Renewable Energy and Red Tape
There is so much to this issue. Let’s take a quick look at how District 36 is faring in this arena.
For nearly 50 years, the Alaska Energy Authority (AEA), a public corporation of the State of Alaska has had a directive to “reduce the cost of energy in Alaska.” They are still advocating for us every day.
Impacting communities across the state, the AEA operates in the realm of project development, operations and financing. Through their work, we have seen improvements in energy safety, reliability and affordability.
Yet, we still have utility bills that regularly top $200 or more.
HB 154 HFIN AHFC Presentation 041524.pdf
Affordability generally comes with high numbers of people, something Alaska does not have. Alaska is a big state and the people of District 36 are incredibly spread out.
Many of our rural communities rely on the Power Cost Equalization program, also known as PCE. This program was designed to offer rural residents rate relief due to the high costs of diesel power generation, particularly during cold winter months. Some of our areas however, are not included in the PCE program due to connections with major state-subsidized energy projects such as the Four Dam Pool, Bradley Lake, and the Alaska Intertie.
The Copper River region is one of these areas given our connection to affordable summer power from the Solomon Gulch Hydro-Electric project, a member of the Four Dam Pool.
While the Copper River valley from Chitina to Chistochina benefits from reduced energy costs in the summer, we still experience the same high winter energy costs as our northern neighbors as we share the same cold temperatures and a reliance on diesel power generation.
Perhaps we need to take another look at PCE and consider whether it makes sense to help even out costs for the Copper River region during winter months.
CVEA Solomon Gulch Hydro-Electric Project
Did you know that red tape costs Copper Valley Electric Coop rate payers $1 million every year? Did you know that hydro re-permitting through the Federal Energy Regulatory Commission process takes 8 years?
This is unnecessary red tape that is hurting Alaskans.
CVEA Solomon Gulch Hydro-Electric outflow. There are diverters in place which directly support the Solomon Gulch Fish Hatchery.
Establishing new transmission lines between CVEA’s newest hydro project at Allison Lake with the Alyeska-run Valdez terminal is a project that’s been in the works. The partnership is nearly complete, which will allow Alyeska to purchase power from CVEA while returning energy back from the off-gassing of oil. The cost savings for Ayleska will be substantial which will indirectly help all of the benefactors of their pipeline management business.
While CVEA owns and operates an intertie between their Valdez power generation facilities and Glennallen, there are no transmission lines continuing north to Tok or Delta. Extending the CVEA intertie will be an important long-term energy project to consider in coming years.
On the western side of the Copper River / Susitna River basin is the Alaska Intertie transmission line that runs between Willow and Healy, a portion of the greater Railbelt Intertie. The AEA is the owner of this line, connecting Golden Valley Electric Association (GVEA) out of Fairbanks with southcentral Alaska utilities. The benefits of being connected are reduced rates for GVEA (average savings of $40 million annually over the past 15yrs), the opportunity to benefit from a diversity of energy projects, redundancy and security in back-up generation capability for both regions.
Intertie lines, like any infrastructure however need to be maintained and upgraded on a regular basis. With federal infrastructure funds available at a 1:1 match, the State of Alaska is slowly working to upgrade and improve the existing Railbelt Intertie. While the Legislature did not allocate the entire $206 million requested by AEA this past year, the appropriation of ~$30 million will go a long ways towards improving the electrical grid resilience for the long-term.
HB 269 AEA GRIP Federal Funding Match Requirement Presentation HFIN 04.17.2024.pdf
Outside of the road-system, there are a number of smaller renewable energy projects on the horizon that will bring energy costs down for some of our smallest villages.
One of the projects slated to receive federal support this year is being led by the Tanana Chiefs Conference. New federal funding will be directed at Nulato, Huslia, Minto, Kaltag, Grayling, Anvik, Shageluk, and Holy Cross. This project will utilize high-penetration solar PV and battery storage systems that will be incorporated into local energy grids that currently rely 100% on diesel for electricity. This grant will be administered collaboratively with the Alaska Village Electric Cooperative. In addition to developing affordable energy, the project will entail upgrading the existing electric grid infrastructure and it will provide job training. As currently outlined, the project will hopefully reduce the reliance on diesel fuel by 40% over the project’s 25yr lifespan. Read more here.
Alaska has benefited greatly from expanded federal spending over the past few years. We must utilize these funds wisely. Federal funding is a double edged sword for Alaska. We significantly benefit from federally-funded infrastructure and energy subsidy projects, but we all know that the “Inflation Reduction Act” out of DC will do the exact opposite in the long-run.
Alaska must be ready and willing to accept the greater impact of ever-increasing federal spending, while maneuvering to spend these federal grants efficiently while planning for the future. Anything built now will need to be maintained and either upgraded or replaced down the line.
If we’re able to invest in our state effectively now, and we get a reprieve from the red tape in coming years, we will be better prepared with affordable energy, security and resilience for years to come.