutton ’ Stl (Qloees Quufiy: Sertees > (07) 274-1056 MAR 2 1 1996 ate SITKA SENTINEL Client No_YeA [40 Aipecnn ob tn! ~Fanbanbs \ Date Q Dennauta Chain Kei Bay Lieniban bbe) Decision Still Pending On Power Line Intertie UA QE 30% PALMER (AP) — Nearly two months after the state’s self-imposed deadline on whether to approve a con- troversial power line, a decision has yet to be made. A spokesman for Gov. Tony Knowles now says the decision on the line between Sutton and Glennallen depends heavily on whether Chugach © p Electric Association will pay part of the project’s estimated $53 million cost. There’s no new deadline for ac- tion, spokesman David Ramseur said. Chugach is considering paying up to 80 percent of the cost to build and maintain the line in return for being able to sey Electric Agsociation. Chugaclr is wait- ing for Copper Valley to strike a deal with its largest customer, the Petro Star refinery in Valdez, to buy power for the next several years. Petro Star is remaining silent on its plans. Both supporters and opponents say they're frustrated with the lack of leadership on the project, which has been on-again, off-again for more than three years. “‘At some point you’ve got to fish or cut bait,’? said Chris Rose, who co-chairs Alaska Citizens for Respon- sible Energy Development, a group opposed to the power line. ‘‘It’s been over a year now’’ since Knowles started to study the project. Gene Bjornstad, general manager of Chugach, said he was unaware the governor was emphasizing his com- pany’s role in the project. He said he was frustrated by the delay. “I’m spending a lot of time and ef- fort not knowing when they will make a decision,’ he said. ‘I’m not going to keep playing with numbers. You ei- mower to Copper -Valley »; ther decide whether this is viable and go ahead with it or not.’’ The power line, known as an inter- tie, would stretch from Sutton to Glennallen, allowing Copper Valley, which now relies on aging diesel gen- erators for electricity, to tap into the relatively cheap and vast power sup- ly of the Railbelt. Residents of Cop- per Valley now pay about twice what Anchorage residents pay for electrici- ty. The project has stirred controversy since 1993 when the Legislature set “aside a $35 million interest-free loan and up to $25 million in state-issued » bonds: for: the power line. The money “was contingent on then-Department of Community and Regional Affairs Commissioner Edgar Blatchford find- ing a study of the project satisfactory. In July 1994, the study was com- pleted and approved by Blatchford. But in March 1995, with Knowles in office, it was put on hold. Knowles wanted to take a second look. Groups that supported’ Knowles during his campaign have taken oppo- site sides on the intertie issue. The In- ternational Brotherhood of Electrical Workers Union Local 1547 is lobby- ing the governor to approve the pro- ject. The union has an agreement to supply labor to build and maintain the line. On the other side are environmental organizations, including the Alaska Center for the Environment, which opposes the project. The group argues the line would mar the scenic Matanuska Valley and is more than what Copper Valley needs for its 3,- 000 customers. QUALITY SERVICES Date MAR 21 1996 Anchorage Daily News Client No. 4274 Intertie decision han 420A 0333 0452-9 337 34 Jor 32ol 311 ato By S.J. KOMARNITSKY Daily News reporter PALMER — Nearly two months after the state’s self-imposed deadline on whether to approve a con- troversial power line, a de- cision has yet to be made. A spokesman for Gov. Tony Knowles now says the decision on the line between Sutton and Glenn- allen depends heavily on whether Chugach Electric Association will pay part of the project’s estimated $53 million cost. There’s no new deadline for action, eee David Ramseur said. Chugach is considering paying up to 80 percent of the cost to build and main- tain the line in return for being able to sell power to Copper Valley Electric As- sociation. Chugach is waiting for Copper Valley to strike a deal with its largest customer, the Petro Star refinery in Valdez, to buy power for the next several years. Petro Star is remaining silent on its plans. , Both supporters and op- ponents say they’re frus- trated with the lack of leadership on the project, which has been on-again, ngs on amount Chugach Electric is willing to pay Lying p> sa off-again for more than three years. “At some point you’ve got to fish or cut bait,” said Chris Rose, who co- chairs Alaska Citizens for Responsible Energy Devel- opment, a group opposed - to the power line. “It’s been over a year now” since Knowles started to study the project. Gene Bjornstad, general manager of Chugach, said he was unaware the gover- nor was emphasizing his company’s role in the proj- ect. He said he was frus- trated by the delay. “I’m spending a lot of POWER: Decision not yet made on intertie time and effort not know- ing when they will make a decision,” he said. ‘I’m not going to keep playing with numbers. You either decide whether this is viable and go ahead with it or not.” The power line, known as an intertie, would stretch from Sutton to Glennallen, allowing Cop- per Valley, which now re- lies on aging diesel genera- tors for electricity, to tap into the relatively cheap and vast power supply of the Railbelt. Residents of Copper Valley now pay about twice what Anchor- is lobbying the governor to age residents pay for elec- tricity. The project has stirred controversy since 1993 when the Legislature set aside a $35 million interest- free loan and up to $25 million in state-issued bonds for the power line. The money was contingent on then-Department of Community and Regional Affairs Commissioner Ed- gar Blatchford finding a study of. the project satis- factory. In July 1994, the study was completed and ap- proved by Blatchford. But in March 1995, with Kevin Knowles in office, it was put on hold. Knowles wanted to take a second look. At one point, a deci- sion was set for the end of January. In February, current Community and Regional Affairs Commissioner Mike Irwin sent a letter to Copper Valley asking the utility to produce binding agreements that Petro Star would continue to buy power for the next several years and that Chugach or another utility would pay a portion of the project’s Please see Page E-3, POWER \ Harun, the Continued from Page E-1 costs. Irwin set a deadline for the end of March, but he said Tuesday he would give the utility more time if needed. While Irwin is officially charged with ruling on the project, he most certainly will consult Knowles, his boss. Groups that supported Knowles during his cam- paign have taken opposite sides. The International Brotherhood of Electrical Workers Union Local 1547 approve the project. The union has an agreement with Copper Valley and Chugach to supply labor to build and maintain the line. On the other side are environmental organiza- tions, including the Alaska Center. for the..Environ- ment, which opposes the project. The group argues the line would mar the scenic Matanuska Valley and is more than what Copper Valley needs for its 3,000 customers. group’s executive director, said he considers the inter- tie a watershed issue. “It will determine how the governor makes policy decisions, especially when there’s a clash between dif- ferent forces,” he said. On Wednesday night, members of the Center for the Environment and other opponents of the intertie planned to attend a Chu- gach Electric Association board meeting to show their concern. 