GVEA Board Meeting Recap | August 13, 2026

The GVEA Board of Directors held a special work session Aug. 13 focused on a challenge that is increasingly important to GVEA: ensuring we have enough reliable power to serve our members today and as Interior Alaska's demand for electricity continues to grow.

The work session included a joint presentation by Travis Million, Chief Executive Officer; Naomi Morton-Knight, Chief Power Supply Officer; Nathan Minnema, Chief Operating Officer; Sarah Villalon, Chief Finance Officer; and Abby Dillard, Chief Administrative Officer, on GVEA's current generation position, resource adequacy and staff's recommendation to add a second LM6000 gas turbine at the North Pole Power Plant.

The work session was informational, and no action was taken.

Member Comments

Several members provided comments at the beginning of the work session and expressed a range of perspectives on GVEA's generation options.

Comments included concerns about long-term reliance on natural gas and fossil fuels, the potential purchase of a used LM6000 and the importance of diversifying GVEA's generation mix. One member spoke in support of a second LM6000, citing potential reliability benefits and asking for clarification about how the investment could affect rates and the Fuel & Purchased Power Cost Adjustment.

Another member encouraged GVEA to involve and educate younger members about the cooperative and Alaska's energy future.

Regional Integrated Resource Plan (IRP)

Ed Jenkin, President and CEO of the Railbelt Reliability Council, provided an update on the developing Railbelt Integrated Resource Plan (IRP).

The regional plan will evaluate generation, transmission, battery storage, conservation and other resources needed to meet the Railbelt's future energy needs. The Railbelt stretches approximately 700 miles from Homer to Fairbanks and serves about 70% of Alaska's population.

The IRP process is designed to be public, with opportunities for community members to participate in working meetings and provide comments. The plan is expected to be updated every two years and completely overhauled every four years. The earliest anticipated timeline for approval of the current plan by the Regulatory Commission of Alaska (RCA) is the second quarter of 2027.

Board members asked about reliability standards, potential penalties and the risk of resource shortfalls. Jenkin explained that the IRP will be designed to meet the reliability target adopted for the Railbelt.

Why Is GVEA Evaluating Another Generation Resource?

GVEA management provided an in-depth review of the cooperative's current generation position and the factors affecting resource adequacy.

GVEA staff believes adding new generation is among the most critical priorities currently facing our utility. Several significant changes have reduced the generation "cushion" GVEA once had:

• Abundant, low-cost economy energy generated by natural gas from the Anchorage area has dwindled to nearly nothing.

• GVEA has not had access to natural gas-generated power since February 2025.

• Continued load growth is putting additional pressure on GVEA's aged generation resources, with recent conversations indicating growth could exceed last year's forecast. Nearly all projected increases are within existing large-load contracts.

• Ongoing construction outages impacting low-cost Bradley Lake Hydro power are expected to affect GVEA through 2034 during the first quarter of each year, when we experience our highest demand and coldest temperatures.

GVEA has more than 300 MW of installed generation, but installed capacity is not the same as available capacity. Fuel availability, maintenance, reliability and whether a resource is available when it is needed all affect resource adequacy.

Over the last 250 days, GVEA operated with inadequate reserves due to significant generation issues, fuel shortage issues, and/or stability issues for 236 days - that's over 94% of the time.

Why a Second LM6000?

Consideration of a second LM6000 is not new to GVEA. Numerous studies performed by GVEA and external consultants for more than a decade have most consistently pointed to a second LM6000 as a favorable choice to meet GVEA's resource needs.

GVEA's existing LM6000 is a critical part of our generation fleet and is one of GVEA's lowest-cost units.

Last year, staff worked with external consultants to perform a resource adequacy study that evaluated more than 100,000 scenarios. GVEA's performance was measured against resource adequacy benchmark, widely used in the lower 48, of no more than one generation shortfall event every 10 years. While this metric doesn't reflect the size or duration of these events, it provides an important measure of reliability risk.

