An Alaskan utility near Anchorage is seriously considering a 50 MW wind project on Fire Island as a way to reduce its natural gas requirements for its electricity generation. Chugach Electric Association currently pays about $2 for a million cubic feet (mcf) of natural gas, a low price compared to rates in the lower 48 states, which hover around $5/mcf. But Chugach's Peter Poray says the contract will soon expire, after which he expects gas prices to rise two to three times, making wind generation much more competitive. Chugach has about 66,000 retail customers, but it also is a generation and transmission co-operative and sells wholesale power to surrounding utilities. Poray expects construction on the wind project to begin in 2006, but several things must happen first. The utility must complete a combined transmission and wind project feasibility study (Fire Island is about three miles from the Chugach grid) and it needs to complete an integrated resource plan. Together, the feasibility study and the plan will determine when the utility should begin to build the project. Chugach has already poured $600,000 into studies and expects to spend that much more on the feasibility study. Poray says the wind project could grow to as much as 120 MW, depending on the economics. Utility-scale wind installations in Alaska today total slightly more than 1 MW.
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