7 (907) 274-1056 __ MAR 2.3 1996 Mek CHUGIAK-EAGLE S- Ay fa RIVER STAR D Client No. ¥ 224 MEA spat erupts into formal request Aloe F022 Sol 3I/ $39 347 08249 He By LEE JORDAN Alaska Star Editor An internal squabble between mem- bers of the Matanuska Electric Associa- tion (MEA) board of directors erupted Tuesday night into a formal request that one of its members be censured. In a separate but related matter, the board heard in executive session from an attorney hired to investigate allegations of misconduct associated with last year’s annual meeting and election. His report was accepted but the board then directed that a new counsel be hired to follow through on questions raised. Director Doug Mills, target of a call for sanctions, declined an offer to move the discussion into executive session, leav- ing director Jim Hermon free to read his charges during the open meeting. Hermon told the board that Mills had attempted to discredit the utility’s general manager in connection with an oil spill. He also complained that Mills had distrib- uted a “smut sheet” painting General Man- ager Wayne Carmony in a bad light in connection with the layoff of four employ- ees during a reorganization in line with the economic picture. Mills’ campaign for the board in 1995 was backed by the International Brother- hood of Electrical Workers (IBEW), the union which represents most of MEA’s employees. Flyers distributed by a group backed by the IBEW supported Mills, Rodney Cottle and Ted Carlson. They also attacked MEA board president Barbara J. Tami Miller and director Aaron Downing, both of whom were campaigning for re- election. Mills was elected to replace Downing. Miller and Cottle retained their seats on the board. Downing, a retired electrical contrac- tor, has been involved in bitter litigation with IBEW over incidents related to a construction project he operated in the Valdez area. Threats and vandalism were (Please see MEA, Page 2) MEA: Uni Qwe 302 Zo 3Hi 33 nio (Continued from Page 1) reported during the none shop” construction project. Six MEA members, including MEA business agent Gary Brooks, have charged that Miller inappro- priately used her office for politi- cal purposes. That advertising was extended to include an effort by Miller to be elected to a seat on the Chugach board of directors as the MEA rep- resentative. A lawsuit was filed by MEA in connection with that effort. Miller was ruled to be ineligible for election to the Chugach board. Subsequently, Mills and Cottle were asked by the MEA board to comply with disclosure require- ments related to contributions to their campaigns. Their submissions did not satisfy the board majority, keeping the argument alive. Meanwhile, Helene Antel Brooks, on behalf of her husband and five other MEA members, threatened legal action related to some of the board actions. Down- ing also raised questions, as did MEA member Kay Slack in letters to the board. With the allegations passing back and forth, directors at the January meeting asked that inde- pendent counsel be hired to inves- tigate. Jonathan Rubini of Rubini & Reeves gathered an extensive list of questions to be explored, giving estimates of the cost of various lev- els of investigation. A basic review of the issues would cost $12,500 to $15,000 he estimated. A more com- prehensive review would be in the range of $35,000 to $50,000. 34 os27 4204 Rubini suggested that the initial review be conducted. He also pointed out that he represents enti- ties which are involved in the in- tertie projects and that there could be situations which might raise a conflict of interest. After discussing the item in pri- vate, the board reconvened and voted to accept Rubini’s report. It then voted to have its subcommit- tee which is working on the matter engage other counsel to continue the review. With the 1996 annual meeting to be held April 25 at Chugiak High School, the arguments are expected to escalate. Seats held by Hermon and Frank Mielke are to be filled at that election. The MEA nominating commit- tee has named Hermon, a Palmer resident, and Darcie K. Salmon of Wasilla as nominees. Mielke and Ole Larson are fil- ing as candidates by the petition process. Contrary to an earlier re- port in The Star, both said that choice is not an IBEW strategy. Mielke said he had intended to apply through the nominating com- mittee but that his application was not submitted in time for the dead- line. Larson said that he had become disenchanted with the nominating committee process due to a prior experience. He had been appointed to the board and had applied to be nominated for re-election. The nominating committee, however, did not submit his name for inclu- sion on the ballot. To avoid a repeat of that experi- ence, he said he decided to use the n issues heat up petition process, assuring himself a spot on the ballot. Hermon will not have the sup- port of the IBEW while Mielke says he expects to be backed by the union. Mielke, a Chugiak resident, said Wednesday that he will not accept contributions from IBEW, that he is not committed to the union program and has, in fact, voted against the union’s interest in several issues before the board. A similar situation exists at Chugach Electric where Citizens for an Independent Chugach Elec- tric (CICE) is opposing incumbent Pat Kennedy, an attorney who the group maintains is “IBEW-sympa- thetic.” CICE is supporting re-election of incumbent directors Ed Granger and Patricia Jasper. They also en- dorse Chris Birch, a community council member and Hillside activ- ist. IBEW backing of utility board candidates is a growing concern for member-interest groups. With is- sues such as the exclusive agree- ments for construction of intertie projects, there is a great deal of money at stake. IBEW’s Brooks, however, told The Star that the clamor comes pri- marily from non-union contractors who have selfish interests at heart. “They want to use non-union Out- side labor, take their profits and run,” he said. Brooks maintains that the union is in a good position to evaluate the qualifications of the candidates and offers valuable insight into their abilities. Sound management is in the union’s best interest, he said. Q malay Senicesil (907) 274-1056 Date APR OG i995 = CHUGIAK-EAGLE RIVER STAR ¥ “~ ater Ho, Yao ZF Ser J ote Zit 33 = LEE JORDAN Alaska Star Editor The order of business was re- versed at Wednesday’s luncheon forum of Chugiak - Eagle River Chamber of Commerce. At the be- ginning of the program there was a presentation on an infrared- equipped firefighter’s helmet, a state-of-the-art device which en- ables firefighters “see” through dense smoke. The fireworks came at the end of the meeting when two people hurled accusations at a candidate for the Matanuska Electric Associa- tion Inc. (MEA) board of directors. Anticipated acrimony was ad- dressed by the first speaker. Refer- ring to the “War in the Valley,” in- cumbent Director Frank Mielke of Chugiak said, “I wish the people who are fighting each other would take your fight elsewhere.” Although he is supported by the International Brotherhood of Elec- trical Workers (IBEW), Mielke said he is “completely independent. | continue to refuse to take money from contractors and from the union.” _He said it is easy to understand ptt the election is so ae con- tested. “There’s $200 million in- volved in the intertie construction. The question is who’s going to get the work.” Mielke said he was instrumen- tal in getting a long-term lease on the former Eagle River MEA office for the Boys and Girls Club. Even though he had been put off for two years, he said he insisted that this year’s annual meeting be held in Chugiak - Eagle River. It is sched- uled for April 25 at Chugiak High School. Ole Larson also asserted inde- pendence even though backed by the IBEW. He is assistant superin- tendent at Hiland Mountain Correc- tion Center in Eagle River and re- sides between Palmer and Wasilla. “There wasn’t all this conflict when I was on the board in 1989, 90, 91,” Larson said. During his term, Larson said the board estab- lished the scholarship fund, using the interest from unclaimed capital credit money to benefit students from the service area. Dependable electric service is the important goal, Larson said, noting the growing reliance on computers. Darcie Salmon, areal estate bro- ker-owner, said his “nature is one of negotiation” and that he is inde- pendent of special interests. Alaska’s economy, he said, “is more vibrant now” than it was be- fore, during or after the recession of the late 80s. MEA, he said, “should be more active in enticing industry to the Valley and to Eagle River.” Salmon said he sees “no reason for all this animosity and angst.” He doesn’t intend to take any money for campaign contributions, he said. Tom Staudenmaier, who seeks to! merge Southcentral electric utili-: ties, spoke on his merger idea.’ “Merge 10 into two and cut your’ power bills in half,” he said. “Tf you sit here and let the inter- tie go through, you’re beyond my: help,” he told the crowd. Incumbent Jim Hermon is a con- tractor who has lived in Alaska’ since 1935. He served on the State Fair board for 10 years and Hermon, Brothers Field on the Fairground is. named for him and his brother Ben.' “Our industry is changing,”; Hermon said of MEA. “We must} become more competitive.” He said, the board the night before had voted. “to absorb a 2-1/2 percent rate in-| crease by Chugach Electric.” j : i It was Hermon who drew the first question from the audience. The man asked about an “editorial” in the morning paper which had referred to a “frivolous” lawsuit by MEA. The pair debated their re- spective interpretations of the issue, drawing in MEA board president Barbara J. “Tamie” Miller who was in attendance at the meeting. Waving a copy ofa letter which had been left on tables throughout campaign ignites sparks at Chamber Luncheon the room, another man demanded to know who was responsible for what he called “this fradulen ter.” That led to a round of “I guru froms” which ended with former board member Aaron Downing who declined to name his source, saying “it came from the IBEW.” (See separate story.) At that point, Chamber President Dennis Clark closed down the meeting, saying time had expired. Q Quolity Services (907) 274-1056 Date _APR 1 2 1996 Frontiersman __Client No. 42wA Utilities to decide © Intertie's fate Editor: Three months have passed since the public meetings re- arding the Sutton-Glennallen ntertie were held (December 1995). At those meetings hun- dreds of Anchorage and Valley residents expressed loudly and clearly to Gov. Knowles’ ad- ministration that we did not want intertie built. Reasons were many, but one of the eco- nomic arguments that came up repeatedly was the spending of millions of state dollars in the form. of the $35-million-dollar- 50-year-no-interest-loan (= state subsidy) to lower the electrical ‘rates of a mere 2,500 residential jcustomers. And of course, Pet- ‘rostar. | We hear that Knowles is wait- \ing on the decision of Copper \Valley and Chugach Electric Associations to make a commit- ment to the project under the present conditions. With all the “tertie that can meet the'needs of current talk of cutting the state budget, why does the state’s decision to commit millions of dollars to a project rest with someone else’s business inter- est? Sure the 1993 Legislature approved the deal, but under the condition of “feasibility” — which as it turns out can be in- terpreted to mean almost any- thing. The 1996 test of feasibili- ty should be whether the state can afford this. The Knowles administration needs to decide for itself, first and foremost, if the state can af- ford to be doling out a 50-year no-interest loan with its current fiscal situation. It’s not like the $35 million is stashed away — it must come out of what’s available now. i After that first singular level; of analysis, the administration then must address all the other economic, environmental and social inequities of the situation and decide if the intertie is the best project for that level of state subsidy. Look at what this deal is really doing: giving Pet- rostar 8.1 cents/kwh price break versus the 1.1 cent/kwh for the residential consumer, and requiring Chugach Electric members to pay for it! The in- tertie project pits one communi- ty against another. The fact is the project will negatively effect many lives in the Matanuska Valley. C’mon Governor Knowles, there are alternatives to the in- Copper Valley without mis- managing and damaging our state’s most important capital: its natural beauty, our commu- nities and our monetary re- sources. These types of deci- sions should be in the hands of the people, not powerful elec- trical cooperatives, Petrostar and the IBEW. Let's get togeth- er and start talking alternatives that can make a positive differ- ence tq our great state! Dori McDannold Palmer QUALITY SERVICES Date__APR 15 06 __ Anchorage Daily News Client No. ine Full impact of intertie untold At the Sutton’ ‘public meeting on the intertie in December, Commissioner Irwin promised a review'of the feasibility study and a study ofthe ‘socioeconomic impacts on! the Mat: ‘Valley., Alaska Industrial Development and: Export. Aasthority' S Te- view has.come-out. : ‘ : In the review;is.a: list of the potential impacts. The review. says no work has been done to quantify, economic impacts. Yet it admits.potential significant adverse impacts, Yup, no study, Why no study? Becauae the governor's office apparently is intent on this’ intertie, and a study, would ‘reveal ‘the’ obvious ‘major impacts on: the’ Mat Valley. ' Is’ Commissioner: Ir- win’s promise ‘in The" public record? No, because the state’held a public comment meeting withopt a.court reporter. So make sdme”noise’ now, because’ the. Mat Valley resi eas rat Chugach Electric’ Association. ratepayers: are getting sold out for.a few: short-term:jobs and’small savings to the Copper Valley, which could take care of its energy needs with only local impacts: This issue is pitting these two communities against each other. : applaud the state’s concern for Copp Valley. cost: of living. It..would.be Sie <f they gave a damn about'the quality of life: for those of ‘us’on-the proposed route.’ gor Jou sn HOw Le raeney, Elsberg Waem log ees oh ia} Wasilla: QUALITY SERVICES tak Date__apR 21 1996 __ Mek Anchorage Daily News | ban Client No.Yte4q Matanuska utility war gets ugly Death threat, accusations stoke battle for control By S.J. KOMARNITSKY 302 304 37! 2108 Daily News reporter 4204 0337 032-7 337 PALMER — People may roll their eyes at the campaign being waged for control of the state’s largest utility, Chugach Electric Association. But it’s nothing com- pared to the ongoing battle at Matanuska Electric Association — the state’s second largest utility. In recent weeks, a death threat has been made against the general manager, fake memos have been circulated and accusations of illegal conduct have flown back and forth. Meanwhile, board mem- bers have been kept busy accusing each other of misconduct. As at Chugach, the struggle for control at MEA is between people supported by the International Brotherhood of Electri- cal Workers and those who would rather see nonunion contractors allowed to bid on projects: It’s a battle that has been raging for years, but some big money projects are making it particularly heated as Thurs- day’s election for two board seats draws near. IBEW’s interest is high because of an estimated $200 million in contracts that will be offered up over the next several years to build and maintain power lines Please see Page B-2, BATTLE Continued from Page B-1 | in Alaska. Known as inter- ties, the projects include a line from Fairbanks to Healy and another stretch- ing from Anchorage to Sol- dotna. A third, from Sut- ton to Glennallen, still needs approval from Gov. Tony Knowles. IBEW Local 1547 represents about half of MEA’s work force, as well as employees at other utilities and construction workers. An agreement signed in 1990 between the IBEW, MEA and five other rail- belt utilities would give the union the exclusive right to provide labor for those lines. The MEA board voted to rescind the contract shortly after the agreement was made, but IBEW officials dispute that vote. Union supporters are concerned that a board tilt- ed against IBEW would try to break that agreement and the union itself. “IBEW perceives itself to be under attack from those who want more pow- er,’’ said Helene Antel Brooks, lead counsel for the union and wife of union head Gary Brooks. - She points to groups that have formed in oppo- sition to the union, includ- ing Citizens for an Inde- pendent Chugach; Rural Electric Association Con- sumer Help, or REACH, in the Matanuska-Susitna ar- ea; and a new group on the Kenai known as HERO or Homer Electric Ratepayer Organization. “What the employers are trying to do is break those contracts so they can do whatever they want, when- ever they want,” she said. In addition, those elect- ed this year will oversee a $40-some million budget and the renegotiation of contracts’ for many of MEA’s 138 employees. _ “It’s big bucks, big mon- ey,” said Frank Mielke, a pro-union board member running for re-election. “No one would be messing with union, nonunion if it wasn’t for that.” The recent death threat against MEA general man- ager Wayne Carmony shows just how ugly the fight has become. No one knows whether it"was’seri- ous, but the secretary who took the call thought it was. She called police im- mediately. Accusations of illegal conduct, meanwhile, range from illegal campaign con- tributions given to candi- dates elected last year to more subversive activities. Last week, board presi- dent Tamie Miller drove to Anchorage to ask the FBI to investigate whether her phone is being tapped. Three times, she said, she’s heard a voice on her home phone saying ‘‘Be careful now, I’m listening to you.” FBI officials said depart- ment policy prevents them from commenting on whether they’re investigat- ing. Meanwhile, MEA’s seven board members have spent their past several meetings accusing each other of mis- conduct. During a meeting last month, board member Jim Hermon tried to censure another member, Doug Mills, for distributing a let- ter parodying general man-, ager Carmony. The letter was signed “‘The Premier.” Two weeks ago, Mills, a pro-union member, ‘intro- duced a motion to have Miller and Hermon public- ly apologize for passing out lists of.employee wages. About the only thing the group of seven board mem- bers could agree on is that they’re disgusted with each other’s behavior. “This has got to stop,” Ted Carlson told his peers. “J don’t care where this garbage or information or whatever you want to call it came from, but we as board members especially should take it and throw it in the garbage. We’ve got more important things to do than