The study modeled GVEA's risk of generation shortfalls with projected load growth under several resource scenarios:

• Current generation mix: Approximately 17 shortfall events per year - that's 170 times more than the standard

• Add 100 MW wind: Approximately 5 shortfall events per year

• Add 100 MW wind and PACE battery: Approximately 2 shortfall events per year

• Add second LM6000 and PACE battery: 0.0-0.1 shortfall events per year

Staff emphasized that wind and battery storage can contribute to reliability, but the modeling indicates additional dispatchable generation is needed to consistently meet anticipated reliability requirements as load continues to grow. The three key takeaways from the study results were:

• Base-load generation is needed to ensure GVEA can continue to reliably meet our members' needs.

• Variable resources alone, such as wind and solar, will not resolve GVEA's resource adequacy challenge - even with battery storage.

• The addition of a second LM6000, combined with battery storage through the PACE program, is shown to meet current and future capacity needs and brings GVEA within standard resource adequacy targets for generation shortfall risk.

Fuel Availability and Cost

A second LM6000 could provide operational and financial benefits. It could operate on naphtha today while preserving the ability to use natural gas in the future if it becomes available.

Unlike diesel, naphtha prices have historically been more stable. It also experiences less volatility from fluctuating global fuel markets than diesel.

The additional unit would also allow GVEA's aging North Pole diesel units to return to a reserve role rather than relying on them as primary generation. Based on current fuel projections, staff estimates this could save approximately $35 million annually on fuel.

Financial Considerations

The Board reviewed the potential impact on rates of adding a second LM6000. Staff emphasized that economics is not the focus of a resource adequacy study. While the proposal shows a reduction in overall costs to members, the risk of inadequate generation and reliability is the driving focus of this proposal.

The project would increase the utility portion of members' rates, however, lower fuel costs could decrease Fuel & Purchased Power (FPP) rates to levels that more than offset the utility increase in the scenarios presented.

For example, an $80 million investment scenario showed a $10.3M increase in the utility charge and a $39.5M decrease in (FPP), resulting in a projected 4.95% decrease to the overall effective rate - a $10.63 per month decrease for an average residential member.

Environmental and Regulatory Considerations

The North Pole Power Plant was originally designed and permitted to accommodate a second LM6000, with the necessary air and water permits are already in place. The proposed unit would operate adjacent to the existing plant, utilizing joint systems originally constructed to support a second unit.

Because an LM6000 exceeds Alaska's 15 MW threshold for a Large Energy Facility, RCA preapproval would be required. GVEA would need to demonstrate that the project is necessary, meets reliability standards, cost-effectively serves members, and provides the greatest value at the lowest reasonable cost compared with alternatives.

Large Load Customers

GVEA also reviewed its large commercial and industrial customers and their role in resource planning.

In 2025, 44% of GVEA's kWh sold came from 6 industrial accounts. These customers are significant to GVEA's load, revenue, long-term planning, and costs for members in all rate classes.

Staff discussed the potential rate implications of losing major industrial members, such as the two largest gold mines in the Interior, should these members choose to leave GVEA's system due to reliability concerns. Depending on the rates in effect at the time of analysis, the loss of these mines could result in an increase of up to28% to the residential utility charge.

What's Next?

Travis Million, GVEA CEO, emphasized to the board that there is no zero-risk option when making long-term generation decisions. Management's recommendation is focused on maintaining reliable electricity for GVEA members while creating additional flexibility for the future.

Staff identified several potential benefits of a second LM6000:

• Improving resource adequacy and reliability.

• Moving GVEA's aging North Pole diesel units back into a reserve role.

• Providing flexibility to use natural gas in the future if it becomes available.

• Providing additional generation capacity as Interior Alaska's load continues to grow.

No action was taken during the work session. At the August 25 board meeting, staff will request the GVEA Board to provide guidance on the next steps regarding the LM6000 decision.

Ultimately, the decision on future generation plans and staff's recommendation on the LM6000 is up to GVEA's Board of Directors, who are elected by our members to represent the best interests of member-owners on significant decisions such as these.

The information presented during the work session, including the regional IRP update and GVEA's resource adequacy analysis, will help inform that discussion and any future decision regarding GVEA's generation needs.