Today, Golden Valley Electric Association and Petro Star Inc. reached agreement on terms covering the supply of a naphtha-blended fuel to be burned at GVEA’s North Pole power plants. GVEA and Petro Star expect to finalize a fuel sale and purchase contract sometime after the GVEA Board of Directors’ meeting on May 12th.
GVEA has been working to find a new fuel supplier since February when Flint Hills Resources announced it would cease refining crude by the end of May. An interim contract with Petro Star will allow GVEA to continue to evaluate long-term fuel solutions for its power plants.
“We were concerned that Flint Hills’ closing would negatively impact the price of electricity for our members,” said Cory Borgeson, President and CEO of Golden Valley. “The good news is that this fuel agreement will have a minimal impact to our members’ electric bills.”
“Also good news is that for at least as long as Petro Star supplies the naphtha blend, GVEA’s pipelines that connect the refinery to the Trans-Alaska Pipeline System will continue operating, thus allowing for further capital recovery on this investment,” said Borgeson. “Finally, GVEA will benefit from Petro Star’s existing product storage, while it evaluates the option to add its own fuel tanks in the future.”