squabble over elec- tions like this. It’s just appalling to me.” Carlson, who just won-a seat on the Anchorage As- sembly, introduced a mo- tion for members to renew their commitment to act in a dignified and impartial mannpr during the elec- tions. It passed unanimous- ly. Currently, the MEA board is split, with Mielke, Mills and Rod Cottle gener- ally voting pro-union and Miller, Hermon and Will Folsom usually voting against the union. The sev- enth member, Carlson, is not aligned with either side. Five people are running for two board seats, includ- ing incumbents Hermon and Mielke. Hermon is sup- ported by REACH and one of its leaders, Aaron Down- ing, who lost his seat last year and now works as a consultant to contractors. Also running are IBEW- backed Ole Larson, a for- mer board member and as- sistant superintendent at Hiland Mountain Correc- tional Facility, and Darcie Salmon, a local real estate agent backed by REACH. Tom Staudenmaier, who was thrown off the board in 1985 amid allegations of harassment, disrupting the board and releasing confi- dential information, is not supported by either group. Ballots were sent out to the utility’s 27,000 some members in Eagle River and the Mat-Su area early this month. As of Friday, about 6,100 ballots had been returned. Members al- so can vote at Thursday’s general meeting, where the winners will be announced. Those elected will serve three-year terms. The recent death threat against MEA general manager Wayne Carmony shows just how ugly the fight has become. No one knows whether it was serious, but the secretary who took the call thought it was. She called police immediately. Q Quality s sentences casas (907) 274-1056 7 APR 2 4 1996 Valdez Client No. % ue eOA Petro Star Pulls’ fe G.9 % Sis Er Plug On Intertie by Pat Lynn Editor, The Star 210E BISA 302 306 Y20A VALDEZ—Petro Star says it is going to drop off the Copper Valley Electric sys- tem and generate its own power on-site at the com- pany refinery on Dayville Road. Petro Star’s decision may be the death knell for the controversial powerline from Sutton to Glennallen which is designed to tap into cheaper power from the Anchorage grid. Steve Lewis, Petro Star’s chairman and chief execu- tive officer, says the decision to stop purchasing power from Copper Valley was prompted by two factors: The high cost of CVEA power and the unreliability of CVEA power. By producing its own power, Petro Star hopes to cut its annual electric bill in half. Lewis says Petro Star now pays some 1.25 million annually for power from Copper Valley, about double what is paid by other Alaska refineries. Big Savings “We stand to save $50,000 a month (or $600,000 annu- ally) by generating our own power,” Lewis said in a news release issued Friday. He also noted that Copper Valley has “a tremendous number of power dips and outages each year. We need reliable power to operate ef- ficiently and economically.” Lewis said that four modu- lar diesel-powered genera- tors, capable of producing two megawatts of power, will See Refinery... Page 8 Refinery Unplugs From C.V. Electric AIOE 345A Continued from Page 1 be shipped to the refinery this summer and begin oper- ating this fall. Petro Star’s decision to pull the plug on Copper Valley is likely to kill off the proposed intertie powerline from Sutton to Glennallen, a project near and dear to the heart of Copper Valley man- ager Clayton Hurless. A Surprise The Petro Star decision caught Hurless by surprise. “It’s a significant change and it obviously won’t do the in- tertie project any good,” he told The Star. “It’s nota sce- nario we had talked about.” Nevertheless, Hurless says “we don’t know yet” if the Petro Star decision will kill off the intertie power line. Hurless has long viewed the intertie line as Copper Valley’s only long term hope for lowering residential power rates in Valdez and the Copper Basin which are the highest, non-subsidized rates in the state and among the highest in the nation. Largest Customer Petro Star is Copper Valley’s single largest cus- tomer and is responsible for , 13 percent ofthe utility’s rev- BOX 36 HY2OR enues. Even though Petro: Star will stop buying Copper Valley power this fall, the company is not off the hook entirely. Hurless says Petro Star is bound by contract to make monthly payments to Copper Valley, whether it uses power or not, until Dec. 31, 1997 when the contract expires. Holding the hammer on the intertie power line project is Mike Irwin, the commissioner of Commu- nity & Regional Affairs for the Knowles administration. Irwin is holding up a $35 million interest-free loan to help underwrite the $55 million power line. Two Conditions ‘Ina recent letter to Cop- per Valley, Irwin said the loan would not be granted unless two things occurred first: that Copper Valley en- ter into a long term power sales agreement with Petro Star, and Chugach Electric of Anchorage agree to share the cost of construction of the intertie on an 80-20 ba- sis with Chugach taking the lion’s share. j Neither agreement has taken place and now Petro Star says it will go it alone and no longer buy Copper Valley power. More Power In his press release Friday, Petro Star’s chief executive hinted thatthe refinery might even scek to become a sup- plier of power to Copper Valley. “We believe there is a solu- tion to the problem of high power cost for the refinery, for the people of Valdez, and for othrs in the Copper Val- ley basin,” Lewis said. “We look foward to work- ing with the city, the state, CVEA and others to find solutions for these long-term challenges of power cost and reliability,” he added. Lewis’ decision to go it alone is expected to please Gov. Tony Knowles who had been hammered by Sutton/ Chickaloon residents and environmental groups op- posed to building the Sutton to Glennallen intertie power line. Lewis was in Juneau on Monday and Tuesday of this weck meeting with legisla- tors and the Governor's of- fice to explain his decision to drop out of the Copper Val- ley system. : Qsss= —— (907) 274-1056 i APR 2 4 1996 Dai ——_-Valdez Star _ Client No. 4t%0 4 Mister Hubbard Goes To Juneau by Pat Lynn ea ail (wa Gene Kubina leading the Editor, The Star 30 ¥2a way, Hubbard also met with 266 2018 345A 34¢ 347 OSS 18S C199 AKE 3CL JUNEAU—As the 1996 Legislative winds down to its final three weeks, Valdez city manager Phil Hubbard sped off to the capitol for 10 days to lobby hard for several projects vital to Valdez. At the top of Hubbard’s list is a proposal to the state to abandon its plans to build a new multi-million dollar ferry terminal westof the Old City Dock. Instead, Hubbard is pro- . posing a joint venture with the state to extend the dock into deeper water to accom- modate cruise ships and bring their passengers within walk- ing distance of the down- town area. Hubbard is asking the state to use the extended dock for its ferry vessels, and pay dock- age fees to the city, thereby sparing the state the expense of building a new ferry ter- minal. Harborview Prison With state Representative Governor Tony Knowles on the Harborview prison pro- posal. The city council is on record in support of both a 50-bed drug/alcohol reha- bilitation prison and a pri- vately operated 200 bed me- dium security prison. The city, Hubbard he said, is following a “parallel tracks” strategy in its search forsome alternative use for Harborview after it closes next year. Kubinais pushing the state plan fora 50-bed prison, say- ing its the only one on the table in the current session. “The only horse we have to ride (at this point) is the 50-bed drug/alcohol rehab prison,” says Hubbard. He conceded,. however, that there’s ani outside chance the legislature could pass lan- guage authorizing private prisons in the state which would open the door to ne- gotiating for the 200-bed prison proposal. property.taxts. victor suticieci Vibe School Finance Bill Hubbard and school su- perintendent Harry Rogers also monitored progress on Senate Bill 70 that would have amended the law gov- erning taxation on the Alyeska oil. property in the state. The bill was twofold: it would have penalized five rich school districts, includ- ing Valdez, by reducing state school funding by ‘about 70 percent to Valdez. i In the’ ¢ase*of Valdez, ‘it would have meant @'léés of $2.4: million-Which-wouldz have:to ‘bettnade-uptin-local ASHRAELISH 20 edule have-set'a maximum local property.tax of 15.5.mills on, as oil, property. in, the; state. In "the easeof Valdez the differ-: ence. between 15.5 mills and. aj PRSSAAEARE eS, Myaey VEN “thescurrent920, mills ,on Py ‘eee - es e Lobbying Activity Marks Hubbard Juneau dunket Bel ¥2VWA Ack 2C2B 3YSA 346 347 OISS SE 0197 BEE 3er Continued from Page 18 Alaska, except the five richest * districts. That bill was returned to the Senate Rules Committee Tuesday night after it was defeated on a vote of 12 to 8. The Intertie Also in Juneau this week is Steve Lewis, chairman and chiefexecutive officer ofPetro Star-Inc. Lewis is looking for legisla- tive support for his decision to drop out of the Copper Valley Electric system and install company generators at the Valdez refinery to supply its own power. (See separate story, Page 1) Petro Star’s decision will likely kill off the Sutton-to- Glennallen electric intertie power line. The state has insisted on a long term power sales agree- ment between Petro Starand — Copper Valley Electric be- fore releasing a $35 million state loan to help underwrite the $55 million intertie project. Petro Star’s decision to go it alone is expected to irritate some legislators, including somewhowentoutonalimb, _ in support, of the intertie project. Lewis is said to’be miffed at the city of Valdez, particu- larly city manager Phil Hubbard and Mayor John Harris, for not standing up for his decision and sharing the heat in Juneau. w QUALITY SERVICES nate APR 3 0 1996 Anchorage Daily News Client No. Ytre Petro Star decision could kill power line Soe Zot 341i Y¥20H ZION OSTO By S.J. KOMARNITSKY Daily News reporter A controversial proposal to build a powerline between Sutton and Glennallen is in trouble and may be dead after the line’s largest potential customer an- nounced plans to produce its own electric- ity. Stephen Lewis, chairman of Petro Star, which operates a refinery in Valdez, said in an interview with a local newspaper that the company planned to start gener- ating power this fall with four diesel-pow- ered generators. The decision was prompted by the high Please see Page B-3, POWERLINE real (werk POWERLINE: Move could kill proposal Jee Sol SI “20%, ziop, 0$ 70 L Continued from Page B-1 cost and unreliability of power in the area, he said. “We need reliable power to operate efficiently and economically,” he told the Valdez Star. He said the company stood to cut its annual $1.25 million power bill in half by producing its own power instead of buy- ing from the Copper Valley Electric Asso- ciation. Petro Star currently uses about a quar- ter of the region’s power, making it the utility’s largest customer. If the company does decide to go off the grid, that doesn’t necessarily kill the powerline project, said David Ramseur, a spokesman for Gov. Tony Knowles. But he said it ‘tcasts a long shadow” across it. Knowles has made the refinery’s com- mitment to buy electricity a key part of his administration’s decision whether to approve a $35 million interest-free loan for the project. Petro Star’s announcement was a boost to critics of the project, including many environmental groups that say the line’s 80-foot towers would mar the scenic Mata- nuska Valley and that other alternatives such as a hydroproject at Allison Lake near Valdez are better suited to the region’s needs. “This is great news,’’ said Chris Rose, co-founder of Alaska Citizens for Respon- sible Energy Development. ‘I don’t see how the governor can’t kill the project now.” But not everyone was ready to sound the powerline’s death knell. Chugach general manager Gene Bjorn- stad said it wasn’t clear to him how long Petro Star planned to stay off the grid. He noted that company officials had once before announced they planned to produce their own power and then reneged. He also noted the company is planning to use diesel generators this time, which wear out fairly quickly. In the previous an- nouncement last spring, Petro Star had said it planned to use oil-fired turbines. “This whole thing revolves around what Steve is doing at Petro Star,” Bjornstad said. ‘‘The timing makes a big difference.” The powerline, or intertie as it is known, would stretch 135 miles from Sutton to Glennallen. It would allow Copper Valley Electric Association, which now relies on aging diesel generators and a hydroelectric plant at Solomon. Gulch near Valdez, to tap into the cheaper power supply of the Railbelt. In 1993, the state Legislature appropri- ated a $35 million interest-free loan and up to $25 million in state-issued bonds toward building the line. That money was tied to then-Commissioner of Community and Regional Affairs Edgar Blatchford finding a study of a project satisfactory. Blatchford did just that in July of 1994. But when Knowles came into office months later, he said he wanted a look at the project and ordered another study. More recently, Mike Irwin, the current head of the Department of Community and Regional Affairs, sent a letter to Copper Valley general manager Clayton Hurless saying no decision would be made until the utility had an agreement from Petro Star that the company would con- tinue to purchase power for several years. The letter also said that Chugach Electric Association or another utility must agree to pay part of the costs of building and maintaining the line. The two utilities had earlier signed a memorandum of understanding saying Chugach would pay 80 percent of the line’s costs. Irwin said Monday he’d asked the Alaska Industrial Development and Ex- port Authority to look at potential re- placements for Petro Star as a customer. Among those are a $12 million National Park Service center currently being built at Copper Center near Glennallen, and a long-rumored Princess Hotel. “IT haven’t seen any for-sure replace- ments,” he said. But ‘tno way are we just going to sit around waiting.” The AIDEA report should be done in the next two weeks, he said. QUALITY SERVICES a APR 3 0 1996 Kodiak Daily Mirror Client No. Y20A wary Valdez, refinery opts: for:self-power. od A (CHORAGE (AP) — A de- LS by the Petro Star refinery in Valdez to buy its own genera- tors casts doubt on the prospects for a major power line connect- ing the Copper Valley with Railbelt power supplies, accord- ing to a.spokesman for Gov. Tony Knowles. The line from Sutton to Glennallen would be, subsidized with a $35 million in- terest-free state loan. Petro Star currently is the big- gest customer of Copper Valley Electric Association, providing 13 percent of the co-op’s revenue. “‘The announcement that (Petro Star) will drop out of CVEA certainly casts doubt on the project,’’ said Bob King, the governor’s spokesman. ‘‘We’ve asked Commissioner Mike Irwin (of the Community and Regional Affairs Department) to reevalu- ate the project without Petro Star’s participation.’’ King said he didn’t know how long Irwin’s evaluation would take. In a recent letter to the Copper Valley co-op, Irwin wrote that state money for the project hinged on two items: a long-term power sales agreement with Petro Star, and a commitment by Chugach Electric Association of Anchorage to pay 80 percent of the line’s cost beyond the loan amount. Chugach would benefit by selling wholesale power through the intertie. Chugach General Manager Gene Bjornstead said that 80-20 split was in the plans, but he wasn’t sure what how the Petro Star decision would affect Chugach’s participation. The loss of Copper Valley’s biggest cus- tomer ‘‘makes it more difficult for the numbers to work out,’’ he said. : Bjornstead said the line would cost roughly $50 million, and that Copper Valley ratepayers were. expected to pay back the loan and provide enough profit for Chugach to get back its invest- ment as well. “Our position all along was that there would be no negative impact on, Chugach’s custom- ers,’’ he said. Residents along the proposed route of the line, especially in Sutton and Chickaloon, have lob- bied strongly against the intertie, saying it would mar the scenery along the Glenn Highway. But Copper Valley Electric’s gencral manager, Clayton Hurless, says his utility’s rates are among the highest in the nation, and the intertie would allow the co-op to retire aging diesel generators that supplement hydroclectric power from a dam near Valdez. The Petro Star decision is ‘‘a significant change and it obvi- ously won’t do the intertie project any good,’’ Hurless told the Valdez Star. Steve Lewis, Petro Star’s chair- man, said the decision to stop buying power from Copper Val- Iey was based on cost and on re- liability problems. Copper Val- ley has ‘‘a tremendous number of power dips and outages each year,’’ Lewis said. ‘‘We need re- liable power to operate efficiently and economically.”’ Petro Star hopes to cut its elec- tric bill in half with its own gen- crators, Lewis said. “We stand to save $50,000 a month by generating our own power,’’ Lewis said. Currently, he said, the refinery pays about $1.25 million a year for power. The company plans to buy four modular diesel-powered genera- tors capable of producing two megawatts of power, Lewis said. The units are to be shipped to the refinery this summer and start producing electricity in the fall. | THE ANCHORAGE DAILY NEWS “St Ca Tuesday, April 30, 1996 Petro Star ‘decision could: kill power line - By Ss. J. KOMARNITSKY Daily News reporter.» A* controversial ® “propo alto ‘build al powerline between Sutton and Glennallen - is in trouble.and may be dead after: the line’s largest potential.;customer ‘an- nounced plans to produce a? own electric-. ity |b : i Stephen Lewis, chairman on Petro Star,” 3 which operates a refinery in: Valdez, said ‘:in an interview with ‘a’local newspaper that the company planned to start’ genér- ating power this fall with four diesel-pow- : ered generators. «jes oa and unreliabilit area, he said. : rf ~e “We need ' reliable” powers rene operate efficiently and errs he told the Valdez Star... /. ‘He said: the company. ‘stood to cut. its annual $1.25 million.power bill in half by producing its own power instead of buy- ing from the Copper Valley Electric Asso- ciation. Petro Star currently uses about a quar- ter of the region’s power, making it the utility’s largest customer. : If the company does decide to go off the iThe decision was pr mpted by the high’ grid, that doesn’t: necessarily kill the - powerline project, said David Ramseur, a spokesman for Gov. Tony Knowles. But he said it ‘‘casts a long shadow” across it. Knowles has made the refinery’s com- mitment to buy electricity a key part of his administration’s decision, whether to approve a. $35 million interest-free loan forthe project. Petro Star’s announcement was a boost to critics of the project, including many environmental groups that say the line’s 80-foot towers would mar the scenic Mata- nuska Valley and that other alternatives such as a hydroproject at Allison Lake near Valdez are better suited to the region’s needs. “This is great news,’”’ said Chris Rose, co-founder of Alaska Citizens for Respon- sible Energy Development. “I don’t see how the, governor. cant, kill the Project now.’ But not everyone “was ‘ready ‘to sound the powerline’s death knell. Chugach general manager Gene Bjorn- stad said it wasn’t clear to him how long Petro’ Star planned .to’ stay off the grid. He noted that company. officials had once before announced they planned to produce their.own power. and then-reneged. He “also noted the company. is planning to use. Fs \ diesel” generators this: time, which wear: out: fairly ‘quickly.: In the previous an- ‘+: nouncement’ last spring, Petro, Star; had said: it-planned“to use oil- fired turbines. <.ui‘This whole; thing: revolves, around’ “| what Steve is doing at Petro. Star," [ Bjornstad ‘said. “The fe makes a big difference.”’: ; : The ‘ powerlin or. intertie: “as “it is known}; aynela stretch 135° miles from ' Sutton! to'Glennallen. It would allow | Copper Valley Electric: Association, which ‘now relies on aging diesel generators and | a hydroelectric plant at Solomon: Gulch ina : Valdes: to tap into the cheaper power | se pply of the. Railbelt. : in Yoo: “the state Legislature appropri- ‘ated a $35 million interest-free loan and | up to $25 million in state-issued bonds toward building the line. That money was tied to then-Commissioner of Community ‘and Regional Affairs Edgar. Blatchford finding a study of a project satisfactory. Blatchford did just that, in July of 1994. But when Knowles came into office months later, he said he wanted a look at the project and ordered another study. More recently, Mike Irwin, the current head of the Department of Community and Regional Affairs, sent a letter to Copper Valley general manager Clayton Hurless saying no decision would be made until the utility had an agreement from Petro Star that the company would con- . tinue to purchase power for several years. ‘The letter also said that Chugach Electric Association or another utility must agree to pay part of the costs of building and maintaining the line. The two utilities had earlier signed a ’ memorandum of understanding saying Chugach would pay 80 percent of the line’s costs. Irwin said Monday he’d asked the Alaska Industrial Development and Ex- ' port Authority to look at potential re- ' placements for Petro Star as a customer. ' lnang those are a $12 million National Park Service center currently being built at Copper Center near Glennallen, and a long-rumored Princess Hotel. “T haven’t seen any for-sure replace- ments;’’. he said. But “no way are we just going to sit around" waiting.” rhe AIDEA’ report should. be done in : tHe. next’ two weeks, . said. . ~ QUALITY SERVICES MAY 0 1 1996 Dat Valdez Vanguard | “Client No. 420A | State: Intertie still’alive © Y20A BYSA 210E 302 By Mike Jakiemiec 3 cz Valdez Vanguard The man who has the final say on whether the proposed Glennallen-Sutton intertie project ° is feasible or not said Tuesday a recent decision by Petro Star to generate its own power was not necessarily the death knell for the Project. “We’re not saying this is killing the deal; we want to do a little more deliberative work before we make a decision,” said Mike Irwin, Commissioner of the Department of Community and Regional Affairs. “If Petro Star is serious, I want the numbers reworked so that it’s certain it’s not feasible without them,” said Irwin, who was charged by Gov. Tony Knowles to determine the project’s feasibility. Irwin and a working group of four other cornmissioners have been studying the issue for several months. He recently told Copper Valley Electric Association that a eee Intertie x. 20E 362 Boe From page 1 BISA deal with Petro Star to buy power would be one of the conditions nec- essary for the project to be feasible. Irwin said he asked the Alaska Industrial Development and Export Authority “to go back to their original work and see if there’s another poten- tial consumer out there,” he said. Two potential customers for Copper Valley Electric could come from a $12 mil- lion National Park Service center being built at Copper Center or a long-rumored Princess Hotel. Petro Star chairman Stephen Lewis said the company decided to generate its own power because it needed to lower costs and insure a power source in the near future. “It was an economic decision that had to be made,” he said. Lewis esti- ‘mated Petro‘Star' would’save'up t $50,000 a month once its own gener- ators were on line, which he hopes will be by the end of the summer. “People can understand that we need- ed to do something,” he said. Petro Star didn’t take the intertie issue into consideration when mak- ing its decision, Lewis said. “We don’t see the intertie, even if it is approved, going ahead for sever- al years,” he said. Copper Valley Electric general manager Clayton Hurless said he’s keeping his fingers crossed, but he isn’t holding his breath that the inter- tie will get approval. “Obviously, (Petro Star’s decision) hurts the intertie. Whether it’s fatal or not, we don’t know,” he said. “I don’t know whether or not we can salvage it — it’s going to be marginal.” The electric cooperative is look- ing into other alternatives, Hurless said. CVEA has favored the intertie as the best alternative to replacing its aging diesel’generators See Intertie, page 15 One positive.impact of Petro Star going off the CVEA grid is that more power will be available for other cus- tomers, Hurless said. “Everyone has to understand if they do go on their own system, it reduces the demand on our system — that gives us a little more breathing room,” he said. Wear and tear on the diesel generators would also be . reduced, extending their usefulness, Hurless said. The intertie would allow CVEA to tap into the Railbelt system, low- ering local power costs for Valdez and Copper Basin residents, who now pay double what Anchorage residents _ pay. The Legislature set aside a $35 million interest-free loan and up to $25 million in state-issued bonds. Those monies won’t be released until, and if, the intertie project is approved. Irwin said he expects to hear back from the AIDEA numbers-crunchers in about two weeks. (907) 274-1056 ae MAY 0 2 1996 COPPER RIVER COUNTRY JOURNAL Client No.__ 4 24 ULE ELE LLL eae VALDEZ-There’s some bad news for the Intertie. Petro Star in Valdez has said it’s going to generate its own power to keep down costs and ensure reliability. If ' this happens, the Intertie may be killed by the move; the Governor has said Petro Star is vital to his administration’s approval of the $35 million loan for the project. _———— Quality Services ——— (907) 274-1056 Date MAY 0 3 1995 Frontiersman Client No. Yt0A Intertie project at risk By LAURA MITCHELL HARRIS Frontiersman reporter Ber Bub Sil 2CE f20A OG The Sutton-to-Glennallen In- tertie was dealt a blow last week when one of the line’s biggest potential power con- sumers said it was planning to generate its own electricity. Petro Star, a Valdez oil refin- ery, has announced plans to start producing power with four diesel-powered generators, according to a recent story in the Valdez Star newspaper. The Intertie would link the Copper Valley Electric Associa- tion (CVEA) to the Railbelt power system in the hopes of providing lower electric rates to CVEA customers, who pay sonte of the state’s highest rates. The Legislature approved a $35 million interest-free loan in 1993 to fund the project. The loan was approved by former Gov. Waller Hickel’s adminis- tration. Gov. Tony Knowles called for another feasibility study when he took office. The engineering, firm that conducted that study listed Petro Star’s involvement as a condition of the Intertie’s economic feasibility. Another condition was the participation of another utility that would help CVEA fund costs of the project above the state’s loan. Chugach Electric Association, the state’s largest utility, has said it would be willing to be a partner. Earlier this year, state Depart- ment of Community and Re- gicnal Affairs Commissioner Mike Irwin pee his rec- ommendation of the project lo the governor pending further scrutiny. He said public outcry against the eo was a factor in delaying his decision. Environmental groups and landowners in the northeast part of the borough have op- posed the Intertie since its in- ception. They say the power See INTERTIE, Page A10 Yk INTERTIE: Petro Star plan threatens project | Continued from Front Page “HOas 1097. flea Hey mas! line would: tarnishathé rugged; « wooded area of the Mat-Su Val- ley, hampering tourism, hunt- ment: ing and harming the’environ- Hy ZRE twit yal j ‘Opponents also say’ ‘cheaper and more cost-effective alterna- tives are not being adequately —— epresentatives for the gover- nor, though, are not saying the project is over yet. This is the second time Petro Star has said it will produce its own electrici- ty. y eThis certainly casts a shad- ow on the project,” said Dave Ramseur, the governor’s spokesperson. “But it’s too ear- ly to say it’s dead.”, | The governor had ‘always | as- sumed this project was pretty dependent on Petro Star’s par- ticipation, but other options will have to be explored, Ram- seur said. “This throws it all back into a tizzy here,” said DCRA’s Irwin. He said he notified CVEA in February that contracts with Petro Star and CEA or another utility would have to be signed before he made his decision on the project. Apparently, Petro Star had been negotiating its power, agreement with CVEA when, for whatever reason, it chose. to, pursue generating its own pow- er, Irwin said. i His department has not re- ceived any notification of this and is simply learning about it through news reports. Irwin! did say he has asked Alaska In-; dustrial Development and Ex.’ ort Authority to meet with etro Star representatives to de-' termine if this is a serious en-| deavor. If so, AIDEA will also. explore customers who could replace Petro Star’s involve-| ment. This report is expected to. be’ complete in the next several) ao and Irwin was not will-. ing to make any forecasts if, Petro Star does drop out of the project. CVEA has kept in constant; contact with Petro Star, CVEA| General Manager Clayton Hur-| less said, Wednesday. This is an! on-going process with every, possibility being discussed, he! said. os %.! The oil refinery is Coppel Valley’s largest customer, with: another two years left on its | contract with CVEA. “We'll continue to discuss all, the issues with the state, our; customers and the other utili-| ties, and hopefully it will reach, a conclusion soon,” Hurless added. a| QUALITY SERVICES Date__MAY 0.5 1996 _ Anchorage Daily News Client No. 420A ___ Decision needed on power line I would like to comment on Gov. Knowles’ recent response on his call-in show to my question regarding the Sut- ton-to-Glennallen high-power transmis- sion line. My question to Gov. Knowles was why public opposition to this project has not been incorporated, unlike other projects (like the Lower Cook Inlet gas lease). His response was, ‘“‘Public opinion is not the only factor when looking at a project.” I understand that. However, this proj- ect has been studied for over 3% years. The most recent study (Beck, 1994) focused on the economics of this project, but did not include an environmental review. If you look at the studies already conducted and incorporate the public hearings and the general response to this project, the only possible conclusion is a big “No!” for the Sutton-Glennallen high-power trans- mission line. My second question to Gov. Knowles was when will we get a decision on the project. He responded, ‘After Chuga Electric makes a decision.” saat On March 20 at a Chugach Electric Association board meeting, the Chugach Board was asked when they will make a decision on this project. Their response was that the project was ‘not even on their agenda in the near future.” So again, when will we get a decision and by whom? Why is the decision being determined by Chugach Electric? People directly and negatively impacted by this project have put their lives on hold for over 32 years already. Studies and the public have proved that this is a bad project to undertake during this fiscally strapped economy. The majority, not a select minority, deserves a responsible and timely decision on this project. — Michelle Schuman Sutton iva Q Quunlity Sen Tie Spomien, Gueert Date MA Y 08 199 1996_ : Shate| bak Valdez Star Client No. Electric Coop Mulls Plans For Refinery by Pat Lynn Editor, The Star v3 o4 2I0E 302 306 3Y¥5A VALDEZ—In an effort to keep the Petro Star refinery in the fold, Copper Valley Electric is mulling over the idea of installing a turbine generator on the Petro Star property to generate power and waste heat for the refin- | ery on Dayville Road. Atat special meeting of the Copper Valley board last Thursday, the directors au- thorized the staff to study a range of options in dealing with Petro Star, including the building of a co-generation plant at the refinery. Mike Easley, Copper Valley’s manager ofengineer- ing services, says he has been working with Solar Turbines of San Diego in hopes that a generator could be in place by the end of October of this year, subject to Petro Star’s approval. Whether Petro Star will buy in to the deal is unclear. Petro Star president Steve Lewis is not exactly ecstatic over the prospect of a utility- operated turbine generator on the refinery property. He’s bothered by the aging diesel plants in Valdez and Glennallen, the transmission line’ through mouiitainous terrain linking the two com- munities, and the fact that the Solomon Gulch hydro plant only operates at full capacity for eight months of the year. Added to the equation is the proposed transmission intertie line from Sutton to Glennallen. “Wecan’trely on the inter- tie totally,” says Lewis. “We still need generation at this endofthesystem.AndI don’t think Chugach will go for it. Two weeks ago Lewis an- nounced Petro Star would drop Copper Valley as its power supplier and begin * producing its own power on site at the refinery beginning this fall. . At $120,000 a month, Copper Valley power was too expensive, said Lewis. He says efficient generators on. site would cut that bill by half. Furthermore, said Lewis, Copper Valley’s power sup- ply is unreliable: too many power failures and too many “spikes” which are damaging to refinery operations. Lewis also told Copper - Valley that Petro Star is con- cerned about extremely high power rates for all consum- ers, and suggested his com- pany might provide cheaper power for Copper Valley to resell to consumers. If Petro Star were to meet certain federal requirements, Copper Valley could be re- quired by law to purchase Petro Star’s excess power. Petro Star is Copper Valley's single largest cus- tomer. The refinery produces 13 percent of the utility’s annual gross revenue. Hanging in the balance in the negotiations between Copper Valley and Petro Star is the proposed and contro- versial transmission line from Sutton to Glennallen. Cop- per Valley wants the intertie to tap into cheaper power from Anchorage-based Chugach Electric. But the state says it won't release a $35 million state loan to the $55 million powerline project unless two conditions are met: Petro Star must sign a long term power sales agreement with Copper Valley; and Chugach Elec- tric agrees to pay 80 percent of the cost of construction of the intertie powerline. So far, neither has hap- pened which may give Gov. Tony Knowles the reason he needs to pull the funds and mollify his constituents in the environmental commu- nity who vigorously oppose the transmission line. % Services (907) 274-1056 Dare SUN 1 4 1996 Frontiersman Client No._Y 204A Intertie decision remains on hold gor Zeb 2 Y2eH Sis €& By LAURA 2¢e ©3297 0233 MITCHELL HARRIS Frontiersman reporter After countless reports, evalu- ations and delays, a decision still has not been made on whether the state should help build a Sutton-to-Glennallen electrical intertie. A memorandum issued by the Alaska Industrial Development and Export Authority’s Execu- tive Director William Snell last month reaffirms what AIDEA and other agencies have said — without the participation of. Petro Star, a large Valdez oil re- finery, the intertie doesn’t seem economically feasible. It’s ultimately up to Mike Ir- win, the state’s commissioner of the Department of Community and Regional Affairs, to make the final recommendation whether to construct the 127- mile electric line that would link the Copper Valley Electric Asso- ciation (CVEA) to the state’s Railbelt energy system. CVEA customers pay high electric rates and had hoped to reduce these costs with the con- struction of the intertie. In 1993, the state Legislature approved an interest-free $35 million loan for the line, pend- ing a feasibility study. Last fall, Gov. hey Knowles requested another study and appointed a three-agency panel to evaluate the economic feasi- bility of the intertie project. That panel came back with a list of conditions that would enable the project to become more eco- nomically sound. This list included the need for a power agreement between Petro Star, the line’s biggest po- tential customer, and CVEA. The study also cited Chugach Electric Association’s (CEA) participation in paying back the Legislature’s loan as a condition of feasibility. But after several public hear- ings in November 1995, Irwin posiponed making his decision on the project pending further review. Another problem arose last month when Petro Star Chief Executive Officer Steve Lewis told a Valdez newspaper his company had plans in the works to start generating its Own power. Lewis told AIDEA his compa- ny had placed material orders for diesel units that would al- low for power self-generation to begin at the beginning of the fourth quarter of 1996. The governor and Irwin will have more time to address the intertie proposal now that the legislative session is finished, said the governor’s Deputy Chief of Staff David Ramseur. “As far as Chugach Electric is concerned, there are no new de- velopments in the project,” said CEA spokesperson Phil Steyer. The opposition to the intertie is particularly strong in the Mat- Su Valley, where some residents say the unsightly power line is a boondoggle that will hurt hunt- ing and tourism. “We're somewhat discour- age a decision hasn’t been made yet,” said Chris Rose, co- founder of intertie-opposers Alaska Citizens for Responsible Energy Development (ACRED). “There’s always been new crite- ria placed on ee to al- low it to go forward. “The ball is in the governor’s court and the only reasonable option is for him to kill it,” Rose continued. “But if the governor approves this, it is nothing more that a political deal between him and the International Broth- erhood of Electrical Workers union.” If the intertie project is ap- proved and allowed to move forward, Rose said ACRED will revive a pending lawsuit in or- der to delay and, hopefully, kill the proposal altogether. PUY WANYY YE YYIUUVE SOHO SINUATU SHVGI Sanu YUE wie Kyu ws vi Please see Page B-3, AFN.. Convention Center Thursday during the Alaska Federation of Natives conference. Teacher faces Outside sex charge Wisconsin says man seduced, abused student before moving to Nuiqsut By ROSEMARY SHINOHARA vee Daily News reporter A second-grade teacher in the the North Slope Borough Public Safety Office. Joey A. Janke, 35, had taught in Nuigsut since the fall of 1994, The victim, now 21, recently told his mother about the as- saults and that led to the arrest, according to a report Tuesday North Slope village of Nuiqsut . was sent. back to Wisconsin last week to face charges that he enticed and had sexual inter-* course with a teenage boy over’ a period of years, according to said Charles. Mason,. personnel director for the North Slope school district. The offenses he is charged with allegédly took place during 1992 = earlier. ‘in the Appleton, Wis., newspa- per, the Post-Crescent. : Mason said the North Slope Please see Page B-3, TEACHER RON ENGSTROM puichorags Daily News description of the suspect in the assault, the document said. When police ap- proached him, Lekanoff denied any in- volvement in the assault, saying he was at his brother’s house at the time. But the © brother failed to back him up, saying - Lekanoff had not been at his home. He - also acknowledged that Lekanoff often - rode his bike and fished at the lake. ‘ The girl who was attacked, and wit- nesses who saw Lekanoff fleeing from the ~ lake, identified him from a photographic lineup, the document said. During, a sec- ond interview with police, Lekanoff ad- mitted he had assaulted the girl. He also acknowledged his involvement in the May 7 attack on the 4-year-old girl. In that incident, the girl’s mother Please see Page B-3, ASSAULT The fight against the intertie is costing couple more than a view SUTTON — The intertie has already cost Robin McLean and Chris Rose their just the best view. Their log house, basement’ and the - walls so far, rises on a hillside, its empty window openings fac- ing south across a for- est of aspen, thin and straight as bayonets, toward Crag Peak. The prime building site is about 100 the top' of the hill. But if they lose, and the intertie is built; they’d have had to look ‘at it every day from there. ae * , “The sanctity of these mountains is going to be lost,’? McLean said. McLean, 30, is tall, dark-haired, in- tense, a lawyer by training but a potter _by choice. Rose is five years older, big, » fair-haired, sunny,‘'with ‘a law office. in Palmer. “It takes a while to get. accepted: in~ Sutton’ to, begin with,’’ Rose saidh" Proba- bly longer if you’re a lawyer.’ “valley. Although “the intertie is an old | issue, : frustration in her voice is 4s e on gs pi peng eg sedoop es ee de aU roe et a i se a a ‘ful place I’ve ever been,”’ yards farther up, at ‘MIKE DOOGAN Sutton is a aicnie of stores and a sign on the Glenn Highway, 55 miles northeast of Anchorage. The Matanuska Valley _narrows. here, as the river that carved it -nears its source. “This valley, to me, is the most beauti- McLean said. ~McLean is from Peoria, Rose from Des Moines. They met in the Anchorage court- house, when she was still trying to make a go of the law. They moved to Sutton 342 years ago, to be caretakers at the Alpine Historical Park. They liked it here. About the time they found some land to buy, the intertie came back to life. “We knew when we bought this land eee buying rite controversy,” Rose sai i The intertie would connect the power system of Anchorage’to the power system of Valdez: The power line would begin in Sutton and end 125 miles away in Glenn- allen, running along a 150-foot-wide swathe cut through the foothills of the Talkeetna Mountains and across the Mata- nuska River’s tribjitaries until it left the idea, it exists only on: paper because it’s never made economic sense. Even after a few legislators steered a no-interest, $35 million loan the intertie’s way, the state’s own studies said it wouldn’t pencil. . “It’s a boondoggle,”’ Rose said. - Like any boondoggle, the intertie is -' being kept alive by. powerful political | forces. The utility that serves Valdez and Glennallen has convinced its customers they will get lower rates, and is paying a lobbyist to press its case. The electrical union wants the construction. jobs. The governor has gone from being sort-of against the intertie to sort-of for it. Bureaucrats are trying to find a way to make it work, if only on paper. Opposing it are the few hundred people who live in .this end of the valley, a few environmen- tal ‘groups. Rose is the head of the opposition; McLean the heart. Although that’s not the way she describes it. “Chris is the organizer,” she said. ‘I’m the pest.” The battle is wearing on them. Fighting your own government. requires constant vigilane When ‘McLean talks about t out of my sharp as the edge of a well-stropped razor. “It just makes you feel powerless in a country where the people are supposed to be powerful,” she said. ‘I’m not a govern- ment-hater at all, but this to me is an example of how things really get messed up.” Something is badly wrong _ here. McLean and Rose are young, hard-work- ing, concerned about their community. Just the kind of people politicians are always saying need to get involved. They have. SS aghtleds aoventinert by a corrupt and thoughtless government, to be taught that being right is not nearly as important as being well-connected. “TI will be very happy to get this issue life,” McLean said. “I’ve : always believed that things should turn - out right. I guess I’ve gotten a little disillusioned by everything.” — O Mike Doogan’s opinion column appears in the Daily News each Tuesday, Friday and Sunday. --His e-mail adiiress is: pedoopal ice FAI m.